05:29:00 am on February 25, 2009 |
Actions Speak Louder Than Words in Customer Loyalty
Let me ask you a question: would you recommend me to your friends and family? Yes, that question… the “L” question. If you say YES, then you are loyal. If you say NO, then you are not. That is an abusive oversimplification of a very, very complex topic – but one that we are able to make mostly because we don’t really understand Loyalty and we do think that everything in this world should be measured. That question (and its twin sister, “would you use the service or product again?”) supposedly measure loyalty. Why, there is an entire methodology (NPS or Net Promoter Score) devoted to the study of the answer of those questions.
Alas, if you have my previous entry on loyalty you know that I think that Loyalty is so badly used in organizations that it is useless. Thus, asking those questions will not yield any insight into the loyalty of your customers, rather yield some insight into your customers’ ability to answer questions one way – and act a different one. I have not yet seen any proven correlation between answering those questions and being loyal (sorry Fred).
Now, let me turn the concept a little bit on its side. Let’s say for the sake of argument you could measure loyalty. Let’s say that you want to make sure that your customers would indeed recommend you to their friends and family, or even use the product or service again. Would you really take their word at face value? or would you rather have some proof, some evidence that they will act as they say they will? Yeah, thought so.
Here is the simple way to save yourself the money and not buy into the NPS hype and methodology. Don’t believe your customers’ words, believe their actions. Implement frequent shopper or user programs, adopt a referral program – and then see the value of your customers’ actions replace the empty words. Reward your customers for using you frequently (remember, it costs ten times or more to get a new customer as it does to retain an existing one – use those savings for good). Pay them, and their friends, for referring new people into your service or organizations. Make it worth their time to be loyal – and they will.
What do you think? Take their words or their actions? Have you done this? Want to talk more about it? Leave me some comments or email me.