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9 posts from October 2013

Grow loyalty by learning its dimensions

Most businesses interprete loyalty by transactions. If you spend a lot of money with their company, you are loyal. What the don't realize is that they are actually leaving money on the table when they ignore the dimensions of loyalty. Tq131004bd

Customers can increase their spending but that may just be a side effect of their growth. If you're not clued in, they may actually be spending more with your competitors at the same time! Retention (or longevity) and share of wallet are dimensions you have to consider. Finally, the customer can cease to need your product or service, and yet become your biggest advocate, sending you more and better referrals over time. 

Inspect each customer relationship carefully and figure out which type of loyalty exists and could exist. Then make sure you're driving the customer behavior you want.

Inside CXM: Five CX Touch Points You Need to Improve, 2013-Sep-6 by Bob E Hayes

Grow your company by increasing different types of customer loyalty. Gaining new customers, expanding existing relationships and keeping customers around for the long-haul each require different efforts. To gain new customers, you need to make a solid product and make it easy to do business with you. To improve your up-selling and cross-selling capabilities, you need to know where you are headed and communicate that path effectively. Finally, to decrease customer churn, you need to hire the right people.

It is important to note that the results of this study address the "typical" B2B technology company. The top drivers of customer loyalty might be different for your specific company. So, be sure to conduct a customer relationship survey to identify what is important to your customers. Use this information when setting your company strategy to ensure you are working on improving the right CX areas of your business.

How much of loyalty is a matter of voice?

As the airlines have discovered, and the wireless companies soon will, locking in customers is impossible over the long run. Some competitor will figure out how to spring them.

Tq131001sdVoice not only offers a way to monitor customer satisfaction, but also provides a value in and of itself. I don't expect my every whim to be answered, but I do want to be heard. Giving customers a voice is a way to recognize their individuality and to show respect.

HBR Blogs: Yahoo, Tumblr, and the Loyalty Factor, 2013-May-5 by Ben Gomes-Casseres

Against the backdrop of civil strife and war in the late 1960s, Hirschman wrote that when faced with declining institutions, consumers have two choices: Exit and go elsewhere with their support or dollars, or use the power of voice to generate change from within. These two choices are mediated, he explains, by members’ loyalty to the institution. Loyalty makes people more likely to stay and work for change from inside. But loyalty is also a product of how effective a consumer’s voice is likely to be; it does not stem from feeling locked-in or having no possibility of exit.

...can Yahoo count on Tumblr users staying on? That is probably how the investment bankers framed it — as a question of switching costs, lock-in, network externalities, and the like. Where are these users to go? There is no equivalent forum of this type, richness, and network size (at least not yet). It would seem that the 18-24 year-old demographic that Yahoo is pining for does not have an easy exit choice.

If the new owners indeed think that this community has nowhere to go, they will kill Tumblr, and possibly Yahoo too. As Hirschman explained, in an organization where entry is easy, exit may also be easy.