The Customer Loyalty Loop

by Noah Fleming

  Step 2: In conjunction with a guarantee, ask yourself the following questions. How can we reduce the customer’s fears and objections? Remember, the more you can do before the sale, the less you have to worry about after the sale. The reason many companies need guarantees is they aren’t doing enough of the grunt work in the earlier stages. I much rather prefer guarantees that not only reduce risk but back up the positioning of market dominance and product superiority: “We are so convinced this will be the best mattress you’ve ever slept on, go ahead and sleep on it for 100 days. If at that point you’re not convinced, no problem. Just call us up and you’ll get a full no-questions-asked refund.” Now that’s what I’m talking about.

  Step 3: Create your guarantees. I believe that if you’re selling something that you can’t fully guarantee, then you shouldn’t be selling it in the first place. Imagine if everyone backed up what they promised in sales and marketing, and then lived by their guarantees! What a world we could live in. Create powerful guarantees with strong emotional language. For example, it’s easy to say, “All of our guitars come with a 30-day return policy.” But that’s rather boring. It’s a lot more interesting to say something like, “Go ahead. Plug the guitar into your own amp, use your own pedals. Take it on the road with you. Jam with it. We know that buying a guitar online isn’t easy. It might look nice, but that’s a lot different than using it on your terms. Go ahead and try it for the next 100 days. If you’re not absolutely convinced at the end of those 100 days that you’ve made an incredible investment, go ahead and send it back to us. We’ll pay the shipping and either send you another guitar, or refund your money in full.” Which guarantee is more valuable to you? Make your guarantees bold and emotional. Guarantees aren’t about stating policies and a lame mission statement on the wall about customer satisfaction; they’re a moment to tap deep into the emotional state of your prospective customer.

  Step 4: Now improve your guarantees by reducing even more risk. Make it virtually effortless for the customer to take advantage of the guarantee. Too many companies offer guarantees and then fill them with fine print that essentially voids the impact the guarantee had in the first place. Make it fuss-free. Learn why the customer is unhappy or asking to take advantage of the guarantee, and give the guarantee. Now, a moment ago I mentioned that in my own guarantee, I offer to refund in full the entirety of consulting projects. I also mention that we will meet mutually agreed-upon objectives. My entire business relies on my relationship with the buyer. We have a crystal-clear discussion about the desired outcomes and create agreed-upon objectives. It’s not a loop hole, it’s more about doing my due diligence in advance. But at the end of the day, if the client isn’t pleased, I will refund their money. In my 12 years of business, I’ve never once been asked to give a refund. If you offer a money-back guarantee, send the money the day the request is received. Don’t create tons of hoops for the customer to jump through. If the customer is unhappy, you’re only creating more animosity after the fact.

  Step 5: Want a winning guarantee? Here’s the single-most powerful way to do it: Look at every major competitor in your industry and create the single-most powerful guarantee in the industry. That’s how you win. That’s how you make it a no-brainer. That’s how Zappos dominated the shoe industry. That’s how Walmart dominated the lowest-price retail industry. That’s how Dominos dominated the pizza industry. And that’s how Lands’ End dominates with my favorite guarantee around.

  Changing the Dynamic of the Relationship

  You remove resistance from the sales process by shifting from sales persuasion to collaboration. There’s been a lot of talk of the consultative or challenging sales approach over the past few years, and rightfully so. Instead of presenting the sale as a jousting match, you approach it as a partnership. Your front-facing people need to become trusted advisors, consultants, and guides. Your goal is to guide the client to their desired outcome—one that improves the client’s condition. Here’s a better way to think about today’s customer and today’s marketplace. Customers have a better radar for techniques. They smell it, and it turns them off. But if you approach every relationship with one of real intent that you strive for long-term relationships, and you have their best interest in mind, they’ve got a radar for that too. Many salespeople have gotten a bad rap, but rightfully so.

  I’m going to assume you’ve successfully removed all resistance (and don’t worry, in the third section of the book I’ll give you specific tools to build your sales process experience and actual language you can use), and the prospect has now officially converted to a customer. Now we’re going to move on to the third stage of the loyalty loop where we’re delivering your product or service.

  In the overlap between sales and marketing, the balance needs to be struck between presenting your products in the most appealing way but also building a relationship with your customer. The binary brain once again rears its two-sided head and can make us believe that presenting your products and building a relationship are somehow two different activities. Ideally, they are not. When you are doing the former, you are doing that in the context of an ongoing interaction with the customer. And when you’re relationship building, the customer is typically mindful that this is a sales interaction. I’m reminded here of crowdfunding campaigns.

  Anyone with knowledge of crowdfunding platforms knows that typically you can’t just put up a video of your product and expect people to donate to the cause, whatever it may be. What you’re trying to do, first and foremost, in a crowdfunding campaign is to gain fans. A crowd-funding platform is a place where you can showcase your stuff in a way that develops a fan base. Once someone is a fan, they are much more likely to reach into their pocket. So, in almost every business transaction, there’s a delicate balance between presenting your goods and developing a relationship—and that is what the Customer Loyalty Loop is all about.

