Emotion’s Role in Customer Loyalty

August 19, 2010

The story of Steven Slater dominated the news for a few days recently.  He is the JetBlue flight attendant who reportedly responded to a rude passenger with a torrent of publicly-delivered verbal abuse.  He followed that up with an exit from the aircraft via the inflatable emergency ramp with beer in hand.  I have since read that many passengers had no recollection of any altercation involving Slater.  And one passenger vouched for his generally pleasant, bubbly disposition.  Some are calling Mr. Slater a hero for telling off a rude passenger.  Others deride him as unstable and out-of-control.  My question has to do with the effect of Steven Slater’s actions on the experience of JetBlue’s customers.

Many companies seek to build reputations for delivering superior quality, outstanding customer service, or unique customer experiences.  The ultimate goal is to grow revenues and profits through the creation of loyal customers.  But what is a loyal customer and what are the key factors in creating one?  A loyal customer is one who will do business with the company again and proactively refer the company to others.  How does this differ from a satisfied customer and why is the distinction important?  A satisfied customer generally has his/her expectations met.  The customer will usually indicate that service wasn’t bad…but it wasn’t exceptional either.

The value of a loyal customer when compared to the satisfied customer is that she drives revenue growth and profitability for your company.

Studies have shown that acquiring customers is a costly endeavor.  Having a customer base comprised largely of loyal customers infers lower costs and higher revenues.  And thus the loyal customer is of greater value to a company than a satisfied one.  But how do you create a loyal customer?  The essence is creating an emotionally positive experience for customers every time they come into contact with the company.  We know that most purchases are based on an emotional response.  To hold that customer…earn their loyalty…the company must create positive emotional reactions from the customer at every point of connection.  A high level of trust must be created, an emotional tie must be created, and empathy must be used to strengthen relationships.

Conventional wisdom says that loyalty is created by products that are highly differentiated, higher-end products where price is not a significant factor, products with a high service component, and multiple products for the same customer.  Think Apple or Mercedes-Benz.  A product/service orientation is important but I contend that the emotions are an equally important factor.  It was critical in the original decision to purchase and it is just as important in the creation of a loyal customer.

So here is the connection to the Steven Slater event.  Customer interactions are always experiences that generate an emotional response.  At each point of connection with your company there is an opportunity to create an emotional bond that can lead to a loyal customer.  Where that point of connection is manned by a human being he/she must know and respond appropriately to customer emotions and…know and control his/her own.  If an employee is not self aware, cannot identify and manage his/her own emotions, what are the chances that he/she will be able to identify and respond to the emotions of your customers?

Regardless of the motivation or trigger for Mr. Slater’s actions I assert there was an emotional impact on the JetBlue customers.  Depending on whether they were positive or not the passengers’ response to his behavior created a positive experience upon which to build a relationship of trust and loyalty…or not.  Customer loyalty is created by exceeding customers’ expectations at every point of connection.  Your employees’ ability to manage the emotions (theirs and the customers’) is a key factor in the process.  Is your company looking to ensure growth and profitability through the creation of a loyal customer base?

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Emotion’s Role in Customer Loyalty

August 18, 2010

The story of Steven Slater dominated the news for a few days recently.  He is the JetBlue flight attendant who reportedly responded to a rude passenger with a torrent of publicly-delivered verbal abuse.  He followed that up with an exit from the aircraft via the inflatable emergency ramp with beer in hand.  I have since read that many passengers had no recollection of any altercation involving Slater.  And one passenger vouched for his generally pleasant, bubbly disposition.  Some are calling Mr. Slater a hero for telling off a rude passenger.  Others deride him as unstable and out-of-control.  My question has to do with the effect of Steven Slater’s actions on the experience of JetBlue’s customers.

Many companies seek to build reputations for delivering superior quality, outstanding customer service, or unique customer experiences.  The ultimate goal is to grow revenues and profits through the creation of loyal customers.  But what is a loyal customer and what are the key factors in creating one?  A loyal customer is one who will do business with the company again and proactively refer the company to others.  How does this differ from a satisfied customer and why is the distinction important?  A satisfied customer generally has his/her expectations met.  The customer will usually indicate that service wasn’t bad…but it wasn’t exceptional either.

The value of a loyal customer when compared to the satisfied customer is that she drives revenue growth and profitability for your company.

