Keeping customers happy and preventing them from being lured away by your competitors is a key strategy to having a stable customer base and healthy revenues. Part of a successful customer retention strategy is ensuring that customers know that they are valued and not viewed as a commodity that you can replenish as needed.

And when it comes to making your customers feel valued, a simple message of ‘Thanks for your business!’ does the job perfectly. Have you ever been on an American Airlines flight when they say “We know you have other choices and we appreciate that you chose to fly with us…”. I know it’s a script that the flight attendants are given, but obviously, it had an impact on THIS customer. It’s a great message…for all of us!

But words alone can only have so much of an impact. I just looked back at the July 2011 email I received from Netflix which was their first announcement of the debacle that led to a plummet in customer numbers and their stock price. “We realize you have many choices for home entertainment, and we thank you for your business.” And now we are going to raise prices on you and ‘encourage’ you to stop ordering DVD’s…what?! I felt ANYthing but valued after reading that email. And will never feel the same about Netflix, a company that I had been a raving fan of up until then.

An example of how ‘actions speak louder than words’: Yesterday a San Francisco gas station owner lowered gas prices by 50 cents per gallon for 8 hours as a way of thanking his customers and helping make their holiday travel a bit less expensive. WOW! No advertising of this offer ahead of time to get MORE business, just a concrete (and unexpected) thank you to his customers. And, how cool that his actions made the local news, but that wasn’t his objective. It was a pure token of thanks. Side benefits: extremely loyal customers who hopefully won’t be tempted by saving a few cents per gallon at a competing station and who will spread the word about this station to others.

Here are a few ideas for how you can say thank you to your customers, not only during the holiday season, but ANY time during the year (or ALL year!):

• Send an insert with all orders (or orders over a certain amount) that provide a discount on future orders…with a message saying “Thanks for your business!’
• Create a culture in your organization for anyone who interfaces with your customers (sales reps, support staff, cashiers, customer service reps, etc.) to make sure they say a sincere “Thank you for your business” after each interaction.
• Have executives proactively call key customers for the express purpose of saying “Thank you”…no selling involved.

Those are just a few deas to get your juices flowing…let us know what you have done, or are thinking of doing, to let your customers know how much you appreciate their continued business!

And thank YOU for taking the time to read our blog! We’d love to hear your comments…

We’ve all seen the movie where the girl or guy turns to their significant other and says “I love you, but I’m not in love with you.” Sometimes it’s hard to believe while other times you want to yell at the TV and say “Duh!!!!!” Shouldn’t the recipient of the news have known? You can tell when someone loves you compared to being in love with you right?! Most of the time I think it’s pretty obvious.

Companies often fall into the same situation when you change the first “love” to “satisfaction” and the second to “loyal”. Companies tend to think that satisfied customers are enough, but it’s not. You want loyal customers! Companies also tend to think that satisfaction and loyalty are the same.  They are very different!

So what’s the difference between satisfaction and loyalty? Satisfaction is defined as contentment and fulfillment. Loyal is defined as being faithful and showing allegiance to someone or something – somewhat similar definitions but huge differences when it comes to businesses. Sure I was satisfied with my lunch today, but I’m going to keep looking around for a better restaurant like the one down the street that I’m loyal to. I love it and try to go as often as I can while also telling others about it.

Bain & Company and Satmetrix talk about satisfaction as a product meeting the needs of a customer, a product working as expected or problems being resolved as expected. Loyalty is a bit different. They both describe it as ordinary services delivered exceptionally or exceptional services/features delivered well. You will see the difference being “satisfactory” versus “exceptional”. When you were in elementary school you got a “satisfactory” grade if you did things okay but nothing exceptional – that’s what “A’s” were for. I always equated “satisfactory” with a “C”. Is that good enough? It might be for you, but not for me.

Still not sure of the difference?  How about this….

Love = satisfaction = dating

In love = loyalty = marriage

Studies have shown that loyal customers add to a company’s bottom line. Less money is spent on retaining them than trying to gain new customers. Loyal customers also tell others about their great experience with you. Loyal customers want to let others know how smart they are because they selected your product. Loyal customers have a vested interest in your company and product.  Satisfied customers are happy for the moment and although they might tell others about you and be repeat customers, it’s more beneficial for your company to make them loyal.

Simply put, satisfaction keeps customers happy for the moment while loyalty keeps them happy for a much longer period of time, while also having them tell others. It’ll cost you less money in the long run to have loyal customers rather than satisfied customers.

Don’t get me wrong, satisfied customers are good and definitely better than ticked off customers, but your ultimate goal should be loyal customers. Loyal customers are more beneficial to your company. Don’t be afraid to be exceptional! It’s the difference between loving someone and being in love with someone.

Are your customers satisfied or loyal?

Maeve Naughton has been involved in B2B customer references and customer loyalty for ten years.  She is currently on the Board of the Customer Reference Knowledge Sharing Network (CRKSN) and writes her own blog, Customer Reference Programs Maeve can be reached at maeve.naughton@gmail.com AND twitter id: @maevenaughton.

