Loyalty, Customer Experience, and the Death of Your Business

Customer Experience

Customer Experience

The deeper I get into the research concerning customer loyalty and engagement, the more it is pounded into me that it centers on Customer Experience (CX for short). The kicker about CX is that, while there are certain common factors and processes that carry across most customers and audiences, it really is an individual experience with you and your business. What does this mean?

First let’s look at the percentage of Loyal customers / audience you already have. Recent studies propose that you may have between 8%-15% customers that can be considered Loyal (your mileage may vary, especially given the differences in businesses: e.g. a coffee shop may have a greater opportunity for “regular” loyalty than a real estate office…). Let’s posit that your customers (a) DO have the opportunity, given your product / service, to purchase from you again within 12 months (and can certainly REFER you at any time!), and (b) this product /service is of value to them and at a fair price. The end-to-end CX for them has been better-than-just-positive overall, hence their loyalty. Their post-purchase experience has also been “positive+” (better than just OK…).

As it turns out, that bit is very important! 

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Why Focus on Loyalty?

Loyalty

Loyalty

Loyalty, always a high-sounding word, is ever more in the news and on our minds.

Whether it’s loyalty to a sports team, a political cause or ideology, a leader, a brand, a long-standing relationship, a coffee shop, or the family doctor, we seem to be more concerned with it and discuss it more than ever before.

I’ve been doing (and continue to dig into…) research on loyalty. Specifically, I am interested in:
  • What the drivers are for customer loyalty to businesses
  • How these drivers relate to relationship and dialogue stages
  • Factors / components that are online, off-line, and a blend of the two
  • Other components or influences that I have yet to uncover
While this will not be the “Unified Theory of Loyalty” (with apologies to physicists everywhere….), I wish to come to a clearer understanding of what establishes, builds and maintains this stance in customers and people in general. Humans are complex, absolutely unique individuals who, nonetheless, exhibit certain related behaviors and tendencies. If this were not so, the social sciences would have to just fold up their collective tents and take up hospitality management.

As I continue to research this topic and make discoveries, I will be writing about them here first. The eventual end-product is likely to be a paper, some podcasts, a video or two….likely a combination of all of the above.

So stay tuned!

Now, having gotten the preface out of the way, let me get to the first bit:

Why Loyalty?

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What Do Your Customers Think?

Happy Customers

Happy Customers!

Got customers?

Then you are interested in what they think of you, since that will drive not only whether they purchase your product or service, but other things, too. Like:
  • What do think of your product  / service?
  • Will they buy again?
  • How will you know what they think unless they tell you?
  • What kind of review will they give you (on-line or off-line)?
  • What kind of influence will their experience have on how others think of you?

The basic ideas behind Customer Experience (or CX as it has come to be known) have been around for awhile. Think about when you walk into an office or a store of some kind. The initial impression of location, attractiveness, and the employees’ attitude towards you all contribute to the CX. It could be all over the place as to your experience, but that was, and is, a huge part of it In Real Life (IRL, for those of you who like acronyms…).

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Collaboration: The Action Side of Conversation

Collaboration

Collaboration

Collaboration is the action-oriented manifestation of dialogue.

I had an online conversation with a colleague during which we each remarked on the current snapshot of busy-ness we have (summer can be notoriously slow, depending on your business…I think the ice cream parlors pick up, but I digress…) and some of the projects we’re working on. Then she offered to “hop on a call” and look at some ways we could collaborate. This caught me by happy surprise, as I’ve never met her face-to-face, since she lives a continent away.

Her suggestion immediately sent my imagination reeling in a kind of high, fuzzy way. By that I mean that I couldn’t think of what such a collaboration might look like immediately, but the chance to take part in it opens up unknown possibilities….which are always exciting! While the possibility may mean work for me that I might not have done otherwise (filling out my “bandwidth” for the week, for sure….) the value of that work would be at the top for me.

Collaboration, as I mentioned earlier, is conversation in action. The shared listening and thoughts, the enlightenment and discovery, the humor and evolution of opinion and points-of-view result in an end-point of sorts that could not have been gotten to any other way.

