Customer loyalty is a must-have for any company. Without people or companies coming back to do business with you, the cost of acquiring customers becomes a crushing expense. The stronger the loyalty, the more you can contain marketing costs while increasing the average customer's lifetime value. But there is a step beyond loyalty, particularly for a middle market company that is trying to hit its next stage of growth. What you want are customer fanatics: people who will act as brand ambassadors and do more than loyally buy from your business. They help acquire new customers through positive word of mouth and brand promotion. However, brand ambassadors are people you need to woo, which means understanding the difference between a true fan and a loyal customer. Here's what you should know.
Not All Customers Are the Same
Customer loyalty can help keep people doing business with you. But that definition embraces a range of attitudes and not all are favorable. Someone may continue buying from you because there is no obvious or readily available competitive alternative. Their loyalty might rest on a specific product feature, pricing or ongoing discounts. It might even be the product of an appreciation for a type of bribery. These reasons don't help because the customer feels affinity to a particular circumstance and not to your brand or product. Not all customers will ever feel enough of a connection to your business to become brand ambassadors, and that's all right. Focus your efforts on the super customers who could become fiercely loyal.
Have IT Systems to Handle the Work
The entire process of developing brand ambassadors requires data analysis, which means having a customer relationship management (CRM) system in place. Staff should be trained so that they ask and enter the necessary information. For example, when someone does business with you for the first time, ask how they heard of you. Although you don't want to bribe this behavior from customers, you might offer a small discount, bonus or gift to people who do spread the word. Records within the CRM system should note what customers buy, what issues they've had and the path to resolution. In short, document everything about customers. A middle market company is too large for the few people responsible for most interactions to keep everything in their heads.
Identify the Super Customers
Since not everyone will necessarily become brand ambassadors, you want to identify the people who might. To do so, start by looking at past behavior. Who buys regularly or in large quantities? Which customers have stayed the longest? Are there customers who have convinced others to do business with you? What are the characteristics of your business customers? Can you model them and see who else either fits into the same profile or is close to doing so? You will need big-data systems, software and expertise to properly segment customers.
Service and Recognition Are Key
Good prices or product selections are fine, but they aren't enough to turn loyalists into brand ambassadors. Such a connection is emotional in nature, and practical benefits don't evoke that degree of feeling. Customers react this way because you treat them like exceptional people. That means you recognize their existence in big and little ways and offer a level of service that makes them feel appreciated, wanted and respected.
Recognition requires two-way communication over every channel possible: telephone, mail, email and social networks. Technology can act as a communication amplifier so you don't miss what customers say, whether it's directly to you or indirectly at you through public posts. Computers and modern telecommunications can also help you manage contact with customers. In addition, systems can monitor for specific conditions and automatically alert the appropriate personnel at your company, launching a chain of communications when appropriate. Even complaints can become a way to bring special customers closer, so long as the communications are clear and the resolutions are swift.
Does your company have customers you might consider brand ambassadors? What qualities do they demonstrate and how do they support your company? Let us know by commenting below.
Erik Sherman is an NCMM contributor and author whose work has appeared in such publications as The Wall Street Journal, The New York Times Magazine, Newsweek, the Financial Times, Chief Executive, Inc. and Fortune. He also blogs for CBS MoneyWatch. Sherman has extensive experience in corporate communications consulting and is the author or co-author of 10 books. Follow him on Twitter.