5 Fundamentals for Keeping Loyal Customers

Photographer : Joche Van Eden

I’ll use the terms “loyal customer” and “regular customer” interchangeably, since I’ll focus primarily on service-oriented businesses, like restaurants, small cafes, and coffee shops for this post. The points I list here, however, could apply to most vendors, products, or businesses.

The concept seems sort of “obvious” and “corny”, actually. I mean, who would say that loyal customers are bad for business? Well, here’s my scenario: It never fails. I try Chinese take-out one night from a new restaurant, get exposed to a great desert at a small café after a big meeting, or wake up for a morning visit to the coffee shop and it happens. I’m hooked. In fact, I might find myself going to the source of my new infatuation at the same times each week, repeatedly, for a long period of time. Maybe I’ll follow the same ritual for most of a year or longer. Sure, I may develop some specific “quirks” and make some special requests each time I order, but for the most part, I try to “blend into the background” and be respectful of the staff and not too demanding. In fact, as a regular customer, I become friendly with the staff, they know how I like my order and cater to it, and so our “work relationship” goes for the time that I continue to indulge my senses with the product of choice. I realize this scenario applies to a lot of people, even if only for a small item like their morning cup of coffee or sandwich from the downstairs deli in their workplace. It was this type of customer-vendor relationship, built on the customer’s appreciation for the product and the vendor’s appreciation for the customer that inspired TV shows like Cheers. You know, “where everybody knows your name”. This is also the type of customer loyalty that the biggest name brands and product manufacturers continually seek and are “dying” to achieve. Great, so everybody continues in this routine “happily ever after”, right? Not so much.

Okay, well, it’s not that it can’t potentially be that way. We all remember the old shows like The Andy Griffith Show, and many others of course, that depict scenes with certain men in the town visiting a certain barbershop, café, or any other type of business and remaining loyal to it for their “lifetime”. Yes, there are many more choices available now, far too many sources vying for our “share of wallet” (that’s a piece of our cash, for the uninitiated), and far more diversified tastes and preferences than may have been apparent in the “golden age” of television. The goal, of course, is to attract customers, keep them over the long term, and turn them into our store or brand “evangelists”. We all understand this, so why does this relationship often break down and take other potential customers with it? After observing behavior at various coffee shops that I’ve frequented over the last couple of years, I came up with a list of points that coffee shops, cafes, and restaurants should remember to both attract customers and continue to satisfy their “regular” patrons. This list could apply to other types of businesses in most cases, but we’ll focus on those.

1. Loyal customers are still your customers. Treat them like that. Sounds silly, right? It is amazing how often this is overlooked. It is overlooked most often when a server or owner is friends with the customer. It is in my nature to be nice, to defer to others and allow them to be served ahead of me when I have extra time, and generally to be helpful and humble. However, in every situation where I’ve been considered a “regular” it seems that a server, manager, or other customer-facing employee begins, over time, to view a regular as a “nuisance” and as “undeserving” of the same level of service as other patrons. Again, I certainly don’t demand much, but I am a customer. That is the point here. Regardless of how well you know your customer, or how you infer that they “can wait”, make sure you are giving them the best level of service possible, just as you would to any customer that walks through the door. This does not have to be service that interferes with other customers, simply the type of service you would provide to any of your customers.

2. Loyal customers are your best referral source. In business, we all say we know this one. It is how we “implement” this principle that proves that we know it. Once again, I can use myself as an example of this point. If I really like a restaurant, café, or particular coffee shop franchise or location, I will not only tell all of my friends and family, but I will bring them with me, give them gift cards, or do anything else I can do to encourage people to visit the establishment. Never forget that most regulars engage in the same behaviors.

