7 factors for building extreme customer loyalty rita schnarr ppt

Welcome ~

Seven Factors for Building Extreme Customer Loyalty
Presented By: Rita Schnarr

www.profilesinternational.com
©2010 Profiles International, Inc. All rights reserved.

Sound Familiar??


Today’s Presentation Topics:

• Why Build Extreme Customer Loyalty?

• Customer Loyalty vs. Customer Satisfaction

• What Drives Customer Loyalty:

“
1. Emotional Dependence
2. Structural Dependence
Two-thirds of business 3. Business Dependence
from existing accounts 4. Satisfaction
and one-third from new 5. Performance
6. Economic Value Proposition
accounts is the common

”
7. Alignment and Fit
balance.
• Solutions

Six Crucial Behaviors for Customer-Facing Employees | 3

Why Build Customer Loyalty?

• More predictable revenue
• Command premium prices
• Lower cost of sales
• Higher margins
• Word-of-mouth promotion
• More open and honest feedback
• Willingness to test new ideas
• More satisfying work
People Practices for Building Extreme Customer Loyalty | 4

Background to “Loyalty”…

Josiah Royce: An American Philosopher in the mid-late
1800’s claimed that the trait of loyalty was most often
associated with political institutions, religion, war, and
family.
In these situations, people had one key influence in
common ~
‘A PASSIONATE LINK TO A ‘COMMON CAUSE.’

You build loyalty when you and your customer are
ALIGNED on Seven Key Factors…

1. Emotional Dependence:

~ The Customer’s psychological commitment to an
organization.

Factors influencing emotional dependence
include: Integrity, reliability, depth of
relationship, and empathy.

i.e. An online flower shop botches their
order and his wife doesn’t get her birthday gift.
Others?

…1. Emotional Dependence

Learn what your customers value on a personal
level and go beyond their expectations to
demonstrate that you care about them.


…1. Emotional Dependence

Show a high degree of empathy and
responsiveness when you sense your customer
is getting emotional about an issue.


Put the right person on the job who can
really connect with the customer…

Your customer-facing people are your
brand!
It takes 12 good service experiences
to overcome a single bad one.
7 of 10 customers who switch to the
competition do so because of poor
service.
91% of unhappy customers won’t
buy again from the company that
displeased them.
And not only will they defect, they
will grumble to 9 of their friends.

Individual Exercise:

1. Choose One of your Key Customers
2. What Do They Value?

~ Record in your Box


2. Structural Dependence:

The operational foundation of the
relationship.
It consists of people, facilities, systems, and
distribution channels.

i.e. Outsourcing non-core operations such as I.T.
Services.

2. Structural Dependence:

Understand how your customers’ businesses
operate.

Determine where they have gaps or inefficiencies
that would enable you to operate portions of
their businesses better, cheaper and with fewer
headaches or risks for your customer.


In Your Box Record Your Answer to:

How can you strengthen this customers’
weak links?


3. Business Dependence:

• ~ The marketing position of the relationship. This
includes the way you help your customer create go-
to-market solutions, grow and retain customers,
and be competitively sound.

• Conduct an analysis and identify opportunities for
building on each other’s strengths and minimizing
each other’s weaknesses.


…3. Business Dependence

i.e. Apple distributed the iPhone through AT&T’s
massive retail network and, in turn, AT&T built its
subscriber base by attracting customers from
competing providers.


In Your Box Record the Answer to:

How can this relationship work both
operationally and financially to build mutual
value?


4. Satisfaction:

~ Customer satisfaction influences loyalty but it
isn’t the only predictor!

• It is usually an indication of how well your
organization performed during a recent event.

• This might include elements of service, support,
delivery, solving a service issue, or executing a
campaign.

… 4. Satisfaction

• Starts with a careful assessment to determine
needs and uncover expectations with regard to
price, impact and level of service.

• Then you must meet or exceed expectations.


… 4. Satisfaction:

• “How” you deliver can be as important as “what”
you deliver.

• Don’t underestimate the impact emotions play in
satisfaction scores.

• Formal surveys and properly designed
questionnaires are a big help.

Harvard Business Review Study…

• On more than 75,000 customers interacting with contact
center reps/self-service channels found that firms
encourage loyalty not by indulging in over-the-top efforts
but “by helping (customers) solve their problems
Quickly and Easily.”

