How would you like to be in the recent position of CBS executives, canceling the drama “Jericho,” then receiving 25 tons of peanuts as fans say “nuts” to your decision? Can any company really afford to turn their backs on delighted customers to such that it becomes a news item?
With increased numbers and types of ways to communicate with companies, customers have moved beyond the sedate letter to the president and are instead expressing their feelings in more assertive ways. The “muscle” behind those 25 tons of peanuts is one example. When customers can spread the news about how they feel, they can positively and negatively impact your company and how it is perceived in the broader marketplace.While this is “soft stuff,” it’s core to any business.
Where does that leave a discussion of customer affinity?
Affinity is that tight bond a customer has with a company and its brand. When a customer has affinity for your company, they’re in a long-term relationship with you. Apple has it. ECCO has it. Polo has it. Pentel has it. Coach has it. L.L.Bean has it. Mercedes-Benz had it and is working to gain it back (quality problems). Jet Blue had it and lost it (customers held on the tarmac). Natural Balance lost it (harmful pet food).
When affinity is high, the cost to launch a new product goes down. When affinity is low, you have to spend more to overcome negatives and find new customers. It has a bottom line impact in Fred Reichheld’s book, The Ultimate Question, where he takes affinity to its next logical place of loyalty. He points out that major companies replace half their customers in five years. While some churn is healthy, it’s the loss of customers that causes a loss of potential profits.
What’s important to know is that every company—small or large—can create affinity, keep it, grow it to loyal users or lose it—faster than a runaway train.
Do you know what form that bond takes for you and your company? Because that’s the secret sauce of company growth and success.
And like many simple sauces out there, it’s got some basic ingredients. Here are a few things I think create customer affinity.
Quality in the components, quality in the final product.“Quality” products do what they are designed to do and create value. In the case of a Bottega Veneta handbag, quality is cumulative. It’s the use of vegetable dyes and special tanning methods that cause the leather to be incredibly soft. In the case of The Wall Street Journal, quality is an organization and a culture that supports great writers and editors who are required to take the time to develop an idea and look deeply at a story. It’s caring enough to make public corrections when there’s a question of ethics. It’s about developing and maintaining a culture of quality. Here are a few ways to add quality:
- Up level the product or parts of the product. When Levi Strauss developed his original 501 jeans, he added copper rivets. They made the pants stronger and also differentiated them.
- Up level the process. Toyota allows employees to stop their manufacturing line when there is a problem, encouraging them to both initiate action and take responsibility. Make employees an important part of your process.
- Improve the components. An improvement in function, features, durability, strength, weather-resistance, longevity, color, ease-of-use, quietness (machinery), sound quality (audio components), and even ease of disposal (HP Trade-In/Return for Dash/Recycle/Donate program) can make a huge difference in the quality perceived by your customer.
The way things are made makes a difference. The difference between a Ford and an Aston Martin is more than just the materials. What is done to and with the materials demonstrates workmanship.Touching a satiny finished piece of wood that is perfectly fitted imparts that sense. The sound of a car door closing firmly does, too. Here are some ways to deliver it to your customers:
- Exceptional fit and finish. If you’ve ever looked at a vintage teak Chris-Craft, you’ve seen skilled workmanship.The curve of the hull, the shine of wood and varnish meeting the water—that’s it. In software, it means the UI is intuitive and consistent. Functions are placed logically and learning to use it is quick.
- Thoughtful design. The Nokia N95 is an example of a cellphone that encompasses a high level of features and functions along with beautiful design. The Museo Guggenheim Bilbao is another example of great design. Design is more than just something the customer looks at. It is an experience.And as Apple found in their introduction of a phone, they can guarantee a market expectation on great design because their iPod reminds customers about their company, their products and their people every time the customer turns on their MP3 player.
- Make it special. With so much mass production today, finding “stuff” to buy isn’t difficult.What’s difficult is finding that unique item. Something customized: color, size, fit, personalization or even delivery to Timbuktu—a product and a company that combine to provide you with a choice and the unusual.
3. Buying experience
What is it like to buy your product? Is it being sold by a surly teenager, a condescending socialite or a passionate fan? A classic example is the Apple retail store versus the shopping experience to be had at Circuit City. One environment is painstakingly planned and controlled for maximum results—with incredible dollars-per-square-foot productivity. The other is designed for a series of do-it-yourself quantity sales—the equivalent to quickly turning tables in a fast-food restaurant. Recent staff cuts at Circuit City make the analogy even more apt. The price may be about the same, training of employees similar, yet the Apple experience clearly attracts both employees and customers for whom buying experience esthetics are critical. By the way, if lots of discounting comes to mind when you think of the name of the company (particularly if it’s a retailer) the buying experience itself is probably discounted. Elegant purchasing experiences are often the result of training and discipline. It may appear that the salesperson at Ferragamo just happened to know the right color to go with your Chanel jacket, but don’t believe it. You had a seamless, delightful transaction because there were hours of training and years of experience behind it. At Ferragamo, the quality and workmanship involved in the sales process is equal to that found in the products.Here are some ways you can provide a great buying experience:
- Informed sales associates. Trained salespeople—knowledgeable about both the product and customer base—make the difference. If you shortchange the customer here, you’re really just hurting your business. Get the best people, and then train them. Make sure the customer gets everything necessary to use what they’re buying. If it’s software that works with Bluetooth, suggest a device. If it’s a leather bag that requires special care, tell them about the leather creme. Better yet, include the one in your hand.
