Building customer loyalty comes down to one thing: Delighting customers. As I discussed in my last blog, we begin to delight customers by The Golden Rule: treat others the way you want to be treated.

At the re:member group, we know that a systematic approach to building customer loyalty works. Our Dealership programs yield an increase of service revenue by as much as 39 percent among Members and have increased sales by 7.5 percent. But I’ll be the first to admit that our Loyalty Marketing Solutions are simply a tool, and successful only in companies that are dedicated to building customer loyalty by treating customers the way they want to be treated.

This starts with hiring the right people. This is so important, it bears repeating: If you want to build customer loyalty, hire the right people. Your staff has the power to earn the enthusiastic loyalty of your customers by creating economically rational ways to delight them. Delighting customers means putting kindness and intelligence into action. Quite often, a customer is delighted by something small that doesn’t cost a great deal of money—for example Bonus Points, or a spontaneous offer to wash the customer’s car or print discount coupons to the restaurant down the street.

You can’t script or incentivize employees to delight customers, however. Doing so makes the gesture mechanical, and defeats its purpose. At the same time, scripting or incentivizing shouldn’t be necessary if you have the right people. If you have hired the right people, they come to work motivated to delight customers. In short, you don’t need to pay them extra to delight a customer, because they already see it as part of their job.

One sales person we know is stuck in the sixties, still using expressions like “right on” and “groovy.” But he makes such an impression on his customers, they write him notes telling him they love their “groovy new car.”

Let’s face it. Companies aren’t equipped to train core values. Our parents either did, or didn’t, do that a long time ago. Companies are equipped to hire the right people, though—those that have an inner desire to delight customers. Companies are also equipped to give these people the opportunity to do it.

What are you doing to delight customers? If you’re an employer, are you hiring the right people? If you’re an employee, are you enriching the lives of your customers, and those you work for?

Building customer loyalty comes down to one thing: Delighting customers. As I discussed in my last blog, we begin to delight customers by The Golden Rule: treat others the way you want to be treated.

At the re:member group, we know that a systematic approach to building customer loyalty works. Our Dealership programs yield an increase of service revenue by as much as 39 percent among Members and have increased sales by 7.5 percent. But I’ll be the first to admit that our Loyalty Marketing Solutions are simply a tool, and successful only in companies that are dedicated to building customer loyalty by treating customers the way they want to be treated.

This starts with hiring the right people. This is so important, it bears repeating: If you want to build customer loyalty, hire the right people. Your staff has the power to earn the enthusiastic loyalty of your customers by creating economically rational ways to delight them. Delighting customers means putting kindness and intelligence into action. Quite often, a customer is delighted by something small that doesn’t cost a great deal of money—for example Bonus Points, or a spontaneous offer to wash the customer’s car or print discount coupons to the restaurant down the street.

You can’t script or incentivize employees to delight customers, however. Doing so makes the gesture mechanical, and defeats its purpose. At the same time, scripting or incentivizing shouldn’t be necessary if you have the right people. If you have hired the right people, they come to work motivated to delight customers. In short, you don’t need to pay them extra to delight a customer, because they already see it as part of their job.

One sales person we know is stuck in the sixties, still using expressions like “right on” and “groovy.” But he makes such an impression on his customers, they write him notes telling him they love their “groovy new car.”

Let’s face it. Companies aren’t equipped to train core values. Our parents either did, or didn’t, do that a long time ago. Companies are equipped to hire the right people, though—those that have an inner desire to delight customers. Companies are also equipped to give these people the opportunity to do it.

What are you doing to delight customers? If you’re an employer, are you hiring the right people? If you’re an employee, are you enriching the lives of your customers, and those you work for?

If you are asking whether customers are satisfied with your service—you’re asking the wrong question.  If you are measuring and trying to increase your customer satisfaction—you’re measuring the wrong thing. Eighty percent of satisfied customers will still shop around to your competitors.  So don’t grow your number of satisfied customers. Grow your fan base.

