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've posted a few articles on this site, touting the benefits of customer loyalty, and the ways dealerships can use these programs to prompt interaction with their clients.

I was reading this article at CNBC.com, and felt I needed to share this. Here are a few ways you can damage your relationship with your loyal customers.  (I did not write this, Carol Roth of CNBC.com did.)

-----

3 Ways To Get Customer Loyalty Wrong

Guest columnist Carol Roth explains three things business owners might overlook when they are trying to build customer loyalty.

Customer loyalty is a topic that is more important than ever, as technology has created more consumer fragmentation, as well as creating message and brand overwhelm.

While it’s a critical strategic endeavor for every company, even some of the largest brands in the world make significant customer loyalty mistakes. As a small business, you may have even more at stake.

Here are three key ways that companies get their customer loyalty efforts backwards.

Not Respecting Your Existing Customer: As a company or brand, your existing customers are your most valuable asset. However, in the quest for business growth, many businesses are so focused on new customers that they often forget how important their existing customers are to their business. This means that you should never offer a mass-marketed special to new customers that existing customers don’t have access to (think the cable companies who offer great rates if you switch, but won’t honor them if you are already a subscriber).

This has become more pervasive of an issue with social media, as agencies that are paid to create a Facebook or other social media campaign are often not focused on the bigger picture of customer loyalty. This means that certain campaigns meant to get more “likes” or “followers” make existing customers jump through hoops to get benefits or even to purchase products, ignoring the pre-existing relationship with the customer. When we design customer loyalty programs for clients at my firm Intercap, we always place a tremendous value on existing customer relationships and work any social media and other tactics around that.

Focus instead on getting the most from your existing raving fans. This could include selling more products or services to meet their needs, giving them a perk for introducing a new customer or giving them exclusive access to products or services before you make them available to the masses.

Rewarding Spenders but Not Senders: Another way that companies miss the mark on customer loyalty is by designing programs and strategies that reward spenders, but not senders. Spenders — those who spend a large amount of money with the company directly — are obviously valuable and programs that grant rewards by the amount that a customer spends are fairly easy to implement. But that misses the value of another critical segment of your customer base, which is the senders, otherwise known as influencers and mavens who are raving fans and let others know about your brand. They may not spend as much money directly, but indirectly, they are critical customers that spread the word to other customers. This means that in the aggregate, a sender may be just as valuable as a spender, if not more so. Understanding who these senders are and finding ways to reward them is critical to a strong loyalty effort, particularly given the amplifying effects of social media.

Creating a Loyalty Program vs. Brand Loyalty: Whether it’s a formal program (like get one point per dollar spent) or a singular campaign (buy two and get the third free on a specific item), many customer loyalty strategies and tactics forget to focus on linking loyalty to the brand or company in question. When you forget to do that, you end up creating loyalty to a program, which is effectively the same as competing on price. If your loyalty driver is a rewards program, you are vulnerable to customers switching if another competitor offers a superior program. For example, if you offer buy 9 and get the 10th free and another competitor offers buy 7 and get the 8th free, you aren’t creating true loyalty to your company and risk customers fleeing to get the better discount.

Remember that true loyalty comes from customers feeling that you care about them or that they were treated like a king or queen when dealing with you.

Carol Roth is a business strategist and a  New York Times bestselling author of"The Entrepreneur Equation."

-----

So, what do you think? Have you done any of these things at your dealership? What are you doing to avoid these potential relationship barriers? Let me know in the comments.

Will Michaelson

Sales Associate

Re:member group

Phone: 952.224.8002

I've posted a few articles on this site, touting the benefits of customer loyalty, and the ways dealerships can use these programs to prompt interaction with their clients.

I was reading this article at CNBC.com, and felt I needed to share this. Here are a few ways you can damage your relationship with your loyal customers.  (I did not write this, Carol Roth of CNBC.com did.)

-----

3 Ways To Get Customer Loyalty Wrong

Guest columnist Carol Roth explains three things business owners might overlook when they are trying to build customer loyalty.