  • Do you do this in your business?

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Doing Specifics the Right Way

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specific

Be Specific!

The challenge of being specific is that it seems impossible to scale.

What does being specific mean in your business? It’s the truth behind perception, communication, understanding, prejudice and the barriers presented by a kind of ‘telephone’ game space between people. It means that if you can connect with one person, that doesn’t mean you can connect with the next one, no matter HOW much alike they are. And that is the end point….how do you plan or strategize for this kind of connection?

Going by previous data and experience will only get you so far. And sometimes it doesn’t even work for the same person! Think about how your own thoughts and feelings have changed over the years. If the “younger me” tried to convince the “today me” of a number of things about people, places, beliefs, prejudices and things I’ve learned more about over the years, well….I would have walked away as a younger man.

So back to being specific…in business, I’ve learned that a focus on “anybody who” as a customer is actually no one. Even honing it down to “A small business owner with a company that has 5 – 100 employees and has been in business for at least 5 years” is too broad. What do they care about? What are those 2 or 3 things that are nagging, painful problems they just can’t seem to crack? While each business is unique and has its own problems, there ARE business norms and trends in the U.S. There is a certain amount of consistency.

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Can We Save This Conversation?

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conversation

Have the Conversation

The events of this past week and my ongoing focus and interest in conversation and communication converged in a big way. Can’t ignore this one….not that I’d want to. The challenge and opportunity are too big.

The direction that America takes impacts us all as citizens and as business people. No one enjoys uncertainty, but it seems that uncertainty can provide an opening for conversation. Without going into details and the innumerable permutations that this provides, it is safe to say that, despite anyone’s expectations, things will likely turn out differently than any of us suppose at this time. Establishing and building upon conversations, we can begin to mend the trust so horribly lost over the past months and years.

The day after the US election I got to experience an election of a different sort. I am honored to report that I and 5 more of my colleagues have been elected to the Board of Directors of our local Chamber of Commerce. In this context, the first question that came to mind was “What does the national election mean for the business climate in our area?” One of the terrific things I’ve noted about the area in which I live is the ongoing, strong focus on the community. I’ve seen what I’ve come to call the Venn Diagram of Local Involvement. How this manifests itself is that I see many of the same people involved in numerous business, community and non-profit organizations. Not ALL the same people in every one, but of the community that I come in contact with, I see many of them participating and leading. These folks really CARE about each other, and, not only is that good for the community, but it’s good for business too.

How Do You Focus To Listen?

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Listen-To-Understand

Listen-To-Understand

There is a budding resurgence taking place concerning the importance of Conversation in life and business. Not that a lot of the words aren’t just hanging out there, dissipating in the wind. A lot of businesses grab the “shiny thing” when it comes to the latest discussions and thinking around whatever can keep us growing, or at least “safe.” I still experience an enormous amount of Telling and Broadcasting instead of Conversation and Engagement, both online and off-line. Even conversation has numerous forks in the concept, the largest two seem to be “listening-to-reply” and “listening-to-understand.”
A few years ago I wrote an article about the abundance of LIKING-type behavior online in comparison to the actual conversation taking place. Businesses were still trying to figure out this new paradigm where the customers actually controlled the brand perceptions, and NOT the BRAND controlling them. Along with the immature capabilities for measuring real engagement and the misunderstanding surrounding the actual meaning and value of a LIKE or a FOLLOW or a “+1” meant that the definitions of success were too fuzzy, and likely incorrect.
Things are different now.

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FOCUS: Does It Really Matter If You Care?

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Caring

Caring

Caring is “we” not “I.”

In life and business, caring is the assessment that you have the other persons’ interests in mind as well as your own when you make decisions and take actions. Of the four aspects of trust I’ve written about, this is in many ways the most important. Others may believe you to be sincere, reliable, and competent, but if they believe you’re “only in it for yourself”, they will limit their trust of you to specific situations or transactions.  They will not fully TRUST you….

