How to get your customers to Love your brand

Customer loyalty is of extreme importance to any firm.  Many firms find that their ‘loyal’ customers often defect to competition.  Yet we find that there are organizations and entities that have ‘customers’ who are loyal to the extent that they love them, will never leave them and will be willing to pay more money for the same product/service.   Usually we find these types of ‘customers’ in sports, music, and charities.  For example, when have we heard of fans giving up support for the Celtics or Manchester United, just because they didn’t win the trophy?  Or when have you heard of people flocking to the music stores to buy a particular music album just because it’s on sale.  People will only buy music they love, not because it offers more points, is cheaper, or just because it was conveniently available.  Similarly, most people who donate money to a charity usually do so because they feel emotionally attached to it.  Many people support Save the Children, or Greenpeace, because they feel strongly about what these organizations are doing.

The problem is that these entities don’t fall in the ‘normal’ category of business.  Can we get customers to love our normal companies, and how do we do it?  After spending nearly four and a half years doing research into this area, I’ve finally found some answers.  The good news is that yes indeed you can get your customers to love you.  These customers are loyal to an ‘extreme’ extent that they feel emotionally attached to your brand / company.  They will never search for alternatives (unless if you don’t offer what they’re after).  These customers will not only spread good word of mouth, but go out of their way to tell others.  Moreover, these guys will be willing to pay more to receive the same service / product that you have to offer them!  In fact, I’ve found that these customers are willing to spend up to 20% more money.  Overall, they are between 20 to 50 percent more profitable than other types of ‘loyal’ customers.

Hence, the million dollar question is, how to get customer to love you?  The following are some steps which may help in achieving this.

1. Focus on customer delight.  Nearly all the marketing texts you pick up, nearly all the marketing experts have one thing to say, marketing is about customer satisfaction.  However, customer loyalty is about delight, and not satisfaction.  Delight does not necessarily mean that you try to surprise the customer every time.  Instead, often customers will be delighted because you consistently deliver a high quality service!  One of the key differences between customers who just like, and those who love a firm is the level of satisfaction.  Customers that love the brand are extremely satisfied whereas others were only satisfied.
2. Appropriate service recovery.  To err is human.  However, the manner in which we handle a service failure will determine if our customers will hate, like or love us.  The recovery has to be timely, and appropriate to the level of mistake that you’ve committed.  Customers who said they like a company but not enough to love it, were of the view that service recovery was ‘too little, too late’.  Others who loved the company said that the recovery was very quick and much better than what was expected.
3. Don’t compromise on quality.  No matter what your target audience, make sure that you offer the best quality in your product category.  Customers who love their firm always have had a positive perception of the quality.  These customers are of the view that the level of quality at this brand is better than competition.  Even if you sell to the lowest segment in the market, you need to be better than the competition.
4. Never forget the customer.  Customer’s needs are constantly changing.  Companies that are good at winning customer loyalty, always keep in touch with their customers.  They know what their needs are, and how best to satisfy those needs.  These companies can sense the changes in the customer requirements and then quickly act upon them to fulfill the needs.
5. Focus on providing a unique service.  Even if you’re selling products, you need to differentiate yourself.  Best practice firms seem to focus on providing a unique service, instead of merely selling products.  This is a factor that usually gives brands an edge over competition, and also makes customers feel good about the brand as a whole.
6. Focus on the brand image.  Interestingly building a positive image about your brand helps customers not only to be attracted to your firm, but also to feel good about the brand.  A positive brand image is highly crucial in the initial stages of loyalty development.
7. Know which customers are likely to progress to the love phase of loyalty.  These customers need to be nurtured, and made a part of your company.  It is with the help of these customers, will you be able to build a wider base for loyal customers.

Finally, don’t expect results to happen overnight.  My research indicates that for customers to love a company there is usually a specific time frame involved.  This can vary between 30 to 50 transactions or visits.  You need to work hard to build a system in your organization that can cultivate love among the customers.  However, with time this hard work will pay off in terms of greater market share, improved levels of profits, increase in employee morale and a better brand image.

The Experience Revolution!

A number of key events in time have shaped history, and more specifically defined how we do business.   For example the advent of money changed the way how business was done.  Much later the industrial revolution again brought about many changes and brought prosperity to the ‘industrialized’ world.  After WWII the Quality Revolution allowed companies in Japan and Germany to prosper.  Not too long ago, the IT revolution has again changed the way business is done.  Companies like Amazon, Apple, EBay, Facebook, Google and Microsoft have achieved success in very short periods of time, which was unimaginable in the past.  Each new ‘revolution’ has allowed business to achieve greater success, earn more profits, grab bigger market shares, than was possible in the previous era.

