What is customer loyalty? How do you generate and maintain it? And – for a sales professional, why is it important to focus on customer loyalty when there are so many other pressing priorities to address in the process of closing sales?
Let’s first define what customer loyalty is, and then we’ll discuss how and why it should be developed. Customer loyalty is one of those topics that often goes into the category of “I can’t describe it, but I know it when I see it.” The good news, however, is that customer loyalty can be quite clearly defined.
Customer loyalty is the sustained, demonstrated commitment that customers have to your brand, expressed through both commercial and non-commercial actions. A commercial action might include returning to your company for repeat purchases. A non-commercial action may be promoting your brand on social media, or sharing a positive review on Yelp.
Why is customer loyalty important? The answer is that, in most cases, customer loyalty is the best way to build future business. This is true first and foremost because securing a repeat purchase from an existing customer is far easier and less expensive than securing that same purchase from a new customer. And it is also true because loyal customers provide the necessary independent validation of your brand to convert future prospects into customers as well.
Customer loyalty can be developed and leveraged in many ways, and the good news is that the stronger your efforts are to build it, the easier your efforts will be to leverage it. For example, for many years the former Saturn Motors Corporation maintained an active owner’s club. While many car companies have owner’s clubs, they are traditionally exclusive to high-end sports cars and other performance vehicle lines.
The idea of a compact ‘average person’s car’ having a loyal and active owner’s club seemed, at first, a bit silly. To overcome this challenge, Saturn provided club members with the opportunity to come for an annual pilgrimage to the company’s manufacturing plant, where they would meet with production line personnel, join in a company-wide barbeque and meet fellow Saturn owners. As a result of these efforts, Saturn developed and sustained one of the most successful customer loyalty track records of any auto company for many years.
In a similar vein, an enterprise software company that sells manufacturing control systems decided to use its quarterly customer/user conferences as opportunities to interview customers on video about their experiences, and encouraged customers to lead sessions (rather than just company employees). By turning the events into peer-to-peer events in which customers engaged with other customers, the company was able to create a level of brand presence that was unprecedented in its industry.
As a result, new prospects were already halfway to being sold on the software because they had already heard success stories by, about and from their peers. The truth is, the company’s top competitor probably had just as many satisfied customers – but no one knew about it, so it didn’t matter.
The other powerful thing about customer loyalty is that it enables you to focus on values alignment between your company and your customers. For example, Saturn customers generally held values that included (a) driving a reliable, practical vehicle with a solid safety reputation, (b) purchasing through a ‘no-haggle’ buying experience and (c) supporting American jobs. Saturn delivered with a highly reliable product, sold through a fixed-price dealership model, and made exclusively at a U.S. factory located in Tennessee.
Values alignment is a critical component in values-based customer loyalty strategy because it clearly defines the values your business is bringing to the market, and therefore, what kinds of customers are going to most clearly appreciate and benefit from your efforts to implement those values.
Another key to values-based customer loyalty is to focus on it equally in the pre-sale process as in the post-sale experience. Remember that how customers experience your business before they buy from you is a critical factor in whether or not they choose your products or services, regardless of the technical ‘fit’ that may be present.
Therefore, a values-based sales organization trains its front-line team members to clearly articulate the company’s values (both ethical and practical) early on in the sales cycle, and emphasize consistency in applying those values across the process. This sends a message that your company follows through on its promises.
The final key is to engage loyal customers, both directly and indirectly, in the sales process. Direct involvement may mean literally introducing current customers to future prospects. Indirect means may include sharing customer case stories, testimonials, online reviews, video interviews and more.
Fundamental throughout the process is to recognize that this is a cyclical process, not a linear one. The satisfied customer becomes your most powerful resource in securing future business, which in turn should lead to the creation of more satisfied customers.
The one essential point hidden in that statement is that your company needs to be able to satisfy new customers to the same level that it has satisfied past ones. If you manage a physician practice that promises same-day appointments to patients, that may be a promise you were able to deliver early on in the history of the practice – but you need to invest in keeping that promise even more so in the future as you reach critical growth milestones.
Stay focused on your core values, continue to seek customers who share the same values alignment with your business, and make sure you nurture existing customers to engage and deepen their loyalty so that they, in turn, can help your business grow.