Imagine coming across a car that grabs your attention – in particular you are taken with the handling and performance of the car. So you take a look at this car and identify the features that contribute to or help shape the performance of this car. Having done so, you set about adding those features – bigger tyres, different exhaust system, different engine – to your car. How likely is it that you car will generate the kind of performance that you are after? How likely is it that your car won’t even start and if it does the performance will be less than it was before you added the ‘shiny objects’?
Given that so few of us would be this stupid in the domain of cars why is it that so many are this stupid when it comes to the organisational domain? Why is it that so many organisational people take ‘shiny objects’ or ‘best practices’ and start adding them to their organisation in the expectation that they will replicate the success of high performing organisations?
Can you take this cherry picking approach to Customer Experience and customer loyalty? Can you just tack on a veneer of Customer Experience to your organisation and thus cultivate customer loyalty? Can you tack some Customer Experience ‘shiny objects’ (almost always these involve technology) and ‘best practices’, here and there in your organisation, and reap the benefits that come with a loyal customer base? No!
I want to take you back to 1993 and the wise word of Frederick Reichheld:
Building a highly loyal customer base cannot be done as an add-on. It must be integral to a company’s basic business strategy. Loyalty leaders like MBNA are successful because they have designed their entire business systems around customer loyalty. They recognize that customer loyalty is earned by consistently delivering superior value ….. Designing and managing this self-reinforcing system is the key to achieving outstanding customer loyalty.
When a company consistently delivers superior value and wins customer loyalty, market share and revenues go up, and the cost of acquiring and serving customers goes down. Although the additional profits allow the company to invest in new activities that enhance value and increase the appeal to customers, strengthening loyalty generally is not a matter of simply cutting prices or adding product features. The better economics mean the company can pay workers better, which sets off a whole chain of events. Increased pay boosts employee morale and commitment; as employees stay longer, their productivity rises and training costs fall; employees’ overall job satisfaction, combined with their knowledge and experience, leads to better service to customers; customers are then more inclined to stay loyal to the company; and as the best customers and employees become part of the loyalty- based system, competitors are inevitably left to survive with less desirable customers and less talented employees.
