The Customer Loyalty Loop Page 5
18. Do you know why customers stop doing business with you?
No (0), Yes (2)
19. Do you engage in regular customer reactivation campaigns?
No (0), Yes (2)
20. Have you carefully articulated your customer archetypes?
No (0), Yes (2)
21. Do you know how much a customer is worth to your business and what you’re willing to spend to get one?
No (0), Yes (2)
22. Do you use guarantees and risk reversals?
No (0), Yes (2)
23. Do you employ recurring revenue models or subscription-based offerings?
No (0), Yes (2)
24. Are you constantly looking for new ways to improve your customer service?
No (0), Yes (2)
25. How often do you send regular, nonpromotional materials to your prospects and customers?
Rarely (0), Quarterly (2), Monthly (4), Weekly (5)
26. How often are you creating new content for your website?
Rarely (0), Quarterly (2), Monthly (4), Weekly (5)
27. Do you perk, reward, and create special events, or exclusive product and service offerings only for your top customers?
No (0), Yes (2)
28. Do you routinely shop your competition?
No (0), Yes (2)
29. Have you created your own Remarkable Moments?
No (0), Yes (2)
30. Do you use NPS scoring as your main source of customer feedback?
Yes (0), No (2)
31. Do you understand the buying cycle of your customers and know when they should be buying from you again?
No (0), Yes (2)
32. Do you market to customers who should be buying, accordingly, at the right time?
No (0), Yes (2)
33. Do your employees have the authority to make an unhappy customer happy within reason? (This means, they can spend money—again, within reason—to fix a situation without managerial approval, and they know exactly how much they can spend to fix it.)
No (0), I think so (1), Yes, within reason (2), We have a specific amount an employee can spend to fix the situation without any need for approval (4)
34. Is every employee able to answer basic questions about your business? (Where are the restrooms? Where is the front desk? Who can help me with X? Who do I need to speak to to get something fixed?) If tested on this, would every employee pass with flying colors?
No (0), Maybe (1), Unequivocally (4)
35. Does the CEO or president (perhaps that is you?) of the company work on the front lines and directly with customers at least once every 90 days?
No (0), Yes (2)
36. If I asked all your individual sales representatives to map out and define your entire sales process, they would all be the same?
No (0), Yes (2)
37. Do you understand the top five causes of resistance and skepticism of your prospects in Stage Two?
No (0), Yes (2)
38. Do you use the Cialdini principles of influence, even if they’re not entirely true (e.g., scarcity)?
No (2), Yes (0)
100 total score____
The Answer Key
The next step is to tally up your scores and see how you rank.
A) If your total points are 51 or less, it tells you that you’re likely delivering a very poor customer experience. Your business could be stable, profitable, and seem to be doing well, but your greatest opportunity for growth revolves around creating a well-balanced, cohesive customer experience by understanding each stage of the loyalty loop. You’re likely losing customers regularly and investing a ton of time, money, and energy into customer acquisition efforts.
B) If your total points are between 52 and 89, you’re delivering a decent customer experience. You have an understanding of each stage of the customer experience, but small hinges will swing big doors. You have room for exceptional improvements. You can likely improve profits and revenue by 50–60 percent or more by working on a small number of the things you’re not doing.
C) If your total points exceed 90 or higher, congrats! I’m willing to guess you’re delivering a wonderful customer experience and your business results are confirming that. However, even though you’ve ranked so high, this creates even more opportunity to tweak, improve, and create dramatic growth opportunities by harnessing the power of the loyalty loop. Regardless, you deserve a high-five for a job well done. Now keep improving, keep tweaking, and keep testing. Utilize the action steps found here to embrace continuous improvement. The test is designed such that a perfect score is possible—can you get there?
3. Stage One: Imagination Before Persuasion
“MEN WANTED for Hazardous Journey. Small wages, bitter cold, long months of complete darkness, constant danger, safe return doubtful. Honour and recognition in case of success.” —Ernest Shackleton, 4 Burlington Street
As the story goes, this ad was placed in London newspapers in the early 1900s. The story claimed that the ad generated at least 5,000 responses from men and women of all ages ready to embark on the adventure of a lifetime. The ad’s response was a catalyst for claiming its spot in a book titled The 100 Greatest Advertisements of All Time.1 The ad was supposedly written by an Arctic explorer named Ernest Shackleton. Unfortunately, the ad might be a myth. It may have never even been published. One website has devoted the past 15 years to trying to find a copy of the advertisement and put up a $100 cash bounty for anyone who can find it.2 Dozens of Internet sleuths have searched the microfiche archives of hundreds of newspapers and nobody has yet to locate it. I’d suggest increasing the bounty, but we’ll come back to this ad shortly.
Sales, marketing, and loyalty experts are continuously talking about the traditional customer journey. We’ve already spoken about this in the previous section. All too often, those experts view the first two or three parts of the traditional customer lifecycle as the most important, but then fail to focus enough (and sometimes any) attention on the additional steps (and perhaps the most important steps in helping us maximize profits and revenue for our organizations).