The relationship between employee and customer loyalty is easy to sense or feel but hard to prove. This is a tough question to answer well, especially for the analytics, but let’s see if we can create a trail of causation.

Recent research by Dan Pink author of Drive indicates that there are three important factors involved in motivating employees in a sustainable way:

• Autonomy (I get to choose and be in charge of certain things at work)
• Mastery (I get to to become master of a skill, domain, etc.)
• Purpose (we all need to know why if we are going to present our best self and best effort.)

People who are motivated in a sustained way do their best, deliver their best work, and contribute.

Autonomy + mastery + purpose = engaged employees

Who do you want interacting with customers?  If I am an engaged employee, I usually interact with enthusiasm and speak from an informed authority. I am also more inclined to advocate for my company if I feel good about the work I am doing, the opportunities I have, and the understanding and clarity I have for why my work matters. We all prefer to talk with upbeat and informed people- so do our customers.

The only piece missing from the information above is ‘listening to the customer’ which you describe so well in your video.  I don’t assume that an engaged employee who can speak well on the part of the company is necessarily a good listener or open to tough customer feedback. However, that is a skill that we all can develop over time with practice and training.

Patrick Reilly is the President of Resources In Action, Inc. Patrick is a successful entrepreneur and executive consultant with 20+ years experience helping leaders solve current business problems while supporting them to become better leaders tomorrow. His work is strategic, developmental and focused on improving performance. He specializes in working with leaders and organizational systems in transition. His experience is both tactical and strategic.

Patrick brings his extensive experience in both change management and executive development to accelerate and focus the results of his work. Patrick has been a featured speaker at national and regional conferences sponsored by the Association of Executive Search Consultants, ERE Media, the Professional Coaches and Mentors Organization, Northern California Human Resources Organization, and the Organizational Development Network.

We got started on this topic a month or so ago when discussing our respective work with clients: her focus is on employee retention and mine is on customer loyalty.  We are both passionate about helping organizations be more successful from our different perspectives…and we realized that our clients that don’t focus on ‘loyalty’ as a priority are least likely to emerge from this recession in a healthy position…or at all.

As we explored this topic, we found a multitude of information that supported our hunch about the link between employee and customer loyalty:

- Southwest Airlines is rated the #1 place to work in Glassdoor.com’s 2nd annual Employees’ Choice Awards.…is it just coincidence that this same organization rates as one of the highest in customer satisfaction/loyalty?

- Deborah Schmidt of Loyalty Leader, Inc. recently wrote an article, “Unhappy Employees Create Dissatisfied Customers“, that explores the many facets of this connection and provides some great advice to employees.

- Walker Information has been tracking the relationship between employee and customer loyalty for the past 8 years and finds that both types of loyalty consistently move in parallel to one another.

Given this strong connection, it’s a very bad omen to those of us who are passionate about customer loyalty that employee satisfaction is at a record low.  According to a study by the Conference Board, only 45% of U.S. workers are satisfied with their jobs compared to 61% in 1987…and the numbers have been declining over the past 20 years.

During a recession where companies believe that they are in the driver’s seat since unemployment is high, it’s especially vital to remember this inextricable relationship…if organizations don’t consider employee loyalty a priority, it will inevitably show up in the quality of their customer relationships.  Just remember the last time you had contact with someone from a company that had obviously ‘checked out’ and was unhappy with their job…how good was THAT experience?  What did that do for your commitment to that company?

Let’s all spread the word out there to not forget about the importance of employee satisfaction/loyalty…it’s common sense, but another area that is not common practice.

An excellent video talk by Joseph Pine on What Consumers Really Want. He talks about how we’ve evolved from economy that was based on commodities, to goods, to services and now its about creating and selling experience.  In this context, authenticity is the new consumer sensibility and it’s what consumers want to experience.  We’re hearing this with social networking/web 2.0 taking off as well.  But the question remains: what is authenticity and how do we (as businesses) render it effectively?

You’ve heard the adage, “It costs five times as much to attract a new customer as it does to retain an old one.” Even if you question the multiplier number, you know the concept is valid. And yet, businesses don’t always realize when former customers have decided not to buy from them again.

One possible clue: sales are down. Granted, in a recession most everyone’s sales are down, but this is not a time to get complacent. Another clue: people are bad-mouthing your business online. How would you know that’s happening? There are many tools that allow you to monitor whether anyone is talking about you on social networks.

Customers decide not to come back to a business when they have expectations that the business, service or product are not fulfilling. Invariably, they find an alternative. There goes somebody’s market share.

The trick is to learn what customers expect of your business in advance of their departure. Next, ask them how well you’re meeting those expectations, and implement changes that will keep them on board. Best to ask before they go, but if it’s too late and they’re gone, ask anyway.

I recently wrapped up a project for a business services company to help them uncover reasons for a fairly high customer defection rate. They knew a few of their small business customers had ceased operations when the economy took a nosedive. But they wondered what else might be wrong.

We pulled a list of customers that had left during the last year and undertook to interview as many of them as we could. We offered to make a generous donation to a nationwide health organization in the name of each business that granted us a 10-minute interview. Some contacts just weren’t reachable after multiple calls, so we sent out a survey to those.

