Why Customers Come Back


Published on

1 Comment
  • good easy summary
    Are you sure you want to  Yes  No
    Your message goes here
No Downloads
Total Views
On Slideshare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Why Customers Come Back

  1. 2. Why Customers Come Back How to Create Lasting Customer Loyalty Others AUTHOR: Manzie R. Lawfer PUBLISHER: Carrie Press DATE OF PUBLICATION: 2004 NUMBER OF PAGES: 268 pages
  2. 3. <ul><li>Do you want to build greater customer loyalty? Do you want to know what makes customers keep coming back and apply them to your business? Do you want to know how you make your business even more successful by getting more loyal customers? </li></ul><ul><li>If your answer to these questions is yes, then read “Why Customers Come Back” by Manzie R. Lawfer. This book helps you discover the motivation and characteristics of loyal customers, and the advantages of dealing with loyal customers. This book is about working with current customers to develop lasting loyalty. </li></ul>THE BIG IDEA
  3. 4. I. Customer Loyalty: Secret To Business Survival and Success <ul><li>Many businesses and professionals experience lackluster performance and reduced profits, face increasing competition, and confront other difficult financial conditions. </li></ul><ul><li>Today, as in the past, only one thing makes companies survive such hard times – customer loyalty. This is because loyal customers are easier to do business with, are more predictable, and don’t carry the expense associated with attracting new customers. Companies with a loyal customer base enjoy greater profitability in good economic times and can depend on loyal customers to survive during difficult times. </li></ul><ul><li>Therefore, getting customers to come back again and again is the most important endeavor of any business. No business can be successful by continually dealing with new customers. </li></ul><ul><li>Repeat customers are the source of all profit. It is not until a customer buys from you a second, third, or fourth time that any profit is earned. Customer loyalty is the ultimate competitive advantage. Companies that promote and enjoy customer loyalty are more stable than companies that are forever searching for new markets and customers. </li></ul>
  4. 5. <ul><li>How do you create loyal customers? Well, the first thing you need to know is: Customers are self-serving. Their only interest is to deal with a business that gives them what they want. Loyalty is not a characteristic of customers. It is a response to the actions of your business and you. </li></ul>II. There Are No Loyal Customers
  5. 6. <ul><li>If there are no loyal customers, what, then, is customer loyalty? Customer loyalty is an activity; it is not an emotion or opinion. When customers buy from you again an again, and tell the world why everyone else should buy from you, they are demonstrating loyalty. Customer loyalty is the specific activity of buying from you or recommending you to others on a repeat basis. </li></ul>III. What Is Customer Loyalty?
  6. 7. IV. How Can Loyal Customers Make Your Business Successful? <ul><li>Accounting methods can show you how much profit you make, but they won’t show you from which customers you make it from. The truth is: all profit comes from loyal customers. Why? </li></ul><ul><li>First, you don’t have to educate repeat customers about your business, your products and services. They already know about you. This saves you time and money, which translates to profit. </li></ul><ul><li>Second, repeat customers are predictable. If you can predict the behavior of all your customers, you can do your inventory much better, buy and stock only what you will be able to sell within a given period, and in the process save on expenses and increase your profit. </li></ul><ul><li>Third, it costs more to attract new customers, which can actually cancel or substantially diminish any potential profit from them. Companies pay millions on advertising, promotions and special sales to attract new customers. And they don’t make a profit until these new customers become repeat customers. But it usually costs nothing or next to nothing to attract repeat customers. </li></ul>
  7. 8. IV. How Can Loyal Customers Make Your Business Successful? <ul><li>Fourth, it takes more time and money learning how to deal with new customers – their credit habits, their service preferences, their delivery requirements – and teaching them about your business. </li></ul><ul><li>Finally, repeat customers are actually a great channel for marketing your business. At no cost to you. And customers’ recommendations are more credible and therefore carry more value to customers who come to you as a result. In fact, you can actually build a business through word-of-mouth marketing. </li></ul>
  8. 9. V. Toyota: A Success Story of Customer Loyalty <ul><ul><li>Toyota has built the company on the premise that all profit comes from loyal customers. It aggressively pursues loyalty. More than 70 per cent of Toyota customers return to buy another Toyota automobile. Most automakers have only a 30 per cent repeat purchase rate. </li></ul></ul><ul><ul><li>Toyota focuses on its existing customers. If you look at Toyota’s brochures, you will be sure to find an older model. The message is: It doesn’t matter if your car is old or new; if you own one of our cars, you are part of the family.” </li></ul></ul>
  9. 10. <ul><ul><li>American businesses usually attempt to create customer loyalty through customer satisfaction and special incentives. But experience shows that satisfaction does not actually create customer loyalty. </li></ul></ul><ul><ul><li>Cheerleading and exhortations won’t build customer loyalty, either. Why? Because loyalty is a behavior, and it will not occur simply by telling people what to do. The activity of repeat buying is a response to the five principles that create customer loyalty </li></ul></ul>VI. How Do You Create Loyal Customers?