Studies have shown that acquiring customers is a costly endeavor.  Having a customer base comprised largely of loyal customers infers lower costs and higher revenues.  And thus the loyal customer is of greater value to a company than a satisfied one.  But how do you create a loyal customer?  The essence is creating an emotionally positive experience for customers every time they come into contact with the company.  We know that most purchases are based on an emotional response.  To hold that customer…earn their loyalty…the company must create positive emotional reactions from the customer at every point of connection.  A high level of trust must be created, an emotional tie must be created, and empathy must be used to strengthen relationships.

Conventional wisdom says that loyalty is created by products that are highly differentiated, higher-end products where price is not a significant factor, products with a high service component, and multiple products for the same customer.  Think Apple or Mercedes-Benz.  A product/service orientation is important but I contend that the emotions are an equally important factor.  It was critical in the original decision to purchase and it is just as important in the creation of a loyal customer.

So here is the connection to the Steven Slater event.  Customer interactions are always experiences that generate an emotional response.  At each point of connection with your company there is an opportunity to create an emotional bond that can lead to a loyal customer.  Where that point of connection is manned by a human being he/she must know and respond appropriately to customer emotions and…know and control his/her own.  If an employee is not self aware, cannot identify and manage his/her own emotions, what are the chances that he/she will be able to identify and respond to the emotions of your customers?

Regardless of the motivation or trigger for Mr. Slater’s actions I assert there was an emotional impact on the JetBlue customers.  Depending on whether they were positive or not the passengers’ response to his behavior created a positive experience upon which to build a relationship of trust and loyalty…or not.  Customer loyalty is created by exceeding customers’ expectations at every point of connection.  Your employees’ ability to manage the emotions (theirs and the customers’) is a key factor in the process.  Is your company looking to ensure growth and profitability through the creation of a loyal customer base?


Managing the Promoter Score

August 5, 2010

 

Most automobile manufacturers engage in some type of customer feedback survey used to measure both the new car purchase and the service experience. As the Customer expectation levels increase the process of gathering data is changing. What for years has been the “Customer Satisfaction Index” is now evolving to the “Promoter Score” or some similar term is used to identify a loyal customer.

The Customer Loyalty score is derived from “The Net Promoter” a customer loyalty model developed by (and a registered trademark of) Fred Reichheld of the Bain and Company and Satmetrix. The model was written in the Harvard Business Review in 2003. The score is taken from basically one question to determine the chances of a customer moving from being just satisfied to an advocate of your business and a promoter. Using the Promoter model the rating scores will categorize a customer as either a Promoter, Neutralizer or a Diminisher.

As automobile dealerships begin using the model, the question becomes, are they using it to really measure the buying and service experience of their customers? Auto manufactures wrap huge dealer bonuses around the promoter scores. Dealer management pay plans and bonuses are in kind tied into the score. Any wonder why customers are coached on how to respond to the survey? Any wonder why you feel like you are treated differently than other service customer. Some vehicles are flagged as survey customers when they come in for service and receive a different process.

My question is if a segment of your customers are being coached for the responses, and service customer’s cars are being flagged as a survey customer, are the surveys really measuring your customer shopping experience? Can you really measure your dealership’s “Promoters” based on a survey to customers that have been shown or told how to answer the questions of the survey?

True “Customer Loyalty” is a measurement of your customer’s entire shopping experience and can be improved through the proper management of customer “Points of Connection.” Points of Connection are defined as any contact between your business and the customer. It can be a web site, a Yellow Pages ad, a telephone call to any department, the landscaping, the appearance of a Salespersons desk, the accuracy of the paperwork etc. Any point the customer comes into contact with your business is an opportunity to improve customer loyalty. 

Understanding how to improve your business by using a real Customer Loyalty process that shows the methods of managing Points of Connection, gives a better understanding of what the customer perception really is and how to truly exceed expectation levels. Using this customer loyalty process will help develop the necessary tools to reduce employee turnover, increase sales ,and to increase profits. As we navigate through the most competitive times in history, successful businesses will be defined by their ability to manage their customer base. Peter Drucker states “The number one purpose of business is to attract and maintain customers.”  The Customer Loyalty process has all of these goals ready to be achieved. For more information please contact.

Bill Griffith        billgriff9@att.net                 Jeff Johnston jeff@goaladvantage.com

Ocie Irons        ocie@ironbridgedev.com