By Marwan Jamal
Taking care of customers has always been crucial to business success. In fact, stock experts have found that brand loyalty is the most reliable aspect in predicting a company’s performances in both short and long-term futures. A study by Michigan State University found that traders who built stock portfolios based on customer satisfaction data made nearly five times more money than their peers.
So, yes, customer satisfaction matters and can make or break your business. I’ve compiled a list of eight best practices that will improve customer satisfaction:
1. Be an “ecologist”
“What happens in one area affects every other area to one degree or another,” writes former Disney executive Lee Cockerell in his book The Customer Rules. He believes great managers should see their organization as an ecosystem where everything is connected because even the smallest mistakes can have tremendous consequences on the service customers receive, and therefore affects brand loyalty.
For that, Cockerell suggests if you want your customers to experience excellent service, you must pay close attention to every decision you make, every promotion you award, and every person you hire.
Case in point, the secret to Sam Walton’s success with Walmart was that he thought about his customers whenever he made a critical business decision. He dined at family restaurants, slept two to a room while traveling with his executives, and among all of the eighteen airplanes his company bought, none of them were brand new.
Walton wasn’t cheap, but as he once said, he believed that every time Walmart spends one dollar foolishly, it comes right out of the customers’ pockets. He simply knew that every time he saved a customer a dollar, it put him one more step ahead of the competition.
2. Write like Shakespeare
Lee Cockerell spent decades in the hospitality business, and he believes a key to his success is something he calls “The Shakespeare Assignment.” Imagine the perfect experience your customers could have, from the moment they enter your business (or land on your website) to the moment they leave—happy, content, and eager to return. Then write out that “scene” in detail, and see things from your customers’ eyes. Ask yourself, What do they see? What do they hear? How do they feel? Share this script with everyone on your team, and distribute roles accordingly. By doing this, you’ll ensure your customers will get the best service possible.
3. Find your John Dunham
When Sam Walton moved to Arkansas in the 1940s to manage his first store, he met with John Dunham, who owned the town’s most profitable variety store, which also happened to stand across the street from where Walton worked.
For more than five years, and until he quadrupled his profits, Walton spent his lunch breaks across the street at Dunham’s, digesting everything he could learn about the retail industry from his competitor—from Dunham’s pricing strategy to how much money he made per quarter. Eventually Walton outperformed Dunham in both customer size and profit.
Similarly, you have to find your own John Dunham—i.e., your best competitor(s). Pay attention to how the big guys in your field treat their customers. If they’re doing a great job, copy them. And if they’re not, use this as a leverage and a reason to attract their unsatisfied customers. This is what great businesses do.
4. Give an unexpected bonus
According to the Law of Reciprocity, when someone gives us something, we feel obligated to repay that debt. You can use reciprocity to boost brand loyalty by giving customers an unexpected bonus every now and then. Why unexpected? Because gifts are more appreciated when they’re not anticipated.
One famous experiment found that restaurant guests who received a small piece of chocolate along with the check tipped more than those who received no candy. Think of a gift you can give your customers, even if they didn’t make a purchase. Many times, customers will pay back either in money or good reviews.
5. Overcome buyer’s remorse
Buyer’s remorse can cause customers to feel cheated or ripped off, which will affect the way they perceive your brand. There are many ways to overcome such remorse:
- Introduce your customers to other users. By using the law of social proof, if others are buying, they must be right.
- Tell them what they should expect. Marketing coach Bob Musial recommends you explain to your clients—both verbally and in writing—what they can expect to receive from your company. This gives them a logical reason to justify the sale and prevent after-sale remorse.
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6. Use endowed progress
Studies suggest that humans are more inclined to complete unfinished projects than to start a new project from scratch. This psychological fact can be applied anywhere, from marketing to writing. Ernest Hemingway, for instance, used to leave an uncompleted sentence each night so he had something to finish the next day.
In one experiment, a car wash was asked to distribute two types of loyalty cards among its customers. The first card required customers to complete eight purchases in order to earn a free car wash (zero progress); the second, however, gave customers a two-wash head start and asked them to complete 10 purchases (20% progress). Now, guess who completed their purchases and became regulars? Yes, those who received the head start.
Similarly, you can use “the endowed progress effect” in business to make customers stick to your loyalty programs, and, accordingly, become more loyal. Find something to reward customers with, then give them a bonus or a sense of progress that encourages them to keep coming back and using your services. They will get hooked and they will love you for it.
One wine company found when their store played French music, customers bought more French wine; when they played German music, customers bought more German wine. This is a tactic called “priming” that psychologists use to adjust a person’s state of mind.
Priming can be used to boost brand loyalty by giving customers favorable names. Customer service expert Shep Hyken once told a story about how one hardware store gained more regulars when it started calling its customers “neighbors.” Hotel managers noticed the same thing decades ago and started calling residents “guests” instead of “clients.”
You can also use words to reshape your customers’ entire journey. One study found that using homophones—words that have different meanings but sound the same—affected buyers’ feelings towards a company. Researchers found that when primed with the term “goodbye,” consumers felt they had just received a good deal or a “good buy.” Another study found that satisfaction increased when shoppers received a “happy face” sticker on their retail receipt.
8. Hire an empathetic geek
Lee Cockerell believes you must hire a technology expert or a “geek” to help satisfy customers in the virtual world. “I will say that if your company doesn’t have a few technology geeks in its ranks, you’re at a competitive disadvantage,” writes Cockerell.
A technology expert also could be the solution to many other problems. The world today is all about innovation and you must have someone who can always keep you updated with these new changes. However, Cockerell says the person you hire shouldn’t just be a technology enthusiast. He or she must also be a caring individual who understands the value of customer service and has the ability to empathetically step in the customers’ shoes and find better ways to satisfy them using the latest trends in technology.