- Physical presentation and design of the experience. This used to be optional. There are now extraordinary expectations about what a customer will see, touch and feel as they walk through a store or an office. At Santana Row in Silicon Valley,designer boutiques communicate their own brand experience within a retail scene that looks like a movie set.Similar rules apply if your customers are shopping online. Design influences us on both an immediate and a subliminal level. When people enjoy an experience, they want to relive it. Use analog and digital design to reinforce your brand and keep customers coming back.
- Help. I don’t always need help. But when I have a question, I’d like to send an email, chat or call and get an immediate answer. The company that provides me with that level of service tells me they really want my business. Because I expect a person to sell me the product, I’m hopeful that I don’t meet up with automated service at the end of my quest for help. Make it easy, simple and always give customers an opportunity to connect more by asking, “Is there anything else we can help you with today?”
4. The post-buying experience
This aspect of purchasing is just as important as everything that leads up to the swipe of your credit card. Consumers want the opportunity to come back and do an exchange or return if the color of the blouse they selected clashes with their boyfriend’s favorite magenta Tiki-patterned Hawaiian shirt. It’s critical that the customer not be made to feel like a second-class citizen just because they need to have their purchase adjusted instead of purchasing anew. I think sometimes we have the experience after buying something of being a bad, bad customer for not understanding the company’s procedures and processes.Dealing with the mobile carriers is a perfect example. Remember, customers have already made a commitment to you by making a purchase. Fail them when they need you to make it right and you’ve lost a customer—and 20 more when they tell their family, friends and the immediate world via their blog. As the old Texas saying goes, “You got to dance with them that brung you.” Show some loyalty to the customers who brought you to this point in your company’s evolution—they’re the cause of your prosperity.When we give prospects preferential treatment, we’re dissing current customers.I have a queue of projects I work on and current client work always trumps talking to new people. Some would argue that’s the wrong priority for a rain-maker. But I know that every time I satisfy a customer, I give them a reason to purchase again and also to refer us. I don’t have to worry about replacing that customer. I just need to keep the customers who already love the service they’re receiving and continuously fulfill the promise of our brand. You can make a great post-buying customers by:
- Making a return. OK, not every marriage is forever, not every purchase is forever. Sometimes, we select the shoe that doesn’t fit quite right, the custom paint that doesn’t match the rest of your walls or the software that just can’t be configured to play nice with your system. When that happens, does your customer become a curse-tomer? Fraud aside, most people are fair and don’t try to take advantage of companies. Be fair with them, too.Take it back. Smile when you take it back.And say thank you. They’ll buy from you again, and they’ll tell all their family and friends. Nordstrom has a policy many of you likely know.They’ll take anything back. And the idea behind it is this: You’ve now got a customer in the store with money in their hand. With that, they are not in a competitors’ store, and they are more prone to take out their wallet to buy something there.
- Service and upgrades. Have a clearly stated service and/or upgrade policy. Make sure it’s written in plain language that’s easily understood by the customer, not jargon that only a veteran software engineer could figure out. And please, when you’re doing a major upgrade, ramp up for it and be able to provide the kind of service you’d like to have.
- Let them know you still love them. Being a customer means you’ve bought something. That’s past tense. But customers still need to know that you view them as important. Reinforcement is important for all of us. It’s how our family and work relationships grow, it keeps our friendships alive. Find ways to stay in contact. Get customer’s permission to reach out to them—then do it with offers or information they’ve told you they want, not spam.
5. The Next Time
The next transaction. Do you remember my name? Do you know what I own—or at least what I’ve bought from you? Do you recognize me as a current customer vs. an anonymous prospect? From the online experience to direct mail, do you know who I am? I recently gave a $10,000 donation to my alma mater, Santa Clara University, as they design a new business school. It was really because I love what the dean has done in his leadership role that I wanted to give. But here’s the thing. I wrote a check.And my husband’s name (also an alum, but that’s a different story) is listed first on our joint checks. And so now I get letters from the school addressed to my husband, not to me, asking for more money. I figure that I’ve got to be in a relatively small crowd of people who have given that sum of money. But they can’t get my name right. I’ve repeatedly asked the school to fix it and yet letters continue to arrive with the wrong name. It has made me feel less loyal, less interested in giving. You know why? Because it matters to me that the place I give to knows who I am. And that’s what customers fundamentally want to know. They want to know that you remember who they are. It’s the equivalent of a local retailer who remembers us and greets us by name when we walk into their store. In today’s world, it’s online and direct mail but the technology enables us to know who we are addressing and their relationship to us. Pay attention to the details and the customer will know you care. So, here are three more ways to ensure there is a “next time”:
- Remember them. Keeping records should now be easy as pie. Does your database provide you with information you can act on when a customer makes another purchase? We’ve got tremendous storage capacity—put it to work on behalf of your customers so that they know you’re thinking of them.
