Why Is Customer Loyalty So Hard to Get? And How Can You Get It Now?

Companies like Apple, Coca-Cola and Harley Davidson must have a secret formula. Customer loyalty for them goes beyond the norm. Calling the people who buy their products “customers” doesn’t do justice. “Raving fans” is a much better description. Billions of dollars are spent every year on customer relationship management in an effort to inspire loyalty. Reward programs are implemented and abandoned when the cost to maintain exceeds the return. Loyalty is hard to get and easy to lose.

Companies like Apple, Coca-Cola and Harley Davidson must have a secret formula. Customer loyalty for them goes beyond the norm. Calling the people who buy their products “customers” doesn’t do justice. “Raving fans” is a much better description.

Billions of dollars are spent every year on customer relationship management in an effort to inspire loyalty. Reward programs are implemented and abandoned when the cost to maintain exceeds the return. Loyalty is hard to get and easy to lose. This is why the companies that have it guard their brand image with a vengeance.

The benefits of good customer/company relationships are well known. When people feel connected to a company, they become lifetime customers and advocates for the brand. Some companies naturally attract loyalty because of their product appeal and exclusivity. The rest have to earn it.

Earning loyalty begins with understanding relationships between customers and companies. Loyalty is hard to get because companies are focusing on the wrong things when they try to build relationships with their customers. Transactional and service relationships are the only type that people want with companies. All of the talk in social media about anything deeper is fantasy. Trying to connect with people beyond fulfilling their needs and expectations is a waste of resources.

Social media is one of many channels that companies use to communicate with customers and prospects. It is an excellent way to share information about the company, products and events and interact with people. It is not a replacement for taking care of the basics that provide the foundation for loyalty. Trying to shortcut the loyalty process by creating viral content is ineffective. If you want an interactive social presence, start with the fundamentals that are endearing to customers.

People want simple and easy more than anything else. Life is complicated and short. They do not want to invest time in the buying process. Simplifying the buying decision and making it easy to purchase, return and resolve issues will do more to create loyalty and increase revenue than anything else. Multiple channels and a variety of tools are available that provide economical and efficient methods to improve the shopping and service experience. To fast-track loyalty for your company:

  • Clean House: Review every process, procedure and policy to insure it is necessary and as efficient as possible. The shorter the paths from initial contact to purchase and problem to resolution, the better. It makes it easy for customers and economical for you.
  • Improve FAQ’s: Answer questions before they are asked. Sometimes this means you have to anticipate the questions because people don’t always know what they need to ask. Including the questions that should be asked in the FAQ’s improves trust and reduces resistance.
  • Supercharge Emails: Add service emails to your marketing mix. Service emails educate and inform customers and prospects so they know what’s happening and how to interact with your company. Educated customers are happier and easier to serve.
  • Offer Self-Service: People don’t really want to talk to your company representatives. They find it easier to solve their own problems when possible. Providing self-service opportunities pleases customers and reduces operating costs.
  • Invite Feedback: Your customers are the best source of information on how to improve your business. Invite them to share their thoughts and make the process as easy as possible. Be sure to always respond with gratitude and information on how the suggestions will be used. It gives ownership and connects people to your company.
  • Do It Yourself: Before expecting your customers and prospects to do anything, try it yourself first. If you developed the process and cannot be objective, ask someone outside the company to do it with you watching. The pain points are quickly identified when this is done.

New Developments in B-to-B Loyalty Marketing

Business marketers have much to gain from retention marketing. Business customers tend to be fewer and more valuable—meaning you can’t afford to lose even one. But how do you keep your customers active and buying from you, versus the competition?  How do you prevent defection? Let’s look at the traditional approaches to retention marketing in B-to-B, plus some new developments in loyalty marketing being adopted by B-to-B marketers today, including social media and gamification.

Business marketers have much to gain from retention marketing. Business customers tend to be fewer and more valuable—meaning you can’t afford to lose even one. But how do you keep your customers active and buying from you, versus the competition? How do you prevent defection? Let’s look at the traditional approaches to retention marketing in B-to-B, plus some new developments in loyalty marketing being adopted by B-to-B marketers today, including social media and gamification.

