The document discusses the importance of customer loyalty in driving business results and outlines how emotional attachments formed through employee relationships can influence loyalty. It emphasizes that high customer satisfaction, defined as perceptions exceeding expectations, leads to customer loyalty while highlighting practical strategies for service recovery and enhancing loyalty through effective employee training. Furthermore, it presents the correlation between strong customer service and positive business outcomes, reinforcing that service can significantly impact profitability.

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?

10. The Loyalty Impact
 Competitive Advantage
 Employee Morale
 Unexpected gains in
 Productivity
 Growth
 Reduced cost

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

24. T hank you
David P. Scurlock