Business owners and managers must be focused on building a successful organization. Let’s define success as a business which is profitable and sustainable. All businesses must be profitable in order to cover their costs and provide the owner with an appropriate income. Sustainability refers to the ability for a business to survive tomorrow, next week, next month and far into the future. Having loyal customers is key to both profitability and sustainability. The questions are, therefore, why are loyal customers important to success and how do you create loyal customers?
Why are loyal customers important to business success?
Loyal customers are those who appreciate doing business with you and return over and over again. They appreciate the value of your product or service. They are the people who tell their friends and neighbors to do business with you. It is a common business understanding that it costs three times as much to find a new customer as it does to keep a current one.
It is difficult to count the number of companies we have visited who tell us about the aggressive pricing of competition. They tell us about the potential customer with whom they worked and then went to a shop down the street for a lower price. They tell us of the impact of the big box retailers out on the highway or of the increased pressure from those shopping the internet. They have reduced selling prices and used promotional discounts, but there was no effect. Their margins are being eroded and they are not sure they can stay in business. (Profitability and sustainability). Being the low cost leader may work for Wal-Mart, but will it work long term for your business?
One can hardly think of an organization or business that can prosper in the long run without loyal customers. Whether it’s Apple, Starbucks, or McDonalds, their success is based on the continuous return of customers. They stand in line to buy the latest leading edge devise from Apple. They spend $4.00 for a cup of coffee at Starbucks. They appreciate the consistency of the product and service at McDonalds.
How do you create Customer loyalty?
Of course there are many approaches, but on the simplest level, learn to understand your business from a customer’s point of view. Understand that the relationship that develops between your company and the customer is largely an emotional one, based upon the customer’s expectations and your ability to satisfy them.
David Bere was CEO of Dollar General when he related this story to a group at a marketing conference. Dollar General is a retail who specializes in selling products in the price range of a dollar or less.
Now it is not uncommon for a retail executive to visit a store. They will typically tour the store looking for shelves without stock and talking to employees about what products are selling and what are not. On this one visit, he walked up to the first shopper he saw and asked if he could carry her basket and walk through the store with her. As they traveled through the aisles and talked, a rapport developed. At the end, the customer told David that there was something she wanted to show him. She asked if he would mind taking a ride in her car and he agreed.
At the conclusion of the ride, they arrived in the parking lot of another Dollar General Store. Where the first store was neat and well lit, this store was dark and messy. The lines at the cash registers were long and manned by unfriendly clerks. The customer then explained that she lived only a few blocks from the store, but preferred to drive several miles to the store where they first met. Lesson learned. David now understood the emotional experience that the customer had with his company.
Success comes to those who create this type of experience and develop plans to turn a negative into a positive. Consider letting us help partner with you in that effort. Call us at (910) 575-1286 or email email@example.com. to start you on the road to greater success.