Talented marketers, expert copywriters, salespeople, user-experience wizards, growth hackers, and so on almost all exclusively focus the majority of their efforts on taking from the customer from a point of interest, to getting the customer to hand over a bundle of cash. If they’ve reached that point, then the job is complete. And as I continue harping at you, the job is never complete!
We’ve all heard the dusty, old chestnut that it cost as much as 5 times more to acquire a new customer than it does to keep an existing one. One of the problems with presenting new and existing customers this way is that it undervalues the process of trying to keep an existing customer. Making it a binary brain issue—new customers vs. existing ones—and showing how much it takes to get the new customer is likely to result in actually minimizing the customer retention effort. However, an existing customer is a new customer; these two categories are a false division because they are not alternatives—they are the same person, just at a different stage of the process! It’s a bit like a medical practice putting all of its efforts into diagnosing people and hardly any into treating them. Another problem with the false division between new and existing customers, and in particular the statement that it costs 5 times as much to acquire a customer as it does to keep them, is that nobody ever tells us how to make the existing customer 5 times more profitable. But I did. And not to toot my own horn, but this was covered in great detail in my previous book, Evergreen. There I espoused not just a strategic framework that would allow companies to understand better who they are, who they’re doing it for, and how to nurture and cultivate deeper, more meaningful, and more profitable customer relationships, but the main point was really about creating a mind-set shift. This mind-set shift focused on the fact that companies are spending enormous amounts of time, energy, and resources on hunting for new business as opposed to caring for and nurturing the customer from the point of the first contact to a long an
d fruitful life doing business with your company.
To take things to the next level, it begins with the Customer Loyalty Loop and understanding the psychology of the new customer experience.
Customer Archetypes
Throughout the book, we talk about why tactical persuasion tactics will only get us so far. If you want to succeed in Stage One of the loyalty loop, there is nothing more important than truly understanding who your buyers are so that you can create marketing and messaging that speaks to them directly. In Stage Two, you need to know their wants, fears, and desires so you can properly remove resistance from the sale. In Stage Three, it’s incredibly important to make the actual customer experience as personal and meaningful as you can. It’s a bit of a fun exercise, but it’s incredibly telling. I’ve done this exercise with executive teams, CEOs, and sales and marketing people. Almost always, we find that people know more about the people they watch on television after work than the people they are charged with serving on a daily basis. If you want to master the loyalty loop, it’s incredibly important to know your ideal customer inside and out.
At my recent Evergreen Summit, I asked a group of executives to explain, in detail, a favorite TV character. At first, they looked at me in bewilderment, but then they took part. For two minutes, heads were down as people crafted incredibly detailed descriptions of Walter White from Breaking Bad, Larry David from Curb Your Enthusiasm, Charlie from Two and a Half Men, and others. I asked someone to share what they had written, and a highly successful CEO went on to explain Walter White in incredible detail. He told where he worked, what kind of car he drove, what color hair he had, what his struggles were, what his family was like, and so on. The list went on and on. Others in the room also wrote incredibly detailed narratives describing their favorite characters. When they were done, I asked the group to flip over their paper and write a detailed narrative of their ideal customer. The participants got down to work, but I could see instantly this was a lot harder than it looked. Finally, one attendee blurted out, “Okay, Noah! Point taken!” Everyone laughed, but nearly everyone agreed that it was much easier to write a description of our favorite TV character than writing a description of our ideal customers. But why is that? It should be the other way around. This is a fabulous exercise to do with both your sales, marketing, and customer-facing employees.
Action Step: The Walter White Workshop
Step 1: Ask your team to write detailed descriptions of their favorite television or movie characters. Give everyone about five minutes to complete the exercise.
Step 2: Spend a few minutes allowing people to share. Make note of all the small, yet important details they know about the fictional character.
Step 3: Ask them to complete the exercise creating a detailed description of your ideal customer. This is important to do across teams and various departments.
Step 4: If you find wildly different descriptions of your ideal customers, then you’ll need to work together to craft your buyer personas.
If it were evident that your people need a lot of help in this area, then I would urge you to spend time learning more about your customer archetypes. If you found that your people genuinely have a good idea of who your customers are and what’s important to them, then go ahead and skip to the next exercise. There is nothing more valuable than a comprehensive, thorough, deeply psychological and emotional understanding of your entire customer base. You need to understand how to reach each type of customer, what resonates with them, and how to speak to them. You can only find the ones you want if you know what you’re looking for. The Walter White exercise is a great way to see if your people truly understand the customers they are serving. It’s important to the entire experience as it guides people on how to effectively communicate with your customers.
