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Loyalty

What should come first: customer loyalty – or staff loyalty?

Customer loyalty has become the holy grail of all retailers and manufacturers.

It’s always been the case that it’s easier to sell to an existing customer than create a new customer, whatever sector you’re in, so keeping customers loyal is a lot more cost effective than going after new blood. Indeed, according to the US White House Office of Consumer Affairs: “On average, loyal customers are worth up to ten times as much as their first purchase.” OK, so that’s an American statistic, but it’s pretty likely to reflect the state of affairs in the UK.

But keeping those existing customers loyal isn’t easy, because your competitors are now just one click away. Your loyal (should that be ‘once loyal’?) customers don’t even need to leave their armchairs to check out what your competition is up to. They can surf the ’net to see what other automotive companies are offering, whether that’s new cars, used cars, MOTs or services. They can even use the web to check out how your own business is doing.

So just how do you create the situation where a customer is so loyal to you, your company, your products and your brand that you would have to be positively rude to them to make them defect?

One thing in your favour is that, despite this easy access to info, research shows that customers are ready and willing to stop dating around and stick with companies who go above and beyond to create a fantastic customer experience. In the automotive sector in particular, a large percentage of customers like to stick to the brands they know, which also helps.

So you start by making customer loyalty the absolute primary focus. In fact, your customer loyalty plan is your new marketing plan. Provide the best experience possible and treat your customers so well that loyalty is a given.

But how do you know you are providing a great experience? The answer is to measure customer satisfaction. Whatever tools you use - be it net promotor score or mystery shopping, or telephone follow calls to customers – you have to measure and score. That way, you can make improvements and give customers the experience they want, to encourage their loyalty.

What are the key areas to focus on above all else? John Spence in his book Awesomely Simple, which includes a chapter on what he calls Extreme Customer Focus, identifies five key drivers of customer loyalty:

  1. Owning the ‘voice’ of the customer – watch, listen and learn from feedback and from conversations with customers and adapt your business to suit
  2. Manage the TCE, or Total Customer Experience - look at every aspect of the shopping, purchasing and owning experience and develop ways to make it simple, flawless and enjoyable
  3. Plan for success and consistently deliver a ‘wow’ experience for every customer, every time – look at retailers and companies that you are loyal to and understand where they are winning. Regular communication, amazing knowledge of who you are and what you have purchased and slick delivery, as well as the ability to put things right that have not quite worked as planned, will stand out
  4. Hire right – your whole plan lives and breathes with your people. Hire people with the right attitude, people who actually enjoy people and would go out of their way to get it right for customers, because they want to. A big part of their training is creating a very clear, specific customer service credo that will guide the behaviour of your employees whenever they interact with a customer.
  5. Culture = Cash – invest in your people. The number one factor in highly engaged, loyal and satisfied customers is to have highly engaged, satisfied and loyal employees.

Get those five points right, and you could keep your customers for life.

How the right staff can boost customer loyalty

We can all too easily identify people who have destroyed any chance of loyalty in our own purchase experiences, so as learning and development experts we bang the drum for hiring the right people and investing in their development, with a particular focus on what will be the major part of the employment pool in years to come, that is a millennial generation.

Research from PwC shows that millennials are not that different in their aspirations to the older generations. Yes, they are certainly more social media savvy but they are asking not just for a better life balance but a sense of mission in their work and greater support in learning and developing different skills and knowledge. Traditional training programmes are not cutting the ice with this generation so support them in the best way for them; consider mixing up the learning approach – design a mentoring scheme, put resources and video examples on app or arrange one-hour ‘rapid learn’ sessions.

Loyalty and attention paid to your staff will pay dividends in them being able to deliver outstanding experiences to their customers - and ‘at home’ is where loyalty begins.

How easy it is to get it wrong

A colleague of mine recently bought a new car. It was her first new car for ten years and she chose a different brand. She chose not to return to her previous brand almost solely because of the poor customer experience she’d had at the dealership.

But having chosen a different manufacturer, was her experience any better? The answer: a little, but not much. The staff were nice, they made a good cup of coffee, but since the day she drove off with her shiny new vehicle she’s not heard a peep, and this even though the salesman made a point of saying how he always follows up with new customers to see how they are getting on. In fact, she now feels a little neglected – he hasn’t emailed, he hasn’t phoned, does he not appreciate her as much as other customers?

Interestingly, she’s yet to receive the promised “how did we do” survey that was due to be emailed. Possibly just as well, because while she loves the car she’s very lukewarm about the retailer.

So what were the classic mistakes made here?

  1. The retailer failed to provide a great experience
  2. The retailer didn’t deliver on promises
  3. The retailer failed to measure the customer experience

It wouldn’t have taken much to make this average experience into a great experience. An average experience isn’t likely to engender customer loyalty – a great experience will.

ABOUT MALCOLM MILLER

Malcolm is RTS Group’s Managing Director so he oversees everything in the company and spends a large proportion of his time on new business development. He joined us initially as an associate, setting up the Mazda Academy, and became MD in 2013. He is a Fellow of the Institute of the Motor Industry.

Malcolm’s background is as a freelance trainer, largely in the automotive sector but also within the finance industry. His first ever job was as a paperboy – he delivered 40 papers a day from 6am, and was paid double on a Sunday because of the weight he had to carry!

He admits he has a somewhat untidy desk and should probably get the coffees in a bit more often, but his good humour and go-getting approach means the team let him off. In his spare time, Malcolm is a rugby referee travelling across the south of England, and he has three grown-up children. Malcolm describes himself as “curious” which makes him the perfect person to explore new opportunities for RTS Group.