Saturday, September 30, 2023

Debunking the five biggest myths about “customer loyalty”

Imagine not having to worry about where your next customer is coming from. Imagine not having to worry about how to market and promote your business. Imagine your business growing exponentially and at a speed you never thought possible.

The key to achieving these almost unimaginable results is to provide the customer with a magnetic experience. An experience that strengthens people’s loyalty to your company and converts customers not only into regular customers but also into brand ambassadors who can’t wait to tell others about you

Unfortunately, many companies miss out on the benefits of being a loyalty-focused company. In some cases, it’s because companies (and their executives) are skeptical about the true value of retaining customers versus the investments required to nurture them. In other cases, companies believe in the promise of customer loyalty but fail in their efforts to create a customer experience that encourages it. All of these mistakes stem from some common customer loyalty myths that, if left unchecked, undermine even the best-intentioned business strategy.

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Myth #1: Happy customers are loyal customers.

Satisfied customers keep changing. In a well-known customer experience study, Gartner found that 20% of customers who said they were happy with a particular company said they were planning to switch providers. That’s why customer satisfaction is a one-way street for the corporate graveyard. To build true long-term loyalty, companies must do more than satisfy their customers—they must impress them, thereby encouraging the repeat purchase and referral behavior that is the lifeblood of any successful business.

Myth #2: Customer expectations are higher than ever.

While it could be said that companies that excel in customer experience have raised the bar for everyone else (known as the “effect” of Amazon“), the truth is that consumers are somewhat desensitized to all the rudeness inflicted on them by companies (e.g., long waits at the 800 line, understaffed stores, poor responsiveness).

In fact, people now expect disappointment when dealing with companies, as a recent study shows. Watermark Advice, for example, found that almost half of consumers are not at all surprised when they have trouble finding someone to help them. That’s right, consumers are essentially impressed when they call a business and a live person immediately picks up the phone and answers efficiently. What was once considered a basic expectation is now cause for celebration.

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Myth #3: Great customer service is the key to customer loyalty.

In many types of businesses, the mere need for customer service is an indication that something went wrong: a faulty product, assembly issues, confusion with an invoice, etc. Even if the service experience is great, that doesn’t change the fact that the overall customer experience was faulty. No one wakes up wanting to call their health insurance company, cable provider, or credit card company. Gardener found that customers are 400% more likely to engage in unfair behavior later when it takes them time and effort to obtain a service.

Myth #4: A good loyalty experience costs more.

When companies shift their focus from providing good customer service to providing a complete customer experience, the business calculus shifts significantly. This is because they are beginning to turn their attention to the upstream issues that drive customer contact downstream (e.g., poorly articulated expectations at the point of sale, complex product instructions, difficult-to-understand invoices, and correspondence). When these upstream touchpoints are improved, the need for downstream customer service is eliminated, resulting in a better customer experience that can be delivered at a lower cost.

Myth #5: There is little evidence that being good to customers is good for business.

According to the widely cited study by Watermark Advice, companies that deliver great customer experiences outperform their less customer-centric competitors by an average 3 to 1 ratio in shareholder returns. This is the ultimate quantification of the financial benefits that companies achieve when they delight their customers. On the contrary, the companies with the lowest scores in terms of customer experience score well below the broader market index. So not only is there a reward for impressing customers, but there is also a penalty for disappointing them.

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True customer loyalty (earned through experience, not “buying with points”) can drive a business like no other force—there’s no myth about it. Avoid the five misconceptions above, and you’ll be well positioned to benefit from the “loyalty boost” that creates a great customer experience, taking your business to the next level.

World Nation News Desk
World Nation News Desk
World Nation News is a digital news portal website. Which provides important and latest breaking news updates to our audience in an effective and efficient ways, like world’s top stories, entertainment, sports, technology and much more news.
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