Customer Loyalty is a Moving Target

My associate, Kimberlee Sautter, brought an article to my attention yesterday about customer loyalty. The author said that one of the common mistakes companies make is to equate customer satisfaction with customer loyalty. I agree with this knowing that print buyers will sometimes switch printers, but not necessarily because they had a bad experience. They switch because the original printer didn’t provide an experience or service that was unique—that another company couldn’t provide. Therefore, if it’s easy to switch (the risks are minimal) and there is a perceived benefit in switching (lower price, for instance), then why not give it try?

The author of the article cites Fred Reichheld’s book, The One Number You Need to Grow. Reichheld contends that customer loyalty can be measured by asking customers a single question: How likely would you be to recommend our company to a friend? His view is that customers who refer your company are putting their own reputation on the line, and that they would only take this risk if they are loyal.

Hmmm. That’s good food for thought, but I believe that a customer’s view of a supplier—and of their peer—is often more nuanced. When they make a recommendation to a friend or peer, they are likely making a judgment about the quality and service that the friend or peer might be satisfied with. Most of us believe that other people are more easily satisfied than we are. In addition, even though your customer has been satisfied by you in the past and believes that their friend will be satisfied, the recommendation in my mind is not a commitment to do future business with your company. Customer loyalty is a moving target. You have to keep re-earning a client’s business.

Of course, it’s obvious that a customer who recommends your company to a peer is much more likely to use your services again than someone who didn’t recommend you. My point is that while there’s a correlation, it isn’t an assurance of customer loyalty.

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  • http://kevinhoward kevin howard

    I sold printing for 30 yrs starting in 1975….I earned 6 figure income for 30 of those yrs….2 seven figure incomes in that time period. Sheet fed! Yes, sheet fed.<br />
    <br />
    A printing company is important…the work has to be at a certain level…but understand one simple indisputable fact. Your sales person IS the company! The only people that deny this simple truth are owners that never sold print. <br />
    <br />
    I took my clients anywhere I could service them…they always…ALWAYS.. followed. Why? Because I grew old with them. I did all the expected entertaining but added to that. My clients became a part of my social fabric. I went to their special family events…they were invited to my mine….my home….my family’s special events. I fell in love with my clients and their world. I wasn’t insincere. These people became close personal friends.<br />
    <br />
    When is the print community going to start realizing that this is the real SERVICE-BUSINESS world! Lawyers, accountants, professional service providers…this is how they capture and retain clients. See yourself as a professional service provider. You are not a vendor…not simply a sales person.<br />
    <br />
    Talk to a "rainmaker" in your market. Listen, follow, learn. There are only a hand full of these special performers, so when you see one make sure you get to know them. Grow old and close to your clients.

  • http://MichaelLennon Michael Lennon

    I find that customer loyalty is often tied into two main ingredients, quality and price. Unless there is a personal connection that ties the customer into the relationship, such as family or friends (not that this doesn’t sometimes present it’s own special set of problems), constant above average service and competitive pricing tend to remain a part of the formula for satisfying clients as it well should. There are plenty of hungry printing companies just waiting to pick up the ball and run with it if given the opportunity, so keeping your eye on that ball is a given if you wish to grow and prosper.<br />
    <br />
    We are happy to find that our satisfied customers do tell their friends. We have benefited time and again for going the extra mile by having many of our customers spread the word that we are keeping them happy. Then when the new customer in turn reports back to the original reference that they are pleased with the outcome it reinforces the confidence level of those existing customers even more.

  • http://PatrickWhelan Patrick Whelan

    I’m the person who wrote the article that you are referring to. I found your comments to be accurate and enlightening. Thanks for furthering the discussion.

  • http://LindaDickinson Linda Dickinson

    I beleive in print buying loyalty certainly plays a role, but for me, knowing the people inside of a printing company – especially the CSR’s – the head of prepress, the production manager, and most importantly the press man – who I make certain i have a first name relationship with, are what makes my jobs run smoothly, correctly and on time. Price is one part of the equation – knowing who I need to talk to at a printer in the times of emergencies is another. <br />
    <br />
    Salespeople play an important role, but not the sole role in loyalty to a printer. Much depends on personality and interaction. Since I am a more "hands on buyer" I want to know all the nitty gritty of the printing company – and because I buy for an ad agency – emergencies and "must haves" are a common part of my buying plans, I need that printer who understands this, and is willing to work with me 24/7.

  • http://DianeDragoff Diane Dragoff

    A print buyer’s comment:<br />
    Kevin is absolutely on the money in his comments! To expand a bit, I have had such relationships over the years with salespeople, CSRs and others within printing companies. Often, the CSR wears planning and service hats and may be more involved with exisiting clients on a daily basis than the salesperson. Having worked inside several printing plants, I built relationships of my own with clients. On one of the most successful accounts, sales and production teamed up to strategize the service of the account, resulting in a tripling of business from that account. The plant owner must understand that the CSR is a critical lynchpin in client service. The best CSRs should not be priced out of the market because they’ve worked at a company for too long, they don’t run a machine or bring in new clients. In many cases, they have worked with the clients at other printing facilities and have exisiting relationships. Some do inside sales with no recognition of that fact. CSRs and salespeople who have business and production experience, are unique; they understand the processes AND the clients needs and can translate back and forth between the two sides. They should be perceived as adding a high level of value by owners and appreciated as all-stars!<br />
    <br />
    It is critical that the client feels that everyone in the plant is servicing the account and understands, at some level, the client’s business. This level of support is the way to retain a client.<br />
    <br />
    Just like you, I’m only as good as the last print job. Just like you, I want to build long lasting relationships. I want to work with and recommend folks who understand what I’m trying to do and have the same business ethics that I have. Printers who provide continuing instances of pricing, quality and service in support of that effort get my loyalty.