My partner, Jim Dickie, recently vacationed in Vietnam. He stayed in a number of very upscale hotels and on checking out of one was handed a customer satisfaction survey. OK, quick: How many times have you been handed one of these and tossed it? Or taken the time to complete it but never heard a peep from the company about it?
Well, Dickie has stayed in more than his fair share of hotels over the years and was not the least interested in taking vacation time to complete another customer satisfaction survey. Then he opened the form. Then he asked to speak to the manager. This was the entire form:
The manager told Dickie the problem with traditional survey forms is that they ask too many questions and still can miss the point. The restaurant meal may have been fine; the server friendly and prompt; and your pillow just right. But you could still have had a bad experience because the person upstairs made a racket all night long.
The hotel manager said his company is genuinely interested in feedback about whether a guest had a marginal or unhappy stay and it wants to address any concerns immediately, without taking a lot of your time.
For years, I’ve been presenting “Levels of Relationship” at sales conferences and the good that accrues as sellers move up from Vendor at the lowest level to Trusted Partner (or Trusted Advisor) at the high end. Among the benefits that increase as you move up the level are increased trust/credibility and access; better understanding of the buyer’s business and its customers; repeat business, references and enthusiastic referrals; shorter cycle times; fewer competitive bake-offs; and somewhat less price sensitivity. To all of these, add loyalty.
Just over 20 percent of firms responding to our 2007 Sales Performance Optimization survey report they exceed expectations in creating customer loyalty, while, somewhat surprisingly, less than 30 percent feel they need to improve in this area. (See Figure 2.) In terms of the mix of business from existing and new customers, there’s really not much difference between those who Need Improvement (62 percent existing and 38 percent new customers) and the Exceeds Expectations group (64 percent existing and 36 percent new).
“But,” says Jill Griffin, co-author of Customer WinBack (Jossey-Bass, 2001) and author of Customer Loyalty (John Wiley & Sons Inc., 1995) “whether a company continues to buy from you is not the true measure of loyalty. The real test is whether that customer will recommend you to someone else.”
This may be a distinction worth pursuing, given that the “Exceeds” group averaged 64 percent quota attainment, while the “Needs” group came in at 51 percent. In examining other areas of significant difference (farming additional business from existing accounts; communicating regularly with customers; adapting the sales process to changes; and obtaining and/or maintaining references and case studies), we see that in every case, there’s at least a 25-percent difference between these two groups. That amounts to a lot of uphill sledding for the “Needs Improvement” group.
How can a company improve in this area? The first thing, Griffin advises, is determine whether you legitimately know you have a problem. Then ask, What are the dimensions of this problem? To begin defining and diagnosing your loyalty problem, answer the following four basic questions regarding your customers.
Do our customers …
- Buy on a consistent basis (based on product life cycle, budget, etc.)?
- Buy a wide cross-section of our products/services?
- Refer others?
- Show immunity to the pull of competition?
It is fair to describe Darryl Draper as a woman on a mission. She is Subaru’s national Customer Relations and Loyalty Training manager. Subaru’s goal was to build customer loyalty; Draper’s goal is to build a community.
Quality is not new to Subaru’s parent, Fuji Heavy Industries Ltd. (FHI) of Japan. And in the world of quality, the catchphrase is: “Don’t give me a program, give me a process.” Subaru’s Owner Loyalty Program, begun in 1999, is grounded in—get this—208 documented processes. The company can tell which person at a dealership is turning customers off and what that person is doing that is causing this to happen. Subaru can measure how sales are trending and track dollar amounts attached to specific customers and the value of a customer over a three- or five-year timeframe. The company knows how much it costs in advertising to get someone onto one of its dealer’s lots—and not buy.
One dealer lost a third of his business over a four-year period—a cool million bucks that went elsewhere. Adios. Sayonara. This dealer found religion and today will tell you, “Keeping my customers and keeping them loyal is profitable for me.”
When the Owner Loyalty Program began, Draper took on the task of single-handedly training dealer personnel, spending three to four days a week on the road. In seven months, she was able to reach only the dealerships in the Western region of the United States. That’s when Draper investigated online training and collaboration in an effort to reach all 600 dealers. With a system in place, she recorded seven OLP recovery presentations that are available 24/7. And numerous people are being trained at each dealership, at a cost of just 75 cents a person.
But even more importantly, at the customer level, actual images of the front and back of any negative survey are sent online directly to the dealer, who is asked: Do you want to recover this customer? The customer is then sent a second survey and asked: Did someone contact you? Are you more satisfied/happier than you were before? The process continues until you say you are.
The payoff for Subaru has been huge and for Draper, gratifying. But she continues to pursue her vision. “It’s not just about delivering training that’s needed now; that’s a Band-Aid. We’re also delivering education on future job needs and are looking beyond this to personnel development anticipating their future needs.”
The next time you have your car serviced and you get a follow-up call from someone who obviously could not care less what your experience was or your answers to their survey are, think about Subaru and Dickie’s Vietnam hotel.
They created elegant, simple methods to create loyalty at the sales level, demonstrating care, valuing the relationship and putting it all in the customer’s terms.