Summary

• Creating customer loyalty is the single most important endeavor of every business because loyal customers are the source of all profit. Loyal customers cost less to attract, are easier to deal with, and are more predictable. These ben efits are the reason all profit comes from loyal customers.

• Customer loyalty is not an emotion or an opinion; it is an activity. Customer loyalty is the specific activity of your customers buying from you or recommending you to others on a repeat basis.

• The value of customer loyalty is not situational or temporary; loyal customers are always valuable. Customer loyalty is never a problem; it is always the solution.

• Customers who refer their family and friends to your business are your advocates and their recommendations are more valuable than any advertisement you can buy.

• Cheerleading and exhortations will not build customer loyalty. Management by activities is the only pathway to creating loyalty.

• Customer loyalty creates money. When businesses compete and customers move from one business to another and never demonstrate loyalty, none of the competing businesses win. No profit is earned until a customer returns to buy from you again and again.

• The five principles that create customer loyalty are:

  1. People do business with people

  2. Differentiation

  3. Value and assurance

  4. Effective communication

  5. Focus

Creating customer loyalty is a journey, not a destination. Getting your customers to buy from you again and again is the source of all your profit. Do you need to create more loyalty in your clientele? Take this test and see.

Loyalty Growth Lesson

1. Does every one of your customers have the ability to deliver a powerful 30-second commercial for your business?

2. Do you see your business growing every month, on a continual basis?

3. Are you financing the growth of your business solely with profits from your business?

4. Is the majority of your advertising budget and promotions directed at current customers?

5. Do you know if your customers are referring new customers to your business?

6. Do you have a program for recognizing or rewarding your customers?

7. Do you know the difference between internal and external customers?

8. Do you know why each of your customers buys from you rather than from your competitors?

9. Are the profits from your business predictable and sufficient?

10. Is your workplace free of signs such as, "Build Customer Loyalty" or "Increase Sales"?

Your answers to these questions should help you discover your strengths and weakness and alert you to what you are doing well and which areas need improvement.