Measuring your fan base is quite easy, and is determined by asking one simple question: “How likely is it that you would recommend this company to a friend or colleague?” This one question, when measured properly, offers a more accurate way of gauging customers’ real loyalty to a company, instead of mere satisfaction in the services it provides. Because really, what is the ultimate act of loyalty, but to place one’s reputation on the line and recommend a company to someone else?

Now that you’ve got the question, ask it of all your customers, every time they do business with you. Determine a simple, unambiguous scale so that managers can make customer loyalty a strategic goal.  Below is a scale developed by Fred Reichheld, author of numerous books on customer loyalty:

According to Reichheld, “clustering customers into three categories—promoters, passively satisfied, and detractors (as noted above)—[provides] the simplest, most intuitive and best predictor of customer behavior; it also [makes] sense to frontline managers, who can relate to the goal of increasing the number of net promoters and reducing the number of detractors more readily than increasing the mean of their satisfaction index by one standard deviation.”

The real number you want to grow, however, is your Net Promoter Index. This is calculated by taking the percentage of your “Promoters”, and subtracting the number of “Detractors.”  For example, let’s say you surveyed 100 people. Forty answered the question above with a 9 or 10, thirty answered with a 7 or 8, and 30 answered with 1 through 6.  Here’s how you calculate your Net Promoter Index:

Don’t be surprised if your score is lower than you expect. The median score for companies is just 16%.  The point is that now you have a baseline to improve your score. Start thinking of ways to foster fans of your organization, and implement with your staff and through your organization. Don’t forget to promote your organization, so your fans know how to promote you too.

If you are asking whether customers are satisfied with your service—you’re asking the wrong question.  If you are measuring and trying to increase your customer satisfaction—you’re measuring the wrong thing. Eighty percent of satisfied customers will still shop around to your competitors.  So don’t grow your number of satisfied customers. Grow your fan base.

Measuring your fan base is quite easy, and is determined by asking one simple question: “How likely is it that you would recommend this company to a friend or colleague?” This one question, when measured properly, offers a more accurate way of gauging customers’ real loyalty to a company, instead of mere satisfaction in the services it provides. Because really, what is the ultimate act of loyalty, but to place one’s reputation on the line and recommend a company to someone else?

Now that you’ve got the question, ask it of all your customers, every time they do business with you. Determine a simple, unambiguous scale so that managers can make customer loyalty a strategic goal.  Below is a scale developed by Fred Reichheld, author of numerous books on customer loyalty:

According to Reichheld, “clustering customers into three categories—promoters, passively satisfied, and detractors (as noted above)—[provides] the simplest, most intuitive and best predictor of customer behavior; it also [makes] sense to frontline managers, who can relate to the goal of increasing the number of net promoters and reducing the number of detractors more readily than increasing the mean of their satisfaction index by one standard deviation.”

The real number you want to grow, however, is your Net Promoter Index. This is calculated by taking the percentage of your “Promoters”, and subtracting the number of “Detractors.”  For example, let’s say you surveyed 100 people. Forty answered the question above with a 9 or 10, thirty answered with a 7 or 8, and 30 answered with 1 through 6.  Here’s how you calculate your Net Promoter Index:

Don’t be surprised if your score is lower than you expect. The median score for companies is just 16%.  The point is that now you have a baseline to improve your score. Start thinking of ways to foster fans of your organization, and implement with your staff and through your organization. Don’t forget to promote your organization, so your fans know how to promote you too.

I have another article I wanted to share today. It’s all about making sure your customers are coming back to your dealership after the initial sale. Oftentimes, customers will make a purchase, and you won’t see them again for a while, if not ever again.

“Customers really don’t become customers until they have bought from you at least twice. The first time they buy, they are merely visitors looking for the value in what you offer.”

One of our current clients, Frank Leta in St. Louis, understands those words. They have been very successful and very deliberate when it comes to attracting – and retaining – customers. Check out a commercial spot to see one of the reasons why (which happens to be a program we built and manage for them). 

