Posts Tagged ‘Loyalty’


Building A Customer Experience that is (and isn’t) “Just Like Home”

About this series: This series of articles from Nextiva will help you grasp of the essentials of customer service: the principles and guidelines that will serve you well in any era, regardless of trends, changing technology, and a constantly evolving customer base. Our guide is Micah Solomon, customer service and customer experience consultant, author, and speaker.

A secret to creating a great customer experience is to get in the homebuilding business.  As in: You’re creating an environment/product/process/service that “feels like home” to your customer.

Now, if you think about it, customers don’t actually want the place they do business with to “be like home”– dirty dishes in the sink, deferred maintenance up the yin yang.  So I use this “home” term advisedly and with some apprehension.  What I mean by “like home” is an experience that is like being a kid in the home of a caring parent: your preferences are attended to (there’s food in the fridge that is to your taste), you’re missed when you leave and sincerely welcomed back when you return, the maintenance is done without you even noticing.  This is what “just like home” means to a customer and what can turn a customer into a loyalist and ambassador for your brand.

There’s a lot involved in creating a true loyalty-building, “homelike” situation for your customers. But I hope the homebuilding metaphor, which is supported by research done at the Ritz-Carlton, will give you a place to start. When you conclude an interaction with your customer, let her know that it matters to you that she come back soon (I’m assuming here that you’re not a surgeon or an undertaker). And when that customer returns to your business after an extended absence, let her know that she’s been missed. And, work on fulfilling, in that great phrase of The Ritz-Carlton, “even the unexpressed wishes” of your customers, as if you know them like they live here.  Customers shouldn’t have to draw you a diagram to get across what they want from you. Figure it out yourself by really getting to know them.  It’ll be worth it.

Technology can make homebuilding easier

Child's house drawing (c) Micah Solomon micah@micahsolomon.com

Child’s house drawing (c) Micah Solomon micah@micahsolomon.com

Technology can make homebuilding and homekeeping simpler and better. For example, custom-tailored, automated anticipatory messaging helps you respond in advance (‘‘pre-spond,’’ I suppose) to customer needs and would have been impossible before the digital communications revolution. Anticipatory design, used so well by companies like Apple and Google, can help simplify your customer’s life. Well-designed ‘‘My 

Account’’ and other self-service technology has made it so that many customers are willing, even eager, to do much of the work for you to keep track of their preferences and other details—information that, in turn, makes anticipatory customer service easier to pull off. Customers will let you know how to improve more directly than before if you keep your ear to today’s available electronic listening channels, thus facilitating a much quicker feedback loop for future anticipatory service.

And, once you delight your customers with anticipatory customer service, they can spread the word much more quickly via social media than was ever possible in the past.

People who help people

But technology is almost never the entire story.  A kid raised by a kiosk would hardly get the warm home feeling I’m aiming for here.  The fact that an actual human cares (mom, or dad, or both) makes all the difference.  In the world of commerce, it’s more or less the same: Automated, fake friendliness will never have the same emotional power for a customer as knowing that she’s coming back to the place where the people themselves care about her and remember her.  Absolutely, those people should be using technology to keep track of credit card numbers so the customer doesn’t have to dig out the card and recite that number a second time.  Absolutely, a business should offer technology that lets the customer update her home address correctly, rather than forcing the customer to laboriously dictate it to a clerk who most likely will mis-enter it.  But the human service provider still needs to care, sincerely and visibly, for the magic to truly work. 


Nextiva Tuesday Tip: Selling to Millennials? You Need a Loyalty Program

Stocksy_txp65da3129op6000_Small_134151If your small business doesn’t have a loyalty program—but does have Millennial customers as part of your target market—you may want to reconsider and add some type of rewards program to your marketing mix. The 2014 Loyalty Report from Bond Brand Loyalty reports that U.S. Millennials (defined as aged 20 to 34) are more likely than other age groups to participate in loyalty programs. What’s more, they’re more likely than other age groups to change their shopping behaviors based on a loyalty program, the study says.

