Building customer loyalty

All business owners, executive officers and career-oriented managers recognize that the most important survival tool is building and maintaining customer loyalty. It is the lifeblood of the business because irrespective of competitor advertising, promotions and price cuts, repeat customers keep the business in the black. There are four important cornerstones guiding the drive to build a solid customer base:

1. It costs five times as much to win a new customer as retain an existing one.

2. A 5 percent improvement in customer loyalty leads to more than 25 percent in profit improvements.

3. Satisfied customers help build the business through positive referrals.

4. Loyal customers are less price sensitive, more understanding if prices must rise and easier to interest in a new product or service.

To put it another way, it is all about building trust. That is not always easy to do. Here are some guidelines for creating a wider and more loyal customer base while retaining your present clientele through trust and consistency:

--Create, deliver and communicate your inspirational trust story. Answer the question most people never ask directly: Why should I trust you? Be specific. Include the information in your brochures and on your website. Be results-oriented. Above all, avoid promising what you may not be able to deliver.

--Remember that a business deals with individuals. Avoid turning people off with the electronic barriers of robot messages, endless menus and deadly wait times punctuated by the recorded voice that keeps saying "your business is important to us" while communicating the message that as a person you aren't.

--Be reliable. Recognize that your word is all you have. Avoid making promises you can't or don't intend to keep. Once lost, trust is almost impossible to regain.

--Learn to really listen to your customers and clients. It is about them, not you. If you are all caught up in your personal story and problems or go on and on with an unwanted sales pitch, they may appear to listen and even be compassionate. But you have given your customer a window into your business they don't need and information that at best adds little or no value to your product or service and at most turns people away.

--Be especially careful about your passions, whatever they are. Don't get caught up in this age of us or them politics, insult humor, me-first web posting or useless twitter. Why take the chance of offending the customer you really don't know that well with a rant about your political beliefs? The offended customer will not likely recommend your business to others even though you provide valuable services or products and may also think seriously about whether they wish to continue doing business with you. It is unlikely you have a total corner on the market the risk is too great to chance it.

--Carefully train all the employees who work for you to be cognizant of all of these guidelines. There are few business owners who can afford to drive customers away--employees become the representative voice of the entrepreneur/owner.

--Figure out in advance how to handle problems. Can the first person the customer speaks to put the problem to rest? The customer is looking for a solution, not the front-line employee who can only say, "I don't know," or "So-and-so will be back at ..." or, even worse, the impersonal statement that "Company policy/the computer/the system won't let us do that." Complaints need to be dealt with professionally. Most of the time there is a solid reason someone is unhappy, and the issue may reveal something the business needs to change. Make sure everyone who deals with people understands that the object of the interchange is not to win the argument and lose the customer.

--Avoid rushing into web tools including blogs, Twitter, Facebook, LinkedIn, and other types of shortcut communication methods and social media. Just as in personal conversation, avoid trying to engage customers without thinking through and establishing sound policies that are fully in compliance with state and federal laws and sound human resource practices. A good starting point: No one should send a message or make a posting without first writing it out, thinking it through from the perspective of the customer and completing a thorough audit and edit. Once out there, it is a permanent representative.

As the London tube (subway) signs say, "Mind the Gap." In the beginning, you may have paid a lot of attention to what your customers needed. Are you now just addressing a group as a place to unload inventory, fill up your needed time slots, or are you continuing to cultivate the customer? The successful business owner recognizes that customer cultivation is an ongoing process.

Dorothy Perrin Moore, Ph.D., is professor emerita of business and entrepreneurship at The Citadel.

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