With the economy in not too great of a condition companies are looking to find ways of surviving.  Moreover competition from the developing economies is making doing business difficult.  A popular question that I often discuss with my MBA students is how to tackle the challenges posed by developing economies like the BRIC or the N11 nations?  Keeping all of these factors in mind, I believe that the time is rife for a new revolution - an Experience Revolution.

Companies that have adopted Customer Experience Management philosophies, and are implementing it in an appropriate manner are already beginning to prosper.  Some of the best practice examples include companies like Apple, BMW, Disney, Harley Davidson, Ikea, Microsoft, Singapore Airlines, and Zara.  Despite the tough economic conditions these companies are outperforming their competitors.  However, as I work with numerous companies from all across the globe I find that apparently only the larger firms have started to adopt a CEM focus.  The 70 odd per cent of the economy, which is made up of small and medium firms have failed to look at CEM.  Overall this is having a negative impact on our economies.

The two major threats to businesses in the west are posed by the current global financial climate, as well as the threat posed by the low cost competitors from the developing countries.  Both of these problems are somewhat interlinked.  Companies try to survive through the troubled economic times by reducing their costs.  In terms of competing against the developing countries, we simply cannot compete on price.  The low wages, economies of scale, coupled with the availability of cheap raw materials makes it impossible for companies to try to compete on the basis of costs.  Customer Experience Management offers us that extra something which is hard to replicate, and hence will give our companies a competitive edge.

My blog, and my talks at various conferences have focused on CEM implementation by a firm.  However, as I see the number of participants and the number of CEM focused conferences increase, I want to focus on the economy as a whole.  Hence, I think we need not just a handful of companies to adopt CEM, but bring about a revolution where a huge percentage of the companies start to adopt this.

A CEM revolution, however, cannot be brought about without the help of the Government at all levels (State and Federal in the US and Individual country and EU in Europe).  The government needs to promote CEM to the masses.  While I’m not an expert on Public Policy, I would suggest the following steps.

First, the governments need to offer tax incentives for companies that spend money on implementing CEM policies.  This will encourage a larger number of companies to shirt towards CEM.  Moreover, this will also encourage, cash strapped, SMEs to adopt a CEM.

An official Government encouragement will also help the academia (which is usually very slow to react to changes in the business world) to focus on this sector.  It will encourage them to do more research, and consequently offer better training to companies.

Governments can also step in and either create or support CEM awards.  The Malcolm Baldrige National Quality Award (MBNQA) in the US has had a positive effect in encouraging businesses adopt Quality policies.  As a member of the Judging panel on the UK Customer Experience Awards, I’ve seen the number of companies apply grow over the years.  Moreover, the quality of the submissions seems to be improving, which shows that companies are adopting CEM.  However, a government backing will not only enhance the reputation of such awards, but will see a much larger number of companies adopting CEM principles.

Similarly, other measures need to be looked at by the Governments to encourage businesses to adopt CEM policies.  This needs to be done to ensure that we bring about a CEM revolution on a large scale, a scale large enough to have a positive impact on our economies.

For comments, please email me at: o.khan@uel.ac.uk I will try to post all of them on the blog.  (To prevent spammers, I’ve had to take this measure).

The Customer Loyalty Lifecycle!

We’ve all heard of the business life cycle, however today I wanted to introduce you to a different type of life cycle, i.e. the customer loyalty life cycle.  When managing a business it is imperative to know what sort of a life cycle the business is likely to go through, and hence we can make appropriate strategies.  Similarly, when wanting to manage loyalty, it is important to understand what type of a life cycle a loyal customer is likely to go through, so that we can make appropriate plans.

Going back to one of my earlier blogs, we must remember that there are three distinct types of loyal customers (http://blog.cibmp.org/?p=32).  Keeping this in mind, we know that the most profitable ones are the emotionally attached customers, and the least profitable are the behaviorally loyal customers.  Moreover, the longevity of the relationship also differs from one type of loyal customer to the other.  Based on research into these types of customers, I have developed a customer loyalty life cycle.

As you can see from the figure, the life cycle is based on two main factors, time and profitability.  While my drawing skills are not great, you can make out the basic concept behind this model.  Customers that are behaviorally loyal will stay lesser time with a firm and not be very profitable.  Attitudinally loyal customers will stick for longer, and eventually they will leave the firm.  Emotionally loyal customers will stay with the firm for as long as they are alive, or as long as they remain to purchase from that product category.  These customers are the most profitable for a firm.  The time factor differs from one industry to another.  However we can now put time figures to this graph.  We can estimate the number of years it will take a customer to become emotionally attached!  The numbers written in the figure above are only for illustration purposes.  My research into this continues, and hopefully in the near future I will be able to publish the time scales, along with estimated profitability figures.