~ Only “Emotionally satisfied customers increased their
spending significantly…”

Source: HBR by Matthew Dixon, Karen freeman, and Nicholas Toran, July/Aug 2010


With a Partner Discuss:

How well has your organization performed for
this customer during a recent event? What can
you do to better uncover their expectations?

(Record answers in your box) 2 min.


5. Performance

• “Not too hot; not too cold – Just right!”

• ~ Refers to how a product or service holds up
against expectations and required industry
standards.

If IKEA Took Over G.M.
Unacceptable “Expectations” for the typical car buyer…


… 5. Performance

• Performance is typically measured over a longer
period of time and with more objective criteria
than the measurement of satisfaction, which is
event-based and emotionally influenced.

• Know what matters and what is expected.

i.e. Don’t assume that a 97% on-time delivery is
acceptable. Your customer might need 98% and
your competition might boast 99%!

In your box, record your answer to:

What performance factor is expected from this
customer?



~ “Show me the money!”

YouTube - JERRY MAGUIRE (Tom Cruise) - SHOW
ME THE MONEY (clean edit)

~Answers the question: “How do we help each
other make more money and stay in business?”



You typically help your customer create value
through one or more of the following 3 ways:

1. Reduce Expenses
2. Avoid Expenses
3. Increase revenue and profit


Your Economic Value Proposition could be worth
“A Million Dollars!”



~ When value is one-sided, loyalty suffers.

i.e. If a customer only buys from you at the lowest
possible price, ties up your support resources, and
pays only after repeated collection calls, then you’ll
come to the conclusion that you can’t afford to
keep them as a customer.


Be their SuperHero By Finding a “Win-Win” Solution and You
will reap the $$$.


Record in your box…

How do your solutions/products create
economic value for your customer?


7. Alignment and Fit

In a buy/sell relationship this includes the
commonality in mission and vision, culture,
collaborative practices, leadership, and
expectations.
The more commonality, the greater the loyalty.
Determine the common characteristics that
predict good and poor fit.
Use your criteria to segment your customers into
those who fit well and those who don’t.

Alignment & Fit


Record in your box…

Think back to the customers who work best
with you. Why do you think this is the case?


Bringing Your Customer Loyalty Program to Life:

• You don’t need to track all seven indicators; a
minimum of five is recommended (only those
applicable to your business).
• Gather insights from multiple contacts in an
account – This will get you the most accurate
measure of loyalty.

Knowledge + Relationships + Economic Value =
Exponential Success


Prioritizing your loyalty-building activity:

Where are you today?
Where do you need to go?
What needs to happen to get you there?


Solutions to Help With Extreme Customer Loyalty

Profiles Loyalty Pro™ (PLP)
Web-based customer loyalty surveying tool.

Loyalty, as determined through the “voice of the
customer”, is a leading indicator that predicts the
“staying power” of an account.

Offers companies a tool to gather ongoing, critical
account intelligence that helps to assess the relationship
between the buyer and the supplier, ultimately driving
the action plan to improve customer service.

Six Crucial Behaviors for Customer-Facing Employees | 38

Profiles Loyalty Pro™ (PLP)

Having insight into your customer’s
perception of your relationship allows you to
steer the strategic business efforts and
initiatives of the account management
teams to continually improve customer
relationships and build a network of loyal
customers.


Do you have the RIGHT PEOPLE on board who will help you
Build Extreme Customer Loyalty??


Solutions to Help You Hire/Develop The Right People…

Profiles Skills Tests:

Consider checking your service people’s abilities to
acquire and/or keep your ‘loyal’customers!

Do they have the characteristics and skills?

Remember:
91% of unhappy customers won’t buy again
from the company that displeased them.

Special Offer For Today’s Attendees:

Free
Customer Service
Online Profiles Skills Test
(Use for New Hires or Existing Staff)

If you’re interested in using it, please give me your business
card and I’ll send you more information and I’ll email the
test invitation to your candidate of choice.



Q&A


Thank You for your Attention!


Profiles International – Who We Are
Profiles International helps organizations worldwide create high-performing workforces.

Through our comprehensive employment assessments and innovative talent management solutions,
our clients gain a competitive advantage by selecting the right people and managing them to their
full potential.

Where We Are
Profiles serves 122 countries
around the globe and has
material in 32 languages.

Contact Us
Profiles International
Rita Schnarr
rita@schnarrassociates.com
604-313-4893

©2009 Profiles International, Inc. All rights reserved. People Practices for Building Extreme Customer Loyalty | 45

7 factors for building extreme customer loyalty rita schnarr ppt

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