How to Improve Customer Loyalty - Example

PROPOSAL TO IMPROVE LOYALTY By The of the The of the School The and where it is located The Date How to improve customer loyalty Many businesses and companies collapse after having started at a very high notch. The question to ask therefore is how can one establish a sustainable customer loyalty to their place? How can these customers are retained or how can new customers be drawn to keep business going? It requires various techniques to build a permanent relationship and even more sophistication in getting new ones joining without losing the old ones. It is therefore crucial to look at the ways and means such as segmentation approaches that meet individual needs and improve them. The verbal skills and word of mouth has major impact on perceived satisfaction or dissatisfaction with a particular service organization that will be explained in this text. In the end there will be a recommendation on how to improve customer loyalty (Farkas 2011, pg.56). This report is therefore a tool to improve entrepreneur skills and aims at enriching the customer loyalty and even drawing more clients for the prosperity of an organization and the improvement of people through a quality service delivery mechanism that would be competitive at a time when most products and services are offered by many. Definition of terms and their application in the real world with relevant contextual examples for successful business will be discussed in detail. Customer segmentation approaches tailored to individual meet individual needs This refers to the dividing and grouping of customers with similar attributes in homogenous groups and dealing with them differently. This targeting must make consideration on what products to sell to whom, the place to deliver them and the how to actually market to them so as to retain them with a good profit margin to the organization (Hansal et al 2010, pg.67). It is very possibly to provide better services to segmented customers if the process is conducted properly. It is a very important approach since the customers themselves would prefer special treatment that targets their capability. Ideally all businesses are founded on a vision and its achievement would require focusing order to leverage resources optimally for the satisfaction of these segments. In a world where population is exceeding the resources the company should give priority to procure enough for the group and deal with their emerging demands (Farkas 2011, pg.71). Although posting the products online would allow the customers to react and order specific requirement such that if one was to buy an electrical appliance, they can post their load requirements. It has been found out that segmentation increases revenue in target group as well as reducing expenses due to the efficiency in use of marketing assets and human resources. It is relatively cheap to deal with a customer with specific needs than having myriads of options that only one is selling at desired rate. Areas that should be addressed in segmentation Although research has shown that most organizations have embraced segmentation, the outcome has not been so pleasing in some cases due to a variety of draw backs that need to be checked and improved. The traditional approaches therefore fail to give back since some create over capacitated groups to handle (Allan et al 2001, pg.84). If the group is too large for instance when based on specialty and size, consumer needs are not clearly vivid and the result is confused catering. Focus on age and income or geography can be detrimental since a consumer may be young but with capacity to beat needs of the elderly in particular goods. Others fail because of lacking a holistic approach and end up ignoring the psychology of consumer and behavior which could have greatly motivated the customer. If the segmentation is not fully incorporated to sales and marketing to properly deliver messaging and communication to the target, the campaigns are likely to fail. Even in work segmentation, the senior workers or job positions should be entitled to particular privileges like consultation in decision making so as to feel relevant to the job. An organization should focus on the vivid distinct group and address it both economically and psychologically. If the group has been determined as attractive then a lot of input is required. Segments of approved profitability and strategic essence to an organization at present and time to come deserve a priority since they will result in a continuity that sustain the company (Herson, 2011,pg.53). Identification of a competitor who may be providing similar services to them could help in countering if the concrete dynamics of the competitor can be overcome through competitive and beyond reproach services. This can be done by analyzing the value and potential of company products against those of the competitor. Success in dealing with a particular segment can be achieved easily if the factors influencing their actions and behavior are understood. Do you know the catalyst? If a customer will prefer buying a new BMW car because of well curved side mirrors regardless of whether the engine specifications are retained or changed then the automobile company will have no obligation than to comply (Phillips 2013, pg.67). Do not stick to the old car make with a claim that you got it right in the first attempt to manufacture since you will easily lose this valuable customer to another company that is busy improving their brand. Effort to should be put to understanding the leverage that influence their loyalty by explaining the service offered and the specific value of the services to the segment. If the core catalyst has been discovered and the leverage is understood then the focus on required services should fit in the emotional experience of customer. If customer raises a concern that the technology is embracing energy saver bulbs, a supply chain should