1. Customer Loyalty
T hat Drives
Business Results
David P. Scurlock
Training and Development that
Drives Business Results
2. Research
Field Experience
Business Week March 9th
The Customer Service Elite
Harvard Business Review (Feb. 07)
Understanding the customer experience
The Ultimate Question –Driving Good
Profits and True Growth
Fred Reichheld - author
3. Definitions
Customer Satisfaction
State of being gratified
Compensation for a wrong
Act of fulfilling a desire or need
Customer Loyalty
Feelings of allegiance
The act of binding yourself (intellectually or
emotionally) to a course of action
Commitment, dedication.
4. Satisfaction =
Loyalty
Short Term Long Term
Can be costly Profitable
5. True Customer Loyalty
Customer Loyalty measures the
emotional attachment
that a customer has with your
product/service/organization.
That attachment is created through
relationships developed by your
employees.
6. Business Week (March 9, 2007)
“The Customer Service Elite”
Companies rated very high in customer
loyalty.
Survey asked how many would
recommend the company to others..
# 1 company 79% would
# 25 company 40% would
7. The Loyalty Effect*
Products are homogenous
Technology is leveling the playing field
Lots of information available
Customer service is the difference and a link to
loyalty.
*”The Ultimate Question- Driving Good Profits and True Growth” Fred Reichheld
8. The Loyalty Effect*
Employee Loyalty Customer Loyalty
Investor Loyalty
Adapted from the “Loyalty Effect” , Fred Reichheld
9. The Loyalty Effect
Central gauge that integrates
all dimensions of business and
measures how well company is
creating value for its customers.
What do they want? What do they like
about your offer? What is missing?
What can be improved ? Why do they go
to the competitor?
11. Customer Loyalty
Starts With The
Employees
Southwest Airlines Example
Hire “Attitude” Look for the following
skills
Empathy
Listening Skills
Problem Solving Skills
Don’t rely on resumes
Use behavior based interviewing
“Past experiences predicts future
behavior”
12. Train Existing
Employees
Listening Skills
Pivotal communication skill
Key to internal communication between
employees.
Key to developing emotional connection
between front-line employees and
customers.
13. Active Listening Skills
Hearing vs. Listening
Start with empathy (other’s shoes)
Do not react or take personally when the other
person is expressing their feelings and
emotions.
Listen for the key message that person is
sending or expressing.
Restate in your own words what the other
person has stated.
Confirm that the other person agrees with your
understanding.
14. Creating Customer
Loyalty
A Greatly Exceed
B Exceed
C Meet
D Disappointed
F Fail
Expectations Perceptions
15. Creating Customer
Loyalty
If the customers perceptions exceed their
expectations customers are highly satisfied
and develop loyalty.
If their perceptions are about equal the
customers are neither satisfied or dissatisfied.
They are somewhere in the zone of
indifference.
If their perceptions are below expectations
customers move to a degree of
dissatisfaction resulting in disloyalty.
16. Satisfaction –
Dissatisfaction Model
Satisfaction High
Customer Loyalty
Zone of Indifference exist in this area
High
Dissatisfaction
Service providers need to understand how to
move customers to a level of high
satisfaction
17. What Customers
Expect
Process
Execution
Predictable
Repeatable
Empower them with information
First Time Resolutions
18. Do you have any Fred
Taylor’s ?
Southwest Airlines
Customer Communications Specialist
Focuses on Service Recovery
Communicates resolutions to field
19. Service Recovery
Listen to the concerns of the customer
Listen to what the customer wants.
Make it easy for the customer to resolve
their concern.
One size solution doesn’t fits all
20. The Four Steps of
Service Recovery
Apologize sincerely- don’t become
defensive or make excuses. Show
empathy.
Fix the problem- Listen, empathize, and
ask open-ended questions that allow the
customer to express what they really
want. Act quickly with a sense of
urgency
21. The Four Steps of
Service Recovery
Do something extra as atonement-
does not have to be expensive or elaborate.
Show the customer that you appreciate their
business, you’re sorry for what happen, and
you want to add value to the relationship.
Follow up- A call from management or the
service person to ensure that the customer is
satisfied.
22. U.S. Office of Consumer
Affairs Findings
Of the customers who register a complaint,
between 54 and 70 percent will do business
again with the organization if their complaints
are resolved. That figure goes up to a
staggering 95 percent if customers feel that
complaints are resolved quickly!
23. Service Sells
Enhance the perception of your brand in
the eyes of the customers during the
service interaction.
Service Margins (post sale)
30% to 200% greater than product margins
25% of total revenue
50% of operating profits
The focus of this presentation is on identifying those factors and activities that create customer loyalty.
The concepts and activities suggested in this presentation come from these sources.
Formal definitions show the difference between satisfaction and loyalty.
The point is that is business satisfaction does equal or always equate to loyalty.
This is the “operational” or “functional” definition of customer loyalty.
In a survey and study published in BW the best company had 79% of respondents say they would recommend them. The point is you won’t get 100%. Identify those customers will recommend you and leverage them.
Customer service can make a difference in establishing customer loyalty.
Starting with employee loyalty it impacts customer loyalty which impacts investor loyalty. One affects the other.
These are the key questions that will help determine if what your company is offering and what your employees are doing are helping to create customer loyalty.
As more loyalty customers are created there are other benefit that can impact your organization.
The common denominator between companies that have a loyal customer base have loyalty employees. It starts with employees.
For existing employees the one pivotal skill that can have the greatest impact on communication between employees and customers is listening skills. This will ultimately lead to the emotional connection between customers and your company..
Here is what is meant by active listening. It is a skill that can be taught.
This chart illustrates that customer loyalty is created when the perceptions of the customers exceed their expectations. Employees create this. Listening and responding appropriately is the key to creating this.
Describes the previous chart.
This diagram illustrates that many customers are neither highly satisfied or highly dissatisfied but somewhere in between. This is referred as the zone of indifference. These customers don’t have a high degree of loyalty, they are subject to next best deal that might be out there. Understanding how to move the right customers to the high degree of satisfaction which leads to customer loyalty is the key.
When surveyed and the information is “distilled” customers expect the following.
Fred Taylor is a real person at Southwest Airlines that focuses on service recovery and acts as a Single Point of Contact to get information ultimately to the customer. This results in meeting the expectations of the customers discussed on the previous slide especially during service recovery.
Keys to service recovery. When properly executed service recovery can move a customer from the zone of indifference or potential dissatisfaction to a high degree of satisfaction and loyalty. This process should be well defined for your business and all employees should be trained in the process and steps outlined on the next two slides.
In summary solving customer concerns can have a direct impact on the financial results of your organization.