Customer Loyalty Lessons

Many astute marketers have carefully planned campaigns to promote customer loyalty and create systems to track and measure customers who keep returning to buy more products or services. In this way, companies are able to distinguish those customers who are leaving and those customers who continue to do business with the company. There is the old adage that the longer a customer stays with a business, the more valuable that customer is to the business. Larger enterprises have been leveraging technology and their marketing campaigns in order to capitalize on this human behavior. Many of these customer loyalty campaigns are increasing companies bottomline for it is much more inexpensive (some say up to five or six times so) to sell to an existing customer than it is to acquire a new one.

But as Jill Griffin shows in this interesting article with the intriguing title, "What Your Worst Customers Teach You About Loyalty", this may not always be the case. Sometimes our drive to acquire new customers may actually hinder our customer retention programs, and those customers who seem to be staying with us may actually be hurting us. However, are the examples that Griffin cites relevant also to smaller businesses. For instance, are small and medium businesses able to capitalize on technology, or specifically, database marketing technologies, for instance to increase customer retention and value? Do smaller businesses have unclear customer acquisition campaigns that conflict with customer retention?

What about you? Do you have systems in place to measure your customer loyalty factor? In larger enterprises, with the benefit of technology and resources, companies can conduct tests and measure the success or failure of marketing campaigns, but when you are talking about the small and medium business, your budget may not allow you to spend massively in marketing campaign and research.

Recently, for instance, our company decided to conduct some exsiting customer market research. However, we have a shoestring budget, so what we did was to analyze our financial information for the past three years and rank by customer spend our top 15-20 customers. We then organize to take each of these customers' CEO along with one or two of their senior executives out to lunch one customer at a time with our Director and the Marketing Manager. The purpose of these lunch meetings with our top customers is to allow them to talk to us in a neutral environment and provide us with valuable feedback regarding our services and products and how that aligned with their business requirements. This way, we get to reinforce our relationships with these customers, and also provide them with a forum to talk to us. Using that information, coupled by our own internal analysis and discussions with our consulting teams, we hope to cull the information to help us improve our service and also provide us with ideas with things that we may not already be doing that might improve our value to our customers.