Five Strategies for Guaranteeing Customer Loyalty

by Robert W. Lucas, Creative Presentation Resources

Customer retention has always been one of the most cost-effective ways to increase business revenue. According to the international consulting firm Bain & Company, you can increase profits by as much as 95 percent through increasing retention by as little as 5 percent. If organizations fail to focus their efforts on servicing current customers while spending excessive amounts on acquiring new ones, they are wasting their efforts and much of their revenue.

Most customers are looking for good value for their money, especially in hard economic times. They also are attuned to product and service pricing. Even so, many customers are likely to pay a bit more to organizations that demonstrate a true concern for customer needs and a willingness to go out of their way to provide quality service levels. Certainly, providing service that differentiates your organization from others requires effort, training, and staffing, but the return on investment is well worth it long term. You cannot expect to approach service with a “fix it and move on” mentality. Service is a process, not an event. It requires dedication of time, money, and resources and a commitment to provide whatever it takes to satisfy your customers.

Here are five strategies that you can use to enhance your organization’s customer retention:

1. Create brand recognition. The most successful companies and those that stay in business for decades or longer are the ones that spend time and effort planning and executing strategies to acquire and sustain brand recognition. This means creating a market presence where customers know who they are and what they provide. Think about organizations such as Sears, JC Penney’s, AARP, Firestone, Ford, AAA, Maytag and Macy’s. When you hear those names, you know what they do and what to expect from them.

To establish your brand recognition, you must first identify what it is that you want to be known for, to whom you will market it, how you will market it, and ways to offer quality products and services at a competitive price. Once you establish these criteria, you can set out to spread the word through advertising, product and service sampling, strategic partnerships, customer acquisition, and effective service.

2. Get regular feedback from your customers. You cannot address customer needs if you do not know what your customers want. A big mistake that many service providers make is that they look at articles and other sources that say “Customers want…” and go on to list what all customers want. While such resources can be a good indicator, unless you ask your customers what they expect and want regularly, you likely are spending time and money providing the wrong thing to your customers.

For example, in good economic times competitive pricing may not get people in your door or to your website. However, when money gets tight, cost may become more important to your customers. Additionally, depending on the type of products or services that you provide, customer needs may be different. For instance, for customers looking to buy construction equipment, safety might be an important concern. For someone buying women’s clothing, that is not likely a big issue. Take your customer’s service pulse regularly in order to keep up with their changing and specific needs. (For sample questions to ask customers, see this article in its entirety at

3. Make it easy for customers to provide feedback. Do not forget to ask for feedback following a sale or service encounter – that is a big mistake. If you do not ask, most customers will not tell you. Some studies show that if customers are disappointed, they will not tell you. They will simply go away and then tell others about their negative experience. This can lead to the loss of that disgruntled customer while missing the opportunity to serve those who heard their story. You need to hear the good, the bad, and the ugly related to how well customers perceive your service efforts.

Many organizations say that they welcome customer feedback, but they hide behind technology and make providing feedback difficult. Make it easy for people to give you feedback or voice concerns. On your website, have a link that says “Customer Feedback.” When customers click the tab, they should get a form to complete and see your organization name, address, phone number, and email address at the bottom, in case they want that information. On your automated phone system, offer an extension in your outgoing message that says, “To leave feedback for us, punch extension #___.” Ensure that someone checks these sources daily and responds in less than 24 hours. Contact the customers to let them know that you received their feedback and to thank them. (For more ways to collect customer feedback, see this article in its entirety at

4. Listen to your customers. It does no good to gather input from your customers if you ignore it. This will only lead to frustrated customers and lost business. If nothing else, thank your customers for taking the time to share their opinions with you.

No matter whether the feedback that you receive is positive or negative, you should receive it enthusiastically and give it immediate attention. Instead of looking at negative feedback or complaints as a bad thing, recognize that the customer took the time to share it with you and ask yourself the following questions:

  • Why would this customer feel this way?
  • What did we do/say that created this impression with the customer?
  • Is the customer’s reaction reasonable? Why or why not?
  • Have we heard similar things from other customers?
  • If necessary, what can we do to prevent similar reactions by other customers?
  • Gather all customer feedback and examine it periodically. Look to see if there are trends or patterns that you need to address – for example, if a number of customers have complained about long wait times on the telephone or that they failed to receive a product or service when promised.

5. Act on feedback immediately. Do not file away customer feedback for discussion later or to have a committee review it; act on it right away. If you fail to examine the cause of customers’ dissatisfaction or to acknowledge feedback received from them, they will likely stop giving it. If customers are complaining, they also will likely escalate the issue higher in the organization or take their business elsewhere.

If someone is unhappy with your organization because of a policy, procedure, or the way he or she was treated, you should deal with that issue immediately. Examine and change the process that created the problem or counsel or discipline any employee, as appropriate. Failure to act can lead to additional complaints by other customers.

The key in guaranteeing customer loyalty is to treat customers not as you would like to be treated but as they would like to be treated. Strive to provide exceptional service in every service encounter, and the name of your organization will potentially become a household word.

Robert Lucas is president of Creative Presentation Resources and managing partner of Global Performance Strategies. He has over three decades of experience in the customer service, human resources, training, and management fields. He has written hundreds of articles and contributed to 28 books, including Customer Service: Building Successful Skills for the Twenty-First Century. You can reach him at or email him at [email protected]