Thinking of ways to gain customers’ loyalty as an independent professional? Check out these insights from one of New York Times’ bestselling authors!
Speaking of which, I’d like to feature today one prominent person who has shared great insights about how to win your target market’s trust and loyalty as well as how you can further strengthen your brand. Keep reading to know more about what this person has to say about genuinely serving your target market in a way that will make them want to convert into your brand’s loyal customers.
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Thinking of ways to gain customers’ loyalty as an independent professional? Check out these insights from one of New York Times’ bestselling authors! Fred Reichheld: A New York Times Bestselling Author, Speaker, and Business Strategist Fred Reichheld is the creator of the Net Promoter System (NPS). [NPS: A widely used market research metric that takes the form of a single survey question asking respondents to rate the likelihood that they would recommend a company, product, or service to a friend, family member, or colleague.] Named by The Economist as the “high priest” of loyalty, Reichheld is a fellow at Bain & Company and founder of Bain’s Loyalty Practice, which helps companies achieve desirable results through customer and employee loyalty. Reichheld graduated with a BA from Harvard College in 1974 and an MBA from Harvard Business School in 1978. He is the bestselling author of 4 books about customer loyalty and his latest book, “The Ultimate Question 2.0: How Net Promoter Companies Thrive in a Customer-Driven World,” tackles how NPS practitioners such as Apple Retail, Philips, Charles Schwab, Allianz, American Express, and Intuit utilize the system to generate tremendous positive results. The book also explains how NPS helps businesses become truly customer-centric by systematically converting more customers into promoters and fewer into detractors. Reichheld’s insights on customer and employee retention quantified the connection between loyalty and profits. His other books, namely:
… have all become New York Times bestsellers. Aside from being a bestselling author, Reichheld is a frequent speaker at major business forums and his work on loyalty has been widely used in The Wall Street Journal, The New York Times, Financial Times, Fortune, Businessweek, and The Economist. The Consulting magazine also named him as one of the top 25 most influential consultants in 2003. According to The Economic Times, he “put loyalty economics on the map.” Let’s talk about some of Reichheld’s insights on loyalty-based management… In a Harvard Business Review article, Reichheld wrote that despite a lot of company activities aimed at serving customers better, only a few have achieved meaningful and measurable improvements in customer loyalty. While most business leaders are aware that profits go up along with customer loyalty, only a few of them have systematically revamped their operations with this subject in mind. Why do you think this is so? One reason is that most companies adopt improvement programs based on an ad hoc basis. According to Reichheld, building a highly loyal customer base cannot be done as an add-on. It must be part of a company’s BASIC business strategy. Loyalty leaders like the MBNA Bank recognize that customer loyalty is earned by consistently delivering superior value. By analyzing the effects of retention on revenues and costs, these businesses intelligently reinvest cash flow to acquire and retain high-quality customers and employees. Additional profits allow companies to invest in new activities and increase their appeal to customers. When this happens, that means a company can pay employees better, which boosts workers’ morale and commitment, making them more likely to become more productive and stay longer in the company. The economic benefits of customer loyalty often explain why one competitor is more profitable than another.” - Fred Reichheld Competing on the basis of loyalty may be complex, but it is not mysterious. In the words of Reichheld, “It requires, first of all, understanding the relationships between customer retention and the rest of the business and being able to quantify the linkages between loyalty and profits. Only then can decisions reflect systematic cost-benefit trade-offs. It involves rethinking four important aspects of the business―customers, product/service offerings, employees, and measurement systems.” If you want to experience the benefits of a loyalty-based system, then all these aspects must be understood and worked on daily for constant improvement. Take note of these 3 important elements of a loyalty-based management:
When you take these points seriously, you’ll have a higher chance of achieving your goal of increasing your loyal customer base. Creating a loyalty-based system requires willingness to shift away from traditional business thinking. Instead of focusing on maximizing profits and shareholder values first, you should put customers at the center of your business strategy, redefine your target market, revise your employment policies, and redesign your business’ incentives. As you refine your ability to deliver value by more effectively harnessing Reichheld’s economic pf loyalty, your brand’s advantages will multiply. When that happens, congratulations! You’ve done well in putting Reichheld’s advice into practice. Hope you’ve found this week’s insights interesting and helpful. Follow us on LinkedIn. Stay tuned for next Monday’s MicroBusiness Marvels! Learn more about Fred Reichheld on Net Promoter Score on next week’s MicroBusiness and Marketing Marvels! |
