Return on Behavior Magazine
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Customer Experience

April 26th, 2010

Strategies for Maximum Customer Loyalty, Profits

If you’re finding it a challenge to create profits, you might appreciate knowing that you’re not alone. Profits in this Great Recession are elusive  for other businesspeople, too.

A case in point: 50 percent of the members in a Seattle-area business-networking group admit to selling products at below cost to remain in float. That’s according to a survey by Washington State University and the Seattle Executives Association (Feb., 2010).

The leads group, with about 100 member businesses, is comprised of one business per category throughout the greater Seattle area.

They described their employment, financing, inventory and sales situations as “stagnant to declining.” However, they were optimistic about their prospects.

Obviously, it’s important to do a profit analysis to determine your strengths, weaknesses, opportunities and threats. Then develop a strategic action plan and implement it.

Another factor affecting profits is customer retention. American businesspeople and consumers have become cost-conscious and look for opportunities to save money.

Many companies are slashing prices and making the mistake of focusing on price in their sales messages. That means your customers are constantly hit with discount offers. And they are tempted to change to your competitors because of price, quality and service.

But it isn’t a permanent switch. Such customers will gravitate to the next low-ball offer. So advertising to attract such customers is simply not cost-effective.

It’s true that many customers base their decisions on price, only. That’s 18 percent of buyers. So, it’s key to target the other 82 percent who can be persuaded to buy based on their five perceptions about value.

My research also shows that you have to reach a prospect with five positive messages before the decision is made to buy your product or service.

Why companies lose customers

When devoutly loyal customers shop elsewhere, 70 percent of the time they feel taken for granted.

Customers will leave you for a myriad of reasons, including failure to properly answer questions, treating them abruptly, making the buying process inconvenient, failure to solve problems quickly and subsequently failing to provide added value to assuage an unhappy customer.

Losing customers also means blown opportunities for word-of-mouth advertising and customer referrals. Plus, social networking and blogs – positive and negative – have changed the marketplace even more.

That’s why listening to customers is so vital – to gather information, to analyze it, and to develop answers.

In large cities, the advertising opportunity costs are high – usually $300 to $400 or more per customer.

If you lose a customer, it will cost you more to attract a replacement. Then, you have to factor in the sales curve – how long it takes for a new customer to become profitable.

So profits suffer in a down economy if you lose customers and can’t easily replace them. That means layoffs, which will hurt you even more.

Fifty-two percent of a customer’s value-perceptions motivating them to buy from you hinges directly on what they think about your people – spokespersons, sales reps and other personnel. (For more on value perceptions, see “The Seven Steps to Higher Sales.”)

So it helps to have ongoing discussions with your staff on these topics: Why customers buy from you, perceptions about poor customer service, and the factors about your service and products they like the best.

Meantime, be proactive in other ways.

Continually query your customers in formal surveys and in casual conversations using open-ended questions to get solid answers, not “yes” or “no” answers.

Take action steps and make improvements when feasible.

After you get great feedback and measure the results of improvements, tell your customers and express your appreciation.

When customers make purchases, don’t forget to thank them and prevent buyer’s remorse by tactfully reminding them of the value of their purchases.

And explain to your employees why it’s important to stop using the most-trite phrase on the planet: “Have a nice day.” Instead, your employees need to focus on providing an attitude of service and gratitude.

You’ll be creating a happy buying environment for repeat business and customer loyalty.

From the Coach’s Corner, how would you like some social-networking tips from an outstanding salesperson?

Meet Sean Heiner, he’s director of the membership department at one of the nation’s premier business organizations, the Association of Washington Business (AWB). AWB is Washington state’s chamber of commerce.

From personal experience, I can tell you he’s pleasantly persistent and personable, but I’ve also noticed he keeps up with the times and social-networking trends.

He graciously provides five social-networking tips:

  1. Don’t stop networking outside the social media world, and think that LinkedIn, Facebook or Twitter are replacements for actual human interaction, they aren’t. If you use all of the tools listed above, you will progress much faster with higher quality contacts who actually want to hear from you.
  2. This one is basic but crucial – use the same picture on your Twitter/LinkedIn accounts, and Facebook, as well, if you use it at all for business purposes.
  3. Post! Don’t simply regurgitate information you read somewhere else. Sure, this will allow people to know what you’re interested in, but it will not enhance your personal brand within the business world, online or otherwise. Plus, once people catch on they may begin to tune you out, and that is social networking death.
  4. Verbiage and dictiondon’t use shorthand text style messaging ever in a professional setting, and spell check anything you put on the web. You would be appalled at how many people don’t.
  5. Jump in feet first. So many tell me they are not “techy” enough to use social networking sites, and I’m sure they are also still enjoying their gramophones, but just go for it!  All of the social networks I use, and there’s about five total, take up less than 20 minutes a day, unless of course you count reeling in all of the new business I’ve been able to generate through that activity.

About the Author

Terry Corbell

As The New York Times referred to him in this article, "Been There... Done That... Here's How," Terry Corbell has more than 30 years experience as a profit professional and business-performance consultant. 

He has provided confidential full-service business solutions for Northwest companies in the U.S. ranging from technology to professional service firms, and for the public sector since 1992. 

As managing member of CMS Associates LLC, he is developer of The CMS Approach – strategic proprietary systems and best-practices management. 


Mr. Corbell is writing a book tentatively entitled, “How to Watch Your Back in the Jungle – Avoiding Business Predators.”

Especially timely in this economic downturn, he provides a nine-point financial turnaround program, on a pay-for-performance basis, for a small retainer and just one percent of the net-profit increase. 

Web site:






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