In my Daily Dose video series, I explore the topics that chief customer officers must grapple with on a daily basis. Join me as I discuss what I’ve learned over the course of my 35-year career, so that you can more effectively do the work that needs to be done.
The following is a lightly edited transcript of the video below.
Do you believe customers are assets or cost centers? Thinking about customers as assets is my first customer experience competency. The idea of “customers as assets” gives you a simple way to measure whether you did or did not earn the right to customer-driven growth. In today’s episode, I bring this idea home with a story that’s all too common:
A Loyal Customer
When a new pet store moved into Jeanine’s neighborhood, she was ecstatic. Her schnauzer, Buddy, could now be just minutes from care if he needed it. And she just loved the convenience. The day after the store opened, she went over and registered Buddy, signed up for the loyalty program, and made an appointment for his first grooming. She continued those appointments every six weeks, like clockwork. Over the years, she also purchased all of Buddy’s toys and food from the store, and she went there for any physical ailments that he had. She was a devoted pet mom to Buddy, and she kept giving her business to the store because it was so close.
But Jeanine was felt like something was missing in the experience with that store. It felt to her that Buddy was just a number there. Because the staff turned over constantly, no one recognized Buddy as a regular. The staff often didn’t check records before Buddy’s appointment to get to know him or to get to know Jeanine.
So when Jeanine showed up 10 minutes late for an appointment and was told that, because she wasn’t there on time, they had moved on to the next dog and she would have to reschedule her appointment, she’d had enough. The staff made no effort to give her the benefit of the doubt or even to contact her to find out where she was. They didn’t know her and certainly hadn’t tallied up all that she had spent there.
Jeanine stopped shopping there after five years of weekly purchases, constant grooming, and care that she went to that store for. The value she took with her as a customer was over $40,000 a year.
Customers Expect to Be Known. Do You Provide Your Team the Tools to Do So?
Would you take your mom’s money for years and then not recognize her or cut her a break? Well, you know the answer to that question.
Jeanine, like most customers, yearns for a company to keep track of and know how much they have given to an organization, and how much they’ve been loyal to them. They want people to know this information about them and honor them accordingly. They expect to be known.
Think of your own life as a customer. What’s the first thing you think of when a company you’ve been loyal to treats you like a number? It’s, “Don’t they know how much I spend here?”
If you walked into your favorite restaurant every week, and no one recognized you after the fifth visit, how would you feel? Would you eventually stop going?
Remember customers, take care of them, and don’t take them for granted. This is our opportunity to honor customers for how they honor us.
Commit to Understanding Customer Value
But it takes doing the hard work to know customer value, it takes the commitment to give your people the information and also the permission to make informed decisions about actions to take with and for the customers in front of them. According to Econsultancy, only 42% of companies are able to measure customer lifetime value. Those that do it, behave differently with their frontline, and with how they serve, and in how they reach out and embrace their customers.
Make-Mom-Proud companies, give their people the tools to know customer lifetime value, and to prepare them with options to ensure customers know they’re valued. This is our opportunity to say to customers, “We know you, we value you. We realize that without you, we don’t have a business.”
Signal That You Value Customer Loyalty: A Case Study
Alaska Airlines, for example, resists industry practices that signal to customers that they’re undervalued. Instead, they prove that they value customer loyalty, for example, by continuing to award miles to customers based on mileage. This presses against the industry shift to instead give miles based on ticket price.
This Alaska practice says, “We value you, that you fly with us.” Not, “We value you when you pay more.”
Listen to my podcast for another case study, featuring St. Jude Children’s Hospital, on honoring customers (in this case, donors) as assets.