Can brand loyalty build customers for life?

Photograph: Kevork Djansezian/Getty Images

Photograph: Kevork Djansezian/Getty Images

One of the most important factors in retaining customers for life is brand loyalty. When customers understand and value the benefits of your brand, you can maintain their loyalty, despite problems that could potentially damage the relationship.

But, how far can you go without losing your customers? If you suffer a series of problems, how can you repair the damage?

A recent story about the premium sports clothing brand, Lululemon, best known for its yoga wear, illustrates the benefits and the risks in loyalty based on brand strength, rather than quality customer experience.

Steering a brand through problems

Lululemon, which claims to be the ninth most valuable sports brand globally, continued to see its sales and share price rise through 2014 despite a series of public relations problems. The company had to make a number of recalls after complaints about problems with the product. It also faced an angry reaction when Lululemon’s co-founder suggested that the products were not suitable for certain body shapes.

And, to add further controversy, the company issued a series of price rises way above the rate of inflation. Yet, customers remained loyal to the brand and seemed happy to pay a premium price to have the Lululemon logo on their clothing.

The fact that the company survived those problems and continued to grow shows the strength of its brand and the benefits of building a loyal following. However, most companies would have to take a more proactive approach to repairing the damage.

Responding to problems

Take the feedback on the company’s message board, for example. Hundreds of customers complained about the scale and speed of the price rises. Should you ignore the comments, particularly in an environment that was already hostile? Experience indicates that customers respond positively when you resolve their complaints or explain clearly the reasons for the problem.

Are price rises a risky strategy if you want to retain customer loyalty? In a competitive market with a commodity product, you could find customers switching to competitors offering lower prices. But, if you can demonstrate that your product offers greater value, despite the higher price tag, you reduce the risk of defection.

Communicate clearly

So, the message is clear, raise prices if you need to, but be sure that you offer benefits your competitors cannot match. And, be sure to explain why you have to make the increase.

The same principle applies to product recalls. To ignore problems hoping they will go away or treating a product recall as a routine event is a high-risk strategy, even for a company with a very strong brand.

Be clear and open about the problem. Admitting there is a problem and responding in a positive way helps to rebuild customer confidence quickly and demonstrates that you care for customers. You should also make it easy for customers to return products so they have the minimum of inconvenience.

Balance strength with responsiveness

This example shows that strong brands can survive a crisis, but it also indicates that companies must be responsive to customers’ concerns, rather than take customers for granted. Companies that build customers for life combine these qualities with a brand and an attitude that creates a great customer experience.

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Six Ways Instant Feedback Creates Customers For Life

Customer feedback is vital to the long-term development of your business. It gives you insight into customers’ perceptions of your business and your products, and it can alert you to potential problems. Used properly, customer feedback can help you develop products that meet customers’ real needs, and offer a standard of service that builds customers for life.


1. Capture Opinions When They are Fresh

The challenge is to obtain feedback at the right moment, when customers have just experienced a service, then translate the feedback into information you and your team can act on. Survey techniques using mobile applications are changing the way businesses acquire feedback and providing them with data in real time so they can respond immediately to service issues or business opportunities.

2. Make it Convenient for Customers

Auto centers, for example, can offer their customers the opportunity to complete a short survey on a tablet or other mobile device, when they hand back the car after a service or repair.

Compare the immediacy and convenience of that technique with telephone or email surveys that reach the customer some time after their experience. They may have forgotten the experience or have no motivation to respond. A traditional feedback card given to a customer is easy to forget or discard. The immediate feedback from a mobile device, in contrast, captures an accurate response and is available for action.

3. Report and Respond

The response from mobile devices can be transmitted immediately to a data center where it can be analyzed and converted to a report. Within a very short time, you could have information that highlights potential problems with the quality of service or other customer concerns. A quick call to customers who have experienced problems can often help to limit potential damage and rebuild relationships.

4. Focus on Feedback that Matters

To make even better use of the feedback, you should focus on the opinions of the customers who provide midrange to lowest ratings. On a scale of ten, they might give a score of two or less, or as high as eight. These customers require immediate intervention to fix any small issues before they escalate and you risk losing that customer. Those clients providing lower scores will appreciate your quick response to solve their issues.

Every customer should be thanked for their business. Every customer surveyed must be asked for ways that you can improve your service.

Even customers who deliver a score of 10 will appreciate your interest in their opinion. These clients will also realize that you are not taking their business for granted.

5. Follow-up Feedback

By following-up quickly and asking customers at the low end of the scale a further question, you can gain valuable additional insights. The question might take the form, “what one action should we take that would encourage you to recommend our service?”

The response from dissatisfied customers can help identify and resolve serious issues that are critical to the long-term success of your business. The follow-up question also demonstrates that you are prepared to listen and respond to criticism.

6. Create Advocates

By engaging customers who are already passionate about your product or service with that additional question, you can turn them into advocates who attract other customers. It can also strengthen relationships even further and create loyal customers for life.

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Calculating Financial Benefits of Customer Experience


Forbes defines customer experience as the “cumulative impact of multiple touchpoints” over the course of a customer’s interaction with an organization. Positive customer experience is a must have if you truly want to grow revenue.

There’s a widely reported argument that it costs less to retain existing customers than to acquire new ones. Quality customer experience plays a part in retaining customers, but do the financial benefits of customer experience go beyond that? Is it possible to calculate the wider financial benefits of customer experience?

An article in the August 2014 Harvard Business Review, “The Value of Customer Experience, Quantified” by Peter Kriss, quotes information from a study that compared the revenue and loyalty gains from customers with different levels of satisfaction with their customer experience.

