Building Customer Loyalty

Before building something we need to understand what is the meaning of the term loyalty.

Simple definition:
Where an individual becomes accustomed to buying from you.

Loyal customers will:
- make regular/repeat purchases
- purchase not one but many of your products/services
- refer others (spread your story)

Some people say that "in every old customer you will find a new customer waiting to be break out and spend more money with you!..."

Value Pyramid Example:
1. Basic Value - Accurate billing, Prompt service
2. Expected Value - Delivery by 10 a.m on next business day (things to stay even with competition)
3. Unanticipated Value - first to provide online tracking, first to provide handled devices

When it comes to loyalty and retaining customers I would say the following:

"The more unanticipated value you provide a customer the deeper his loyalty to you"

Don't forget the 80-20 rule: 80 percent of your revenue is being generated by 20 percent of your customers. This means the not all customers are created equal.

So how to identify your best customers:
- Total revenue (for example $746,000)
- Calculate 80% of revenue (746,000 * 80% = 596,000)
- Next begin listing in descending order revenue b customer
- Add a column which will sum the revenue till now, stop when you get to your 80% revenue)

- RFM

- PPRFM

Comments

The innovators and the early adopters, can you spot them?

Before I start this post. I would like to thank TED talks for helping me enrich my world of marketing and more. One of the best talks I ever heard was made by Simon Sinek and was about how great leaders inspire action. In this post I would like to emphasis the change in my approach towards contacting customers and in which way to do it. Simon presented the following diagram: We need to talk to our customers from the inside to the outside. Conveying why we do things, how we do it and at last the what we do. As Simon said, people follow the why you do it and not the what you do. Then he spoke about the innovators and the late adapters using the following diagram: Where he brakes down your customers into groups, where the innovators pass your story along with the early adopters. The 80/20 rule also can be adjusted according to this diagram: 1. The Innovators - 2.5% - your top VIPs 2. Early Adopters - 13.5% - 2nd level VIPs 3....

Meeting summary, how to make sure everything is working according to plan!

When it comes to meetings the most important thing in my opinion is how we implement what was decided. In order to do this right, we need to be organize and assign people with tasks but most important is to assign head of implementation - the person that makes sure everything is going according to plan (i.e Execution Manager or just EM). Every meeting that requires a follow up needs an EM. So what do we need in this Meeting Summary Template: 1. Project Name/Meeting Title 2. Date 3. Time 4. Attendees 5. Non-Attending Invites 6. Agenda Items (what we spoke about in the meeting) 7. Decisions Made 8. Issues Identified 9. Follow-up Action Items 10. Most important: EM You can download the template here

Customer Life Cycle

Simple and easy way to understand your customer's road map (also known as customer's life cycle) As you can see I separated the customer's life cycle to 4 stages. 1. when he gets to your site 2. when he signs up 3. when he makes his first purchases (retention only starts after four* purchases) 4. retention stages * you can define different quantities and also change it to days/months of activity. I just think you need to understand that most customers will purchase only once - twice with you. So you need to treat them differently and show them the way to become loyal high value customers!

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