How Loyal Are Your Customers?
Did you know that even the most satisfied customers can switch to the competition?
In a customer satisfaction study of 10 major industries, an average of 72% of the respondents indicated that they were highly satisfied with the products or services received. Yet 88% said that they were willing to switch providers for any reason. If that startles you, it should!
How do you know which customers are most likely to defect? In his book, The One Number You Need to Grow, Fred Reichheld contends that customer loyalty can be measured by asking customers a single question: How likely would you be to recommend our company to a friend?
Reichheld found that the percentage of customers enthusiastic enough to refer a friend or colleague directly correlates with growth rates among competitors in many industries. Recommendation is one of the strongest signs of loyalty. Customers who make referrals are putting their own reputations on the line. They take this risk only if they are loyal.
Undoubtedly, many of your competitors offer quality products and services with prices and delivery standards that are reasonable or excellent. How can you attract and win new customers while fostering loyalty among your current ones?
All things being equal, customers will go where they consistently feel well treated and appreciated. So be intentional about your communication. Don’t only contact your customers when you want to sell them something. Offer useful tips. Send newsletters, press releases, and case studies, as well as relevant product information and timely incentives.
Although direct mail is often viewed as a way of winning new customers, its effectiveness as a customer loyalty tool should not be overlooked. Set up a series of “nurturing” mailers throughout the year. Implement a continuous client contact program that will demonstrate at regular, pre-planned intervals that you honestly and sincerely care about their well-being.
Communicate, cross-sell, educate, and survey your existing customers, and watch their loyalty grow.