Customer Service or Experience – What does it matter?
For a few years now people have been talking about the Starbucks domination of the coffee market. And, the CEO and other Guru’s of the Business World have stated the difference is in the Starbucks Experience. And, while I personally prefer my select coffee beans, I can not argue with the success this company has had over the years.
You will very seldom find an empty Starbucks outlet (Okay, smarter I heard that and I know no one is there when the store is closed. 🙂 ) so they must be doing something right. And, that is the truth. Like Apple Inc , Starbucks have loyal customers who keep coming back everyday of the week.
So, what does it mean to have loyal customers?
Seems to mean a lot, that is if you like making money consistently.
So to support his emotional claim, I looked for some research into the numbers and data showing if there was a difference between ordinary customer service (reactive) and developing Loyalty from your customers. And, the research data does show it is very important to your bottom line to get this customer loyalty stuff right.The research tells us the following…
- Loyal Customers are 70% more willing to increase their spending by a minimum of 10% with businesses who exceed their expectations on a regular basis.
I’ve been a loyal customer of Apple since 1980, their stuff is very cool and easy to use – thus I get more productivity from them. Plus, I tend to find reasons to buy more from them during new product introductions or an add-on for more productivity. And, I have convinced a number of people to switch from other systems to the Apple side. This is another reason for customer loyalty – they recruit new customers for you.
- 40% of Loyal Customers are willing to pay a 10% or more premium with a company they expect to receive great experiences with when dealing with them.
Personally, I know I’m paying a premium for my Apple products and Starbucks drinkers know they are paying a premium for their coffee – but we cannot help ourselves due to our loyalty. It is an emotional thing and does not have logic involved – other than to justify our emotional decision.
- Loyal Customers are almost Three Times ( 3X ) as likely to than a dissatisfied customer to continue doing business for another 10 years or more.
Once you have a loyal customer the only way to run them off is to stop selling what they want to buy. Again, I have been buying Apple products since the mid 70’s when the Apple II first came out. Geez, I’ve been around for a while. The key is people who are loyal with stay a customer for an extended time period without having to be convinced with anything but excellent service. Did I mention the Apple Store Genius Bar? Unbelievable service and happy faces sharing information and fixing things quickly and knowledgeably. Wonder what the new iPhone 5 will have in it? Or the new MacBook Pro or well you know more buying. Just like the line at the Starbucks – all day long.
There you have the paybacks and outcomes for offering a Customer Experience which drives Customer Loyalty. However, the big question is now – “How do I get my organization to build Customer Loyalty?”
The difference lies between customer service and giving the Customer an Experience. Interestingly, it does not take rocket science or huge new marketing budgets (Just thinking – when have I seen an ad for Starbucks?) Here is a quick and simple list of critical things to do…
- Focus on developing Customer Loyalty as a Strategy
- Get Buy-in and understanding from all levels within the organization
- Select customer friendly systems
- Make it easy to reach people within your organization (This one seems most difficult)
- Responsiveness to customer inquiries with actually contact
- Customer friendly locations if a retail or business to consumer company
- Parking availability or information (again this is more important for drop in customers, yet it does apply to b2b companies as well.)
There you have a quick list of things you can do. Now if you want more, get Lior Arussy’s new book entitled “Customer Experience Strategy” for more insight into how to develop Customer Loyalty.
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Voss Graham is an Organizational Architect with 30+ years of experience designing sustainable business growth for organizations of all sizes.
Creating the Strategic Focus with the Executive Leadership Teams, he uses Systems & Process to ensure the Drivers for Business Growth are Executed at the Highest Levels. Voss is available as a Speaker for your conferences or company meetings – contact him at 901-757-4434 or use the LinkedIn or Facebook direct messages.