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Foolproof Your Customer Loyalty Program

Posted by: Today's Tip Contributor on October 15, 2010

According to a study conducted by Bain & Co., although 80 percent of companies believe they offer a superior customer experience, only 8 percent of their customers agree. Based on a recent study of 200 companies worldwide, we’ve identified six steps to developing a fool-proof customer loyalty program:

1. Implement a formal customer satisfaction and loyalty program and gain buy-in across the organization. Too many organizations have no formal program to measure the customer experience. This results in well-meaning business units and departments conducting individual feedback efforts without a coordinated approach. To be successful, organizations must decide what they’re going to measure (ideally with customer input in the process) and get the buy-in of internal stakeholders so that the program will be given the resources and management commitment needed to succeed.

2. Implement a common data collection platform. Too many organizations are unintended victims of "disconnected listening," a situation where they use multiple tools to listen to the voice of the customer. This results in uncoordinated efforts, a lack of a consolidated view of customer feedback, and dramatically increased costs. Successful organizations consolidate their listening efforts on a single platform through which they manage all of their interactions and data collection efforts.

3. Use a common set of metrics and measure against them. Once an organization has a plan, management commitment to execute it, and a platform that enables consistent data collection, it needs a common set of metrics to measure progress toward success. Listening to the voice of the customer is the first step in the process—but at some point, listening has to turn into action. If it doesn’t, customers will stop providing feedback.

4. Use known data to personalize customer interactions and maintain response rates. Customers have an expectation that they’ll be treated with respect, and a big part of that is showing them you know how you’ve interacted with them before. Show them in your interactions that you know the products or services they use, how much money they spend, and any other data that are relevant. Having this data enables you to focus your feedback efforts and show customers that you respect your relationship.

5. Share data with customers, employees, and internal groups. If all an organization does is capture data in PowerPoint presentations, a significant opportunity has been lost. Customers will continue to share data freely with organizations that acknowledge their voice has been heard and is being acted upon. Successful feedback management programs also allow easy information sharing with front-line employees who interact with customers, as well as with all functional organizational groups. Even those who don’t interact with customers on a daily basis can benefit from understanding what customers are saying.

6. Engage customers in an ongoing dialogue to co-create products and services. Organizations that request customer input on products and services, report back what they’ve heard, and incorporate those ideas into future offerings consistently have the highest degrees of customer loyalty. The reason is simple: If you demonstrate you have taken the time to listen and incorporate customers’ ideas into future offerings, you create a sense of shared ownership. This co-creative environment is one of the most powerful loyalty-building tools you can establish, because it trumps competitive threats such as price wars, feature/function battles, and other tactics by strengthening your bonds with customers.

Brian Koma
Vice-president for research
Dulles, Va.

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