3. Losing a customer is bad. Losing a loyal customer is even worse. There are lots of books written about the necessity of good customer service. It just makes sense. In the book, Fifty Powerful Ideas You Can Use to Keep Your Customers, by Paul R. Timm, he states that an upset customer will tell, on average, 11 or 12 other people about their experience. The book was written in 2002, so you can imagine that in the world of social networking, which matured long after that date, the numbers are far higher than they once were. We’ve heard the news stories of a celebrity tweeting about something that upset them at about a brand or product and all of the damage control that ensued on the part of the brand’s PR representatives to try to fix the problem. Your daily customers may not be celebrities, but they have a similar reach in social networking and other platforms with technology. To compound the issue, regular customers feel they have a part of their life “invested” in your product or service. While they are content, they share that joy with you in the form of repeat business, referrals, and treating their friends and family to your products. If you upset or neglect them, they will take on your demise as their new purpose in life. I want to emphasize this, not to be cynical or pessimistic, only to point out just how critical this fact is to your business’ survival and prosperity.

4. Reward loyalty, don’t punish it. Yet again, it seems as though this point would be understood without even mentioning it. It is difficult for any business to control what all of their front-line customer representatives do at all times, whether management is present or not. All of the customer service personnel, however, are ambassadors of your product or service. One bad seed can spoil the whole thing. I will leave implementation ideas to the experts, but the point must be made. If any service person makes a regular customer, or any customer for that matter, feel less than welcome, the consequences mentioned above could apply. I believe that most “regular customers” at restaurants and cafes are like myself; they don’t expect special treatment and simply like the environment, products, and some good conversation now and then. We understand when you are really busy, not feeling well, or have other pressing obligations that demand your time. We can survive with the same level of service you provide to others. However, from time to time, it is good to recognize loyal customers for what they are and offer some additional “perks” or “incentives” for continuing their visit and to bring others with them as well. After all, they could spend that daily or weekly cash at another place. An occasional discount or freebie may seem like an imposition at the moment, but it can result in renewed enthusiasm on the customer’s part which could lead to instant payback on your part.

5. If you have an issue with a loyal customer, communicate with them. It would be nice to think that all customers are model patrons all of the time and that there is nothing but positive benefits experienced by all as a result of their visits. Unfortunately, this isn’t the real world. Here’s an example. Maybe a regular customer, who is usually well-behaved and unobtrusive, decides to listen to some loud music that can be heard through their headphones every morning while they eat. After a period of time, other customers start moving away from them and one may even complain to management. Rather than letting the situation get worse without intervening, the best approach is always communication. If service personnel or management can communicate with regular customers in times of concern, in a pleasant and appropriate manner, the situation will most often resolve itself. A customer cannot read the manager or personnel’s minds any more than they can read the customer’s mind.

Given an opportunity to rectify a situation, it is my assertion that the customer will be more than happy to comply and very apologetic about an issue they probably were not aware of in the first place. If a problem persists, even after communication, then management naturally must handle the situation as they would with any adverse situation. Most situations should, however, resolve themselves gracefully if given appropriate opportunity.

The points above are basic customer service reminders, and it is true that most of us are very well aware of them. Rather than trying to overstate the obvious, such reminders are beneficial for all of us sometimes. As we become inundated with our work efforts and technology becomes overwhelming, it simultaneously becomes easy to look past these critical principles. The key point to remember is that restaurants, cafes, and coffee shops have “built-in marketers” in their midst. When recognized for the gem that they can be, they will produce long term results that money and the best advertising agencies in the world just can’t buy.

Doing Our Own Research – Some Fundamentals

“We all need to do our own research.” It seems to me that we hear this phrase often these days. Regardless of the forum – be it marketing, politics, health and wellness, financial matters – the edict is always the same. This statement is actually a correct one no matter how it applies. The real question, though, is, “what does this really mean?” If we are in the pursuit of “doing our own research”, do we have a set of “standards” by which we determine, either individually or corporately, that our “research” and the results we uncover are as correct and useful as possible?

