Today, satisfied customers switch suppliers all the time. In other words, Customer Satisfaction is the table stakes, for the game of business. What all business owners should be striving for is Customer Loyalty.
Customers switch for a variety of reasons. Here are the top 6 reasons:
- The customer (or buyer) dies (1%)
- The customer moves (3%)
- The customer tries a friend (5%)
- A competitor paid them a visit (or called) them. They seemed nice and the offer was reasonable so they tried them out. (9%)
- You don’t have the right product or price. (14%) Now your sales people will tell you this one is the biggest reason but they are either delusional or they aren’t giving you the full story.
- The customer felt that the supplier did not really care whether they came back or reordered. In other words, Perceived Indifference, (68%)
And to make matters worse, 95% of customers that are dissatisfied vote with their feet; they don’t return and they don’t complain.
In order to achieve customer loyalty, you need to shoot way beyond satisfaction and aim for customer delight in every customer interaction.
ActionCOACH Customer Delight Formula:
Positive Result > Customer Expectation = Delight
There are two fundamental ways to increase customer delight.
- Provide more positive results.
- Create more favourable expectations. Many customers (especially novice buyers) have unrealistic expectations.
For example, estate agent sales people will tell you that many buyers will have highly unrealistic expectation of what they can sell their property for. Trying to cater to these unrealistic expectations by “listing high then pricing down when the property doesn’t move” is the perfect recipe for customer dissatisfaction.
Here are 4 ways to create more favourable expectations:
- Educate your customer. Give him or her the information they need to form a realistic view of the options available. Do this early in the customer interaction. Wherever possible, do this in your printed material and on your web site. Verbal information is often discounted (i.e. dismissed as self serving).
- Do or offer something unique. If you aren’t different, then people will only judge you on your price and possibly your sales person.
- Stick to what you do well. Don’t try to be all things for all people. It will stretch you too thin and increase the chances of expectation gaps.
- Target customers that value your uniqueness. This will ensure a closer match between what you offer and customer expectations. For example, if you are selling high end products or service with lots of value add, don’t write ads that place emphasis on price. You will attract the wrong people.
