What Your Worst Customers Can Teach You About Loyalty – Part 2

In this two-part series, Jill Griffin, an internationally-published author and customer loyalty expert, highlights four difficult customer types and the lessons they provide.

Customers are our best loyalty teachers. And the lessons gleaned from “problem” customers are often rich and long lasting. Consider these four less-than-ideal customer types and some of the loyalty making insights they provide.

For Part 1 of this series, please click here.

 

Customer Type 3
Bought Aways: Leave them alone!

For many companies, the rate of first-time customer attrition is often more than double that of older customers. Why? Two reasons: First, new customers are often not properly nurtured when they are initially sold, causing them to move on. Secondly, the Fickle Factor is at play. Simply put, some of the very customers your acquisition initiatives attracted have just demonstrated their propensity to switch. These fickle customers are Cassanova buyers in disguise. They’ll love you and then leave you–fast! This is particularly true of “bought away” customers whose only true allegiance is to the vendor with the lowest price.

Consider the experience of Super Embroidery, Inc., a 300-employee Phoenix firm that does automated embroidering of hats, caps and jackets. Super Embroidery has hundreds of customers. Sometimes business is lost to new companies that price very aggressively in an effort to get accounts. Says company president, Anna Johnson, “Most of [customers] I get back within three months because competitors fail to keep their promises.”

But others don’t return. “There was one customer we lost because of three cents a hat,” says Johnson, even though the customer was completely satisfied in every other way. That customer’s buyer called Johnson a few months later, complaining that her new supplier was slow and the quality of work was below Super Embroidery’s. However, the customer still wanted Johnson to reduce Super Embroidery’s price by three cents a hat to win back the order. Ultimately, Johnson declined to reduce the price, and the lost customer did not return.

When I work with sales teams on acquisition strategies, we begin by reviewing some sobering sales stats. For example, six out of ten prospective customers will say “no” four times before they say “yes.” We discuss that while easier to sell, easy-to-sway, shoo-in buyers are often the hardest to keep and why hard-to-crack prospects frequently make better, long-term customers.

Lesson: When targeting new customers, beware of the Fickle Factor, particularly those prospects that can be bought away by lowest price. It’s you they will leave next time for lowest price. And don’t get discouraged with prospects that require long sales cycles, as these are oftentimes the very customers from which you can earn long-term loyalty.

Customer Type 4
Variety Seekers: They need, uh, variety!

Variety Seekers are customers who will not remain loyal to your product because they prize the experience of using many different products. For example, I have a friend who is nuts about high-performance cars. Over the past decade, he’s owned a BMW, a Lexus, a Mercedes and a Porsche. (With each of these cars, he’s experienced no major problems with either the vehicle or the dealer.) Whenever asked about his car purchase history, he talks with passion about each of these cars and the thrill of the drive, but it’s clear his need for variety trumps any feelings of brand loyalty. He reads car magazines and websites voraciously and is already eyeing a new Jaguar model.

Lesson: Variety Seekers are not good winback prospects. Their need for variety will likely be more important than any winback initiative. However, this type of customer may still have value as an advocate for your brand since he’s likely the go-to source for many of his friends and family contemplating a purchase.

So, next time you encounter some “un-loyalty-like” customer behavior, take heart. Loyalty lessons await you. Dig in and reap the rewards.

 

Jill Griffin is a seasoned independent public board director, internationally-published author, corporate adviser on customer loyalty and keynote speaker. Known to her clients as The Loyalty Maker, since 1988 she has led the Austin-based Griffin Group, which helps firms world-wide to build fiercely loyal customers. Jill is a corporate board director for Luby’s Corporation, has served on the marketing faculty at the University of Texas’ McCombs School of Business and is a frequent guest lecturer there today. Jill is a Magna Cum Laude graduate and Distinguished Alumna recipient of the University of South Carolina’s Moore School of Business from which she holds her MBA.

Jill has published three books in multiple languages and additions. Her work includes “Customer Loyalty,” “Customer Winback” and “Taming the Search & Switch Customer”. For more information about Jill and her books, please visit www.theloyaltymaker.com. She can be reached at jill@theloyaltymaker.com.