This blog entry does not delve into statistical analysis, although a perusal of the subject would be helpful to many, as important elements are analyzed. The decision of whether certain research goals require a “population” or simply a “sample” and whether the results that are derived actually mean what one believes are questions every good researcher must face. I will present 5 fundamental principles that marketing researchers must remember when faced with either explicit tasks to conduct research, or with situations where research is needed even if they are not aware of it. Certainly, there are more I could present here, but we’ll keep it fairly brief.

Quite bluntly, my observation, no matter in which context the phrase is used, is that the phrase “we must do our own research” is about the same as a high school girl saying “let’s just be friends”. In the latter statement, 1) there is no intention of ever being friends, 2) the other party is not allowed the opportunity to present a reasoned debate on this outcome (the decision was made by the girl), 3) there is no accounting for whether the “source” of the decision was valid or appropriate (maybe her friends all agreed)…and so it goes. In the context of someone stating “we must do our own research”, they are usually implying at least one or more of the following: 1) “I am correct, this is what I think, and I don’t want outside opinions”, 2) “Go away and leave me alone, it is not open for discussion”, 3) “I consulted my ‘usual sources’ without any regard as to their validity”, 4) “This issue is not important enough for me to really exert any energy on it”. Of course, I could go on, but you get the idea.

Yes, the list above seems a little cynical, but if we are being truly honest, we know that this appears to be the general indications given (a possible research opportunity? – more on this in a moment). To be fair, there is an overload of information in today’s society, and consuming it all is impossible. We also must prioritize the most important issues and focus on what matters to us most. With this, I begin my list of important fundamentals when approaching research and the need for it:

1) Try not to assume. If you make an assertion, make sure you can back it up factually. I’ll be up front on this one. I’m guilty of this too – I believe we all are at times. We make an assertion about a client’s service or product and say “people want this”, or “studies show that” when, in fact, we don’t know for a fact that they do. We may be basing our knowledge on previous efforts in which we’ve been involved. This might be effective, but we must verify that the information is timely and that empirical evidence backs up our assertions. This of course, assumes that the issue is “important enough” to warrant such verification.

2) “What have you done for me lately?” Okay, well, maybe it doesn’t matter what someone has done, but this is part of the last point above. Make sure that all information gathered is timely and reflects the information as it is most recently, whenever possible. A good example of this is looking at today’s “mobile shopping” habits of consumers. This is an obvious point for most, but if you were to look at data only one year old, you would find completely different numbers than if you analyzed data today. The target is moving that quickly. Many issues will thankfully not move quite as fast, but timeliness should be assessed.

3) Always verify, as closely as possible, that you are pulling data as “close to the source” as possible. I spent some time working at various radio news organizations in the past. While those organizations were very studious about doing the best work they could do, I noticed a trend in the industry as a whole, especially as technology had taken over and the bad economy started to replace experienced workers with lower paid “stand-ins”. The newswires would print a story (that was probably derived from another source originally) and all news affiliates of a particular news network would simply “rehash” the story – many times in almost identical words of the newswire. Yes, time and expense limited other approaches to disseminating the news. The whole point of this example, though, is that no one could say with accuracy whether any of the news passed “down the chain” was completely accurate or just a “re-telling” of someone’s version of an incident. In a way, this is what we must guard against in doing our research. If you were investigating the habitat of a rare bird in South America, for instance, then get as close to the actual source of those who live around the subject, witness it first hand, etc. Therefore, data that is collected should be not only collected near the source initially, but then verified, checked again, documented, etc. One must have the highest possible confidence that the data is accurate and timely.

4) Don’t let opposing points of view cloud your efforts. This is one of the toughest points to adhere to for most, but it is the only way to feel truly confident about your efforts. Whether you have a strongly-engrained loyalty to a client’s product and its image, or a deeply held personal belief, try to consistently check yourself as you conduct your research to make sure you are not influencing it with your own bias. If you are, for instance, researching public sentiment on “fast food” campaigns, and you are an ardent fast food connoisseur, it might be wise to have a third party involved in the research, or at least other sources to “audit” your efforts to guarantee that, as much as is possible, bias is removed from the equation.