immediately check the best in the market and make it accessible so that the precise needs of the customer are met. At the end of the day, the most successful approach that retains a customer is that which combines the psychology of a company with a competing strategy in business in order to market to a group based on their age, behavior and location (Pastorius, 1981, pg.64). Always investigate to determine whether services are satisfactory to the group even if it means conducting interviews. Impact of word of mouth on perceived satisfaction or dissatisfaction Research indeed supports one powerful claim that word of mouth spoken is of more influence to the behavior of client than market controlled source like consumer reports (Phillips 2013, pg.85). It influences the range of awareness and perceptions such that the expectations from a given dialogue in handling consumer complaint can be predicted. Such an expectation is usually vivid from the attitudes that one has towards a service (Herson 2011, pg.77). Any ill intentions can be controlled if proper defensive and compensatory formula exists so as to sustain an organization. It has also been shown that word of mouth is readily emphatic in influencing the purchase decision of a client perhaps because trust is easily built in a dialogue. Word of mouth can have both positive and negative influence. A satisfied customer will definitely communicate with a good prospect in any organization and would thus influence the development of that company. In other words, word of mouth can bring a customer to loyalty and even transform the prospect into a customer. Input word of mouth is achieved at providing pre-purchase information. The genuine information providence helps the customer make informed decision while defensive marking influences an opinion over the purchase and even cultivates their confidence. The utterance s after the purchase is the output word of mouth. It portrays the consumer experience (Olsen 2003, pg.92). For every company, a post purchase complaint needs critical address. Complaints should be viewed as gifts that can be handled to avoid future dissatisfaction. An initiator in the company discloses the need of the product to the user. The influencer has a tangential role in impacting the purchase decision. The buyer is the one to obtain the service and as such can be the decision maker on whether to procure it or not. All these persons determine the overall perception of the service through their interactions via word of mouth. It is part of the consumer relationship management. Positive impact of word of mouth If a consumer is convinced through product information provided verbally by the sales manager, then hypothetically loyalty is the outcome (Phillips 2013, pg.86). Customer behavior has for long been empirically analyzed and the tendencies to exhibit different behavior like assigning an immense sum of money to a specific service provider is the outcome of good lobbying and advertising. Put in other words, the cause of repurchase is a cultivated believes in the quality of service (Herson 2011, pg.79). Satisfied customers also provide useful recommendations about the company to people within their cycle especially friends and relatives to come and get served in such an organization. Furthermore, these loyal consumers will have great incentives to share new information about the company and those can be company ambassadors (Obrein & Carter 1997, pg.110). These consumers will protect the company by defending it against negative information. This loyalty is an indication of service satisfaction and can be related to service quality. This is why their behavior becomes defensive for your services and thus the company can back up its established reputation by presenting feedback from surveys on customer loyalty. A research conducted on tourism in Switzerland provided a proof that many tourists visited the place due to positive comments and explained experiences on media which in turn attracted more people across the globe to tour it (Obrein & Carter 1997, pg.121). Negative impact of word of mouth Substandard services and dissatisfaction are the causes of customer complain. If complain do not get addressed in a way that brings justice, trust is lost. The result is deleterious to any organization because they perceive no value to your organization (Obrein & Carter 1997, pg.122). The worst is when there is no compensation. It is understood that a company needs to make profit to get sustained in business but a sustained customer relationship is paramount to the sustenance of the organization (Herson 2011, pg.117). All the above complains are normal for any organization but how they are responded to matters a lot. Customers will go on media and criticize your services with any proof of dissatisfactions and can opt to recommending the place they feel service was best for then. Moreover, they would discourage any loyal customer from coming for your service and the worst is when every person demands compensation which can easily render an organization bankrupt (Pastorius 1981, pg.89). The company will be discriminated and become invalid for customer satisfaction. Simply put, negative feedback will, if dealt unjustly will ruin your business and any such prospects in future. The best way to sustain a company is therefore engage in customer dialogue and properly compensate them for any damage that was due to an erroneous service to retain them for a testimony in future business undertaking (Olsen 2003, pg.44). A consumer is a boss and their behavior, attitudes, decision and perception should be heard to retain trust even from their reference groups that are prospects to become future customers. It is better to have a referral system that backs up your services whenever complain cannot be handled within your current set up of organization to maintain sincerity that get stuck with a customer( Phillips 2013,pg.66). Recommendations