A state of limited trust can infect the other areas of trust. If others feel you don’t care, they begin to doubt your reliability, sincerity and competence. At the very best, they put conditions on trusting you. This will not deepen or strengthen your relationships with anyone.

It leads to this kind of thinking:
  • I may be able to believe what she says
  • She may do what she commits to
  • She may be competent
But…
  • I’m not going to trust her to do anything beyond the exact thing we’re working on right now.
  • I won’t let her get close to me or know what I’m thinking.
  • I’m not sharing ANYTHING about what I care about with her.

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FOCUS: Is Your Competence “Fake It ’til You Make It”!?

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competence

Competence

What kind of reality do you live in?

This is more than a philosophical or existential question, reaching past any famous figures “Reality Distortion Field” or the stories we tell ourselves, good or bad. As regards our true competence, the role we fill in our business lives, it is more about the difference between APPEARING competent and our ACTUAL competence. Wanting to display ourselves as knowledgeable, “Fake it ’til you Make it!” can get you into big trouble.

Feltman defines competence as, “the assessment that you have the ability to do what you are doing or propose to do. In the workplace this usually means the other person believe you have the requisite capacity, skill, knowledge, resources and time to do a particular task or job.”

Sometimes we have to battle the “brightness effect.” This causes others to believe that since you are associated with competence in one area, you are also competent in another area. I experienced this a lot when I worked for Microsoft. Many I know (a LOT of family members…..) assumed that, since I worked at Microsoft, I could fix whatever was wrong with their computers. Granted, I lived in a PC-centric world for many years, but that didn’t turn me into a computer engineer any more than standing in your garage turns you into a car! An example of this in business is a high-performance individual who is promoted into a management position. As many of you know, managing others is likely a COMPLETELY DIFFERENT SKILL from whatever the individual specialized in. The best you can do is be clear about what you know you can do, and what you have yet to learn. Then work with your management to get the resources to better your chances of success in your new role. Try very hard not to let them get away with “just figure it out.” Your success and the success of your team hinge on your becoming better.

 

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FOCUS: Of Course You’re Reliable! RIGHT??

Are you Reliable?

Are you Reliable?

The far end of reliability is taking things for granted, right?

You hop in your car, perform some kind of ignition action, and you just EXPECT the car to start up so you can go do what you need to do. You head into the barbershop or salon you’ve been frequenting for awhile, sit down for some kind of hair-related operation (maybe with the same barber or stylist you’ve been seeing the whole time…) and EXPECT to look a certain way when you leave. You flip a light switch in your living room and you EXPECT a light of some sort to go on.

It’s when you perform these actions and what you expected DOESN’T happen that you become intensely aware of reliability.

Each of these examples involves an inanimate object, but the same expectations and certainty are what define reliability in relationships as you build trust. In his book on trust, Charles Feltman defines reliability as “the assessment that you meet the commitments you make, that you keep your promises.” You make commitments in two ways: in response to someone else’s request (or, if they’re higher up the food chain than you are, it might be a direction or command…) OR by making an offer to someone. When the other persons accepts your offer they usually consider it a commitment on your part.

Requests can be the problem. Crystal clear communication is crucial here, because if you don’t have all the information you need AND you walk away with the request, the requester will assume you’ve committed to do exactly what they asked…..only you won’t be clear on the specifics, so you chances of success are, shall we say, variable. Sadly, many requests are the only-slightly-less-generic version “go do stuff with that thing and get back to me whenever…”

YIKES!
Feltman writes that you can increase real reliability through what he calls The Cycle of Commitment – basic elements that make for clear, complete, and direct requests:

  • CUSTOMER – Who’s doing the asking here? Who’s the request actually FOR? Never assume anything that looks obvious, here. When someone says something like, “We need to do some research on this” you desperately need to know who the research is for, so you can get to specific expectations about the research and also know to whom you go for further clarification or if you have concerns.
  • PERFORMER – Who’s going to do the work? Is it you? Are you qualified? Do you have the resources (time, talent, funds…) to fulfill the request? Is that clear to you AND to the requester?
  • ACTION – Just what EXACTLY does the customer want you to do? Can you actually do it? What measurements for the action or deliverables will be the outcomes of this action?
  • TIMEFRAME – When does the customer want it to be completed….Oh, and ASAP is not at all helpful.  Get a solid date, since ASAP may mean by the end of the week to you and by the end of the day to the customer.
Make sure you have complete clarity on each of these elements and your chance at success AND demonstrated reliability are significantly enhanced.