5) Do not embark on your research efforts in order to find a pre-determined result. This point is similar to the one above, but I want to emphasize one important aspect: “premeditation”. Actually, this element can creep into research at any stage, but it most often happens before one starts. For example, let’s say I ask this question: “What percentage of people understand the fact that fast food is bad for them and will kill them by age 45?”. This question essentially implies, by using the word “fact” that indeed, fast food is bad and will kill someone by 45. If this type of question is asked of a survey respondent, they will give an inappropriate answer, believing that this is indeed a fact, when it may not be. There are many other ways that survey responses can be “manipulated”, thereby skewing the results of surveys greatly. It should be a high priority for researchers to research a point in order to find out what the data says, not what they want it to say. Prepare to learn, possibly be personally disappointed, but factually correct according to the data uncovered.

Hopefully the points presented here will assist anyone embarking on research projects, regardless of their application. When armed with facts, one can be confident they will possess data that is more useful, and if need be, more defendable.

Top 5 Signs “You Might Need to Improve Your Agency’s Information Systems”

As a former CRM implementer and developer for over 10 years, in company after company (regardless of industry), I saw many examples of organizations who acquired the latest technology, but had not applied as much effort toward verifying that it was used to its fullest capacity. In today’s marketing organizations, repeatedly, I see a handful of different client-oriented teams or departments, various disciplines (print, digital, social-networking/PR) that operate mostly as “silos” that share some information as needed, but otherwise relegate a majority of their hard-fought former projects to the “information wasteland”. In addition, since most agencies revolve around a collection of largely “creative-focused” disciplines, there is a profound lack of process structure. These arrangements may effectively deliver “the goods” for clients as deadlines come and go, but on a historical and collaborative level, there is too much talent, good ideas, and “information efficiency” that is never realized.

I have compiled five quick, simple considerations that every agency, regardless of their structure should ponder to see if their own organization could benefit from improvements. For grins, we will say, “You might need an “information infrastructure remodel” if…(my apologies in advance to Jeff Foxworthy):

1. If key executives do not have immediate visibility, via an “executive dashboard” or other business intelligence system, into new business statistics, you may need an I.I.R.

Quite simply, what this means is that I should be able to spontaneously ask a top agency executive, “Do you know the dollar amount of new business in your pipeline set to close next quarter?” or “What division sold the most business last quarter?” Or, basically, I could ask any question along those lines, and the executive should have a place to go to in under 5 minutes to get the answer and “drill down” into details that comprise that number.  If it isn’t that easy, your system is not working for you. The system, of course, won’t get the business for you, but if your organization is getting the business, you should be able to answer high-level questions such as this without any considerable effort.

2. If you (or everyone in your organization) receives emails from random departments about tasks that are due for a specific system you have nothing to do with….you may need an I.I.R.

Sometimes, when companies where I’ve consulted here me bring this to their attention, their first reaction is to be a little defensive, possibly “embarrassed” to realize that this is happening in their organization. The good news is, if this is your company, you’re not alone. This is actually one of the most common things I see in today’s agencies. Accounting will send an email about some sort of financial information that is needed by some “manager level” in the organization. Shipping and receiving will send emails about “sign offs” that are required before the end of the day by a certain small group of individuals. You name it, I’ve seen it. The point is that the communication strategy of “send it to everyone and no one will miss it” is not only a security concern, but believe me, they’ll probably miss it. Your interdepartmental systems should be designed to trigger “workflow” that targets only the individuals required for a task, but no one else. These systems can be designed to work “the way you do” and if something is missing, it should be immediately noticeable by the person or people monitoring the process.

3. If the way to request something from another department or vendor is to “just call or go find them and tell them what we need”, then you might need an I.R.R.”