Nearly 25% of the former customers did participate in an interview, and over 8% responded to the online survey. The results were both predictable and surprising, in turns. They had anticipated that some customers were upset by a price increase that occurred when the recession started. But they hadn’t realized that their one-size-fits-all bundle of services really didn’t work for everyone. Patterns emerged, and profiles of several different types of offerings that customers wanted became evident.

Better than finding out why they’ve gone, take active steps now to understand your customers’ expectations while they are still with you.

• Set up a social media-monitoring tool to alert you if people are posting comments about your business online. Identify someone in your organization to track and respond promptly to both positive and negative comments.
• Invite key decision-makers to a customer advisory board meeting. If possible, bring in an independent facilitator, and hold the meeting to a preset agenda that is relevant to the attendees.
• Encourage product management and marketing people to meet with a few different customers semi-annually to discuss how they are using what you offer, what they like, and what’s missing.
• Conduct a survey to determine what is important to your customers. Ask someone who is not so close to your business to help you frame the questions. Provide respondents the option to give more detailed, off-script comments.
• When you gain insight into what you can do to be a better partner to your customers, make it happen.

If you did this last year, that’s good! Now, it’s time to do it again. Customers’ needs change. Just remember, it may “cost you five times more” if you don’t keep taking their temperature.

Mary Sullivan is a co-founder of KickStart Alliance, a team of marketing and sales consultants to B2B technology companies, including clean tech. Mary started her career in tech in sales and later moved to product management and product marketing, bringing her affinity for the customer with her. Increasingly, her focus is on online and social marketing and the value of the content that can enrich businesses’ relationships with their customers.

I just happened to check my online credit card account info last night and saw a long paragraph in red letters telling me that a “recent merchant database compromise” may have put my account at risk and that my card was no longer active and I would be receiving a new one…WHAT?!

My immediate reaction was “Why didn’t they call or email me with this information?”  I have always been pleased with CitiBank’s service in situations where they suspected ‘fraudulent’ activity and called me proactively…why didn’t that happen this time?

I immediately got on the phone to customer service…and got an extremely frustrating response from the customer service rep who was very vague and never answered my questions about what merchant database was compromised, when did it happen, why didn’t I get a call to inform me of the situation, etc.

Instead, I got a ‘party line’ repeated to me over and over again: “We suspected that there might be fraudulent activity, so we cancelled your card.”  Got it…you were being proactive…cool…thanks…but how about that NEXT step of ‘proactivity’ and letting me, the customer, know what was going on?  BEFORE I try to use my credit card and get rejected by a merchant/store/gas pump?

I asked to speak to a manager to express my frustration and to get answers to my questions but he not only wouldn’t accommodate my request, but expressed his OWN frustration that I ‘was making him repeat himself’.   Ay yi yi…

This is a wonderful illustration of how companies lose customers.  I could have been talked off the ledge if the customer service rep had handled our call just a little differently using some very simple (common sense) steps:

-          Apologize for the problem/stress/concern that their message caused

-          Clarify what exactly had happened and what they had done and what would happen now

-          Ask whether I had any remaining questions/concerns

-          Apologize one more time for the inconvenience

-          Assure me that CitiBank is looking out for me and wants to protect my assets

-          Thank me for my continued business

It’s quite simple (hey!  Let’s give it an acronym: ACAAAT!)…and I think that this formula would work with any reasonable customer…it astounds me that respectable companies (which I truly consider CitiBank to be) still aren’t getting this…for those of us who work with organizations to help them monitor customer satisfaction/loyalty and retain customers, let’s all make it our mission to keep spreading the word that the SIMPLE things are what will help them keep customers…it’s not the fancy stuff…loyalty programs are great, but if you can’t get the simple human interaction stuff right, they are wasted.  And for those of you who have ANY influence at all over your own organization’s service policies and/or strategy, please keep this in mind.

What the @*!# are they thinking?

By reaching out to proactively talk to your customers, you can learn a lot about the pressures they are dealing with which may include:

- their customers are pushing to get more for less
- cutting expenses
- attempts from your competitors to get their business
– and more!

If you show an interest in understanding their pressures/challenges, you could gain their undying loyalty which is ultra-important in times like these.

Talking to your customers can be as simple as just picking up the phone.  Once you are clear that your intent isn’t to sell them anything, but to just talk and understand where they are coming from and what has changed for them, your clients will be grateful for the opportunity to vent.

Who should talk to your customers?  The higher level the person making the call, the better—nothing impresses a customer more, or makes them feel more important, than a call from a senior exec.  Obviously senior execs can’t connect with all of your customers, but you could develop a strategy for assigning some of your key/highest stakes customers to each of them…and coordinate a plan for salespeople and/or support staff to reach out to others.

It’s quite simple…and something that can have a very high return on the investment of time… a simple phone call can differentiate you in a huge way from your competitors…and that’s a good thing in times like these.

See our paper, 7 Good Reasons to Talk to Your Customers in a Bad Economy, for more information about how to take the next step in talking to your customers.