If you spend thousands of dollars to get new customers in the door, they likely won’t come back if you don’t wow them or reward them. You have to supply the “wow,” but we can help with the rewards.

Think about it. One-time-only customers are the most unprofitable – and expensive – you will ever have. Whether someone buys one car from you, or half a dozen, your initial marketing investment is roughly the same. The only thing that changes over time is your Return on Investment.

The Proof Is In the Pizza

A couple of years ago a national pizza chain began to gather insight to identify customer behavior patterns in the wake of a system-wide sales decline, and decided to launch a loyalty program. The result? A 65-percent increase in sales company-wide. Read more.

Even the world’s largest pizza purveyor, with an astounding 48% market share and millions to spend on marketing, realizes that sometimes it takes something more than just another ad or marketing message.

Obviously the price point of a new vehicle is exponentially higher than a pizza, but there are still some takeaways.

What's Your Story?

We’d love to hear some case studies or best practices for you. Contact us and we can continue the conversation.

Until then, here are a few numbers for you:

-It’s 7-10 times more expensive to acquire new customers than it is to keep existing customers coming back.

-Over 75% of consumers have at least one loyalty card.

-Repeat customers spend 33% more than new customers.

-Having an up-to-date and working customer database can double the value of your business.

-60% of consumers in a recent national survey say they “try to avoid advertising”

-Shoppers are spoiled. They have to come and ask “If I give you my business, what will you give me in return?”

-Studies show that customers who belong to a loyalty program visit twice as often and spend 4 times more than those who don’t.

If you would like to hear more, please  contact us today.

Sincerely,
 
Paul Long
President
re:member group

What success have you seen in getting your customers back into your dealership? Let me know in the comments, and tell me what you think you could be doing to improve your customer retention rate.

I have another article I wanted to share today. It’s all about making sure your customers are coming back to your dealership after the initial sale. Oftentimes, customers will make a purchase, and you won’t see them again for a while, if not ever again.

“Customers really don’t become customers until they have bought from you at least twice. The first time they buy, they are merely visitors looking for the value in what you offer.”

One of our current clients, Frank Leta in St. Louis, understands those words. They have been very successful and very deliberate when it comes to attracting – and retaining – customers. Check out a commercial spot to see one of the reasons why (which happens to be a program we built and manage for them). 

If you spend thousands of dollars to get new customers in the door, they likely won’t come back if you don’t wow them or reward them. You have to supply the “wow,” but we can help with the rewards.

Think about it. One-time-only customers are the most unprofitable – and expensive – you will ever have. Whether someone buys one car from you, or half a dozen, your initial marketing investment is roughly the same. The only thing that changes over time is your Return on Investment.

The Proof Is In the Pizza

A couple of years ago a national pizza chain began to gather insight to identify customer behavior patterns in the wake of a system-wide sales decline, and decided to launch a loyalty program. The result? A 65-percent increase in sales company-wide. Read more.

Even the world’s largest pizza purveyor, with an astounding 48% market share and millions to spend on marketing, realizes that sometimes it takes something more than just another ad or marketing message.

Obviously the price point of a new vehicle is exponentially higher than a pizza, but there are still some takeaways.

What's Your Story?

We’d love to hear some case studies or best practices for you. Contact us and we can continue the conversation.

Until then, here are a few numbers for you:

-It’s 7-10 times more expensive to acquire new customers than it is to keep existing customers coming back.

-Over 75% of consumers have at least one loyalty card.

-Repeat customers spend 33% more than new customers.

-Having an up-to-date and working customer database can double the value of your business.

-60% of consumers in a recent national survey say they “try to avoid advertising”

-Shoppers are spoiled. They have to come and ask “If I give you my business, what will you give me in return?”

-Studies show that customers who belong to a loyalty program visit twice as often and spend 4 times more than those who don’t.

If you would like to hear more, please  contact us today.

Sincerely,
 
Paul Long
President
re:member group

What success have you seen in getting your customers back into your dealership? Let me know in the comments, and tell me what you think you could be doing to improve your customer retention rate.