Customer Loyalty Scores Reveal ‘Best of Breed’ Printers

Do you really know how loyal your customers are? Or, do you just feel you’re doing great?

Last year, the owner of a printer in Colorado shared how he dodged a bullet saving one of his established large accounts. What surprised him most was that the two of them sat together each month at the local Rotary meeting, but the customer never said anything to him face to face. The customer could not tell him face to face that he was blowing it, and only when the printer owner received a filled out survey did he uncover the issues.

We all have stories in which our loyalty to a supplier slips to the point where we turn elsewhere, and we did not share our dissatisfaction. Many of us would rather just slip into the sunset than invest time in situations where we no longer have skin in the game. We all do it, but it doesn’t have to end that way.

How do you measure loyalty?
Loyalty is measured by asking one question: “How likely are you to recommend us to colleagues and friends?” Let’s first look at a couple competitive industries—life insurance and airlines.

For life insurance companies, customer loyalty is in the low 20 percent range, and for airlines it is worse. But still, State Farm (35 percent) and Southwest Airlines (52 percent) achieve high customer loyalty and, not coincidentally, are more profitable than their peers. Read Fred Riecheld’s best seller—“The Ultimate Question”—to learn how businesses achieve success by measuring customer loyalty and taking action.

Study after study show that customers participating in a survey have the potential to be loyal if complaints are corrected. The entire feedback system reinforces itself, both with the customer and supplier.

The ultimate question should be asked to customers in a safe environment to drive candid feedback. If a customer is not “very likely” to recommend you, then they are not loyal. It’s that simple.

The best-run printers achieve over an 84 percent rating, or 84 percent of their customers are very likely to recommend them. These printers benefit in several ways:

• Customers become an extension of their sales force through positive word of mouth testimonials and referrals.
• Customers will turn to the printer they are most loyal to when searching for new services or projects.
• Loyal customers are quicker to adopt new services the printer rolls out.

The benefits go on and on. It takes long-term thinking to understand the life time value of a customer and how it impacts growth.

How do you know where you fall in the pack?
All this loyalty stuff sounds so basic, but you will be surprised to learn how individual printer performance varies. Let’s try categorizing printers into three buckets. Putting printers in boxes is dangerous, but humor me.

Best of Breed (>84 percent): These printers consistently achieve high scores, feel they still have room to improve, live by the rule “good enough never is,” are paranoid about losing any customer, and strive to preserve their hard-earned reputation. They feel reputation is critical to their success and doing the right thing is in their DNA.

These organizations are ripe for growth, continuous improvement and innovation. You would think they would become complacent, but they keep pushing ahead to preserve their reputation in the market, reinventing themselves when necessary, and investing in their team and infrastructure.

Middle of the Pack (74-84 percent): Most printers are average. That is why my stats teacher said there is a bell curve. Everyone can’t be on top. This group either strives to get to the next level, feels that being in the middle of the loyalty pack is fine because product quality is more important, or they service their top accounts with white glove service while others get second rate service.

Be careful thinking that quality drives loyalty. Quality is just a prerequisite to being in the printing industry. It is expected. The white glove player may need to figure out how to say “no” to those customers or jobs that are not a fit or they will continue to have mixed loyalty. Reputation is at stake with mixed loyalty Be careful. Those looking at how to get to the next level are well on their way.

Bottom Feeders ( Bottom feeders are either ignorant to how to serve customers, have processes poorly defined for consistent performance, are in denial and feel negative feedback is what to expect, or management is plain burnt-out or checked-out. This group must look in the mirror and seek help. Typically, a bad reputation is already out of the barn and tough to turn around.

A few years back, I worked with a person who bought a printer. What would make them do such a silly thing? They were changing careers and wanted a challenge. They got a challenge alright. They were unaware the past owner had checked-out long ago and customers were ticked off. They conducted a survey and discovered they were a bottom feeder. It took six months of customer presentations and PR to prove to the community and customer base things were different. “Under New Management” blasted from the mountain tops! They did a great job turning around the business, but it was painful.

While 84 percent percent of print buyers being very likely to recommend a printer may seem low to you, be careful about throwing stones. Go out and ask the question to learn how your customers truly feel and, more important, how you can earn and retain their loyalty.