Creating Customer Loyalty

By Christy Poturkovic

Are you creating loyal customers in your business? I’m not talking about satisfied customers, that’s no longer an adequate measurement. Satisfied customers go anywhere, loyal customers come back and tell their friends about it. So what are you doing in your business, all day, every day, to create customer loyalty? Please note, you may call your customers “clients”, “patients”, “members”, “students”, “constituents” or a multitude of other labels, but who I’m talking about here are the people who buy your goods or services and ultimately pay your bills.

In today’s business environment, satisfaction is a measurement of mediocrity. If a customer tells you he’s satisfied, what he’s actually saying is things aren’t that bad, but things aren’t that good either. What that means is if they find someone who treats them a little better, offers a better deal, they are going to make a change. Translation: Instead of one satisfied customer you now have one less customer!

Customer Loyalty is a Strategic Advantage.

For long term sustainable growth, the best strategy for your organization – and it doesn’t matter if you’re a company of one or one thousand – is to create and retain loyal customers. This initiative will create a competitive distinction for your organization, but it must become a strategy that is part of your organization’s culture. Creating loyalty isn’t done just by the service people or the “front line” people, it’s done by everyone in the organization.

What is loyalty worth?

In order to help you quantify loyalty, let me use a very simplistic example. Let’s say your average satisfied customer spends $50 per month with you – I’m using a low number on purpose - or $600 per year. A loyal customer is likely to buy from you more frequently and make larger transactions, so let’s say a loyal customer spends $75 per month, or $900. The difference over five years is $1500 for one customer (now multiply that by 10 or 100 or 1000 to get a better picture of the value).

But it gets better. Now consider that a loyal customer is also telling all their friends and family about you – and you know they will because that’s what you do when you have a really positive experience with someone. Let’s say they tell five people a month and one of those people becomes a loyal customer – in a year’s time that’s 12 new loyal customers, $900 in transactions each for additional revenue of $10,800, now multiply that by 10 or 100 or 1000. I know that was a simplistic example, but the point is that the value of one loyal customer increases exponentially.

Additionally, you haven’t had to do any extra advertising because your customer has done it for you – 50% of American business is done by word of mouth advertising. So not only have you increased revenues, you’ve been able to do it and save time and money!

Here’s more good news: loyal customers are unlikely to be swayed by discounted pricing, coupons or other incentives from the competition, and in fact are usually willing to pay somewhat more for your product or service, and are more forgiving when your organization makes a mistake.

What’s the word on YOU?

In this highly competitive marketplace, what are your customers saying about you? If you want your business to grow and maintain profitability, that's a question you need to answer. In the words of Jeffrey Gitomer, "Customer satisfaction is worthless, customer loyalty is priceless."

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Christy Poturkovic is a Certified Empowerment Coach, speaker and facilitator with more than 25 years of business and sales experience. Her diverse background includes sales, management, product evaluation and long range planning. She has worked with individuals and groups from the board room to the front lines to define desired results and achieve them.

Christy is passionate about helping people discover and achieve their full potential by building on their inherent strengths. She provides a proven process that enables clients to create a plan that will help them achieve a higher degree of success, both personally and professionally. Her approach helps clients expand the attitudes, skills, knowledge, and habits that result in sustainable improved performance.

Christy is active in several local Chambers of Commerce, Toastmasters, the Indy Chapter of Int'l Coach Federation, and is a 2007 graduate of the Hamilton County Leadership Academy.

Her guiding principle is “it is better to dare mighty deeds than to live a life of quiet desperation and wonder what might have been.”

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