The 3 Immutable Laws of Building Customer Satisfaction, Value, and Retention
At just a little over halfway through the year and during the summer doldrums, its a perfect time to revisit how you’re when it comes to building customer satisfaction, value, and retention.
Take a quick inventory of what you’ve done so far this year. Have your sales people offered some deep discounts, bought a few lunches, gone golfing with their clients, invested in some event tickets, handed out some swag with your logo on it, and pressed the flesh at some trade shows? Have you done some customer satisfaction surveys and gotten good results? Great! But none of that has anything to do with building customer satisfaction, value, and retention.
Conventional tactics are no longer enough because every one of your competitors is doing the exact same thing.
Unless you’re running a monopoly, customer churn and customer loyalty measurements are likely on your mind. You’ll see results when you find a way to stand out in a crowded marketplace even if you don’t have a huge marketing budget to invest. It’s simple but not easy to implement better ways to go about attracting and retaining customers.
Instead,
- Ask yourself how many unsolicited testimonials you received this year, and how you’ve shared them with other customers and prospects to demonstrate customer satisfaction and value.
- Tally the number of referrals you’ve received from truly satisfied customers.
- Identify a time when a customer invested their time and energy to help you become a better supplier.
Is that list a lot shorter than the first inventory you took above?
Building customer satisfaction, value, and retention isn’t about survey scores, perks, and loyalty programs – more often they create dis-loyalty or unsustainable expectations for your customers, and a false sense of security for you. So what should you do instead?
The 3 Immutable Laws of Building Customer Satisfaction, Value, and Retention
- The Law of Customer Satisfaction: Did you know that customer satisfaction scores DON’T correlate to loyalty or repurchase decisions? Not one bit. Author Fred Reichheld’s research across multiple industries proved that the best customer loyalty measurement is the question “On a scale of 1-10, how likely is it that you would refer us to someone else”. That’s a good start, but you also need to know how to keep them satisfied in future, so I’ve created a Value Creation Conversation template that helps you dig a little deeper.
- The Law of Customer Value: Value is in the eye of the customer, not the supplier, although we all love to think we deliver great value add. After asking the question above, I teach my clients to ask their customers “What would it take to be a “10″? You’ll identify new sources of the exact value they want, and your competitors will be none the wiser. That same value will help you attract new customers when you embed it in your value proposition.
- The Law of Customer Retention: Retention is all about responsiveness. If your customer gives you anything less than a 10, provides you with some ideas on how to get to a 10, and then never hears another word from you other than more sales pitches, you’ve shot yourself in the foot. 67% of customers leave their suppliers due to a perceived feeling of indifference, NOT pricing or customer satisfaction issues. You have to close the loop, even if you can’t give them what they’ve asked for. Try to find an alternative, but even simply letting them know they’ve been heard is a valuable tactic for retaining customers.
When they feel seen, listened to, and truly heard, you’ll receive the testimonials and referrals that may be missing from your business today. Keep closing the loop with appreciation each time you receive positive customer feedback, and build an ongoing strategy for attracting and retaining customers by sharing everything good you hear, to differentiate from your competition.
What’s the most effective way you’ve ever found for building customer satisfaction, value, and retention?
