Economy Got You Down? Call Super Customers to the Rescue!
November 04, 2010by Mike Cholak
As intense competition and the ongoing economic downturn continue to make customers more finicky, sales resistant, and prone to defect, businesses can rightly ask: Whatever happened to customer loyalty? The answer: Customer loyalty is still alive and well, just not in the same old places. Today, companies that want allegiance must look for it at a new address – among the “super loyal,” an elite class of customers who deliver a superior return over the long term.
Traditionally, businesses have followed a broad-brush approach to loyalty programs with the idea of catering to a wide swath of customers. However, in growing numbers, this generalized approach is losing followers – most notably among customers themselves. Findings from the 2010 Convergys Customer Scorecard Research show a 12-point drop in the number of customers participating in classic loyalty programs.
Given the declining ROI on standard loyalty initiatives, and the ever-pressing need to drive revenue, companies should consider a new tack: Identifying and pursuing customers who are – or who have the potential to become – super loyal. By our definition, a “super loyal” customer is not only loyal, but also demonstrates loyalty by:
- Making frequent purchases of a company’s products or solutions
- Recommending a company to friends or colleagues
- Avoiding the temptation to shop the competition for a better price or deal
Super loyal customers vary from one industry sector to the next; however, in general they share quantifiable behaviors and demographic markers that make them stand out, and that can provide a roadmap on how to cater to their special interests and attributes. According to Convergys’ research, the “super loyal” are:
- 22% more likely to bundle services with a provider.
- 25% more receptive to proactive communications and “open” to a company attempting to build a relationship, which goes beyond the purely transactional customer-company relationship.
- 18% more receptive to special offers and discounts.
- Likely to be younger Baby Boomers, from ages 45-54 years.
- Affluent (35% more likely to have a household income that exceeds $100,000).
- 15% more likely to prefer live phone or live chat support.
- Roughly one-third less likely to prefer self-service websites, touch-tone phone systems, and speech-based phone systems.
Once a company identifies who makes up its super loyal base, the next step is to deliver the service style they prefer. Recognize that every segment – for example, young Baby Boomers, Millennials, and Generation Xers – will have different expectations of the “right” service experience, and that close alignment with the needs of any one group is the best way to bring out their “super powers.” The four-step program for tuning in to each segment’s needs includes:
- Watch where customers want you to go next. Young Baby Boomers prefer live phone support, but Millennials may expect a prompt response on Twitter. Some 11% of consumers are now likely to have used text messaging for service and support.
- Solicit feedback from your – and your competitors’ – customers. Whether through proactive survey outreach or via your company’s social media presence, make sure customers know that you care about their experience. What starts as customer feedback can lead to product improvement or even complete redesign.
- Monitor all channels of communication to improve feedback and retention mechanisms. Different customer groups prefer different contact channels, each of which can provide priceless information. Leverage every interaction to build a relationship.
- Measure and address barriers to a satisfactory experience. In other words, take that monitoring and do something with it. Identify and admit systemic weaknesses in products, services, or communications. Thank the customers who point them out, and when possible involve customers in the fix. When a customer’s opinion is valued and put to work, it can become an investment in your company – the starting point for the ongoing trust that becomes “super loyalty.”
Rather than blame the economy, take action. In This Time is Different: Eight Centuries of Financial Folly, authors Carmen M. Reinhart & Kenneth S. Rogoff track scores of financial crises over the centuries, in 66 nations. From one economic period or country to the next, it’s never really different. Boom follows bust in an endless cycle. Those individuals and entities that evolve, survive, and become tomorrow’s ultimate victors.
What may look at first glance like the end of consumer loyalty is actually just the newest step in an evolution, and an opportunity for companies to move on and devote greater resources to their most important customer relationships. When you identify, target, and pamper the “super loyal,” you’ll have an antidote to soften the tough times.
For more insights, check out the following:
Webinar: Cultivating Super Loyalty
Point of View Paper: Cultivating Super Loyalty
Podcasts: Designing a Pilot that Cultivates Super Loyalty, Loyalty in a Changing Marketplace
Mike Cholak is a consulting practice executive in the Customer Management line of business at Convergys. He leads a team dedicated to delivering a full suite of consulting services to the Company’s clients that help leverage customer intelligence and feedback to optimize long- term customer loyalty and profitability.
