Wired Together: Building Customer Loyalty And Word of Mouth

There are two questions I receive from business contacts regularly.

  1. How can we increase loyalty?
  2. How can we get more word-of-mouth business?

They are actually two sides of the same coin, in my humble opinion.

Consider yourself as a loyal customer. We are most likely loyal to some brand or another. I’m sure the Apple enthusiasts out there are already assigning themselves in the Apple column. Some swear by Nike. Others might think of the local coffee shop where the owner knows them by name. Whatever. You think of how you’re loyal and you get a warm, familiar feeling. You like being loyal to these businesses because they earn your loyalty. The smile from the coffee shop owner makes you feel welcome and recognized. The way Apple products just work for you make you feel grateful you’re not messing around with trying to get things to work. They earn your loyalty because of how they make you feel.

Now consider the last time you talked up a brand without any reward except sharing the good news. Most likely, it’s because you wanted your friends to know about something great.

Wired Together: Building Customer Loyalty And Word of Mouth image Together600pxWired Together: Building Customer Loyalty And Word of Mouth

All loyalty and authentic word-of-mouth marketing results are based on emotion.

It’s well documented how 20% of your customers (the loyalists) bring in 80% of your revenue. They are the ones who come back over and over again, and in some cases spend 10 times more over their lifetime than the other 80%! Reason enough to treat them right, huh?

Not entirely surprisingly, these customers are also the ones most likely to share their happiness and spread the word about your business. In fact, they are 70% more likely to do so if they are part of a loyalty program or “VIP” customers.

The ways to increase loyalty AND gain more word-of-mouth traction is to treat your customers fabulously. Zappos figured this out early by offering those small moments of delight, like upgrading to overnight shipping unexpectedly, and spent very little on advertising. Their customers did their promoting.

In answering these two questions, I offer a few ideas to insert emotion into your strategies for marketing and building customer loyalty:

  • Never assume your loyalists will stay loyal “just because.” Continue to earn it. In any accounts or sales meeting, discuss the 20% as the real people they are. Find ways to insert surprise and delight into their experiences.
  • Empower your people to recognize the 20% as special. Instead of greeting a frequent shopper with a “You again?” joke, greet them with their name, and express gratitude. (As an example, I stayed at a hotel monthly in Birmingham, Alabama, for a while. Realizing I never rented a car because the client was across the street, the hotel front desk person offered to pick me up from the airport each month so I wouldn’t have to take a cab. Recognizing my unique situation and offering a little hospitality during a business trip earned my loyalty like nothing else could! Plus, I told EVERYONE about it.)
  • Say thank you. Don’t assume they know you are grateful. Don’t assume an impersonal discount or coupon will show gratitude. Say thank you.
  • Don’t ignore the ones you lose. If you suddenly realize a loyal customer has vanished, it’s ok to not only debrief internally but ask for their feedback. While marketing might have “earn back” programs, a standard letter and discount probably won’t work on this group. Instead, reach out. Ask what went wrong. It might be something easy to fix or it might be a sign of things to come. One client started noticing a drop in this group and asked some of them why. It was all about price, because the company hadn’t gone out of their way to make the experience special. Loyal customers are only loyal until they aren’t.

What can you do to help your 20% feel exceptional? How can you change the game so they can’t wait to tell others?

Image credit: .reid. via Creative Commons

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