- Where is your system leaking? Don’t let the goodwill that customers feel for your company drip away. What can you do to provide them service that delights? Can your customers become your advocates? That’s just what McDonald’s recently did by taking a group of mothers on a kitchen tour. Find customers who are influencers and give them a place to have conversations. Get people interested and talking—provide the forum.
- End of life. At some point, your product will be ready for replacement. Develop a system that helps you reach out to your customer before that need occurs. And if it’s a product that can be recycled, set up a system that enables you to touch them as they drop off the software, server or computer you originally sold them. As I mentioned, for years HP has been a leader in this kind of effort with their trade-in/return program.
Okay, once you have affinity, what do you do with it?
Affinity is a step above a customer transaction. A prospect becomes a customer, who then becomes a customer who has affinity for your company and products. Engaging the customer, then, is a key next step to building affinity.
- Consider additional customer needs that are not about a transaction but about adding value. If it is a family who has just purchased security software, you might give them a newsletter on how to keep their child safe online and provide tips from other parents. This shows how much you understand and care. In the field of marketing, these efforts are sometimes called Relationship Marketing programs.And in this case, the name works. You must go beyond the customer purchase to establish a connection that builds on what you know about that user—what they care about, what they need.
- Regular two-way communications. Ask for feedback, and let them know what you’re up to. Many companies wait until the next release of product to talk to their customers. Instead, send out a blanket email asking for their participation in a survey so you can get some user feedback. Do that once or twice between product cycles and treat their comments with respect. Then, when you announce the new offer/solution/product, you could credit a person in particular who did a great job articulating a new product need. You can say, “Dave, you raised a question and so we built xyz around that.” Note what I’m doing here. We are asking for feedback in mass, and we are providing a new product in mass, but the way we’re handling things shows an interest in what users care about. Many product managers think “they should know” and while I agree that you have a lot to offer to filter good ideas from bad, why not build a rich set of things to choose from?
- Create occasional delight. Think of one way you could surprise your customers with something they don’t expect. We are all used to doing x and getting y—buying a product and getting a service, whatever. But there are those times when a company just does something out of the blue. I remember when Amazon sent me a mug after I spent $2,000 with them one year. A $10 mug counting shipping. But I was delighted. It made me feel like I stood out from the pack and I had more affection for Amazon for “thinking of me.” What delight can you plan in your cycle that you never reveal to a customer in advance but that you can drop into the process? In software engineering terms, this used to be a hidden wry joke or image called an “easter egg.” It could be something simple like giving research results published for circulation, or a specially branded CD of content the user might like. The thing is that it’s not about the expense. It’s about the way you show you’re paying attention. You only need to do it once and it’ll go a long way in letting them know you want them as a customer again. Do it twice in an un-routine way and you have stepped above the fray of other products and companies.
- Encourage word-of-mouth. You know the old saying, “Those who…”Well there’s a corollary in the arena of customer love. Those who love, talk.They talk about you to colleagues, friends and online to your prospects. The question is how to support them to do that. Do you give them a forum? Do you ask them questions that inspire them to think about you? Word-of-mouth occurs when your customer genuinely loves what you offer. Cultivate those feelings of love by providing new flavors, different colors, more cool features, and correct price. If you gained your reputation by being first-to-market with the most indestructible power tools, maintain that key attribute in your product line and layer other features onto it. Don’t take customers for granted—ensure you’ve got programs in place for influencers and encourage your best customers with special editions, one-time discounts or unique gifts. Delight must be earned constantly, it’s not a one shot thing.
- How you use market power. A company will sometimes try and figure out how to “profit optimize” when they really start to make it. For example, they’ll hire lower-quality people so they can cut expenses. Or they’ll make processes so repeatable and robotic that the special experience of your product or service is lost. Maybe the zen of the sales process becomes blah or the elimination of a handwritten thank you note makes customers less delighted. One company I know raised their prices by 500% as soon as they gained category leadership. While I commend that at some level, such moves have to be balanced to retain customer affinity. What’s my method? Rubicon throws a thought leadership dinner with smart people who enjoy the industry and trading insights. The first seats always go to clients because it’s my way of saying thank you for believing in us, co-creating with us and supporting us. Without them, we wouldn’t be in a position of market authority. Make sure you use the power you accumulate along the way to celebrate the people who’ve helped you get where you are. They’ll remember, they’ll have more affinity for you and in the end you and your company can become more successful by riding a tide of goodwill.
This article could have been titled “Customer love: How to earn it, how to keep it.” But that’s not the right goal.
Affinity is different than love.
Affinity is more practical, more rational. Pragmatic marketers seek to create more preference, more loyalty over time to generate profits and growth.
Learn more about obtaining and retaining customers at Pragmatic Institute’s Market.