Customer loyalty is a topic that is more important than ever, as technology has created more consumer fragmentation, as well as creating message and brand overwhelm.

While it’s a critical strategic endeavor for every company, even some of the largest brands in the world make significant customer loyalty mistakes. As a small business, you may have even more at stake.

Here are three key ways that companies get their customer loyalty efforts backwards.

Not Respecting Your Existing Customer: As a company or brand, your existing customers are your most valuable asset. However, in the quest for business growth, many businesses are so focused on new customers that they often forget how important their existing customers are to their business. This means that you should never offer a mass-marketed special to new customers that existing customers don’t have access to (think the cable companies who offer great rates if you switch, but won’t honor them if you are already a subscriber).

This has become more pervasive of an issue with social media, as agencies that are paid to create a Facebook or other social media campaign are often not focused on the bigger picture of customer loyalty. This means that certain campaigns meant to get more “likes” or “followers” make existing customers jump through hoops to get benefits or even to purchase products, ignoring the pre-existing relationship with the customer. When we design customer loyalty programs for clients at my firm Intercap, we always place a tremendous value on existing customer relationships and work any social media and other tactics around that.

Focus instead on getting the most from your existing raving fans. This could include selling more products or services to meet their needs, giving them a perk for introducing a new customer or giving them exclusive access to products or services before you make them available to the masses.

Rewarding Spenders but Not Senders: Another way that companies miss the mark on customer loyalty is by designing programs and strategies that reward spenders, but not senders. Spenders — those who spend a large amount of money with the company directly — are obviously valuable and programs that grant rewards by the amount that a customer spends are fairly easy to implement. But that misses the value of another critical segment of your customer base, which is the senders, otherwise known as influencers and mavens who are raving fans and let others know about your brand. They may not spend as much money directly, but indirectly, they are critical customers that spread the word to other customers. This means that in the aggregate, a sender may be just as valuable as a spender, if not more so. Understanding who these senders are and finding ways to reward them is critical to a strong loyalty effort, particularly given the amplifying effects of social media.

Creating a Loyalty Program vs. Brand Loyalty: Whether it’s a formal program (like get one point per dollar spent) or a singular campaign (buy two and get the third free on a specific item), many customer loyalty strategies and tactics forget to focus on linking loyalty to the brand or company in question. When you forget to do that, you end up creating loyalty to a program, which is effectively the same as competing on price. If your loyalty driver is a rewards program, you are vulnerable to customers switching if another competitor offers a superior program. For example, if you offer buy 9 and get the 10th free and another competitor offers buy 7 and get the 8th free, you aren’t creating true loyalty to your company and risk customers fleeing to get the better discount.

Remember that true loyalty comes from customers feeling that you care about them or that they were treated like a king or queen when dealing with you.

Carol Roth is a business strategist and a  New York Times bestselling author of"The Entrepreneur Equation."

-----

So, what do you think? Have you done any of these things at your dealership? What are you doing to avoid these potential relationship barriers? Let me know in the comments.

Will Michaelson

Sales Associate

Re:member group

Phone: 952.224.8002

Good morning,

I wanted to share an article written by Paul Long, explaining the way companies can express their appreciation to their customers, and how inexpensive it can be. Take a look, and see how you can thank your loyal customers in an easy and effective way.

----

‘Putting a Lid on Loyalty – Little Things Can Mean a Lot’

Since we are in the business of loyalty marketing – and indeed it is our only business – we are constantly on the lookout for best practices and case studies about how businesses or organizations are rewarding their customers and how the business in turn earns its own reward.

We recently came across a post dated January 9 on a blogsite called B-A-M, a.k.a. Bust a Myth: Delivering Customer Service in a Self-Service World.

A woman by the name of Mary Jane Grinstead writes about her husband, a lifelong Chicago Cubs baseball fan, and more to the point, a Cubs season ticket holder for the past couple of decades.

Since a new Cubs ownership group paid over $800 million for the privilege of buying the team last fall, they raised ticket prices to raise revenue.

