When your customers return to do business with you again and again, they are demonstrating loyalty. The size of their initial purchase doesn't determine loyalty. The level of satisfaction with their initial purchase does not demonstrate loyalty. It is only when they return to buy from you a second, third, or fourth time that they are demonstrating loyalty. The only incentive they have to do business with you on a repeat basis is the assurance you give them that their next purchase will provide as good a value as the last purchase. Assurance is the attraction to return. If a customer doesn't think they will receive the same value on repeat transactions, they have no incentive to return.
Some businesses, such as Office Depot, print the amount the customer has saved by doing business with them on every receipt. For example, a ream of paper, a box of pencils, and a three-hole punch may cost $15 at Office Depot. The receipt might say, "These same purchases would have cost $17 at a competitor's store. You have saved $2." Office Depot is demonstrating value and the assurance that they will continue to deliver a cost advantage.
My friends Gary and Sharon, recently traveled to Barbados. They purchased an all-inclusive vacation package at a fraction of its regular price. Tourism in Barbados, as many places, has continued to suffer since the September 11, 2001, terrorist attacks. Gary and Sharon flew to Barbados and stayed at a first-class hotel-resort for less than half of the normal rate. They received a terrific value. When they returned they said it was the best vacation of their lives. I asked Gary if they would go back again next year. He told me, "Probably not. We'd never be able to get the same deal. It was a one-time special."
Value and assurance are linked together. A great value is only a one-time deal unless it is accompanied by an assurance. Assuring your customers that your value proposition is a constant gives them the confidence to return to buy from you again and again.
McDonald's and Denny's restaurants enjoy a loyal clientele. These restaurants have been successful because they consistently meet their customer's expectations. Few people claim they have never tasted a hamburger better than McDonald's. Few people say the best steak they ever ate was at Denny's. Yet both of these restaurant chains see their customers come back on a regular basis. The reason for this loyalty is because the customer's expectations are met. The customers know what to expect. Every trip to a McDonald's or Denny's assures the customer of his or her expectation. Customers know these restaurants. They receive the same value time and time again. The customer is confident he or she will receive full value.
Interactions where the customer's expectations are met are reassuring to the customer. The more times it happens, the more assured the customer is that it will continue.
A few months ago I attended a meeting with the CEO of a major American company. He told the audience that he had seen a recent report that claimed 80 percent of the things salespeople promise their customers they do not deliver. The salesman says, "I'll call you back." But he doesn't call back. "I'll get that report to you." But he doesn't send the report. "I'll schedule a meeting." But he doesn't schedule a meeting. "I'll get shipping to give you a call." But shipping never calls. These are just a few examples of the many things salespeople promise and don't deliver. I don't know if the 80-percent figure is accurate, but I do know this behavior does not earn loyalty. Everything you say to your customers is an assurance. When you don't do the things you say you will do, you negate the value of your product or service.
Keep in mind that we are talking about what you can do to create customer loyalty, not what the marketing department or the production department or someone else in the company can do. What you can do is whatever you say you will do. Doing what you say you will do when you say you will do it is the best way to assure your customers they should continue doing business with you. When you promise to call the customer back in an hour, you are building the customer's expectation and creating an opportunity to assure the customer. When you promise to ship the material no later than tomorrow, you are building the customer's expectation and creating an opportunity to assure the customer. Every time you make a promise and then fulfill the promise, you are building a stronger bond with the customer. Eventually, the customer believes you will fulfill every promise you make. This assurance you have given confirms to the customer that they are making the right decision in doing business with you. The customer will want to return to you on a repeat basis, and you have empowered the customer to refer business to you. The more promises you make, the more opportunities you have to build customer loyalty. The words do not need to be, "I promise to call you back in an hour." You can simply say, "I'll get back to you in an hour." The important part is calling the customer back. Even if you call to say you do not have the information but you are still working on the customer's request, calling the customer within the hour builds assurance. It builds confidence in the customer that you will always do what you say you'll do when you say you'll do it.
Assurance is making promises and keeping them. Assurance is always being accountable to your customers. Offering assurance and being accountable to your customers provokes an emotional response from your customers. People make emotional decisions for logical reasons, and one of the most logical reasons for your customer to do business with you is that you are accountable and do what you say you will do.
The Zippo Manufacturing Company has produced 300 million windproof lighters since 1932. Every Zippo lighter is backed by its famous guarantee: "It works or we fix it free." Zippo's literature says. "Any Zippo lighter, when returned to our factory, will be put in firstclass mechanical condition free of charge, for we have yet to charge a cent for the repair of a Zippo lighter, regardless of age or condition." Zippo is assuring its customers that any Zippo lighter will always perform the same as the day it was purchased.
Today, Zippo windproof lighters represent one of the fastest growing categories in the world of collectibles. These lighters are bought, sold, and traded by thousands of enthusiastic fans from evey continent. Zippo regularly introduces new lighters commemorating everything from Corvettes to past U.S. presidents and their loyal customers continue to buy new Zippo lighters every year.
Zippo enjoys the emotional attachment many of their customers have for their product. Their customers recall carrying a Zippo lighter overseas while they were in the service or other memorable times in their lives. They remember the guarantee. They remember the lighter always faithfully producing a flame. Despite the decline in cigarette smoking, the Zippo Company sells to more than 4 million loyal customer collectors. Their assurance of value carries over to their entire product line including tape measures, knives, and writing instruments.
Swiss Army knives and Gibson guitars are two other examples of products that enjoy fierce loyalty. These manufacturers continually assure their customers of the value their products provide. Their value propositions are woven into every aspect of their products and services. The value propositions of these products are so compelling that customers buy them as collectibles even when they have no utilitarian use of them.
My friend Doug is an executive with a large company. Doug was in California at a business convention and heard a marketing executive from the Harley Davidson Motorcycle Company give a speech. In the speech he discussed the tremendous loyalty Harley Davidson has created. The marketing executive mentioned that many of their customers even tattoo the Harley Davidson logo on their bodies. "Now that's loyalty!" he commented.
When Doug returned home from his business trip he visited the local Harley Davidson dealership. Doug said that when he arrived at the dealership wearing a suit and tie he could hear snickers of "Rolex rider." Doug was impressed with the quality and glamour of the big motorcycles and purchased a Harley Davidson Road King for nearly $20,000.
Doug researched motorcycles further and discovered that BMW builds an equally impressive motorcycle that offers a much smoother ride. Doug became the proud owner of a second motorcycle. Despite the rough ride, he didn't sell or trade in his Harley. The value and assurance Harley Davidson gives for every one of their motorcycles makes Doug confident his investment in a Harley will always be solid.