In the business world, you always hear people talk about customer loyalty and retention. But if you go beyond the buzzwords, what does it take to make new customers stick with you in the long run?
Before you even start thinking about loyal customers, take a step back and look at your business … If you don’t have an immediate – and firm – answer to these questions, take another step back. Retention strategies are the least of your worries.
Be honest and ask yourself:
Are you a Budget Inn or a five-star hotel?
Are your customers looking for the next bargain or a high-value investment?
Do you offer a stellar customer experience – or are you just another business in an oversaturated market?
I hope you get the idea.
The quality of your service will determine the quality of your customers. And which type of customers do you think will be coming back to your business over and over again?
So, how do you master long-term customer loyalty and retention? Not everyone is going to agree with the customer retention strategies I’m about to share.
“Courtesy treatment will make a customer a walking advertisement.”
James Cash Penney
You’ll typically hear corporate folks go on about things like NPS (Net Promoter Score), CLV (Customer Lifetime Value), complicated loyalty programs and whatnot. But I’m here to cut through the nonsense and tell you like it is.
Some will say the techniques I’m going to cover are unconventional. Excessive. Unreasonable, even.
Good.
My obsession with world-class service has resulted in a massive 10X Community with more repeat customers than I can keep track of.
So, without further ado, here’s how YOU can do it, too – the first two steps.
1. Understand that NOT all customers are equal.
There’s a tremendous difference between prospects and existing customers. In order to provide the highest level of service, you need to understand where the person is in the buying cycle.
Let’s say you have a customer generally researching your brand online. Another expresses interest in a direct message on social media. Then, there’s the one to whom you’re about to deliver your product or service. Do you think the researcher should be treated the same as the sold customer? Of course not. There are different opportunities at each level. And the way you adapt your service to every customer can make or break their loyalty.
2. Don’t fall for the “Low Price Trap.”
This lesson comes from an entrepreneur who took hold of one fourth of the American marketplace at the turn of the century. I’m talking about James Cash Penney, the founder of the department store chain, JCPenney.
Penney began as a partner in two department stores in the late 1800’s. After buying out his partners, he renamed it The Golden Rule Store, which reflected his service-driven policy.
This “golden rule” policy helped him open 893 other stores by the year 1958. The department chain even grew throughout the Great Depression. Old JC built a successful brand on this concept of service and value to customers. But violating their own principles is what caused the later downfall of this retail giant.
The year 2012 was an economic recession for America. Consequently, the company stopped providing service … and started slashing prices. That very year, JCPenney lost one billion dollars. And to this day, stores continue to close across the country.
What’s the big takeaway here?
Service is senior to price. Not low prices – but providing the customized service each customer type needs is key to unlocking their loyalty.
See you next month for the next steps!