Okay, so this one might not be as obvious to all companies in all situations, but the basic scenario goes like this. An account manager tells an account coordinator, “we need this artwork for this project at this time. Go find Bill and tell him and if he has any questions or problems, we’ll meet about it and clear it up.” Now, I’m not suggesting that meetings for clarification are a bad idea. Instead, I am simply trying to point out that there should be a “defined process”, for the protection of both sides of the request, for making a request and the steps it must take. It most certainly might evolve over time, but today’s systems can be flexible in details. I’m also not suggesting that an agency must implement “loads of bureaucracy”.  At a minimum, information on what,why,where, who, and when must be gathered. Obviously, the more detailed the information is, the more it might help when researching projectshistorically, but fighting the urge to create something overly complex is also critical.

4. If vendor or partner participation and progress on a project is a “black box”, then you might need an I.R.R.

This can be a very “political” issue for any agency, but the more expectations can be set up front for how the project or tasks will conduct business, the better it will be for everyone. Working in teams is unavoidable these days. These teams are most often in remote locations. Do your team members share everything by email? Do they spend a good portion of conference calls asking who has the latest document, where to find it, etc? These scenarios have so many negative repercussions that I don’t have enough time to go into them all here. To get to the bottom of it quickly, if these scenarios exist, your agency must, without hesitation, investigate the use of collaboration technologies and help clients and partners to understand that these technologies will be used and why they will be used.

5. If you can’t quickly determine the relationship of projects, customers, campaigns, social networking strategies,  etc, you might need an I.R.R.

This final point is loaded with a ton of detail, but the premise is the same no matter what specific “items” we discuss. I should be able (given my “need to know” in an agency) to quickly determine how certain items relate, the documents, graphics, or other tangible “assets” created for that project (and when and by whom). In addition, all email, phone, or other important notes about a campaign, any item produced as a result of that campaign, etc, should be stored in such a way that the agency can retrieve it for use or analysis later. What if a client comes to an account manager 5 years in the future, concerning an item considered “insignificant” at the time and says, “I want to do something exactly like THAT item we produced at that time”. To take it further, what if all the people who worked on the campaign at the time have moved on and are unavailable for comment? There might be some documents “floating around” on the file server, but unless your system supports such information retrieval and gathering, it is not serving you to its fullest capacity.

Every organization is, of course, different and therefore the ideal solution to any challenge will be unique to that company. However, the good news is that technology has evolved to a point where most solutions are integrated, cross-compatible, and much more cost-effective than they once were. In a future blog entry, I will cover some very basic criteria to consider when “upgrading your information infrastructure” as an agency. Fortunately, today’s vendors make these considerations  fairly easy to address, and that is great for you.  Do you have information/communication challenges in your agency that are not covered here? Please feel free to comment and let me know your thoughts.

Customer Loyalty Programs – A Learning Opportunity

Customer loyalty programs have been a part of the retailing scene for a long time now, and some are certainly more effective than others. Recently, I visited the website for a large grocery retailer to register my shopper card, with the intent to manage it online and to get “additional online coupons”. Grocery retailers have long leveraged partnerships to offer points or discounts (or both) on their own grocery items as well as gasoline and other services.  My experience during this “adventure” prompted me, as a marketer and technologist, to make some points about loyalty programs, whether they be for grocery retailers or any other type of product or service. Before I begin, I want to emphasize that, while they will remain nameless, I still frequent this retailer’s store and I do respect them for their efforts. I view this experience as an opportunity to communicate “improvement opportunities”, not to call out a single retailer for an unfortunate experience.

Fundamental Point: Whatever “features” you offer as part of your loyalty program, make sure they are fully supported and understood by your employees and your customers.

