10: The Secret To Affluent Loyalty
Customer satisfaction studies have been used as a method of gauging customer loyalty, but the two are entirely different concepts: satisfaction measures how someone feels about a decision they have made in the past, whereas loyalty pertains to a decision they will make in the future. While there is some connection between the two, in that a customer who is dissatisfied is less likely to purchase the same brand in future, satisfaction does not guarantee or even indicate loyalty.
There is a long history of customer satisfaction metrics, which have been in use by JD Power since 1968, and measures of customer satisfaction become advertising claims and a metric for employee performance. It's worth considering that affluent customers react negatively even to being surveyed: they are annoyed by the intrusion, and sense that their decision-making skills are being called into question.
Loyalty is a far more significant measurement, and it is based on action rather than opinion: when a customer purchases multiple items form a given vendor, or the same item repeatedly, over a period of time, they are considered to be a loyal customer. If a customer purchases infrequently, or once and never again, they are not a loyal customer.
Loyal customers are valued because:
- They seek out their preferred brands whenever they need to purchase
- Repeat purchases are a clear sign of intention to continue doing business with you
- They will be open to cross-selling and up-selling
- They are resistant to the pull from your competition
- They provide unsolicited referrals, and gladly provide solicited ones when you ask
Satisfied customers, meanwhile, merely say claim to be pleased with a past purchase. They may or may not be loyal customers, and they may or may not even be satisfied.
Earning Loyalty
The second call illustrates the level of commitment required to earn the loyalty of your affluent customers or clients. I have spent countless hours studying this issue and have concluded that there is no one set of activities that will garner affluent loyalty. However, here are seven principles that should shape your thinking and guide your efforts:
The author has attempted to study customer loyalty, but poring over research and case-studies have not led to a clear conclusion that one set of activities can be relied upon to guarantee it. However, he has found several ideas that seem to be mentioned frequently, and can "shape your thinking" about what can be done:
- Show, don't tell. Virtually every company claims to place emphasis on customer service, but very few act accordingly. Be consistently courteous, professional, and helpful and your reputation will take care of itself.
- Be modest. Most of the people who are affluent come from modest backgrounds, and are not impressed by unnecessary extravagance. In fact, it seems wasteful. A simple, clean, and functional environment is comfortable and suggests that you are efficient.
- Attend to hospitality. Greet customers promptly and in person, give them your full attention, and walk them back to the lobby. Do nothing that is not focused on them while they are with you.
- Be available 24/7. Make it clear that you are available to your customers whenever they need you to be.
- Answer the phone. Give affluent clients a number that will reach a person that can respond to their needs - not an impersonal voice system, and not a person who will have to forward them to someone else.
- Never say "no" to any reasonable request. Find a way to respond to anything a client wants, regardless of what it is, and do not charge for "extra" services unless it is absolutely necessary. Affluent customers rarely seek to take advantage, and if a few do, it's worth it to accommodate them.
- Set expectations. Tell the customer what they can expect of you, and what they will need to do, to minimize assumptions and surprises.
- Take personal responsibility. Do not expect your company, another department, or a vendor to be as concerned about the customer's needs as you are. Be their point of contact for anything they need.
Professional Problems, Solutions, And Loyalty
Affluent customers want to be loyal to a firm, as much or more than firms want their loyalty. To the customer, having a firm they can count on makes their life easier and reduces the amount of stress they have: they know they will be taken care of, and don't have to shop around because they know the firm that serves them will meet their needs. They want a firm that they can recommend with confidence to others.
The author uses a lengthy anecdote about a cardiologist to illustrate these ideas, outlining a pattern of behavior that is common to many businesses: a patient typically seeks a specialist in a time of dire need, when they have an immediate problem; they don't know where to go, and ask friends and acquaintances for suggestions; and if they receive attentive treatment, they will remain loyal to a given doctor and refer other patients to him.