Experience and revenue – a meaningful relationship

The figures indicate that there is a direct and measurable relationship between the quality of customer experience and future spending. That probably comes as no surprise, but there has been comparatively little hard evidence of that relationship and the financial value of customer experience. Gathering and presenting data like this can help if you are trying to demonstrate the return on investment of improving the quality of customer experience.

Kriss quoted results from a study of two different types of company – one selling its products and services by a subscription model, and one selling its products in a store or on a website, a transactional model.

Major gains from satisfied customers

The study used recorded customer feedback and purchasing histories, and discounted other factors that might influence results. Researchers found that customers of the transactional company with the best reported experience spent around 140 percent more than those with the worst experience.

For the subscription-based business, the study found that customers with the worst recorded experience were only 40 percent likely to renew, while customers with the highest levels of satisfaction with their experience had a 74 percent chance of remaining members.

Adding value to relationships

These figures highlight the potential benefits of good customer experience. When customers keep returning to stores or websites and buy, that opens up many other revenue opportunities. It gives companies the chance to introduce new products, gain additional business through referrals or increase the lifetime value of individual customers.

Take a long view

But, does all this come at a price? If feedback indicates that customer experience is mediocre or poor, it’s time to invest in training or better customer service infrastructure. With increasing costs, the potential revenue gains may not yield such a good return, in the short term, that is.

That’s why it’s important to take a long-term perspective. The figures in the study highlight future revenue or renewal levels resulting from a positive customer experience, and that makes investment in an improvement program a strategic priority to retain customers for life.

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What Does Customer Loyalty Have to Do with a Conference


RSA Conference is an annual event aimed at information technology (IT) security professionals from countries around the world. The organizers hold events in North America, Asia, the Middle East and Europe, attracting over 30,000 participants a year, with many returning year after year. The key to attracting customers for life for this event is the quality of content and the collegiate atmosphere during the conference, according to the organizers.

Quality content represents value to the customer

For busy IT security professionals, a visit to a conference like this can take almost a week of their time away from work. The conference itself lasts three days and delegates must add on additional time for travelling to and from the venue. To justify the time and cost of participation, the event must represent excellent value for money particularly when corporate travelling budgets are tight.

RSA Conference positions itself as a unique learning experience and a one-stop shop for all IT security information needs. This positioning is important because the conference competes for the same audience against online learning resources and other IT security events. It wants to be recognized as a not-to-be-missed event.

To deliver the promise, the conference offers delegates a choice of 100 keynote presentations with high-caliber speakers, sessions on different learning tracks and sessions for special interest groups, as well as an exhibition that attracts leading vendors to the IT security industry. The wide choice of quality content gives delegates the opportunity to create their own tailor-made agenda to cover the areas of security that are most important to their organization.

A collegiate atmosphere builds relationships and loyalty

RSA Conference attracts a wide range of IT security professionals from senior executives to IT managers, developers and consultants. Some work for large corporations in internal IT departments, while others are independent specialists or members of IT or security consultancies. There is also a broad range of interests, including people responsible for compliance, security policy or implementing security systems.

The organizers build on this community of knowledge by encouraging networking and collaboration during the conference. They organize social events before the conference starts for returning delegates and set up special interest groups to share information and experience. This approach helps to build what the organizers describe as a “collegiate atmosphere” that provides a welcoming environment for delegates. Communications before and after the conference help to reinforce this perception and build delegates’ commitment to return to future events.

LoyaltyPlus members who have attended for many years receive special treatment and privileges at the conference, including fast-track registration and access to sessions, use of a hospitality lounge and the services of a conference representative.

Satisfied customers return

The organizers aim to give delegates the information and motivation they need to implement change when they return to their own business. This can help them enhance their own career prospects and creates high levels of customer satisfaction, giving RSA Conference the opportunity to create customers for life.

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Lifecycle services help banks build customers for life


Customers can now switch easily

In the UK, legislation in September 2013 has made the switching process even easier. UK banks must now complete the transfer within seven days, instead of the former process, which could take 30 days or more.

That change has encouraged many customers to overcome the inertia caused by a complex, lengthy switching process. In the twelve months following the legislation, the UK Payments Council reported that 1.2 million customers switched current accounts, an increase of 22 percent over the previous year.

New rivals emerging

Banks don’t just face competition for footloose customers from their traditional rivals. The news that Walmart was entering the US banking scene in 2014 gave established banks an unwelcome challenge. The continuing growth of telephone, Internet and mobile banking services mean banks can no longer rely on personal contact with customers visiting a branch for their transactions.

Recognizing customers’ changing needs

So, how can banks retain customers for life, when it’s now so easy to move? One approach is lifecycle based – a portfolio of services that align with customers’ changing needs through their life.

In the personal banking sector, the relationship might begin with a checking account when the customer gets their first pay check. The customer might need a mortgage for their first home, loans for car purchase, family vacations or home improvements. Later, banks can target empty nesters who are looking for advice on investments or retirement plans. With high net worth customers, banks can add an additional level of value by offering the services of a personal banker of investment advisor.

By using customer relationship management (CRM) systems to track their customers’ circumstances and preferences, banks can identify opportunities to offer the next level of services and meet their customers’ changing needs.

Building stronger long-term business relationships

There are similar opportunities in business banking. Small businesses and startups may require a small range of basic services, including loans, credit lines, payment and deposit services as well as insurance.

As the business grows, the range of services could change to include business development loans, invoice factoring, leasing, investment financing, electronic banking, treasury services and international financial services.

Personal relationships are more important in the business sector and banks appoint business managers to meet their customers, find out more about their operations and recommend financial services in line with changing needs.

Focus on customers for life

Products linked to customers’ lifecycles give banks the opportunity to grow revenue and strengthen relationships with customers. However, unless the banks treat their customers as “customers for life” and look at their business with a degree of continuity, they will lose the incremental opportunities to other financial institutions.

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