How Big Brands Are Nurturing Satisfied Customers and Loyal Customers Differently
You may have read the title of this post and thought, satisfied customers and loyal customers go hand in hand, I already knew that! It’s the logical, but incorrect assumption that many businesses make. Often times it may feel like acquiring a satisfied customer is the first step on the yellow brick road to a loyal brand advocate of your business. The reality is they are vastly different customer groups that have conflicting business impacts, and therefore should be nurtured in different ways.
The Satisfied Customer: An Attitude
Let’s use Bobby for example. He just took a road trip and stopped at a local coffee shop for the first time. His experience was amazing. The barista who took his order was on her A-game, and even suggested the extra shot of espresso that he almost forgot to request. His caramel latte with the double shot of espresso and extra whipped cream was handed to him in under a minute and was the perfect temperature to take the first sip without scorching his mouth. To add some icing on the cake as soon as he left the counter to take a seat in the lounge area his favorite Dave Matthew’s Band song came on. This quaint coffee shop has wowed him. He has now entered the category of a satisfied customer because of his newly found positive attitude. The following statistics show how satisfied customers, like Bobby, affect the short term reputation and value of your company:
“55% of consumers would pay more for a better customer experience.” – Defaqto research
“89% of consumers have stopped doing business with a company after experiencing poor customer service.” – RightNow Customer Experience Impact Report
“It takes 12 positive customer experiences to make up for one negative experience” – Parature
With this information in mind it’s clear that putting value toward creating a steady stream of satisfied customers is a smart business practice. Once you’ve hooked a satisfied customer you should then focus on nurturing them. Your goal with satisfied customers is to align their behavior with their attitude to mold them into a loyal customer over time. How do you do that?
1. Collect feedback quickly and often:
You’ve wowed a customer, great! Get some feedback from them while their positive experience is fresh in their mind. This customer generated feedback, whether it’s about the customer’s experience specifically or at a more general level, can have a huge impact on drawing in and engaging satisfied customers. The best avenues to collect instant feedback are on social media sites, with website pop-ups, and of course in person. Take Velveeta for example. They recently reached out through Facebook to get some feedback from the public on what packaging design stood out the most to them. Creating a conversation allowed Velveeta to engage customers in a non-intrusive way, and reinforce their brand image.
2. Keep in touch:
Build a plan that helps you collect satisfied customer contact information. Use it to send them exclusive deals and coupons to remind them of your brand. One strategy that is beginning to take over the world of retail is the email receipt. This provides convenience for the customer by allowing them to store their receipt in their frequently checked inbox, but also provides your brand with a way to keep it touch with them without having to blatantly request their email. Urban Outfitters is a company that strategically uses this email collection technique to engage with satisfied customers in a visually appealing way.
3. Frequently distribute branded materials:
Give them something free to take with them. Make it useful or quirky, and something that aligns well with your brand. People are visual by nature and this inexpensive tactic will remind satisfied customers of your company in the future.
The Loyal Customer: A Behavior
Now let’s look at Suzie. She’s heading to work on the same route she’s taken every morning for the past year and a half. The clock strikes 7:46am as she pulls into the Starbucks drive thru. The barista greets her by saying “the regular?,” and she responds with a groggy “yes.” She grabs the coffee through the window, and notices her name is spelled with an “s” instead of a “z” per usual. In a couple of minutes she’s back on route to her office. Suzie has formed a behavior that adds Starbucks into her daily routine. In fact, she’s probably spent hundreds of dollars with Starbucks over the past year because of its convenient location on her way to work. She can be placed in Starbuck’s pool of loyal customers because of her consistent behavior. The following statistics show how loyal customers, like Suzie, add long-term value to your company:
“On average, loyal customers are worth up to 10 times as much as their first purchase.” – White House Office of Consumer Affairs
“It is 6-7 times more costly to attract a new customer than it is to retain an existing customer.” – White House Office of Consumer Affairs
“A 10% increase in customer retention levels result in a 30% increase in the value of the company” – Bain & co.
With this information in mind it’s clear the deep rooted value that loyal customers bring to the table. Loyal customers already have the routine behavior set, but how do you nurture a loyal customer to align their attitude with their behavior and turn them into cheerleaders for your brand?
1. Customer loyalty program:
Create a worthwhile customer loyalty program to engage with your following. Your Loyal customers already have a routine behavior that has them interacting with your brand, sometimes daily. Use that to your advantage! Not only do customer-centered loyalty programs work magic at creating a positive and fun relationship with your customers, it provides your brand with some detailed marketing information that could give you a competitive edge. Take the Starbucks Rewards Program for example. It’s simple to use, visually appealing, and has worked wonders at nurturing their already strong following of loyal coffee drinkers.
2. Personal recognition and meaningful engagement:
Keep a contact list of your loyal customers and show them how much you care by sending personalized company updates, valuable content, or even to collect feedback. Loyal customers will gain a closer connection to your brand if they feel like you’re keeping them in the loop with insider information. They will also be more likely to think highly of your brand if you’re constantly working to make their life easier. Take Foursquare for example. By using their location data to their advantage they are able to send personalized information to each and every one of their loyal customers.
3. Create a community:
Your loyal customer base probably has commonalities with one another. Create a brand centered community to share valuable information, encourage feedback, and strengthen relationships. Take Harley Davidson for example. They created an exclusive website that can only be accessed by Harley riders called the Harley Owners Group to recognize their loyal brand advocates.
The Satisfied vs. The Loyal Customer:
Do you see the difference? Although a satisfied customer may have just been delighted by your business the only thing that is impacted is their attitude about your company. You have not necessarily changed that customer’s future behavior. And on the other hand, although purchasing the product or service your business provides may be the frequent behavior of a loyal customer, they could have an indifferent or negative attitude about your company. Recognizing that your business development strategy should focus on nurturing both groups differently is the first step toward a successful business model.