Traditional Approaches in B-to-B Retention Marketing
Given the importance of customer retention in B-to-B, business marketers have a long history of investing in loyalty drivers. The most basic approach has been—simply—superb account management.

In a well-run company, the sales team in charge of any given customer will do its best to understand what’s going on in the account; sell to them the way they want to buy; deliver on time; develop new products to serve their evolving needs; solve any customer service problems; cultivate deep relationships with the specifiers, influencers and decision-makers throughout the account; and generally provide the best possible products and service levels. It is this basic approach that has stood the test of time in account development.

But as buying has become more complex, businesses have developed additional strategies to deepen customer relationships and engender loyalty. For example:

  • Data-driven segmentation and differentiated treatment. Not all customers are created equal, so segmenting customers by value and treating them differently is a strategy that works well in business markets. Some companies will identify their top accounts—based on margin or on top-line revenue—and provide them with special perks, pricing and service levels, such as:
    • Corporate-wide purchasing agreements, where all buying across a far-flung enterprise can benefit from pre-negotiated contract pricing.
    • Dedicated sales teams, some of them even housed on site at the customer’s operation.
    • Dedicated customer service phone lines, where the service personnel can develop an ongoing personal relationship with individuals in the account.
    • Special status, like Gold Customer or Preferred Customer, programs that may include access to discounts, free shipping, invitations to events and other perquisites.
  • Incentive programs. Taking a page from the consumer world, some business marketers have found success with frequency marketing programs that reward customers for certain behaviors, such as repeat purchase. These programs are not universally applicable in business, but they have their place, particularly when the purchase cycle is short and purchase behavior can be tracked.
    Rewards programs are typically applied in businesses that mimic consumer purchasing behavior, like office supplies. Staples, for example, runs a thriving business rewards program targeted to its small-medium business customers. Financial services and telecom have also done well with frequency marketing programs in SMB, examples being American Express OPEN, the MasterCard Business Bonus program and Verizon’s BusinessLink.

New Developments in Loyalty for Business Markets
In the last few years, B-to-B loyalty marketing has benefited from the arrival of new tools that support the goal of deepening relationships with business buyers. Social media, for example, has created an easy, low-cost way for companies to build communities and foster engagement. Social media is being applied across the B-to-B marketing spectrum, from prospecting via viral pass-along, to enhancing customer relationships, to surfacing and solving customer service problems.

In the area of enhancing customer relationships and fostering loyalty, the power of social media is being felt throughout the B-to-B marketing world:

  • Companies build the ranks of their followers on Twitter and LinkedIn, their “likes” on Facebook, and their RSS subscribers to blogs and YouTube channels. These connections then become another set of media channels for staying in touch, introducing new products, sharing ideas and case studies, and otherwise building an ongoing relationship.
  • Within social media environments, companies establish communities of customers and prospects around certain subjects, like technologies, products, events and other shared interests. In these forums, chat groups, blogs and other formats, like-minded people share ideas, expand their knowledge and make valuable connections.

One of the most exciting new developments in B-to-B loyalty marketing is the new concept known as gamification. The idea here is to build on people’s natural enthusiasm for games involving prizes, competition and recognition, and turn that motivation into a loyalty driver. The goal of gamification is to add gaming elements to otherwise boring processes and tasks, converting them into something fun, competitive and addictively engaging.

Marketers who want to introduce game design and mechanics to their loyalty programs can now take advantage of several new software platforms, like Badgeville, CallidusCloud and Bunchball. These tools are taking loyalty programs to a new level of interactivity, real-time feedback and social interaction, with some promising early results.

If you’ve experimented with loyalty programs in B-to-B, please share your experiences.

A version of this post appeared in Biznology, the digital marketing blog.

Use Social Media and Email to Get More Customers and Keep Them Coming Back

Apathy kills more customers than bad service and poor quality products combined. Loyalty is inspired when people are interested, engaged and valued. The top priority of every business that wants long-term growth and profitability is acquiring customers and keeping them coming back. Focusing on one without the other is a recipe for disaster.