So, that’s what it looks like when others are making requests of you, but how can you help others by making your requests more effective?

Be Direct. Direct requests have a much better chance of clarity than indirect requests. Many people often “soften” their requests (making them indirect in a way…) because they feel that direct requests are impolite in some way. Granted, different cultures have different standards and mores surrounding the acceptable kinds of language used in making direct requests, so you need to be aware of that factor, however, what appears to work best in what I will call “typical” European and North American cultures, what seems to work best include the phrases:
  • I ask that you…
  • I request
  • Will you (please)…
  • (Please) do this….
 Less direct request, which are less clear and therefore less direct, include the phrases:
  • I want or I need…
  • Why don’t you…
  • …needs to be done.
 None of these is a real request, but most understand the intention.

Ridiculously indirect requests, which are usually not even perceived as requests, can include phrases like:
  • My coffee cup is empty. (Secret request: Get me more coffee.)
  • The conference room is a disaster. (Secret request: Clean up the conference room.)
  • It’s almost eleven o’clock. (Secret request: Get me the printed slides for the 11:00 team meeting.)
See how helpful being very indirect ISN’T?!

Of course, how you respond to a request is just as important as getting the request right if you’re demonstrating reliability. Once the Customer makes the request, the Performer (you, in this case…) need to respond. Here are the possible responses:

  • COMMIT – “Yes, I’ll do it.” To them this means, “I will do exactly what you’ve asked me to do. Here is where real clarity about the request is critical. If the request is vague or missing information, it is up to you to ask for it.
  • DECLINE – “No, I can’t (or won’t) do it.” This let’s the customer that you aren’t available to do whatever she’s requesting…..she needs to find a different resource. Sadly, in the workplace, many times “No” isn’t an option….however, saying “Yes” is truly setting yourself up for failure, so consider how “No” could be framed.
  • COUNTEROFFER – “I can’t do that, but instead I can do…” This is one way “No” in the workplace could be framed. Create something that MIGHT work. A counteroffer opens a negotiation scenario between you and the customer. This should end in either a commitment or a declination. Leaving things hanging in midair is the same as failure.
  • COMMIT-TO-COMMIT – “I need to check on something (resources, time, etc.) before I can get you an answer. I’ll get back to you by…” You might need more information. Regardless of the reason, be sure to designate a time at which they WILL get a firm answer.
Lastly, there’s the old favorite, the Drive-By Request. Seen mostly in offices, this type of request is the most easily tossed-off and the most likely to fail.

I remember vividly chasing my manager down the hall pleading for more information and clarification as she receded into a conference room and shut the door. As many of these requests are, it was a “short-fuse” request and I could either wait for her to return to her office AND lose precious time, or get hot on the request and HOPE that I hit at least SOME of the actual target. I usually did the latter and paid for it painfully. So, You can live with the stress of unclear deliverables or the stress of waiting for clarification so that success will be more likely. If possible, get together with this customer and go over the Cycle of Commitment with her…..for example, ask her not to assume “Yes” to a Drive-By request. Instead, she should give you a chance to respond to the request and get all the particulars. Everyone involved is much more likely to be happy with the result.

So here are some ways build your reputation of reliability:

  • Make sure you can actually do what is asked of you BEFORE you respond to a request.
  • If the request is unclear, ask for clarification and any missing bits of information.
  • If you are offering to do something, be sure they understand what you CAN and CANNOT do.
  • Listen to people to determine if they are making EXTREMELY indirect requests of you. Are they just talking, or are they creating a framework of expectations that are clear to them and vague to you? Decide which it is, and respond.
Reliability is more than just consistency. I know people who consistently make questionable choices…..that’s not the kind of reliable I’m looking for!