  The Psychology of Testimonials

  Remember the lines repeated many times in this book. Logic makes people think, but their emotions make them buy. They buy on emotion but justify those decisions with logic. In Stages One and Two, we’re tapping deep into the customer’s emotions. Testimonials are one of the most powerful tools used to demonstrate your ability to provide value to your clients. It’s one thing for you to say it in your sales and marketing efforts, but it’s another for your customers to say it for you. In this brief section, we’ll look at how to obtain and create compelling testimonials, what a testimonial should include, and where to use it. The more trust you present in the earlier stages of the loop, the better job you’ll do at obliterating any resistance as the prospect moves to the third stage. As mentioned in Stage Four, the very act of gaining testimonials is part of that stage, but now I’ll show you how to get them. More important, I’ll show you to put a system into place to gather testimonials in a systematic manner and where to use them in your sales and marketing efforts. I can draw a direct correlation between specific testimonials and a lot of revenue in my own business. Let’s briefly discuss why testimonials work.

  Why Do Testimonials Work?

  When I wrote my first book, I realized I was entering a new phase of my business. For starters, my business had done well, but outside the client base and work I’d done in the previous years to attract business to me, I was now putting myself out there for people who had never heard of me. When you write a book, your publisher asks you to get endorsements. Endorsements are a lot like testimonials. After all, if this person is willing to vouch for this other person, or say their book is worth reading, then it must be worth reading. I decided to go right to the top of the business world and seek endorsements from one of the most influential people in business, and that was Seth Godin. Seth and I had met a few times at previous events, but beyond basic pleasantries that was about it. I attached my manuscript to an e-mail and hit “send,” sending to Seth. In less than an hour, I got a response from Seth. He explained that, as I could probably imagine, he gets a ton of books and would
try to take a brief look in the coming weeks. Less than 24 hours later, I was driving when I saw a notification on my cell phone. It was a response from Seth. I pulled over and read the response. Not only had he read my book, but he had even disagreed with a few of my points and wrote very articulate reasons for why he disagreed. Then, he explained what he did agree with and at the end of the e-mail was an endorsement.

  Gaining testimonials are incredibly important. They’re even more important when they come from influential companies. These are one of the highest-impact, lowest-cost business growth tools available to almost any business. I remember once speaking to another consultant who told me fascinating stories about the time she consulted with Apple. She told fantastic stories about working with the company and spending time in the boardroom. I asked her if she had a testimonial from them, and she did. I then looked at her website and found no Apple logo, no mention of her work with Apple, and no testimonial. Do you think this small tidbit of information might do a lot to alleviate resistance from prospects in the early stages of the loop? Of course it world. I asked her why she would do this and she said it felt a bit like gloating. She was also afraid people might not believe her. This is such nonsense. When I e-mailed Seth Godin, I figured the worst thing that could happen would be that he would say no. He said yes. Who are the exemplars in your business or industry that could provide you with a fabulous testimonial or endorsement?

  Action Step: Solicit Great Testimonials

  The goal of a great testimonial is to reduce friction and solidify a prospect’s decision in the second stage of the loop. Here are the only things you need to know about a great testimonial:

  • The testimonial should show the before and after of doing business with your company.

  • It should tell a story.

  • It should use specific and concrete examples. You don’t want your customer to say, “The experience was great and we saved a lot of money.” You would rather have them say, “Our experience working with Noah was so good. In fact, his recommendations saved us $127,450 in the first six months of working with him!” That’s a real comment, by the way, from one of my clients.

  How Many Testimonials Do You Need?

  You should be soliciting them regularly so they’re new and fresh. If it’s 2016 and I’m looking to have you rebuild my web presence, the last thing I want to see is testimonials from 2004 when AOL was bombarding everyone’s mailbox with CDs. I’m all for quality over quantity, but it should be part of your post-customer follow-up to request a testimonial, a review, or specific feedback for your work and the experience they’ve had with you.

  Where to Use Them?

  You should be using them everywhere. There’s no bad place to use them as they have impact during each stage of the loyalty loop. In Stage One, they cause the prospect to pay more attention. In Stage Two, they make your sales process more believable. In Stage Three, they help solidify the prospect’s decision, making them more likely to enjoy the experience. And in Stage Four, the client is more likely to give one if they’ve seen many others. Use them on your websites. Use them in your outgoing customer communications like quotes and proposals. Use them on your brochures and in your advertising. Use them in your regular, nonpromotional material to clients. You get the idea. Don’t send anything out without a testimonial on it. The psychology of testimonials is really quite simple. Prospects are skeptical, cynical, and resistant to sales efforts. Testimonials work to break down those walls. I looked, but I can’t find a great business that isn’t using them (Apple, Zappos, Amazon, GE, etc.) but I easily found over 50 small business websites that were not.