Meaningful, Memorable, and Personal
One of the underlying assumptions of all great customer service delivery and exceeding customer’s expectations is to understand the power of personalization in a world gone mad with automation and cost-cutting, and how to balance that personalization with the automation of the right elements of your business to maximize the impact of that personal touch. The customer experience must be meaningful, memorable, and personal. Too many companies drop the ball when it comes to providing experiences that are personalized, positive, and consistent. Today more than ever, larger organizations are tapping into large amounts of data to provide these more “individualized” experiences. All companies of all sizes need to recognize the power of ensuring that experiences are personalized, positive, and consistent. Even something as simple as sending a letter to a longtime customer that reads, “Dear Valued Customer,” can create feelings of resentment with that longstanding customer. Is the customer truly valued? Was your call really important to them? Organizations need to be mindful of how the experience starts and how the experience ends as two key opportunities to influence the mind of a new customer and one that becomes a loyal customer.
Are there easy ways to increase customer satisfaction? According to research, there are. In a study done with waiters at a restaurant, they were able to significantly increase their tips, showing that customers felt better about the service, through a very simple strategy. The waiters would bring table mints and, some time later, they would come by the table again and offer more mints, in case the people at the table wanted more. This alone increased tipping by 23 percent.
What does this study show us? It suggests that offering a more personalized and careful attention to the customers, even when this is expressed through small things like offering more mints, can significantly increase customer satisfaction.
There are a couple of ways in which the study is relevant for the Customer Loyalty Loop. First, it shows that small details, such as free bonuses, personalized attention, and follow-ups, among other things, can significantly increase customer satisfaction, increasing their loyalty as well. Second, it shows the importance of showing concern for the customer’s needs in a noninvasive manner. In this case, the waiter came to offer more mints because he wondered if the table needed more. For the customer, that shows that the waiter took them into consideration and showed some concern for their needs, making the service that they received far more personal, even if it was only done at the end of the meal.
In general, this study suggests that by showing concern for and attention to the customer even through small details, customer service can be significantly improved, raising customer loyalty and satisfaction. For example, after someone buys, consider calling them to thank them. Simple. Don’t forget the power of handwritten notes. Hardly anyone is using it, and it always generates a wonderful response.
Action Step: Touch Points Workshop
Look at all the little customer touch points throughout the entire loyalty loop and brainstorm ways you can make each part of the process more meaningful, memorable, and personal.
If someone books a stay at your hotel, instead of e-mailing them a confirmation letter, call them to follow up. If someone has purchased something from you, or you’ve installed something at their place of business, stop by every once and a while and check it out.
Finally, depending on what type of business you’re in, categorize your clients even further. Make note of their interests personally and professionally. Here’s what I mean. For me, it’s simple; I usually take on about six to eight large projects a year, keeping my client base relatively small at any one time. I have a number of coaching, mentoring, and speaking clients, but the larger projects I’m engaged in are manageable to the point I know a lot about each one of their businesses. I’ll routinely capture and maintain articles, stories, and things I find that might be of interest to that client. I’ll maintain a file and send them once a month. I’m not suggesting everyone gets something monthly, but if I have a client in the funeral industry and see an interesting piece of content in the New York Times on that specific industry, I’ll clip the article and/or forward it with a brief, personal note. “Shawn, this i
s interesting as it related to the work we’re doing with your sales team. What are your thoughts?” It’s meaningful, memorable, and personal. There’s nothing malicious about this; it’s pure added value. It might be impossible to scale this to hundreds or thousands or millions of customers, but it doesn’t need to be. I have another client who has a keen interest in fishing—so do I. I’m constantly sending him interesting things I see, and he appreciates it.
Think about what you’d like your customers to be saying about your business.
Workshop: Take a Compliment
Get your team together and brainstorm on the following questions.
• What are the three to five best compliments and words of praise a customer can give your business?
• Are you doing enough to influence those compliments and words of praise?
• Are current reviews and testimonials confirming that you’re getting those compliments?
• If you’re not, where else do you need to improve? What can and should you be doing to ensure you’re getting those compliments and words of praise?
The New Customer Experience
In the first stage, we start with the beginnings—before the sale. This is the first time the customer is exposed to your brand or the moment the idea of your company is first planted in their head. This is counterintuitive for many, but the Customer Loyalty Loop starts long before the sale has ever been made. It starts from the very first time a prospect is exposed to your sales, marketing, and advertising efforts. It’s that first time they read an ad in a London newspaper that stops them completely in their tracks and makes them say, “Sign me up for that adventure!” It’s the first time they open their mailbox to find a brochure from your firm. It’s the first time they find you via a Google search. It’s the first time they’re told by a trusted colleague that they need to implement your enterprise software solution or your sales approach. The impressions and the memories of these initial encounters with your product are the platforms on which all subsequent actions are based. This stage becomes all about the behavior of the customer, understanding how our actions align with how they’re feeling, and more important, how they’re making decisions. We begin by asking ourselves questions like, “How can I better understand what is happening at this point, and how can I use that information to improve my sales and marketing efforts?”