Loyal customers are the lifeline of any business.
Audience: Anyone who makes or sells products
Level: Intermediate
Quick Read with Links
A loyal customer purchases frequently, becomes your biggest advocate, and resists the allure of competitors. Their loyalty isn't won over by mere satisfaction with your product or service; it's the result of being genuinely delighted by their overall experience with your brand.
It’s not enough to please people to get them to be loyal, you have to delight them. Stew Leonard's is a store in the US. Their customers are so delighted and loyal, one asked her family to bury her with a Stew Leonard’s shopping bag. She wouldn’t switch, even after death. That's a loyal customer!
What cultivates customer loyalty? It's not about promotional giveaways, insistent sales tactics, or generic customer surveys. The secret lies in truly understanding them – their lives, their challenges, and how your business can help overcome these hurdles.
Online surveys are enticing, given their ease of administration. However, they often provide little value in developing in-depth insights into your customers.
A proper loyal customer survey
The key to gathering meaningful insights lies within your daily business operations:
- Experiment with new approaches and assess their impact.
- Engage in genuine conversations with your customers to understand their lives better.
- Develop hypotheses about their needs, test them, and refine based on the outcomes
Good customer understanding comes more from ongoing observation than from a survey. Engage with them, but don't ask them what could help. Come up with something and see if it works for them.
Consider this example from my own experience. After observing the popularity of our salad bar and noticing the demand for bulk food, I theorized that a self-service olive bar might be a hit. Upon testing this idea, it turned out to be an instant success. In fact, I am told we invented the modern olive bar, working with what Jeanne Quan and Sotiris Kitrilakis from what was, at the time, Peloponnese Foods.
At Stew Leonard's, another instance showcased the importance of understanding customer perception to figure out how to make them loyal customers. A customer panel member complained about the freshness of the fish. After a conversation with the owner, it became clear that 'freshness' to her meant fish displayed on ice, not pre-packaged.
¨ Does the customer invent a new product or service? The customer generates nothing. No customer asked for electric lights… No customer asked for photography… No customer asked for an automobile… No customer asked for an integrated circuit.¨
J. Edwards Deming, Page 7, The New Economics
Remember, customers won't directly invent new products or services. Some of the greatest inventions weren't requested by customers – they were innovations born from an understanding of their needs.
Consider the Kano model, a framework that identifies three critical product characteristics: basics, benefits, and delighters. Basics are essential attributes; without them, no one will consider your product. Benefits relate to the performance of the product and lead to customer satisfaction. Delighters, however, are unexpected, unique features that create loyal customers.
Dr. Kano defined three essential product characteristics. First, the basics, then benefits, and finally, the delighters.
The basics are the must-have attributes. Anyone who sells a product or service like yours must have these characteristics, or no one will buy them. Performance related characteristics, called benefits in selling terminology, will lead to customer satisfaction. Examples would be size, ease-of-use, value for price, and great service.
But, thoughtful, unexpected, and unique touches enchant and delight. They make people want to include your product or service in their lives.
To foster loyalty, you must go beyond the basics and benefits to truly 'delight' your customers. If you're wondering what could possibly 'delight' them, it's time to revisit the drawing board.
Identifying your actual customer is crucial. Just because someone buys your product doesn't necessarily make them your 'customer.' Sometimes, the real customer is the end-user. Thus, it's essential to delight the real customer and improve the purchasing experience for the buyer.
Approach your business from an 'outside-in' perspective rather than 'inside-out.' Understand what's basic for your customers, what benefits them, and what could potentially delight them. Once you hit the sweet spot, you'll see a significant surge in your sales.