Lessons In Customer Loyalty From 3 Successful Businesses
Hi folks. Susan Payton, Secretary of KBA, here. I recently published this post on Forbes and interviewed a Kensington business owner I think you’ll know well.
Whether you’re a local mom-and-pop shop or an international business, there’s a common thread that your business relies on: loyal customers. A happy customer is one that will bring you business again and again, and cut down on your own efforts to attract new business, since they’re usually willing to refer their friends to you.
I spoke to three distinctly different companies to see how they foster customer loyalty: my local video store (yes, video), a payroll processing brand, and a well-known computer technology company.
Loyal Customers Bring Endangered Genre Back by Popular Demand
When I moved to my neighborhood and saw a video rental store, I scoffed. In this era of Netflix, how on earth could such a relic survive?
Once I got to know the Hanfords, the family who owned Kensington Video for 30+ years, I understood the appeal. The parents, in their 80s, had become icons in the community. Especially Winnie, who is an avid film-watcher, and puts out a list called Winnie’s Picks with her recommendations. Their children and their grandchildren worked there every day, greeting customers by name.
A few months ago, the family decided to close down the store. Not, as you’d think, for lack of business, but rather because, damn, at 80 it’s time to sit down and relax! There was a public outcry at the sad news.
“The overall response from our customers was one of disappointment, sadness, even despair, coupled with their understanding of how we might want to retire. There were many hugs, tears, and letters of appreciation,” said Guy Hanford, son of Winnie and Rich Hanford.
Guy, never one to sit still for long, never wanted to retire in the first place. After a few months, he approached his family about reviving the brand on his own. He plans to incorporate technology and an online database to not only appeal to past loyal customers, but to attract a new generation. He also plans to add a venue for film buffs to view independent films and discuss them, as well as a juice bar owned by his nephew.
In terms of how loyal customers brought the brand back, it’s a result of the Hanfords’ effort to connect with customers, Guy says.
“We had a strong connection with our customers by greeting them by name, making eye contact, and providing a good ear to their requests. We never tried to rush a customer out of the store. Some customers would stay for hours, and that was fine. Our customers knew that we cared more about them than their money.”
This, he says, is in stark contrast to the experience people get at a big box store.
Feeding the Fire of Brand Evangelists with an Online Community
I can speak firsthand about ZenPayroll’s efforts to bolster enthusiasm in its customers. I’ve used the payroll processing service for about a year, and was invited to participate in its exclusive online community, Friends of Zen, created by Influitive. On the site, participants can complete tasks, like reading an article or sharing their thoughts, in exchange for virtual coins. These coins can be redeemed for gift cards and other treats (e.g., the cupcakes I gobbled up a few weeks ago).
Within three months of launching the program, the brand saw a 45% increase in 5-star reviews across different review sites. ZenPayroll can track positive ROI from this; many of its customers point to reviews as one of the main reasons they sign up.
Margot Leong, who leads community and customer marketing at the company, says the tool serves as a channel to mobilize ZenPayroll’s community: “We’re able to call upon our evangelists to help us out in a number of ways, including quick responses to press inquiries, voting for us for various awards nominations, social media campaigns, helping us create content for the blog and marketing collateral, etc.”
Margot says that while the site includes rewards as a form of appreciation for evangelists engaging in activities in our community, only 5% of advocates have ever redeemed a reward.
“This shows that they’re a part of Friends of Zen because they truly want to help ZenPayroll, not because they’re in it for gifts or compensation.”
ZenPayroll has accomplished its goal of making every customer feel like a part of the brand’s success as well as a valuable extension of the team.
Creating Raving Fans Through Loyalty
One of the best-known computer technology companies in the United States, Dell has long made strides to connect with customers, understand their needs, and make improvements within the company.
I was a part of the Dell Customer Advisory Program a few years ago, and can speak firsthand about that experience, which was designed to connect Dell with customers to get ideas and feedback on products and services. In the sessions held in Round Rock, Texas, the panel voiced its concerns loudly about the overseas customer support that was lacking in cultural connections, kept us on hold too long, and focused too much on upselling when we called for technical help. A year later in a followup session, we learned of the many ways Dell had worked to implement our feedback and improve customer service. I was impressed.
Another initiative Dell has is its Customer Advisory Council: a forum for customers and technical leaders to interact with Dell’s product groups. Customers can find out about technologies and features that Dell is evaluating for inclusion in future products.
“The sessions are a forum for customers to provide feedback about their interest level in utilizing these platforms and capabilities. This event also provides the Product Group an opportunity to learn about business challenges and technology choices being made by our customers so our future products can be better tuned to address these needs,” said Christina-Marie Furtado, a Corporate Communications Consultant at Dell.
Additionally, Dell has rolled out Dell Advantage, its customer loyalty program that provides an instant 5% back in rewards and exclusive offers. When Dell Advantage launched in Canada, more than 50% of registrants bought Dell products again, and the brand is on track to share more than $1 million in rewards by the end of October.
Christina-Marie says that by getting to know Dell’s customers and responding through these various efforts, the brand earns their loyalty, and even inspires them to evangelize on Dell’s behalf.
Each of these three brands has a different approach to fostering loyalty among its customers, but each works in its own way.