A whopping 60 percent of Millennials would switch brands and two-thirds would change where they buy in order to get more loyalty rewards. In addition, 67 percent contend they wouldn’t be loyal to a company without a good loyalty program.

Consumers overall are enrolled in an average of 10.4 loyalty programs, and are active in about seven of those. While loyalty programs are widespread, consumers are getting slightly more unwilling to share personal information with them. Some 32 percent say they worry about divulging personal information, compared to 29 percent last year.

What works to get customers to spill their data? Offering discounts based on prior purchasing behavior, inviting customers to special events, customizing offers for them and inviting them to online communities for loyalty program members are all effective ways to get users to share their personal data. In addition, users say that when a company’s loyalty program makes them feel valued and important, they’re more likely to share personal information with that business.

However, there are some important differences in what works for Millennials as opposed to other age groups. Millennials are more likely to want to interact with your business on a mobile device. They’re also more likely to care about non-monetary rewards, such as getting recognized by their peers or being able to share their experiences with others.

Craft your loyalty rewards program to appeal to your desired customer base, whether that’s seniors who want plain old punch cards or mobile-loving Millennials who want to track everything on their smartphones. Your efforts will pay off in greater loyalty and higher sales. 


Nextiva Tuesday Tip: 3 Types of Loyalty Programs and How to Make Them Work

Does your small business use a loyalty program to keep customers engaged and spur them to buy? The Boston Consulting Group recently published a report on loyalty programs and what it takes to make them profitable and effective for businesses.

According to BCG, there are three main types of loyalty programs:

  1. Earn-and-Burn. The classic punch-card program (Buy 10, get one free) is an example of earn-and-burn, in which customers benefit from their purchases by earning rewards at specific thresholds. Other types of earn-and-burn loyalty programs include points programs (in which customers earn points they can redeem for free products) and discount programs (in which members get discounts).
  2. Recognition. In a recognition program, repeat customers get special perks or services only for them, based on the total amount they spend or the total number of points they accumulate. Airline rewards points are an example of a recognition program; customers who accumulate a certain number of points earn special perks and upgrades. 
  3. Customer Relationship Management. CRM programs are the most sophisticated type of loyalty program. They typically use loyalty software to capture purchase data, then use that data to develop targeted special offers for loyalty members. Examples include members-only promotions or targeted communications such as newsletters, emails or even website content.

According to BCG, each type of program has its pros and cons. The cost of an earn-and-burn program can eliminate any gains, while recognition programs by their nature limit the number of members, and CRM programs can have both of these flaws.

Ideally, you’ll want to find a loyalty program that enables you to prompt more spending from customers, increasing your margins rather than cutting into them. BCG uses the example of a company with a 35 percent gross profit margin. In this case, a customer who spends $100 annually generates $35 in profit. If the customer joins the loyalty program and increases spending by 10 percent, to $110 annually, the company makes an additional $3.50 in profit. However, the cost of the loyalty program ($3.30) eats up most of that; essentially, the business is breaking even. But if the customer spends 20 percent more, the company makes $7 in profit, or $3.70 minus the cost of the loyalty program. At this point, profit begins to grow rapidly.

According to the study, the most profitable loyalty programs invest more in the customers who spend the most. Typically they do so by using a tiered rewards system: As customers meet increasingly higher thresholds of spending, they qualify for bigger and better rewards.

Ideally, you’ll also want to use rewards that are inexpensive for your business to give, but have high value to the customer. For example, a hotel that has an expensive room sitting unused can score points by upgrading a loyalty customer to that room. It doesn’t cost the hotel anything, but it earns greater loyalty from the customer.

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Work Your Biz Wednesday: How to Provide Outstanding Customer Service

The real secret to keeping customers coming back is to deliver great customer service. Find out how to deliver the "wow" from Small Biz Lady, Melinda Emerson:




 
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