  10. 11. <ul><ul><li>Principle 1: People Do Business With People </li></ul></ul><ul><ul><ul><li>Most of the time, people only do what they want to do. So the only way to get someone to do anything, is to make that person want to do it. </li></ul></ul></ul><ul><ul><ul><li>What makes people want to do things? Psychology offers many answers, but basically people are motivated by one ultimate desire – to be important. Understanding how a person wants to be important is the basis of knowing how to make someone want to do something. And listening with our ears, eyes, and an open mind is the only way to gain this understanding. </li></ul></ul></ul><ul><ul><ul><li>Principle 2: Differentiation </li></ul></ul></ul><ul><ul><ul><li>There is competition for every purchase and sale. To win, you need to show that your product/solution/service is more appealing, and that your competing product/solution/service is risky, or not as attractive. </li></ul></ul></ul><ul><ul><ul><li>Differentiators are the unique features or differences in your product/solution/service that make it stand out and special. You may not be able to differentiate your product, but you can differentiate your services and how you deal with the customer. </li></ul></ul></ul>VII. Five Principles of Customer Loyalty
  11. 12. <ul><ul><li>Principle 3: Value And Assurance </li></ul></ul><ul><ul><li>The customers always decide what is of value to them. Value is determined by the customers’ specific tastes, preferences, wants and needs. Value should not be confused with price. Price is only one component of value. People base their purchasing decisions on their specific situation and desires. </li></ul></ul><ul><ul><li>How a customer perceives the value of your product or service can be described as your value proposition. Value proposition encompasses the true usefulness or specific benefits the product or service provides. </li></ul></ul><ul><ul><li>Principle 4: Effective Communication </li></ul></ul><ul><ul><li>Communication is the largest single factor determining what kinds of relationships you make with others and what happens to you in the world you live in. Communication is effective when it is two-way. Speaking, listening and learning are the basis for effective communication. </li></ul></ul><ul><ul><li>The message you give to your customers and how you deliver that message is central in the process of creating customer loyalty. You communicate by what you say, how you say it, and how you look. </li></ul></ul>VII. Five Principles of Customer Loyalty
  12. 13. <ul><ul><li>Principle 5: Focus </li></ul></ul><ul><ul><li>Focus is the object of your current attention. Focus affects customer loyalty in three ways: </li></ul></ul><ul><ul><li>How you think about yourself and your business. When you make the five principles that create customer loyalty a part of your deepest thoughts, you are instructing your subconscious mind to use its infinite powers to serve your purpose. </li></ul></ul><ul><ul><li>How you think about your customers. Developing your ability to focus on relationships instead of just making a sale is critical in creating customer loyalty. </li></ul></ul><ul><ul><li>How your customers think about you. </li></ul></ul>VII. Five Principles of Customer Loyalty
  13. 14. <ul><ul><li>Developing Activities that Support Principle 1: </li></ul></ul><ul><ul><li>People Do Business With People </li></ul></ul><ul><ul><li>Are you the kind of person people want to do business with? </li></ul></ul><ul><ul><li>Do you have your customers’ best interests in mind? </li></ul></ul><ul><ul><li>Are you truly interested in your customers? </li></ul></ul><ul><ul><li>Do you spend more time talking or listening to your customers? </li></ul></ul><ul><ul><li>Do you make a habit of asking your customers questions? </li></ul></ul><ul><ul><li>Do you spend most of your time with customers making statements? </li></ul></ul><ul><ul><li>Do you really know your customers? </li></ul></ul><ul><ul><li>Do you really understand your customers? </li></ul></ul><ul><ul><li>Do you lead your customers? </li></ul></ul><ul><ul><li>Do you help your customers? </li></ul></ul><ul><ul><li>How are you serving your customers? </li></ul></ul>VIII. How Do You Do It?
