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Creating Customer Loyalty

by Tom Milligan, Executive Vice-President of Sales and Marketing - May 31, 2012

Creating Customer Loyalty by Tom Milligan, Executive Vice-President Sales & Marketing for Vector BPO 

The Customer Service Problem

A few years ago, I was hired to run the call center in a hyper-growth company. You know, the kind of company that was possible before Sarbanes-Oxley ruined American business. You remember those days right?

Anyway, because of the rapid growth, the company hadn’t really been able to develop any meaningful processes for shipping, billing, returns, or even payroll. Such rapid growth made it difficult for the factory to keep up with demand. As you can imagine, this situation generated a lot of unhappy callers.

It’s hard to express my sense of disappointment when, after just two weeks on the job, the CEO began an update meeting by telling me how disappointed he was that I hadn’t fixed “the customer service problem” yet.

That was nearly 15 years ago and I’m still wondering how someone that had accomplished so much in life didn’t understand the basics of customer service.

He didn’t understand that real customer service starts long before the customer calls the call center. In fact, the Customer Servi ce Department is usually tasked to clean up the mess caused by the poor customer service already provided.

Since that time, I’ve come to realize that very few of us truly understand that every touch point we have with a customer combines to make up customer service. That our sales literature, the quality our product, our invoices, and yes, our Customer Service Department all make up the customer experience - and that the quality of that combined experience determines customer satisfaction, but does not create loyalty.

Maslow’s Hierarchy of Needs

Most of us are familiar with Maslow’s hierarchy of needs as it relates to our own lives.

According to Maslow’s hierarchy, the most basic needs such as air, water, food, and sleep are largely ignored until the needs aren’t being met. For example, we don’t really think about getting air to breathe until we don’t have enough of it.

In the event that parents choose to satisfy only the most basic needs for their child, while the child will survive, there will be no bond between parent and child as the child is forced to find alternate means of satisfying their higher needs. Those parents who find ways to provide for each of the needs in the hierarchy enjoy a parent/child bond that lasts a lifetime - also called loyalty.

Like the parent who provides only the basic needs and their children who merely survive; companies that strive only to satisfy their customers’ basic needs are forcing their customers to find alternative means of satisfying their higher needs.

To understand how providing more than mere satisfaction creates loyalty, we need to explore the emotions behind the customers’ hierarchy. First, we should recognize that satisfaction is a logical reaction that can be predicted and measured across the customer-base, while loyalty is purely emotional and varies from customer to customer.

What customers need isn’t always what they want and is seldom what they value. Customers’ true needs are the basics: a quality product at a fair price. Just like our personal needs, simply meeting these basic needs cannot elicit positive emotions - but not meeting them is sure to generate many negative emotions.

Too often, we sit in our offices and dream up new ways to make our customers happy and hope that happy customers are loyal customers. We record our calls for “training and quality assurance” (read “policy compliance”). We staff to a randomly chosen service level or ASA. We create lengthy QA forms to ensure our Agents use the customer’s name during the call and to close the call by asking if we’ve solved their issue. We do all of this - and much more - in a vain effort to produce a loyal customer base. When in reality, most customers don’t care if you miss your ASA by 3 seconds, if you’re following policy, or if you use their first name at least 3 times during the call. All of these activities fill basic needs. None of these activities build loyalty.

Since loyalty is born of positive emotion, avoiding negative emotion - by providing for their basic needs - is the first step to building loyalty. But to create loyalty, we must find a way to consistently create positive emotion, which can only be accomplished by adding value.

By value, we aren’t necessarily referring to good deal, discounts, or other monetary definitions of value. Rather, value relates to the importance or significance assigned by the individual in a given situation.

For example, if there’s snow on the ground, I assign great value to my coat. That same coat is far less valuable to me as sit by the pool working on my tan.

To consistently add value, we must determine what the customer values and find a way to provide it. Identifying what your customers value and finding a way to provide it, is the key to creating loyalty.

The most effective way to find out what your customers value is to simply ask them - and it doesn’t count if you ask them at the end of a call they initiated. In fact, it works best to speak with the customers that haven’t called in a while.

Call your customers specifically to demonstrate that you value them. Thank them for their business, then ask the magic question: “What could our competition do to win your business?” The answers you get to that question alone are worth 1000x the cost of the call. Following up with a hand-written thank you note is icing on the cake.

Now let’s get real. In the real world, there’s no way you could call all of your customers. But you can call some of them. Create a plan to have every member of your executive team call five customers per week and to send a thank you note as a follow up.

Compile the data, look for patterns, make improvements and let those customers know that their input triggered the actions taken.

In a strange, yet simple way, asking your customers what they value shows that you care. Put simply, what your customers value most is that you value them.

If your customers feel valued, an emotional bond is created and loyalty is born.

Tom Milligan is the Executive Vice President of Sales & Marketing for Vector BPO (www.vectorbpo.com) - a leading American owned and managed call center provider located in Cebu, Philippines specializing in helping their clients create and enhance customer loyalty through the proper use of technology and human capital in the call center and all other touch points. Their services and philosophies combine to improve the processes, service, and profitability of their clients.

 
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