The adventure begins as I went to the “big grocery retailer” website to  manage my shopper card account and  “load coupons” onto its shopper card. I thought “This is cool, I won’t have to have paper coupons with me. I can print out one list for my own guidance and then simply get the discount taken off at the register without wasting time with scanning paper coupons.” After all, I rationalized from my own technical experience, the coupon offers are presented on the retailer’s website (you can’t import offers from third parties, although that would be a great enhancement) and therefore fraud is less of a concern since the retailer knows exactly what items are offered, the discount available, and when the coupons expire. Sounds easy enough for me and “common-sense” enough for the retailer, right? Well, when I attempted to use this feature and then print a list of “coupons” on my card, I immediately saw “opportunities” for improvement. First, I wasn’t able to print pictures (color would be nice for those who have that capability) to appear in my list. How would I remember what the package for a new item looks like at the store? What if there are three “similar” items and the one that actually counts for the discount isn’t in stock at my store?

Next, I shopped at the store to pick up my items. After a situation that caused some “confusion” at the register, the bottom line was that I did not get my discount. When confronting customer service, they told me that “if I had the paper coupon, they could give me the discount, but since the coupon was just on the card (i.e. electronic, and not a tangible, paper coupon), they could not do anything”.

The average consumer’s response? “Forget it. I’m never going to use that service again. In fact, I’m so mad, maybe I’ll never return to that retailer again.” One might ask, why did the retailer even bother to create an online site and offer services if the most basic aspect of the service is effectively useless and not supported at its stores? No joke, folks. I am much of a “technophile” and, as a marketer, I can relate to the retailer and their efforts to provide extra features in their loyalty programs via new technology. I’m rooting for you. The average customer, however, will increasingly, not be this tolerant. If you can’t offer a feature on your website, in your mobile app, or whatever the medium, that you fully support at the point of sale and with customer service, then don’t even do it in the first place. Seriously. It will make you look bad, initiate a wave of bad publicity (instantaneous these days) and some customers will never use your loyalty “perks” again. They may even turn away from your products or services in the future.

Lesson to learn: How could we have improved this situation? First, if your organization is going to offer online coupons, they need “first class treatment” across all of your retail establishments. After all, this is a channel that YOU control. Even if you work with third-party vendors, YOU can set the requirements of the relationship, data transfer, and security from the point of offering to point-of-sale.  Coupons, discounts, or other offers acquired from a retailer’s own channel (web site, mobile app, or whatever platorm or venue) should have validity and availability equal to or surpassing printed coupons. Retailers know the potential for fraud with printed coupons — even the ones that look totally authentic. With technology and your own venues, however, you can establish controls that provide immediate, consistent results and satisfaction for the consumer. Maybe, when printing the list of “coupons” that appear on the loyalty card, the list could print with barcodes that identify the product, the discount, and any other information the retailer needs in order to verify the authenticity of the item when scanned.

A “data tie-in” to the shopper card’s online account at the point of sale could be implemented. That way, any question about the  authenticity of coupons, or other account details, could be resolved at the point of sale or customer service desk without incident. A full discussion of technical possibilities is beyond the scope of this post, but I know for a fact that there are no “technological limitation” excuses here.  As marketers and retailers, we should be “above” those arguments. I cannot stress this enough: from the consumer’s perspective, they went to YOUR site to print YOUR coupons and shopped at YOUR store. Please, never tell consumers that “this is difficult because”, or “if you would have done this, then”. They were using a service YOU created and offered them. By doing anything other than making them feel like a “first class customer”, you are dooming not only your customer loyalty program, but maybe their patronage as well. Remember: customer feedback is immediate, and sadly, it is usually the negative kind. With the new crop of mobile, technology-saavy shoppers, however, positive reviews are out there. They simply have to be earned.

Do you represent a retailer with a shopper loyalty program? What are your thoughts?

Are you a consumer and have concerns about a loyalty program that you would like to see addressed? As a consumer, do you have praise for a loyalty program and/or a feature you wish retailers would offer?

As always, I’m curious about your perspective. Please leave your comments and let’s all watch as loyalty programs and the technologies they employ continue to improve and make the shopping experience better for everyone.