  14. 15. <ul><ul><li>Developing Activities That Support Principle 2: </li></ul></ul><ul><ul><li>Differentiation </li></ul></ul><ul><ul><li>How am I different from my competitors? </li></ul></ul><ul><ul><li>Am I more courteous, prompt, professional, personable, or caring than my competitors are? </li></ul></ul><ul><ul><li>Besides the product or service, what do my customers expect and always receive from me? </li></ul></ul><ul><ul><li>Why would I be the first person someone would think of if he were looking for the products I sell? </li></ul></ul><ul><ul><li>How do I decide where and who I will do business with? </li></ul></ul><ul><ul><li>What traits and behaviors do I appreciate most in others? </li></ul></ul><ul><ul><li>Am I exhibiting those traits and behaviors for my customers? </li></ul></ul><ul><ul><li>What are some of the ways I exhibit these traits and behaviors? </li></ul></ul><ul><ul><li>Are the things that make me different important to my customers? </li></ul></ul><ul><ul><li>How many different techniques do I use in dealing with my customers? </li></ul></ul><ul><ul><li>What kinds of things do my customers say about me? </li></ul></ul><ul><ul><li>Do they say anything about me? What kinds of things do I want them to say about me? </li></ul></ul>VIII. How Do You Do It?
  15. 16. <ul><ul><li>Developing Activities That Support Principle 3: </li></ul></ul><ul><ul><li>Value And Assurance </li></ul></ul><ul><ul><li>What do my customers value in doing business with me? </li></ul></ul><ul><ul><li>How do I know what is of value to my customers? </li></ul></ul><ul><ul><li>How much emphasis do I put on the price of the products I sell? </li></ul></ul><ul><ul><li>Is price really the most important issue to my customers? </li></ul></ul><ul><ul><li>Have I asked my customers what is most important to them? </li></ul></ul><ul><ul><li>Besides price and product, what other value do I offer my customers? </li></ul></ul><ul><ul><li>Do my customers know about these other values? </li></ul></ul><ul><ul><li>Do I regularly make promises to my customers? </li></ul></ul><ul><ul><li>Do I always keep my promises? </li></ul></ul><ul><ul><li>Do I always do what I say I’ll do, when I say I’ll do it? </li></ul></ul><ul><ul><li>Does doing business with me make my customers feel good? </li></ul></ul>VIII. How Do You Do It?
  16. 17. <ul><ul><li>Developing Activities That Support Principle 4: </li></ul></ul><ul><ul><li>Effective Communication </li></ul></ul><ul><ul><li>Do I thank my customers for their business? </li></ul></ul><ul><ul><li>How do I thank my customers? </li></ul></ul><ul><ul><li>How often do I thank my customers? </li></ul></ul><ul><ul><li>How often do I contact my customers? </li></ul></ul><ul><ul><li>What do I tell them? </li></ul></ul><ul><ul><li>Are my communications with my customers different than my communications with non-customers? </li></ul></ul><ul><ul><li>Can my customers tell that I treat them differently? </li></ul></ul><ul><ul><li>How can they tell? </li></ul></ul><ul><ul><li>Do my communications recognize the importance of my customers? </li></ul></ul><ul><ul><li>How frequently do my customers hear from me? </li></ul></ul><ul><ul><li>Do I make my customers feel special, like “insiders”? </li></ul></ul><ul><ul><li>What do I do to make them feel special? </li></ul></ul>VIII. How Do You Do It?
  17. 18. <ul><ul><li>Developing Activities That Support Principle 5: </li></ul></ul><ul><ul><li>Focus </li></ul></ul><ul><ul><li>How do I define success? </li></ul></ul><ul><ul><li>At what point can I proclaim myself successful? </li></ul></ul><ul><ul><li>Is my success tied to the accomplishment of a goal? </li></ul></ul><ul><ul><li>Is my success defined as a progress toward the continuing development of a relationship? </li></ul></ul><ul><ul><li>Am I more interested in new customers or furthering the relationship with each of my existing customers? </li></ul></ul><ul><ul><li>How am I currently demonstrating my desire to develop loyal customers? </li></ul></ul><ul><ul><li>Do I think of and treat the people I do business with as loyal customers? </li></ul></ul><ul><ul><li>What evidence do my customers have of my belief in their loyalty? </li></ul></ul><ul><ul><li>Do my actions support my beliefs? </li></ul></ul>VIII. How Do You Do It?
  18. 19. BusinessSummaries.com is a business book Summaries service. Every week, it sends out to subscribers a 9- to 12-page summary of a best-selling business book chosen from among the hundreds of books printed out in the United States. For more information, please go to http://www.bizsum.com. ABOUT BUSINESSSUMMARIES