Eight Key Ingredients Build Customer Loyalty

An ongoing challenge for any company is the retention of customers. It is well known that getting new customers costs much more than maintaining ones already doing business with you. Incorporating these eight ingredients to a well-rounded strategy for building customer loyalty will produce dramatic results.

1. Be Reliable
Reliability arises from consistent follow-through and execution. Standardize service and product quality. McDonald's restaurants typify reliability of product quality (if not service) in their standardization. We all know that we can go to a McDonalds anywhere in the world and be assured of getting the same Big Mac and fries.

The past Christmas season was an opportunity for the new kids on the block--the e-tailers--to show their stuff. Unfortunately, many e-commerce retailers flunked the reliability test. About 17 percent of consumers recently polled said more things tend to go wrong with their online shopping than during a visit to the store.

Reliability begets repeat business. Become the McDonald's of your industry by assuring customers that they will receive the same top-quality service every time they do business with you.

2. Be Credible
Credibility is enhanced when you do exactly what you say you will do--every time. Avoid holding any hidden agenda. Your customers understand the need to make a profit, so don't try to imply that you are in business just for fun. Provide clear value and remind your customers of this value.

3. Be Responsive
Share your customer's sense of urgency. Provide customers with easy access to information they may need, such as delivery schedules, tracking of shipments, etc. Use the internet for this if possible (people are coming to expect such access). But learn the lesson that the better e-commerce companies are starting to get: give your customers access to live people in case of problems.

Have an aggressive customer recovery strategy. Be sure that all employees recognize the value of each customer. Teach them to recover potentially lost customers, even if the short-term cost may seem high. Empower the employee to make good decisions in light of customer needs, not just the company's.

4. Show Empathy
Assess customer emotions and mirror them. If the customer seems anxious, reassure them. If a customer is excited about the product, share that excitement through comments, voice, and other nonverbal messages. Use their own terms to reinforce feelings.

Understand sensory preferences for visual, auditory, and kinesthetic information. Listen for key words and use these cues to establish rapport. If a customer indicates a visual preference, show them visual information; if an auditory preference, let them hear information; if a kinesthetic preference, give them opportunity to feel the product or service.

5. Hire Good Employees
Select frontline employees based on emotional intelligence, not just skills. Hire upbeat personalities and good attitudes. Then teach them the skills needed.

Steal good employees from other companies. If you receive exceptional service from someone, consider them for a position in your company. Build a file of such candidates. Reach out to potential employees, don't just wait for them to apply.

6. Train Employees Constantly
Have an ongoing training process in place. This need not be formal classroom training but should be built around a set of skills critical to your company's success. Involve employees in designing curriculum. Ask what they would like to know more about, then find sources for training in those areas.

7. Create a Sense of Employee Belonging
Remember that employees are internal customers and earning their loyalty is important. Invite them to participate in strategy development and quality improvement efforts. Use their input. Involve them in organizational decisions.

Keep employees well informed. Trust them with important informational data. Don't censor the "facts of life" for them. Treat them like intelligent participants in the company's enterprise. Your employees will treat customers the way you treat them. Make it a respectful partnering.

8. Make Things Easier for Customers
Look for things that give customers difficulty and solve them. Work to reduce customer paperwork (especially repetitious forms). Continuously simplify for the customer. Consider delivery alternatives. Ask for feedback about what is helpful or nonproductive.

Application of these eight elements will build greater customer retention. And customer retention provides greater profit opportunities.

Paul R. Timm, Ph.D. consults in the field of customer service, has written 38 books on a range of management topics, and teaches at the Marriott School at BYU. He can be reached by e-mail at: DrTimm@aol.com