Apathy kills more customers than bad service and poor quality products combined. Loyalty is inspired when people are interested, engaged and valued. The top priority of every business that wants long-term growth and profitability is acquiring customers and keeping them coming back. Focusing on one without the other is a recipe for disaster.

Customer acquisition without retention is expensive. Costs typically run $25 to $75 per customer depending on the industry and competition. Three or more orders are required to break even. Profitability and growth come when people continue to buy year after year. Companies that excel in acquiring customers but don’t retain them will eventually crumble under the high costs.

Retention without acquisition is equally dangerous. Natural attrition will eventually leave the company without customers. When people complete their buying lifespan, they leave. Replacements are vital to keep the company moving forward. Companies without a stable of new customers coming in on a regular basis are dying. It is only a matter of time until operating costs exceeds revenue.

Apple is a good example of a company that has a good balance between acquisition and retention. The company keeps people coming back even when the products offer less performance than those from competitors. Loyalty remains high even after “antennagate” in 2010 because people are so emotionally invested in Apple’s culture leaving is harder than staying. Any company without a customer cult-like obsession for its products would have suffered irreparable damage from a similar challenge.

What if your company isn’t Apple and has little hope of creating an obsessive fan base? How do you continuously acquire customers and keep them coming back? Creating an integrated strategy that uses the best features of individual channels to connect with people and provide an engaging experience is the key to your success. Start by combining social activity with email campaigns and expand from there. Here are some ideas to get you started:

  • Let people know that you value their business. Neglect is one of two components that make it easy for competitors to snag your customers. Use custom emails to keep the connection between customer and company strong. People know the difference between “personalized” (insert name here) and “personal” (specific messages about orders or challenges). The same technology that creates personalized messages can create personal ones. Make the effort to send custom emails that invite a two-way conversation on a regular basis. Most people won’t respond, but you will still plant a seed that can grow into loyalty.
  • Keep things interesting. Boredom is the second component that opens the door for competitors to steal your customers’ attention with flashy ads, deep discounts, and the promise of something new. Shake things up by injecting new templates in your email campaigns and offering fun activities on your social platforms. After receiving the same format multiple times and repeatedly seeing the same types of posts, people miss the message because their mind tricks them into thinking they’ve seen it before. Avoid this by injecting fresh looks and participation opportunities.
  • Have a plan that moves people from participating in social communities to subscribing to your emails and vice versa. An email sign-up page on Facebook and links to your social platforms at the bottom of emails is not a plan. You need specific calls-to-action that include good reasons for people to move between channels. The process needs to be easy and fun. The more fun you make it, the more likely they will respond.
  • Reward people. Use great offers to get people to convert from prospect to customer. Provide even better benefits for long-term loyalty. Create a special club for people to join when they’ve placed their fifth order or reached a sales benchmark to encourage them to keep coming back. Include membership in private groups on social platforms and exclusive email messages. Let the people who provide the most benefits to your company receive the best offers first.

Is Your Customer Service Killing Customer Loyalty?

As marketers, we spend a lot of time, money, energy and brain power designing and building programs that will drive inquiries, close sales or increase brand engagement. And once a sale is secured, we move into loyalty mode—lovingly nurturing that customer to buy more and buy more often in order to derive a long term revenue stream and ROI for the marketing investment. … So what the hell is wrong with the customer service folks?

As marketers, we spend a lot of time, money, energy and brain power designing and building programs that will drive inquiries, close sales or increase brand engagement.

And once a sale is secured, we move into loyalty mode, lovingly nurturing that customer to buy more and buy more often in order to derive a long term revenue stream and ROI for the marketing investment.

So what the hell is wrong with the customer service folks?

Didn’t they get the memo that says, “Our customers are those people who make sure you get your paycheck. So let’s treat them with respect, concern and understanding. Because if we do, they’ll keep buying from us again, and again and again.”?

Apparently, the customer service folks at Dell never got the memo—and shame on them, because they’ve now lost my business for life.

