How to increase customer loyalty? First, Stop annoying them !

Everyone in sales knows the importance of customer loyalty and the importance of repeat business. Still, we go out and make it difficult for the customer to do business with us. Worse still, we downright annoy the customers.

I had one such experience with a start-up: myPNRstatus.com. They had a novel idea which they are trying out. You can enter the PNR number of the railway ticket and they claim to send you SMS’s on the status of the PNR (if wait-listed, they claim to send you an update everytime there is a change in the status) and also keep you posted on the status of the journey.

I was travelling by rail and had a wait-listed ticket. I decided to try out their service and so registered by PNR with them. I got a couple of SMS as claimed when the status of my wait-list changed from 24 to 22. Then I did not get any further SMS. I did not bother to check the status online myself as I was under the impression that with every change i will get notified. However, just 2 days before my travel date, I decided to check the status myself and was surprised to find that I now had a confirmed ticket. This change in the PNR status was completely missed by the service. I never got the status update on this. I did not think much of it and boarded my train.

While the train had about 12 hours to reach the destination, I started getting status messages about the current status of the train and its expected time of arrival at my destination. In the beginning i was getting about a message every hour or so. But as i was nearing my destination, I started getting an SMS every 10 minutes. This got really annoying and i felt that my inbox was being spammed. The worst part was the fact that I got a status message about the time of arrival at the destination 30 minutes past my arrival. This was downright annoying.

I would have been happy if I continued to get a status update once a couple of hours or even once an hour at the max. Nothing more than that. And never 30 minutes after my arrival.

I am not sure if they are even aware of this issue. My assumption is that as with any other business, they are definitely not aware of this situation and hence will not be working on it either, which is rather un-fortunate for the start-up. Hope they are listening and sort this out.

One of the most important thing that a business can do to increase customer loyalty is to do the following:
  1. Keep using the product or service to experience it as a customer.
  2. Ensure that you do not annoy your customers.  
  3. Ensure that you do not put in road-blocks for repeat purchase.
Hope the folks at myPNRstatus.com are listening. 

Choosing your customers

Today, I read a post by Seth Godin with the same title and was struck with just one thought – How many times do sales people see this point-of-view. My take is that this is a blindspot for most of us. I would like to re-iterate the questions again:

  1. How much does this type of customer need you? 
  2. How difficult is this sort of person to find…
  3. How difficult to reach
  4. How valuable is a customer like this one…
  5. How demanding?
If we are able to build our sales strategy based on the answers to these questions, selling would become so much more focussed and fun. 
Market definition is a much more simpler form of answering these very questions. However, I have not seen many companies define their markets as precisely or even update their definition of markets over time. Everyone is so busy doing our regular work that nobody sits down to ask these. 
Thanks a lot Seth for bringing this up. I am sure this will help me and a lot others like me to again go back to asking these questions.  
Until 

How easy is it to do business with you?

Today I visited a private bank in Bangalore. There was a person who wanted to open a savings account with the bank and deposit some money. The bank manager went on to inform him that the bank can open a savings account and accept his deposit only if an existing customer of the bank recommends.
Here is someone who walks up to your office offering business and the manager almost refuses the business or is willing to do business on conditions.
I think this is what happens to a lot of other organizations as well. As the organization gets more process driven, the processes can stifle your growth and it can become difficult for your customers to do business with you.
I think it is now time for us to stop and take stock of the situation and ask questions like:
·         Do we make it easier for our customers to work with us or the other way around?
·         Do we make customers wait in queues to do business with us?
·         Do we make them fill-out form after form?
·         Do we make it difficult for the customer to reach the right person within our organization?
·         Do we have multiple people talking to a customer, each talking about a different product/service?
·         How easy it is for our customers to understand the contract?
·         Can they understand the language of the contract themselves or do they need lawyers for this?
·         How long is the contract negotiation process?
·         How do we treat our customers once they sign the contract?
·         How easy is it to start using the product/service that we have sold to them?
·         Does the customer already know whom to contact in case something did not work?
·         How easy/difficult is it for the customer to receive invoice and release the payments?
·         How easy is it for customers who want to give repeat business with us?
·         How easy is it for customers to refer new vendors/customers/partners to us?
·         Do we reward customers who spread the word about us and bring in new business for us?
·         How difficult is it for customers to find the product that they want in your store (online or offline)?
I can go on and on with the list of questions, but the crux of the matter is this:
“Make it easier for your customers to do business with you
This can improve your customer satisfaction and will result in customers who would love to do business with you at every available opportunity and will also refer new customers for you.

They could be the best sales team that you could ever hire. 

Double digit revenue growth

With the global economy showing signs of recovery, most of the organizations are looking at revenue growth. Most of the large organizations (like SAP, Uniliver,etc) are looking at achieving double digit revenue growth for 2010. 


The questions to ask are :- 

  • Should these large organizations  be happy with a double digit revenue growth (read 10-12%) ?
  • Is this the best that they can do ? If yes, why is that so ? Is their size restricting them from doubling their sales every 2-3 years or are there other reasons ?
  • Is is possible for these large organizations to achieve 25-30% year-on-year growth in their revenues ? How ?
The answer to these questions is that it is indeed possible to achieve a 25% y-o-y growth for these huge organizations. 

Let us see what can help these organizations to achieve this level of growth:

  1. First things first. The leaders should be absolutely believe that a 25% growth in revenue is possible. Without this absolute belief, everything else will fail. 
  2. They need to continue to re-define their markets. Intel did so by reaching out to the end-consumers directly. Apple did so by entering the mobile handset space. 
  3. Re-define how they sell. The world around us is changing and that at a very rapid pace. The way we sell should also change to keep up with the times. The organizations would really do well to 
    1. Add a new sales channel
    2. Identify ways to help customers reach you
    3. Un-complicate their sales organization  
  4. Improve selling process. My experience is that improved efficiencies in the sales processes alone can add another 1-2% in revenue growth. Continuous process improvements in the sales processes is absolutely essential. 
  5. Provide exceptional customer service. No company can keep growing without keeping their customers happy. If there is only one thing that an organization can do out of this list, it should be to provide exceptional customer service levels. This is the MOST IMPORTANT STEP in the sales process.       
I strongly believe that each of the above can add 1-2% to the revenue growth by itself, but if done as a combination can drive the business to a 25-30% growth. The state of economy does matter to a certain extent. But, if your product/service adds value to your customers, you can still maintain the growth despite bad economic conditions. 


Relevance of our products/services to customers

I received a comment on my previous blog on sales process that if there is no demand for a product/service, improving the sales process might not have any benefit. 


True. But how do you know if the decline in sales is due to lowering demand for your product/service or is it due to some other reason. 


My belief is that as long as your product/service is able to solve a key challenge for your customer, the demand for your product/service should not decline. If it still declines, the culprit lies in the process. 


A follow-up question is, how, when and how often do we check if our product/service is still relevant for our customers. Do we have a process in place for this ?