Written by mayur | 21 October 2009
Posted in customer-service

We now knowthat building Customer Loyalty is key to success in any organization. The philosophywas first articulated by Fredreich Reicheld

who studied the relationshipbetween three factors - customer satisfaction, customer loyalty and profits. (Bain & Company). He statedseveral facts that seem glaringly clear now, but until then, had not beenclearly stated.

Tom Peters,author of the seminal business bible – ‘In Search of Excellence’, describedgreat management ideas as " ablinding flash of the obvious" - because they're so right, so simpleand so obvious. This iscertainly true of Reicheld’s statements on Customer Loyalty. They are equally –extremely POWERFUL. With them – we have the key to success. Without them, weare left without a clear direction forward in competing within our marketplace.What Reicheld stated was “Customerloyalty appears to be the only wayto achieve sustainably superior profits”.

He used as anexample the life assurance business stating that a 5 per cent increase in customer retention has the effect oflowering costs per policy by 18 per cent – no small cost in any business.

The CustomerLoyalty Goals

The moreCustomers we keep the more profits we make. Poor service, bad quality anddeficient delivery are all factors that encourage some people to go. To stay – they must like you. The bare minimum is ‘customersatisfied’ – expectations met. This willnot send customers away – but it will not keep them.

To keep thecustomer we must exceedexpectations – deliver the extra special positive experience. A positiveexperience can involve ‘cheaper’ or ‘better quality’. But the really powerful positive experiencesinvolve feelings - of ‘personal touch’, ‘like’, ‘special’, ‘trust’, ‘ honest’,‘straight’, ‘fair’ and so on.

And now thingsstop being ‘blindingly simple’ –because delivering ‘likeable’ as a business strategy involves a complex system ofinterrelated KPIs, competencies, attitudes and behaviours – that actively drivea powerful ‘customer focussed culture’.

Learning fromSuccess

What dosuccessful Companies do? They accept the basic premise – customer retention is our business strategy. Customers staybecause they like you – they want to stay. To have our people deliver this ‘want to stay’ service - weneed them to WANT TO keep the customer. Weneed them to have the competenciesto do that andbe in an environment that motivates and empowers them.

Customer Focusinvolves adopting an overall strategy that will result in increased customerretention – e.g.

1. We will measure, report on anddiscuss that which is related to customer loyalty – number of defections,customer complaints, positive feedback from customers, focus group reports,feedback from customer care agents, complaint handling, cash collection etc

2. We will manage the CustomerExperience. We will study, report, learn from and take action on CRM data onthe Customer Experience.

3. We will reward people, actions and behaviors that encourage high use of customerfocused behavioral competencies or contributepositively to increased customer retention.

4. We will set targets, expectations, and definition of accountabilitybased on customer focus attitudes, values, and competencies.

5. We will include customer focused core values and behavioral competencies in the job descriptionof all – from MD downward.

6. We will recognize that leader behaviour is afundamental determinant of follower motivation and success.

7. We will use customer focused skill building and creative problemsolving as motivational tools for all our teams.

This Customer Focus Strategy must create an engine that will drive everyindividual within the Company. The pay back lies not only in increased retention, but in a huge surge of highlymotivational drivers that, in turn, increase performance and drive towardssuccess.

About The Author:
Kate Tammemagi is a respected Customer Service Trainer and Consultant in Ireland. She has extensive experience designing and delivering customized Customer Service Courses and Telephone Skills Training.

Source : articleclick.com

Publish This Article On Your WebSite or Blog