Granted, I run a smaller agency and my lack of future purchases will not put Dell out of business. But I think there’s a big lesson that many companies can learn from my experience, and that’s to take a moment to really examine what goes on inside these departments.

For the record, we’ve been purchasing Dell products for well over 10 years now. Laptops, towers, printers, screens … you name it. My IT guy likes the ease of ordering online and the ability to carefully customize each of our purchases for the user.

So when we recently did a little expansion by hiring a new employee, we turned once again to Dell for a new desktop PC. Little did we know it would be the last transaction we’d ever make with them—and all because of how we were treated when something went wrong with the order. Here’s a quick factual summary:

  • Friday, Aug. 24: Order placed online.
  • Monday, Aug. 27: Order ships.
  • Tuesday, Sept. 4: According to the FedEx tracking number, the order was delivered and signed for—unfortunately, FedEx delivered it to the wrong company at the wrong address!
  • Thursday, Sept. 6: FedEx reroutes package to us. It arrives and appears to have been opened and resealed. Since this is a PC, I don’t want an opened box, so we try to refuse the delivery. FedEx persists and requires us to contact their customer service to arrange a return to sender.
  • Monday, Sept 10: FedEx picks up tower.
  • Monday, Sept 10: Alert Dell; they promise to “expedite” a replacement order.
  • Friday, Sept 14: Dell informs us the PC is still “being built.”

I must interrupt the facts to say “Wha–?” When we ordered the first time, it took them 2 days to build it. But when we ordered our replacement, it’s now taking more than 5 days to build the same computer? It only gets better …

  • Monday, Sept. 17: Dells says, “Still building.”

What on earth are they building for us? We try to reach a “customer care” rep. (BTW, I HATE that term. I wish organizations would call a spade a spade— it’s plain old customer service. Or perhaps since “service” doesn’t seem to be part of the equation, that’s why they changed it. So they “care” but they cannot “service”?)

Net-net, phone numbers we are provided don’t work. (Ring, ring, ring… apparently Dell hasn’t heard of that new-fangled technology called voicemail.) Emails go unanswered, emails to the supervisor bounce back as “out of the office.” Did I mention my new employee is twiddling thumbs doing idle work as she can only get so much done on her smart phone?

  • Tuesday, Sept. 18: Dell emails us saying the order will now be “escalated” and we’ll be kept aware of the status.

Okay Dell. It’s been 25 days since I placed my order and there is still no confirmed delivery date is sight. I give up. I cancel the order and buy from a local retailer.

No apologies from Dell to try and retain my business. No offers on a future purchase. Nothing. Nada. Apparently Dell’s customer care folks forgot that those marketing millions spent on driving in leads, nurturing relationships and transacting sales have all been an investment in their job security.

Not only did Dell blow it, but I won’t even attempt to make another purchase from them—ever.

As a customer, I get infuriated just thinking about this incident. As a marketer, I cringe.

If you are responsible for marketing in your organization, do you spend any time at all investigating what goes on in “customer care”? You should—because it may be the reason you’re not making your marketing and sales goals.

Maximize Holiday Sales

As the holiday season kicks into high gear, brands are scrambling to maximize sales and results. The growing use of social media and smartphones adds enormous complexity, along with many opportunities for today’s digital marketing gurus. But fear not! With a little preparation and integration, double-digit sales increases are possible. Here’s how to get the most out of your Q4 digital efforts to drive sales and grow lifetime value for many years to come.

As the holiday season kicks into high gear, brands are scrambling to maximize sales and results. The growing use of social media and smartphones adds enormous complexity, along with many opportunities for today’s digital marketing gurus. But fear not! With a little preparation and integration, double-digit sales increases are possible. Here’s how to get the most out of your Q4 digital efforts to drive sales and grow lifetime value for many years to come.

Community tagging. Tag existing offline marketing efforts with Facebook/Twitter tags. Integrate “Like” opportunities at key touchpoints, such as your homepage and product pages. A recent study from Syncapse and Hotspex found the lifetime value of a Facebook fan is about $136 to top brands. Consider offering an incentive to encourage consumers to become a fan of your brand, such as making a donation to a cause/charity for each sign-up. And remember to stress the value of being a fan or follower. Adding a “Like” button or “Join the Community” call to action only makes return on investment sense if you have a strategy and communication framework established to engage the community once you’ve converted them.

