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Customer Satisfaction Consulting .com
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What Produces Loyal Customers
Companies have argued for years, if not centuries that it is the superior product
that drives customer loyalty. However, with today's technology many product offerings
are quite similar. This is particularly true when you consider the travel industry,
where competitors provide similar product offerings and the only competitive advantage
is usually based on price. When we use the travel industry as an example, we can look at hotels that usually
have only two basic components to attack customers, first their guest room and facilities
and second, their employees. When comparing comparable hotels, one study showed
that when rooms were rated higher to those offered by other competitive properties,
guests returned approximately 35% more than when the rooms received the same rating.
However, when the hotel staff received higher ratings, 87% of the customers return.
This clearly shows that in organizations and industries where products are comparable,
it is the front-line employee, the individuals who the customer has the most contact
with, which is the deciding factor for customer loyalty. Too many times, the typical approach to quality assurance is to identify the problems
and then quickly act to resolve them. Strong evidence supports this approach, due
to the fact that a strong service recovery process can in fact strengthen customer
loyalty. However, this philosophy suggests that problems are actually opportunities
for stimulating customer loyalty to points greater than what they were had the problem
never occurred. One reason for this occurrence is because industries who have done
their to correct mistakes once a problem has occurred often are the very companies
who have already established a positive customer relationship prior to the occurrence
of the problem. This is further proven with companies such as the Ritz Carlton Hotel Company, where
their employee promise is, "At The Ritz-Carlton, our Ladies & Gentlemen
are the most important resource in our service commitment to our guests."
When companies, whether it is the hotel industry or the automotive industry have
a fully engaged workforce, they provide great up-front service, and a strong service
recovery process, which solidifies customer loyalty. Yet, when industries do not
have a fully engaged workforce, they cannot provide great up-front service, and
no matter how strong a service recovery plan they have, they will not fully win
back customer loyalty. Companies that have a fully engaged workforce, have employees that will willingly
go out of their way to provide the utmost customer service because they fully believe
in the values and mission of the company. These employees fully support the brand's
values, can deliver the brand promise, work well with their co-workers, and consistently
exerts their best efforts while on the job. For their efforts, the company fully
recognizes these employees, which reaffirms their beliefs in the brand. When employees are enthusiastic and loyal to the company and to the brand, their
energy helps to create enthusiasm in customers, thus creating loyal customers.
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