Download Customer Loyalty Ladder - Southern Rural Development Center

Customer Service
Patty Rai Smith, Cooperative Extension Service,
University of Kentucky
Barbara Cunningham, University Outreach and
Extension, Missouri SBDC
Customer Loyalty Ladder
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Suspect
Prospect
Customer
Client
Advocate
Advocate
Client
Customer
Prospect
Suspect
*One Stop Marketing by Jonathan Trivers
Customer Loyalty Ladder
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Suspect
Anyone who reads or hears an ad, looks at a brochure or
encounters some other type of promotion is a suspect
Customer Loyalty Ladder
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Prospect
Someone who pays attention to your promotion
Customer Loyalty Ladder
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Customers
Those who buy your product or service
Customer Loyalty Ladder
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Client
A customer who buys a second time
Customer Loyalty Ladder
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Advocate
A customer who gives unpaid advertising for the
products or services of a business
It takes a least 3 times as much money to attract a
new customer via traditional forms of advertising as
to re-attract a repeat customer
It takes at least 30 times as much marketing money to
attract a new customer via traditional forms of
advertising as to have a satisfied customer find new
customers for you
Traditional Advertising
Satisfied Customer Referral
Most business owners spend less than 5% of their
marketing dollars on their customers and spend 95%
of their marketing dollars trying to find new customers
Traditional Investment
5% Marketing $
Advocate
Client
Customer
Prospect
Suspect
95% Marketing $
Customer Loyalty Ladder
Goal:
Invest in developing satisfied customers
Remember:
It takes at least 30 times as much marketing money to
attract a new customer via traditional forms of
advertising as to have a satisfied customer find new
customers for you
Traditional Advertising
Satisfied Customer Referral
How Can You Accomplish This?
How?
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Know who your customers are
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Know that your best customer is your most recent
satisfied customer
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Know that your best word-of-mouth advertising comes
from your most recent satisfied customer
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Act in a way that moves people up the ladder
Lesson Learned
The most recent satisfied customer who has purchased
products from you is the least expensive marketing
way to find new customers. People love to tell if they
are happy.
Lesson Learned
Your worst customer, who will rip you apart to all
their friends, is your most recent unhappy customer.
Nontraditional Advertising
A great marketing company
spends money here
Advocate
Client
Customer
Prospect
Suspect
Traditional
Advertising
Recommendation
30% of your marketing dollars should be spent on
keeping customers…..keeping them happy.
Not 5%…..30%.
Invest in Keeping Customers
To Keep Customers:
30% Marketing $
Advocate
Client
Customer
Prospect
Suspect
To Find Customers:
70% Marketing $
Lessons Learned
To climb the loyalty ladder, business owners must
exceed customer expectations
FISH
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Choose Your Attitude
Play
Make Their Day
Be Present
Sample Company
First Guarantee Financial
Play
Benefits of Play
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Happy people treat others well
Fun leads to creativity
The time passes quickly
Having a good time is healthy
Work becomes a reward not just a way to rewards
Implementing Play
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Post signs saying, This is an Adult Playground. Watch out for
Adult Children
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Start a joke of the month contest with its own bulletin board
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Add more color and make the environment more interesting
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Add more life with plants and an aquarium
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Special events such as a lunchtime comedian
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Form an ongoing play committee to keep ideas flowing
Make Their Day
Survey results
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Customers dread working with us
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Quality of work is adequate but you never extend yourself
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You treat customers like they are interrupting
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You pass customers around
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Your department is the subject of jokes
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Customers believe the department should be replaced with an
outside contractor
Make Their Day
Benefits
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It is good for business
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Serving our customers well will give satisfaction
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It will focus our attention away from our problems
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It is healthy, it feels good and will unleash more energy
Implementing Make Their Day
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Stagger hours so there is coverage from 7 am until 6 pm. This will
be good for customers and some of us
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Pull together focus groups to study ways we can be of service to
customers
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Have a monthly and annual award for service based on customer
recommendations
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Appoint a special task force dedicated to surprising and delighting
our customers
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Ask key customers to “come out & play” once a month
Be Present
Benefits
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Customers know if you are listening
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Customers feel important
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Important opportunities do not escape
Be Present
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Encourage one another to be present. Ask: “Is this a good time?
Are you present?”
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Establish a code phrase: “You seem distracted” to signal a present
moment issue
Choose Your Attitude
Benefits
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By accepting that you choose your attitude, you demonstrate
personal accountability and proactivity
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Choosing your attitude and acting like a victim are mutually
exclusive
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While we may not be able to do what we love, if we choose to love
what we do, our work area will become an oasis of energy,
flexibility and creativity
Implementing Choose Your Attitude
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Purchase copies of Personal Accountability: The Road to a
Rewarding Work Life for Everyone. Organize discussion groups
around the book - follow with similar topics
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Prepare an attitude menu to post in the office
FISH
By:
Stephen C. Lundin, Ph.D.
Harry Paul
John Christensen
www.fishphilosophy.com
Tired of Smile-Free Service?
Article - Newsweek – March 6, 2000
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Employers having difficulty finding good people
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Managers have no control over workers who
give poor service – pointing out deficiencies
leads to high turnover
Research
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Turnover is higher in companies where
employees have a poor view of customer
service
Employees are good predictors of customers’
perceptions
Conclusion
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Increasing the quality of service can increase
both customer loyalty and employee retention
significantly
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People may “job hop” because they haven’t
found acceptable work environments