Customers Satisfaction and Loyalty are not Enough Anymore.
Most of satisfied customers won’t become loyal customers, simply because these customers could find hundreds of other companies or products that could equally or better satisfy their need.
Most of loyal customers won’t recommend your business, simply because they won’t bother their friends recommending a company they think it’s a personal choice between hundreds of equally good choices around. They respect their friends choice, because they know that there are equally good choices outside there.
In most cases, Customers defection is not related to your company product or service quality. A company with a good product or service could see his customers defect in drove. Customers don’t defect because they are not satisfied with your service or product.
So, Don’t take customers defection personally, because it is not related to you, but to the overwhelming fact that, today 98% of businesses are commodity businesses. There is not so much in product characteristics or service innovation that really distinguish them from each other. They are all exchangeable without any loss in value proposition or value for money.
These reasons explain why even a business with a great product or service could fail to attract enough customers to succeed, or found itself in the situation of loosing customers.
On March 1996, Frederick F. Reichheld and Thomas Teal found that on average, U. S. corporations now lose half their customers in five years. With the powerful emergence of Internet these last 12 years, we can say with confidence that today, most companies lose half their customers in less than 2 years. Not because they don’t innovate, not because they don’t have great product or service, not because they didn’t try to keep their customers with sophisticated CRM systems or loyalty programs.
Customers Satisfaction and Customers Loyalty are not Enough anymore.
All marketing departments around the world know that 5% increase in customers retention will yield 25% to 100% increase in profits. That’s why Modern marketing is basically about retaining customers and building loyalty, not Looking for new customers.
So, how to improve customer loyalty in a business environment ruled mostly by commodity businesses?
It’s about Perception, not Products
How do your customers perceive you? As a product seller, or an experience seller?
In the experience economy, your product or service is the customer experience. The experience economy is about orchestrating memorable experiences for the customer; and it’s the memory of these unique experiences that becomes the product or service you are selling. In the experience economy,
Customer is the product. Of critical importance is the takeaway feeling your customer has about you or your product. The memory of this feeling creates you and your business at the same time it creates the Customer.
Remember, in the experience economy, people are not buying a product…they are buying an experience, an experience they won’t forget. Once you get in the mind of your customer, your loyalty program goes on autopilot.
“Those businesses that relegate themselves to the diminishing world of goods and services will be rendered irrelevant.” Jeneanne Rae