  I once heard a marketer say that 10 great testimonials will trump 100 years of positive business history. I believe it.

  Acquire them, and use them.

  5. Stage Three: Experience Choreography

  Who is the most important person in the hotel?

  If you guessed the doorman, you got it right. The doorman is the single-most important point of contact in the hotel, and the reason for that is this: She is almost always the first person the customer sees and the last person the customer sees. These days, one of the things I like to say is that everyone in the organization is the doorman. Everyone can impact the first and last impression.

  If you think about how this relates to any business, it’s quite simple. First impressions are more important than ever before. But at this stage, we’re assuming the prospect has officially moved from prospect to customer. The customer has already had many moments and opportunities to engage with your company, but at this point, their stature has changed. There were other first impressions and moments of the experience that mattered. But at this stage, the customer has been influenced to complete the sale and now has an expectation that you’ll deliver on the promises made in the previous stages. More on that shortly, but first let’s talk about how customer service plays a role in each stage of the loop but becomes even more important in Stage Three.

  Every company says they put the customer first. Every one of your competitors says they deliver “remarkable customer service.” Everyone. Find me a business that doesn’t say they provide extraordinary customer service. It’s a sham, and it’s a sham because it’s rarely true. What companies say versus what they do is rarely congruent. If it were true, we’d have no need for sites like Yelp, TripAdvisor, or Google Reviews. The majority of review sites exist solely for someone to air their grievances for when what they were promised, or what was expected, wasn’t what was delivered. Are the reviews always valid? Of course not. There are valid complaints and there are invalid complaints. And there’s there are sites like Yelp and others that have developed and morphed into mini-communities of foodies and groups of people with shared interests who like to share the experiences—good, bad, or other. It just seems that the bad almost always outweighs the good, and rightfully so. But some of the horrific reviews and almost unbelievable customer service stories we hear about are incredibly valid.

  Almost 80 percent of the work I do with my clients revolves around the concept of the expectations gap, which is the gap between what a customer is sold and what they actually receive. When you fix that, you dramatically increase profits and customer lifetime value. Sometimes the gap is created through overzealous sales and marketing efforts, and other times it’s because the actions of the company simply can’t live up to the vision and expectations of upper management. When I speak to audiences, I often share the story of a hypothetical bank to illustrate the expectations gap. Here’s an easy way to understand it:

  The CEO believes the bank exists to provide solutions for their clients and to be a financial services partner. The rest of the executive team buys this, and the CMO ensures the marketing messaging matches this belief.

  The customer, however, believes the bank is just the place to store his funds while he waits for the mortgage and electricity bills to be paid on time.

  Finally, the teller believes her job is just to smile and ensure she does the best she can to keep the customer satisfied.

  As you see, we have three very different sets of expectations creating one major problem—a huge gap. Almost every organization I start working with has a massive expectations gap. Here’s another way to think about it: Every organization says that they provide solutions to other’s problems. Everybody says that they’re near perfect. But companies, like people, often exhibit a huge gap between what they say and what they do. There’s often a breakdown between the things the company says in its mission statement on the walls and its About Us page on a website.

  Consider the following study from the 1970s where two prominent social psychologists (Darley and Batson) set out to try and better understand what influences people to help others. They carried out their study by testing the classic Bible parable of the Good Samaritan.1 In the Bible story, a man is found lying on the streets beaten and bloodied by a bunch of thugs. A priest and another man both approach the man but just step over, not offering any help. Imagine
that! Finally, another man who would have been considered an enemy to the hurt man stops to help and offers care. He is labeled the Good Samaritan, and this is where the line about “love your enemies” comes from. We expect the priest to stop. After all, here is a man who has supposedly devoted his life to helping others, but the priest couldn’t be bothered even though it’s evident the man was in dire need of assistance.

  The two social psychologists considered the parable for a long time and then asked a smart, but very simple question. Is it possible the priest and the other man were just busy? Is it possible they were in a rush and had somewhere to get to? Maybe the priest was late for a wedding ceremony! It seemed like a valid question, so they decided to recreate the study using a group of seminary students.

  The groups of seminary students were invited to take part in a study that was happening at a particular place at a certain time. When they arrived at the study, the researchers told them that the study had been moved to another room across campus. One group of students were told they had to get there quickly because the study was starting so they better hurry. Another group was told the study would begin when they got there, so there was no need to rush over.

  Along the way, the seminary students would encounter an actor, directly in their path on the ground with his eyes closed, violently coughing and clearly in need of assistance. What do you think happened? Would the students stop to help? Would they ask the man if he was okay?

  Not exactly. In the study, only some seminary students stopped to help. But less than two-thirds did, and only 10 percent of those who were told they were in a hurry stopped to help.