I’m not suggesting that businesses should let customers run roughshod over them. And I’m not suggesting that customers should shirk their agreements. But sometimes, life happens and customers have a problem. And a little flexibility and loyalty on the part of a business could go a long way to earning long-term customer loyalty. And in this day and age, customer loyalty is getting harder and harder to find. In part, because it’s not returned by companies. I’ve heard the phrase “customer loyalty” used in business discussions for years. I can probably count on one hand the number of times I’ve heard businesses discuss loyalty to their customers.

So, how do you institute loyalty to customers? Here are a few ideas:
1. Love your customers: This one sounds a bit silly, but there are actually many businesses out there who don’t really love their customers. They realize they need customers, but they could care less if you walk through the door or if it’s someone else; just so long as a warm body comes in. I’d rather go somewhere they’re genuinely happy to see ME. In my town there is a great store just off the downtown square named The Country Gourmet. They LOVE their customers. They know us by name and they even save bubble wrap for my 4-year-old son who loves the stuff. I visit them often just to say hello… and I almost always spend money, no matter if I was planning to or not. I just love them!

2. Allow team members to use their judgement: If you can’t trust your team’s judgement, why did you hire them? Allow them to determine (at least in reasonable cases) if something should be handled a different way. “Uh, boss, are you sure we want to cut this long-time customer’s credit line off over $3.50?” Most of these issues arise due to strict corporate policies. “Company policy is….” If this statement comes up in your business frequently, you have a problem. Some company policies are necessary. Many are simply a crutch to give employees an excuse to not make a decision.

3. Figure out what your break even point is and don’t haggle about money below that: I used to work customer service for a major national book distributor. We had a standing rule there, if the customer is resquesting a credit under $5, just give it to them. The hassle factor, time needed to research issues and aggravation factor for customers cost way more than five bucks. It was cheaper for the company to just resolve the issue immediately, removed a workload that would bottleneck more serious issues and simply made the customer happier to just handle it. “You got a defective paperback in your shipment? Nah. Don’t waste money returning it. I’ll just send you a credit.” Problem solved. Compare that to my utility issue. I made a small error, and over $2 they cut off my utility, made me go through the aggrivation of aruging with them over it, made me wait to have it turned back on, then charged me a $40 reconnect fee. If utilities weren’t a monopoly, I’d have fired them that day.

How does your company practice loyalty to customers? Share your tips and ideas in the comments section.

Going Out of Business courtesy of reinvented via Flickr

I remember several years ago reading an article reporting on the results of a study showing that consumers will put up with poor customer service almost as much as they will good customer service. I was appalled at that assertion. Why in the world would people put up with bad service? Surely good service wins the day every time. Turns out – no, it doesn’t.

After years of watching people in retail settings, I’ve discovered that they actually will put up with bad customer service. We’ve all seen restaurants with terrible service, but doing a booming business because they’re trendy. What people won’t put up with is inconsistent service. Good one time and bad the next will quickly lose you customers. Customers might deal with it for a short while, but not long.

I used to be a manager at a fast food restaurant. I remember once deciding that I wanted to deliver service so good for customers that they would want to tip our workers (voluntarily), just as they do at a full-service restaurant. For weeks I busted my tail, delivering great service at the counters and even going to table offering to get refills and take trays. People were impressed with the service, but I didn’t see them coming back more than usual. Now, I’m older and wiser and realize that what I was doing was terrible. I was probably inadvertantly hurting the restaurant. Why? Customers weren’t getting consistent service. They were used to a certain level of service, and I was confusing them with something different. Worse yet, a customer could come get great service from me one evening, then come that for lunch the next day and get mediocre service. They couldn’t know what to expect.

I still believe that good service is better and than bad service. All things being equal, I think good service wins the day. However, inconsistent service will kill your business faster than either.

Here’s a funny irony. I believe technology is forcing businesses to come full circle with regards to service and interaction with the customer. Way back when, the way to address prospects and customers was generally on a one-to-one basis. You had to interact with people individually to sell them your products and then again for any follow-up customer service. Technological revolutions began changing that system so that we could address more people at a time. Newspapers would let you tell groups of readers about your products through ads. Then radio let you address larger audiences, then TV came along and you could reach millions. Cable TV let you reach audiences internationally and e-mail and the Internet let you do for pennies what used to cost dollars. Automated phone systems let you receive and route the increasing number of incoming calls without having to hire a bank of receptionists. Fax blasts and e-mail newsletters let you address tons of people at the press of a few buttons. Amazing!

But something has happened. These same technological wonders have enabled massive fracturing of your audience. No longer can you run your TV ad during the CBS News and reach 10s of millions of viewers. TV networks are ecstatic to pull in 6-8 million viewers now. More than a third of US households with a TV have digital cable, meaning they have hundreds of channels to choose from. You’ve got to be selective about where your ad dollars go to gain the most effect.

Fax blasts? They just end up in the trash. E-mail newsletters? Gone are the days when you could just add filler materials around your ads. You have to invest in time (and people) to really put together good information or readers will simply delete or unsubscribe you. That takes more team members.

Automated phone systems have become so convoluted and frustrating that many companies are abandoning them and going back to good old human receptionists to answer the phones. The Internet may draw in lots of visitors to your website, but these days, they expect personal treatment when you respond to them. And online social media services like Twiiter are all the rage in reaching out to customers, but they also require a highly personalized interaction.

So, it seems we’ve gone from one-to-one interactions through one-to-many (broadcast) and now we’re heading back to more one-to-one interactions. Have you noticed the same thing?

Oh, yeah, one more quick question. Are you interacting personally with your customers or are you just pushing information to the masses in hopes of making a connection?

Bonus: Here’s a link to David Armano’s post which got me thinking about this. Thanks, David. If you don’t read his blog, start now.