We’ll let Mary Jane pick up the slightly edited story from there as she describes the reaction of her husband, Phil, upon opening a package from the Cubs front office.

“Last week, a UPS box from the Cubs showed up at our front door. The box contained a baseball cap.  I figured the Cubs had sent one more. Then I heard a ‘Wow, this is pretty cool.’ Phil was standing in his office, turning yet another Cubs blue baseball cap over in his hands with this goofy grin on his face. ‘Check this out,’ he said. Stitched on the back of the baseball cap that those lovable losers sent was the following:  "Season Ticket Holders, 20+ Years".

It was a little thing, and yet it was huge. As the new owners of the Cubs seem to know, a little appreciation goes a long way.”

So, what is the moral of this story? That you should go out and get baseball hats with the number of years someone has been a loyal customer or the number of vehicles they have purchased?

No. The point is that someone who is spending literally thousands of dollars on an organization’s product, was thrilled when the organization recognized the customer’s loyalty and rewarded it with something that had an actual value of $2.13 (or $4.40 embroidered).

We opine that the perceived value of that cap on the part of the guy who received it literally is priceless. He just wanted to be loved – and appreciated! Same as your customers.

If you would like to learn more about how to love and reward your customers, contact us today.

Regards,

Paul Long
President
re:member group
----

What’s your best story of a business showing them you care? Have you given your customers personal care by letting them know they’re appreciated? Let me know in a comment below.

Will

Will Michaelson

Sales Associate

Re:member group

Phone: 952.224.8002

Email: will@remembergroup.com

www.remembergroup.com

Good morning,

I wanted to share an article written by Paul Long, explaining the way companies can express their appreciation to their customers, and how inexpensive it can be. Take a look, and see how you can thank your loyal customers in an easy and effective way.

----

‘Putting a Lid on Loyalty – Little Things Can Mean a Lot’

Since we are in the business of loyalty marketing – and indeed it is our only business – we are constantly on the lookout for best practices and case studies about how businesses or organizations are rewarding their customers and how the business in turn earns its own reward.

We recently came across a post dated January 9 on a blogsite called B-A-M, a.k.a. Bust a Myth: Delivering Customer Service in a Self-Service World.

A woman by the name of Mary Jane Grinstead writes about her husband, a lifelong Chicago Cubs baseball fan, and more to the point, a Cubs season ticket holder for the past couple of decades.

Since a new Cubs ownership group paid over $800 million for the privilege of buying the team last fall, they raised ticket prices to raise revenue.

We’ll let Mary Jane pick up the slightly edited story from there as she describes the reaction of her husband, Phil, upon opening a package from the Cubs front office.

“Last week, a UPS box from the Cubs showed up at our front door. The box contained a baseball cap.  I figured the Cubs had sent one more. Then I heard a ‘Wow, this is pretty cool.’ Phil was standing in his office, turning yet another Cubs blue baseball cap over in his hands with this goofy grin on his face. ‘Check this out,’ he said. Stitched on the back of the baseball cap that those lovable losers sent was the following:  "Season Ticket Holders, 20+ Years".

It was a little thing, and yet it was huge. As the new owners of the Cubs seem to know, a little appreciation goes a long way.”

So, what is the moral of this story? That you should go out and get baseball hats with the number of years someone has been a loyal customer or the number of vehicles they have purchased?

No. The point is that someone who is spending literally thousands of dollars on an organization’s product, was thrilled when the organization recognized the customer’s loyalty and rewarded it with something that had an actual value of $2.13 (or $4.40 embroidered).

We opine that the perceived value of that cap on the part of the guy who received it literally is priceless. He just wanted to be loved – and appreciated! Same as your customers.

If you would like to learn more about how to love and reward your customers, contact us today.

Regards,

Paul Long
President
re:member group
----

What’s your best story of a business showing them you care? Have you given your customers personal care by letting them know they’re appreciated? Let me know in a comment below.

Will

Will Michaelson

Sales Associate

Re:member group

Phone: 952.224.8002

Email: will@remembergroup.com

www.remembergroup.com