Customer Loyalty

August 19, 2015
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Management is challenged every year with delivering sales and earnings growth. The rules have now evolved because customers want more than just a competitive price – they have a whole litany of expectations.

Companies that expect to gain or retain competitive advantage must adjust their business models and message to compensate. Over the last decade, companies have invested in technology to gain efficiencies. ERP and CRM software developed information-based companies. But now the question is:

“How do companies better use market intelligence to grow customer trust and loyalty?”

Customers tell us the answer is quality people. We know it’s selecting, training, and retaining the right people.

But, in reality, growing customer loyalty is much more complicated than just that one piece of the puzzle. In this article, I will discuss a strategy for uniting key needs in the relationship building process – Enterprise Capacity Language.

Customer Types

Companies today have three kinds of customers — Customer Advocates, Customer Neutrals, and Customer Critics.

Customer Advocates offer predictable purchase histories and loyalty to the company. Customer neutrals purchase on a frequent basis but have no real loyalty. Customer critics are those who purchase because they must.

Customer neutrals are vulnerable to competitive threat and are frequently solicited by the competition. Scary is when you learn your high volume customers are really neutrals without any true loyalty to the company. Really scary is when you learn price is not the reason.

Risk management is of great concern to most companies. Risk management is sometimes limited to procurement, supply chain, and security rather than company behavior. In this case, the risk of losing a large customer is significant challenge.

So what do loyal customers really care about?

  • Quality and consistent products and services
  • Innovation
  • Communication / Collaboration / Professionalism
  • Service
  • Value / price

The Catalyst for Change — Growing Customer Advocates

Customers expect 100% achievement to earn a trusting and loyal relationship. Customer loyalty and trust is everything because it’s bankable. Quality customers simply don’t want dysfunction and poor business practices as part of their income stream for good reason, this behavior is unpredictable and costly. Customers want to do business with suppliers that generate profitable outcomes and collaborative relationships. This concept extends to sales agencies as an extension of the company sales force.

We often hear from new clients about business losses due to price. Many times after investigation we find price wasn’t the culprit, it was company business practices. Customer attrition is not only devastating to the financial balance sheet, but to employee morale. Eventually employee perception becomes tarnished which influences company culture.

Enterprise Capacity Language

Enterprise Capacity Language (ECL) is an approach that can help your team better transition your customers toward Client Advocate status.

At the crux of it, ECL is about management and employees using information to grow relationships. With ECL, management and employees center on the source of challenges rather than the symptoms and are empowered to perform well.

Here is the challenge and a key component of ECL— every company employee that touches the customer influences perception. It’s not solely a function of the sales relationship.

Tip: Perception is customer reality. Every contact your customer has with a member of your company must be positive – which includes R/D, production, supply chain, administration, and most importantly, management. No exceptions.

Where Technology Fits In

Industry is in a race to implement new technology. The real race is about selecting and retaining quality management and employees to use technology effectively. Our observation: companies often find it easier to implement technology and cost cutting efficiencies rather than improve the quality of employees and the organization.

“The notion technology alone is going to solve a company’s ills is nonsense. Rather, it’s quality people using technology effectively that achieves objectives.”

Sure, companies need to be highly efficient and price competitive, but there should be a balanced approach between people and technology.

Enterprise Resource Planning (ERP) and Customer Resource Management (CRM) software create vast amounts of information. They operate most effectively when quality people collect, interpret, communicate and apply the intelligence to existing market conditions. Clearly, managing risk is important and companies need critical thinking to gain a competitive edge.

Tip: ERP and CRM softwares harness a plethora of data that you can utilize in real-time. Empower your Quality Employees to act on that data as they best see fit, whether that means rewarding return customers or even company employees. Don’t stymie via red tape and bureaucracy.

Company Culture

Company culture is determined by employees and management. Employees quickly determine if company culture is compatible or flawed. Failing to meet the language of the core values/ vision/ mission statements plants the seeds of discontent. The absence of effective planning, communication, and execution translate to both customers and employees.

Some of the most compelling evidence is when the company loses a key employee over business practices, rather than salary. The fact is both customers and employees recognize the significance of quality. Why purchase from, or work for a company with challenges?

“Legacy behaviors and business practices influence customer perception. Just because we have always done it this way, doesn’t make it right.”

Quality employees want to see the company thrive and prosper. Connecting all levels of the company to a single performance language includes management, production leaders, supply chain, marketing, and sales. One number that says we are on course with customer expectations, or we have work to do.

Tip: Survey feedback both from customers and your own employees. Anonymously or publicly, internally or by bringing in an outside, unbiased source like Tacticware. Give members a voice for innovation, and you can proactively resolve any potential issues.

Final Thoughts

An ECL or “Enterprise Capacity Language” approach bridges the gap between employees, technology, and customer loyalty – it’s a common language of performance focused on creating Customer Advocates.

ECL encourages employee self-management, accountability, and achievement while addressing the needs of the customer and company. We believe that ECL is the catalyst for sales revenue and earnings growth.