Belly up to barcodes. It’s estimated as much as 70 percent of all purchase decisions are made at the point of sale (POS). Therefore, it’s critical to stand out on store shelves and to offer some extra value. How about integrating new 2-D barcodes, which enables consumers to use their smartphones to “Like” your brand or product at the POS? Also, pay close attention to mobile applications like Foursquare, which now boasts more than 4 million users. Mobile will increasingly become a critical channel to not only acquire new customers, but grow the community and drive sales via the serving of location-based offers.

Segment and socialize. Implement sharing capabilities on banner ads and email marketing efforts. For existing email efforts, segment your audience based on engagement and social profiles. By targeting best customers and testing various incentives, you can encourage your best customers to get actively involved in the promotion of your brand, thus extending your marketing efforts’ reach and effectiveness. Remember to not only identify who shared the information, but flag them as an influencer for future campaigns.

Email, social and loyalty. Lots has been written about the integration of email and social media. But the importance of coordinating efforts across channels cannot be underestimated. Coordinate socialized email deployments with Facebook and Twitter posts. Furthermore, for those of you with established loyalty programs and sites, don’t forget to sweeten the deal for loyalty members.

The old rule still applies: With proper pampering, your best customers will become your best advocates. Studies and data also show that they buy more products and purchase more often, so remember to treat them extra special. Integrate offers into loyalty websites and statements, and highlight additional benefits for your best customers.

Remarketing/targeting. If you’re a direct response marketer, you likely have access to lots of data. Start with the basics this holiday season by implementing a remarketing strategy for key efforts. With average open rates hovering around 20 percent, look closely at open/click activity and resend offers based on observed behaviors and actions. Consider sweetening offers when and where appropriate. Implementation of a remarketing strategy can lift overall conversion rates anywhere from 50 percent to 200 percent.

However, be careful not to annoy your customers. Be conscious of the law of diminishing returns. Also, look closely at website data and leverage cookie/pixel technologies to target users both onsite and offsite via ad networks with relevant, targeted offers based on their profiles and behaviors. Don’t forget to review your privacy policy, always be transparent and offer users the opportunity to opt out.

Search and destroy. Search remains an effective and efficient vehicle to drive desired behaviors as consumers are actively in the market for your products/services. But search remains underleveraged. Think carefully about corresponding landing pages, and look to integrate data-capture opportunities that offer relevant value to encourage subscriptions. Doing so will allow you to continue the conversation. Also, pump up your search marketing efforts by adding social links to paid search terms to increase visibility and “Likes” for your social efforts.

Earlier this month, the National Retail Federation forecasted holiday sales to increase 2.3 percent, slightly lower than the 10-year average of 2.5 percent. While this year’s estimate represents a significant improvement over last year, marketers must continue to look for operational and marketing efficiencies. That means working smarter, not harder. While paying close attention to supply chain management, inventory control and minimizing markdowns is a must, marketing must overdeliver as well. Marketers must learn to better leverage data, their best customers and emerging/efficient channels like mobile, social media and email to drive sales in today’s difficult market.

Stephanie Miller’s Engagement Matters: Email Storytelling Sells

Combat the fatigue from crowded inboxes by embracing the role of storyteller. Telling a story, rather than just announcing a fact or blasting out an announcement, is a more engaging way to share information. The storytelling approach weaves a relationship through a cadence of touchpoints. Any nurturing or loyalty program is built on the same concept, and many B-to-B marketers are very good at telling stories to move prospects through a buying process.

Gone are the days of the passive email subscriber. Consumers and business professionals tire easily when publishers and marketers broadcast to them. It’s the online equivalent of shouting. Your customers and readers want meaningful conversations — and they know they have other options if you don’t deliver.

