What’s worth more to your business: a satisfied customer or a loyal one?
As the leader of an organization, wouldn’t you rather have:
- A customer who raves about your business on social media and to their peers?
- A customer who returns again and again – and brings friends?
- Or, in a time when it’s difficult to find qualified staff, an employee who would highly recommend your business as a great place to work?
When I was responsible for marketing and customer satisfaction for an Indianapolis-area hospital system, I created a leadership program based on the Fred Lee book, “If Disney Ran Your Hospital: 9 1/2 Things You Would Do Differently.” A former Disney and hospital executive, Lee was renowned for his ability to create cultures that inspired loyalty.
In time, after the Disney-based training and resulting process changes, patient and employee satisfaction scores increased at my hospital, as did overall top of mind awareness in a very competitive healthcare market.
There’s much to be learned from the brand that brought us our beloved Mickey and Minnie Mouse.
Loyalty as a strategic advantage
“Loyalty is an organization’s best source of long-term strategic advantage,” Lee stated.
Organizations would do well to “emulate the most vital things that earn Disney the love of their guests and employees” to gain customer loyalty – and ultimately, advantage over their competitors.
As the nearly $100 billion brand stresses, Disney does not provide a service. Neither do hospitals. They all provide an “experience.” This is exactly what your organization should strive for, too.
When you open the doors every day to customers, answer the phone or simply reply to an email, your mission shouldn’t be to just meet the customers’ needs at that time.
To encourage loyalty, be proactive about the customers’ future needs; anticipate what else they might also want or need. Just asking, “What else can I do to help you today?” goes a long way in showing respect and appreciation.
I can get service anywhere, from anyone. Of course, I want a quality product or service. But I’m more likely to do repeat business with an organization where I feel valued, special, heard and respected. As a business owner or executive, you should want me to leave our interaction feeling awed by my experience so that I return and am compelled to tell others.
Disrupt your organization to build your future
“Disruption,” the act of causing a system, process, or event, from continuing as usual, is a term that’s taken off in the tech sector. But it’s relevant to any organization.
If your sales have fallen, good employees are leaving, or in-store traffic has decreased, it’s likely time to disrupt some processes. Take a good, hard look at how you’re doing business and ask your internal and external customers for feedback.
Disney’s profits keep climbing in part because they take customer feedback seriously when creating and evolving the customer experience. From no visible piercings to rules for customer engagement when cast members are “on stage,” Disney’s traditions are strategies designed to improve the customer experience and promote retention.
You’re missing out on great opportunity if you think you’re providing “just” a paycheck, professional service, meal or a car tune-up. Provide an experience.
The more you think about experience as a competitive advantage, the more loyal your customers will become.
A Disney spokesperson claimed, “On any given day 75% of the guests in Disney parks are repeat customers.” Research by Bain and Company says it costs six to seven times more to acquire a new customer than retain an existing one.
It just makes financial sense to make customer loyalty a business strategy.
Three lessons learned from Disney
Here are three ways you can focus on customer loyalty and positively disrupt your business today:
1. Monitor perception vs. outcome.
Perception is the customer’s impression – their reality – and you can’t argue with it. In the end, if their perception is negative you can kiss their business goodbye. Lost business is your outcome.
Directly influenced by the quality of your service or product, outcomes to be measured often include customer churn, sales and profitability growth. You must monitor and measure both perception and outcome to affect change.
Ask your customers for feedback at point of sale and, formally, at least once a year when engaged long term.
Do you work with your employees on their soft skills as well those necessary to fulfill their responsibilities? An empathetic and engaging server, for example, can sometimes outweigh my reality of a lackluster meal due to a poorly trained cook.
2. Encourage service recovery.
When I’ve expressed dissatisfaction with a product or service and the company has offered to “make it right” through an upgrade, discount or credit toward future purchases, it often has eased my negative perception. But the recovery must be done in real time, before someone has had the time to fester on the negative.
Recently I was on hold or repeating the same story over a 40-minute period to four different representatives of a software company. I was already crafting my Twitter rant when a fifth person came on the line to apologize and offer a complete refund. The last thing you want to do is leave an issue unresolved.
Amazon CEO Jeff Bezos said, “If you make customers unhappy in the physical world, they might each tell six friends. If you make customers unhappy on the Internet, they can each tell 6,000 friends.”
How do you empower your employees to “rescue” an experience? What is your service recovery procedure?
3. Wow your customers.
What could you do that would be appreciated and totally unexpected?
I recently walked in to a new home furnishings shop for the first time and was thrilled when I was immediately offered my choice of beverage, from water to a refreshing adult cocktail.
Yes, after strolling through the store with a glass of wine, I bought a few items. But I also told my Facebook and Instagram families about the experience.
Whether you run a restaurant or a tech company, engage your employees in creating innovative ways to “wow” your customers. Make this part of your company culture.
Think about your own positive and negative experiences to find some quick wins. What little things can you change today that might make a huge difference in gaining loyal customers?
One of my favorite quotes, “Culture eats strategy for lunch every day,” is originally attributed to Peter Drucker.
My interpretation of the quote is that the customer experience should be at the core of your brand and business strategy. It is for Disney. And since Mickey was brought to life in 1928, the Disney brand has grown into one of the world’s most recognizable and valuable.
You can develop all the strategies you want, but if your entire top-down organization doesn’t support processes vital to creating loyal customers, your strategies go out the window and customers head to your competitor.
Interesting in making sure your business is building a brand that connects with its customers? Let’s talk.