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Editor's Note: CR4 would like to thank Roger Walker of GEA Consulting for contributing this blog entry.
Typically good companies:
- Say that they care about their customers, asking customers their opinion about their direction on current and on new or improved products.
- Conduct customer satisfaction surveys and compile reports on the results.
- Endeavor to resolve customer complaints as quickly and completely as possible.
- Make customer satisfaction is a high priority.
What is wrong with this picture? It appears that you are doing all of the right things to keep your customers satisfied with your products and services.
The fact is that you can achieve 100% customer satisfaction and still have customers defect! The realistic definition of a satisfied customer is one who is satisfied with the product, price and service they receive and who will keep buying from you until something better comes along! All of a sudden, having a satisfied customer doesn't sound as secure as we once thought. What we are really seeking are "loyal" customers.
We can identify loyal customers as those who:
- Prefer to do business with you because of your ability to meet their unique needs better than anyone else and are willing to give you a large share of their business.
- Will give you a chance to correct a mistake because they trust you will do the right thing and they don't want to change from one who is perceived as a partner in their business
- And will actually recommend you to other customers
While the process of developing loyal customers and fully utilizing them as a valuable resource requires a change in perspective and processes, we can summarize the right approach as follows:
- Avoid listening to your customers on your personal radio station W.I.I.F.M. (What's In It For Me) which most companies do. Tune in to the customer's broadcast. Don't look for what you can get out of the relationship; rather learn what is important to them and what would make them very happy with the product, features and services you provide such that they prefer to do business with your company.
- Take time to learn more about your customer's business, their drivers, challenges, etc. so you can better understand why they use your product - for their reasons. Develop a new perspective on their needs so you can identify what you can do differently to improve the value you can deliver.
- Annually validate your relationships with your top customers, those 20% that provide 80% of your business. This goes beyond a satisfaction survey and involves discussing the details of why they do business with you, what they like about doing business with you and what they don't like about doing business with you. Also, take time to find out what they would like to do differently in working with you going forward. Getting the real answers to these questions will take some time and talent, as we have conditioned customers to think of us in the very narrow band of "product supplier" versus a potential partner who can help them resolve persistent problems and/or improve their profitability.
While these steps may sound like an obvious and subtle difference, few companies are able to implement a process to develop "loyal" customers. "People like doing business with people they trust." In addition to the above benefits delivered by loyal customers, they will also bring new opportunities to your firm to help them meet their needs in potentially new areas of business. And what you learn can greatly improve your products and services, create a competitive advantage with them and other customers, and could even foster the development of new, expanded products and services.
In reality, loyal customers are a company's most valuable resource.
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