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Every day in the paper we see another business closing shop, not making it in this historic downturn.  With the shrinking demand for total goods and services, there is a major shake-up of winners and losers.  Customer loyalty is a key to being one of the winners.   Loyal customers will keep coming back as long as they can afford to use your products and services because you have developed more than a transactional relationship with them.  You have created an emotional connection.  Loyal customers will expand your customer base by becoming your sales force.  When Scott Cook the CEO of Intuit first came out with Quicken, Turbo Tax and QuickBooks, he said he wanted to deliver such excellent service that he wouldn’t need to hire salespersons.  His customers would become his sales force and he would have hundreds of thousands of people selling his products.

In today’s recession it is going to take three key factors to build loyal customers:  Be Proactive, Think Win-Win, and Exceed Expectations.

Be Proactive.  You can’t sit around wondering if your customers are going to come back and do business with you, you must be out talking to them and finding out what their needs and concerns are.  Are they trying to figure out how to do things differently to survive themselves?  By talking to your customers now, you may be able to come up with a way to help them and keep them as customers for you too.  For example,  one owner of a small strip plaza was worried about losing tenants who had short term leases with him at the end of their lease to another location nearby that was offering floor space at a cheaper price.  Being proactive, the landlord went to those tenants months in advance of their lease expiring and asked them what concerns and issues they were facing.  After listening and showing interest in their situations, the landlord offered to reduce the price they were paying on the next lease agreement.  The tenants were relieved and made a commitment to stay with him.  The owner justified his action to himself by recognizing that an empty site might take months to fill in today’s market and he would lose that variance in rent in just one or two months of vacancy.  By the way, he did ask the tenants if they had been shopping around for lease space and they said they had.  If he was not proactive in coming to them when he did, they may have just not renewed the lease when the time came and given notice they were moving to another location without him having the chance to renegotiate.

Think Win-Win.  You do not want to go out of business giving away the store in order to keep your customers’ business, but you do need to view the relationship as a partnership.  When you think of the alternatives to Win-Win, there are several.  One is Win-Lose.  In a Win-Lose relationship, you may Win the business for the short term perhaps because the customer has no other choice, but when given a choice, the customer is out the door.  Such was the case of US Air in Philadelphia.  For a long time they were the only carrier and charged exorbitant prices to their customers knowing there was no other option in flying.  Once Southwest Airlines opened a terminal and all those customers who were fed up with being held captive by the US Air pricing immediately left and went to Southwest.    Another alternative is Lose-Win.  The customer pounds on you to lower your pricing to the point you can no longer make a profit and pay your bills.  You got the contract and they got the price, but now you are out of business or hurting to make ends meet.  Of course, the best alternative is Win-Win.  You are willing to work out concessions or be creative in helping keep your customers in business too.   For example, the same landlord above asked one of the tenants who was having difficulty paying their rent, if they would be willing to keep the entire shopping strip area clean, litter-free, swept and kept up, he would be willing to lower their rent.  This was a Win for the owner who no longer had to hire a maintenance group to keep up the parking lot area and a Win for the tenant who received a lower fee.  What resulted was a strong relationship between the two parties because of the trust and partnering.

Exceed Expectations.  Author Jeffrey Gittomer has a book titled:  Customer Satisfaction is Worthless, Customer Loyalty is Priceless.  In order to earn your customer’s loyalty, you need to do more than meet their expectations.  They need to feel they received value.  Value comes in the form of doing a little bit more than what was promised, value comes in the form of surprising the customer with something extra, value comes in the form of making them feel special.  Exceeding expectations does not have to cost you anything extra.  Start by looking at how your competition does business then see what you can do different.  Starbucks separated themselves by getting to know their customers and building familiarity,  Verizon Wireless separated themselves by quick telephone response time to questions,  Publix differentiated themselves by friendly, courteous employees.  In most cases, it doesn’t take a lot to do better than your competition in this area.  Remember two things:  treat the customers as individuals and it’s the little things that count.  Once you’ve identified some ideas, be consistent.  Share the ideas among employees, ask the employees for ideas and give recognition when WOW’s are created.

By doing the above actions now in the middle of these troubled times, you will be setting yourself up to be the best provider of your product/services when the economy changes.  Not only will you have kept your current customer base, but you will also have them out singing your praises to others because you took care of them too.

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