Customer Loyalty: CEO’s #1 Focus to Protect Revenue in 2018 – Part 1
Unlocking the secrets of customer loyalty
Customer loyalty (CL) should be the number one focus for CEOs and business owners interested in stabilizing, generating, and predicting revenue. It’s a sound strategy when you look at the stats on loyalty ROI. According to a recent study conducted by Astute Solutions, “Research shows that loyal customers are worth up to 10 times as much as their first purchase.” How can you unlock the secrets of customer loyalty and leverage the benefits for your business?
There are three key areas that need to be fortified to accelerate your CL strategy: Competitive advantage, branding, and customer experience. In this four-part series, I will deliver a step-by-step guide to retaining B2B customers and ensuring your business reaps the revenue and benefits of customer loyalty. I will also give you things to start doing today to start gaining CL, beginning with the most critical of all of your assets — your competitive advantage. I’ll also discuss branding, customer experience and, finally, the best CL metrics. Let’s start with the first important focus in the series.
Key Customer Loyalty Focus #1 – Keep Competitors at Bay
The folks at the Harvard Business Review recently debunked one of the truths we as marketers thought we knew about keeping a competitive advantage — that staying “new” is critical. In this digital revolution, companies seem to want to keep reinventing themselves to stay ahead of the pack. Yet HBR’s recent research using behavioral science has proven that “helping customers make one less choice” is more valuable than always trying to be seen as “new” or “improved.”
HBR calls the ability to keep customers buying your products or services “cumulative advantage”. This takes into account what they describe as the habit differential: “When it becomes ever so slightly harder to buy the products you didn’t choose, and that gap widens with every purchase—as long, of course, as the chosen product consistently fulfills your expectations.”
We recently experienced an example of cumulative advantage in our consulting business. Our B2B client is starting an extensive sales asset resource library initiative. Rather than onboarding new staff or outsourcing to content developers, they decided that they would use our team to drive this project. Not only were we the “familiar choice”, we were also experienced domain experts who had already summited the learning curve with their chosen audience. Our team knows their target audience and message and their style and voice. We also have the proven ability to articulate their unique competitive advantage. In short, we made ourselves valuable enough to make considering outside competition pointless.
You can leverage this strategy today by assessing and documenting your customers’ perspective of your competitive strengths. This may require assigning someone to do a competitive analysis of your products and services and finding out what your competition is doing to make themselves a habit. You may be very surprised at the results, as they are often different from your perceptions! Once you figure out your differentiators in light of those of your competitors, build an extensive campaign around these them — talking about them in your marketing messaging and email content and within your sales assets.
As we have seen, a customer loyalty strategy is not just the right approach to take because it protects your business, it also makes your job easier and creates the kind of relationships you want to safeguard. As Customer Experience pioneer and author Kia Puhm asserts: “The better you know what customers expect, the better you can drive adoption and highlight the value being delivered. This improves the prospects that a customer will be successful and, as important, stick around for a long time.”
Next up in the CL focus? Your brand, how heavily it correlates to CL, and some strategies and best practices to help you understand and capitalize on the critical secrets of your CL/brand partnership.
- Customer Loyalty: CEO’s #1 Focus to Protect Revenue This Year – Part 4 - March 12, 2018
- Customer Loyalty: CEO’s #1 Focus to Protect Revenue This Year – Part 3 - February 13, 2018
- Customer Loyalty: CEO’s #1 Focus to Protect Revenue in the New Year – Part 2 - January 9, 2018