Combat the fatigue from crowded inboxes by embracing the role of storyteller. Telling a story, rather than just announcing a fact or blasting out an announcement, is a more engaging way to share information. The storytelling approach weaves a relationship through a cadence of touchpoints. This isn’t complex. Any nurturing or loyalty program is built on the same concept, and many B-to-B marketers are very good at telling stories to move prospects through a buying process.

It’s simply a series of stories about use cases, cool new features and real-life implementation of your editorial, products and services. So invite your subscribers to the proverbial campfire and build their anticipation with a question, “How can I help you today?” Email marketing is great for providing the answer.

Invite subscribers on a story journey
Instead of sending a generic newsletter or “special offers,” invite website visitors to accept a two to five message email series on a particular topic. Make it about how your products, services or content will help them: “Five ways to be beautiful this summer,” “Three strategies for impressing your boss,” “Doctor’s advice on buying contact lenses online,” “Ten things your CEO wants you to know,” “Five great summer games for kids under 10.”

Make it easy to sign up by putting invitations in prominent locations on pages that have related content. And be sure permission is clear. If the offer is just for two to five email messages over the same number of weeks or days, then say so. You’ll likely find a higher sign-up rate and higher response and engagement because the content is so targeted. If you’re also signing them up for your ongoing e-newsletter, be clear about that. There’s no reason you can’t encourage a further subscription after you’ve delivered the series, too. Earn their trust first, then sell. Consider the following strategies:

  • Make your story interactive.
  • Tap the socially connected nature of today’s digital experience.
  • Integrate opportunities for subscribers to share with their social networks or forward to others.
  • Invite subscribers to take a poll or survey or give you feedback.
  • Offer a page where subscribers can upload their own stories or photos, and then share that user-generated content back to the group in your series.
  • Ensure your customer service team monitors these pages so that you can quickly respond to any questions or direct prospects to your sales team or e-commerce site.

Why does it work? An email series strategy is based on a fundamental truth of marketing: Provide something of value and customers will continue to engage. A series makes it easy for you to customize messages to the interests of subscribers at that moment. The topic is top of mind for them, and that creates selling and relationship opportunities for you.

Another benefit is that when your email messages are more relevant, you won’t have as many people clicking the “Report Spam” button, which registers as a complaint at internet service providers like Yahoo or Gmail. Even a small number of complaints can result in a poor sender reputation and a block on all your messages. Make even some of your messages more relevant, and the response rates for all your messages will go up and complaints will go down.

For content, consider the following four options:

1. Make it easy to learn more. Offer website visitors a two- to three-part email series rather than a whitepaper. Most downloaded content never actually gets opened or read. Once a whitepaper is downloaded and saved, it’s out of mind. An email series forces marketers to package up content in bite-sized pieces (you can always link to more detail on your website), and gives them several opportunities over a few weeks to engage. Advertising CPMs for these targeted messages can be at a premium, as well.

2. Comparison shopping. Advertisers know that readers are researching and want publishers to help them shorten sales cycles. Use a series of email messages to help subscribers compare competitive sets — the more honest/nonadvertorial you are, the longer they stay on your site! — find testimonials and bloggers, and make a strong business case.

3. Move free-trial subscribers to paid circulation. A series can give prospects confidence in your content or technology. Help them actually use your service during the trial — help them find the best reviews or product feature comparisons, or let them download tools that help them forecast productivity, revenue or cost savings as a result of making a decision to buy. Test if increasing incentives as prospects move through the cycle helps or hurts your conversion (and margin).

4. Educate. Send one great idea each week, and include ways to practice or implement. The next week, ask for input or a story about how that idea worked or didn’t work. Then, the next day, send the next idea. This interactive cadence will build value for subscribers and let them engage repeatedly over time.

Storytelling lets you retain control over the content while giving subscribers the freedom, choice and interactivity they crave. Successful email marketing is built on a very simple concept: Give subscribers what they want, and they’ll give you what you want. Subscribers want you to help them. When you do, they’ll reward you with higher response and sales, positive buzz and sharing, and stronger brand loyalty.

Let me know what you think by sharing any ideas or comments below.