to improve customer loyalty Having seen the importance of a customer in any organization or business, it is imperative that suitable approaches are sought to retain the customers and attract new ones to sustain and prosper the company (Brown 1999, pg.99). There are many things that can be put into place to enhance a business which cannot be done in isolation given the diversity of customers and their expectations which always define what quality is in their context. To cultivate and enhance loyalty, Customer Relationship Management is supposed to be executed in a sensible manner (Hansal et al 2010, pg.87). Bearing in mind that customer loyalty is much more than dedication to the course of an action or services several sensitivities come up and are bound to change the way an organization and revolutionize its purpose (Hansal et al 2010, pg.96). What are the means of retaining a customer? A customer will be motivated to come for a repurchase if their initial service met their demand and satisfied their need (Brown 1999, pg.55). Therefore any practice that ensures quality is essential. This includes integrity in providing service, reduction of attrition, using a communication calendar, social media relationship, maintaining availability of a product, giving special offers, recognizing customers whenever they return, proper handling of complaints, embracing technology and providing extraordinary service. Social media and communication The creation of information exchange groups for a company in a given social media or web page is important way of enhancing customer loyalty. Constant updates on new development in a product via twitter and facebook or even linkedIn will keep customers at par with organization services. Online survey forms can be made available for comments and product reviews (Allan et al 2011, pg.75). This feedback can then be analyzed and keen approach be adopted to ensure concerns are addressed. Online information would help customers know your services before purchase and will ensure that your products are known. A website would rich customers globally since they can click in and read. What is more important here is, advertisement will be easier and views will reach the service provider in time. It is also a platform of exchange with customers to deal with any complains and comment sin a globalized fashion. Occasional blogs are also important. Technology and automation The current development embraces technology to facilitate speed and accuracy in dealing with customers. Wherever a customer received a faster and precise service, he or she will more likely recommend and refer your organization to people so as to come and experience your edge technology (Allan et al 2011, pg.106). For instance, bulk buying would be tedious if done manually considering data input time. Sell and make available If a product returned good feedback from a customer, ensure you make it available for them to purchase again. It can be frustrating if a customer finds out that you are always changing the products and sales (Lawfer 2004, pg.66). Some customers are specific to particular brands and it is better to bring improved products of the brand than to completely change the brand. Always care about brand loyalty issues since they determine customer loyalty. Handling customers Good communication skills can retain a customer. Persuasive and defensive language and good approach to deal with customer improves loyalty. Ensure the customer is satisfied at the end of service and have a compensation procedure for proven errors. Any complain should be dealt with respect by customer care (Lawfer 2004, pg.96). Courtesy in exchanges of information and special offers for customers will keep them coming for your services. Listen to their feedback welcome them anytime they show up and update them on sales and services. This way you will retain the old customers and create new ones easily. In summary the mechanisms to achieve customer loyalty requires various techniques ranging from segmentation approaches, word of mouth dealing and perceptions. The imperative goal of organization sustainability should focus closely on the customer demands and deliver accordingly (Lawfer 2004, pg.125). A good customer relationship management technique is regarded fundamental for any business and outcome can be controlled depending if efficiency is maintained. It has also been shown from the discussion that communication with the customer has to be courteous to motivate them. Organizations should therefore maintain an excellent working relationship with their consumer. References Allen, C., Kania, D., Yaeckel, B., & Allen, C. 2001. One-to-one web marketing: Build a relationship marketing strategy one customer at a time. New York: John Wiley. Brown, S. A. 1999. Strategic customer care: An evolutionary approach to increasing customer value and profitability. New York: Wiley. Farkas, V. J. 2011. Customer relations. New York: Nova Science Publishers. Hansal, A., Weigl, M., & Bull, T. 2010. Oracle Siebel CRM 8 installation and management: Install, configure, and manage a robust customer relationship management system using Siebel CRM. Birmingham, U.K: Packt Pub. Herson, R. M. 2011. Perspective taking, empathy and problem solving in service failure and recovery efforts: The impact on customer satisfaction, loyalty and negative word-of-mouth. Lawfer, M. R. 2004. Why customers come back: How to create lasting customer loyalty. Franklin Lakes, NJ: Career Press. OBrien, J., Carter, W., & American Hotel & Motel Association. 1997. Front office qualitiy service: Solving guest problems. Orlando, FL: The Institute. Olsen, K. A., Copenhagen Business School. CBS., & Handelshøjskolen i København. 2003. Improving employee and customer loyalty. Pastorius, J. 1981. Word of mouth. Burbank, Calif.: Warner Bros. Phillips, R. 2013. The passion conversation: Understanding, sparking, and sustaining word of mouth marketing. Read More