What is important is that we need to realize that all customers start from the same place.  It is up to us to ensure that they end up in the right place.  For example, companies that are committed to providing better customer service and quality will be the ones that will get more customers to go further on this life cycle.  Those that ignore the customer’s true needs will be the ones that see most of their customers end up in the behavioral loyalty sector.

As always, please do let me know what you think about this.  Your comments here, and in various linked in groups are always appreciated.

WOM still the most powerful tool for a marketer

Word of mouth, or recommendation, is the most powerful tool marketers have in their arsenal for attracting and retaining customers.  Despite this being the most powerful of the tools, it is one of the most overlooked, and hence I thought I would devote this blog to the importance of WOM.

Research indicates that customers are more likely to purchase a brand / product based on recommendation from a trusted source than from any other means.  This includes advertising, PR, online marketing, etc.  Moreover, researchers have found that those people who purchase a product based on recommendation from a trusted source are more likely to become loyal than those that went there as a result of other sources.  Interestingly there is further research which states that more customers are likely to purchase a product based on recommendation than even their own past experience!

My research indicates that emotionally attached customers are the ones that are most likely to recommend a brand, and are the ones that will do it most frequently.

Recommendation is also a free tool for marketers.  Usually you don’t spend money on this.  However some companies have started to realize the importance of recommendation and reward their customers who recommend others with vouchers, discounts, and free gifts.

Social media has enabled our customers to use the power of the web to broaden their scope of friends.  This now allows for our customers to reach a wider number of people, and much faster too.

The only problem with recommendation is that it is not really in the control of marketers, or at least not until now.  Companies need to develop strategies, devote budgets, and create teams that will look after recommendation.  With it being a very powerful tool, we must learn to take advantage of this, and not to let it evolve on its own.  Companies need to devise strategies that will assist their customers in being better at WOM.  Various rewards that are being used by firms is just one way to encourage customers to start recommending the company to others.  However there much more to be done.  Companies that can harness the pwoer

Customer Services Across the Atlantic: What we can learn from each other

I spent some time traveling, working and speaking in the US recently.  This particular trip, I paid much attention to customer services and to see how different organizations do things.  Overall, I can conclude that there is much that we can learn from each other about customer services.  There are some things that the Europeans seem to be good at, and others that the Americans seem to be doing well.

Here are just a few of the examples of the type of things that come to mind:

Just about every store you walk into in the US, the employees will greet you with a ‘hi, how are you doing.’  When you purchase something, the person at the check out will always greet you with a ‘have a good day’.  While we can expect this type of friendliness at the ‘higher end’ stores in the UK and Europe, but this seems to be the trend with just about every store I went into.  From grocery stores, to clothing retailers to electronic stores, it seems to be common everywhere.  On they way back, I was skimming through Ari Weinzweig’s book, “Zingerman’s guide to giving great service”.  Right on the 1st page he starts with a Jewish saying, “If you don’t know how to smile don’t open a shop.”  I guess this is something that many of the American businesses seem to be following.

Although the US started off the Internet revolution, it appears that the Europeans are using it more wisely for people who come from other countries.  While trying to search for tourist attractions, I realized that the web sites in Europe, and more specifically in the UK are designed really well from a tourist perspective.  I supposed that is probably because the UK is visited by millions of tourists from all across the world, and hence they have some of the basic things from their perspective.

I must say that I don’t rent cars frequently in Europe, hence a comparison wouldn’t be very fair.  However, there is one company Alamo/National in the US, which really surprised me with good service.  First these guys have a kiosk for fast track check in.  Hence, if you are already registered, simply walk up to the kiosk, no waiting in line, etc.  Next, they give you an option to chose your own car!  So from a range of mid-sized cars, I could chose whichever one I wanted.  Finally, the car returns procedure was also pretty quick.  A guy comes and scans the bar-code off the windscreen, and produces a slip for you, and that’s it!  I did experience a couple of other companies, and they did not seem to be following this process.

Surprisingly there weren’t as many toll charge roads as I expected.  However, you can get a neat little device which you stick on your dashboard.  The device allows you to drive through the toll both without stopping.  It gives off a radio signal, which then charges your account.  This was really great, as it sped up the traffic around the toll areas.

While I loved the wide roads in the US, I was not too impressed with the Zip code (Post Code) system there.  After putting in your zip code into the Satellite Navigation (GPS), you still had to give the street and house number.  In contrast, here in the UK, you just need your Post Code and the house number since each post code represents one street only!  Perhaps the longer version of the zip code may be more accurate, however none of the businesses appeared to be using it.

In terms of bad service, there are plenty of examples on both sides of the Atlantic.  However, I am trying to refrain from going into those details.  Please do send me your experiences.