The Customer Loyalty Loop

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The Customer Loyalty Loop Page 13

by Noah Fleming


  He used the analogy of a burning building to say everyone seemed so interested in figuring out both how and why the building was on fire, or how to put out the fire, but not a single person was asking about the customers inside the burning building. In an interview with Bloomberg, Friedman said, “No one was focused on the people in the building, who were on fire. Their clothes were burning, and many of them dying. We have let customers die.”

  We have let customer die. Wow.

  The company was in serious trouble. Aside from the fact that the company sells high-end furniture and has dozens of web pages dedicated to selling $17 light bulbs (yes, that’s one light bulb for $17), the company was losing customers, revenue, and stock value. The stock dropped by over 26 percent just days before Friedman issued the memo. Friedman finished up by saying the new goal was to delight. The memo read: “We need a MASSIVE CHANGE IN OUR CULTURE AND ATTITUDE RIGHT NOW...THE GOAL IS DELIGHT.”

  I don’t know about you, but I’ve been hearing this word “delight” tossed around customer service circles for a while now.

  Why is this concept of delight so important? I believe one of the reasons why is that we’ve been bombarded with the message that “customer satisfaction” is number one. It’s one of the essential things companies must deliver to the customer. The trouble, however, is that allowing the customer to leave merely satisfied is never enough. The goal must be to go beyond satisfaction, and Restoration Hardware is recognizing this after years of continuous profit decline. Satisfaction is never enough, and I’m not sure sprinkled moments of delight are enough either, but done right, you have the opportunity to create memories that stick.

  In the following pages, I’d like to introduce one of the most powerful things you can do in Stage Three to create distinct memories of doing business with your organization that stick.

  I call them Remarkable Moments.

  Remarkable Moments are the moments during the third stage of the loyalty loop that leave an indelible imprint in the customer’s mind, one which they’ll have no trouble recalling and explaining to friends and family— one that leaves them something specific and memorable to rant and rave about.

  Let me share a few examples of Remarkable Moments in action so you can begin to understand how to apply these to your business and the moments and memories you may be able to create.

  The Bentley and the Butler

  Last year during a short trip to San Francisco, my wife and I dined at the fabulous Michelin-starred Ame restaurant at the St. Regis Hotel. My mentor and business colleague, Dr. Alan Weiss, was treating us to an incredible dinner.

  Outside the hotel’s lobby sat a gorgeous Bentley limo. The Bentley is offered as complimentary transportation for the hotel’s guests. I’ve seen other high-end hotels offer cars like Rolls-Royces and Maseratis. I’m sure you have, too. A small boutique hotel in Cambridge, Ontario, called Langdon Hall recently offered guests the chance to drive a new Lexus SUV parked outside. The Trump Hotel recently took this a step further by providing guests access to the Trump helicopter to cruise the Scottish coastline.5

  Imagine that! Stay at this hotel and you can fly in our private helicopter. Many organizations reserve these lavish perks for their top-spending customers. However, the companies that utilize this strategy most effectively are the ones who make these luxury perks available to most, if not all, of their clients. They use these perks to create memories within the customers’ experience. These are Remarkable Moments, and they’re available to all businesses of all types. I’ll give you a few examples and some exercises to define and test your own.

  Let’s think through the economics of this here, because one of the main areas of concern is that you’re spending money on customers who have already made it to the third stage. Why should you spend more to create Remarkable Moments?

  The genius of this strategy is when you realize that the total amount they’re paying to provide the Bentley equals about 3 percent per guest, for an experience that will make up 90 percent of their guests’ memories, as well as the conversations they will have about their experience with the hotel. This is just one small example of how organizations are crafting experiences with emotional impact. They’re carefully and strategically crafting memories that stick, and these are the things that people want to talk about. Seth Godin once said that the only definition of remarkable was to do something worth remarking about. This is the key to unlocking the power of Remarkable Moments.

  And by the way, do you think that having these luxury experiences makes people less price sensitive? Of course, it does! This doesn’t mean these lavish perks should be freely given to every customer, but companies should show every customer that the perks are available, as well as how to access them. You don’t need to tie experiential rewards to a particular spend threshold or customer value. Instead, businesses must show customers a very easy path or way to access those perks.

  A lot of companies try to use gimmicky promotions in exchange for their customer’s continued business, in the hopes that it will create loyalty and positive associations. They use discounts and various promotions, hoping those promotions might drive a client back through their doors. The harsh truth is that those don’t do much to influence customer loyalty. They’re often forgotten before the transaction is finished.

  The St. Regis Hotel, though, understands the power of customer experiences and Remarkable Moments. They know that nobody remembers—or ever talks about— saving $100 on a room discount, but everyone remembers—and wants to talk about—the Bentley.

  Do not forget to consider fluidity amongst the first three stages of the Customer Loyalty Loop. This is just a small example of something done in the middle of the customer experience and the third stage, not the start or end of the customer experience, and yet it still generates a lasting memory. When used in sales and marketing before the sale, it creates the imagination of the experience to come, and the stories to be told. For example, after making my booking at Langdon Hall in Cambridge, Ontario, I received an e-mail in anticipation of my stay, inviting me to drive the Lexus during my stay. When I arrived at the hotel, there it was sitting out front.

  These are just a few examples of Remarkable Moments in action. But where there’s a Bentley, there’s almost always a butler. Let’s talk about a few more examples.

  The Butler

  Alfred was always there when Bruce Wayne needed something. Even in the depths of the bat cave, Alfred always seemed just to step out from the shadows ready to serve his crime-avenging leader. What if you could have your own Alfred?

  Cruise lines, in particular, have embraced the concept of the butler. Dozens of the main cruise lines offer guests their very own private butler service. Usually reserved for passengers in suites, it is often sold as an upgraded service and sometimes as a surprise.

  While the other guests are battling through the buffet lines, minding the sneeze guards, imagine for a moment, kicking your feet up, and your personal butler arriving at your suite’s door with a bottle of champagne. He opens your patio doors, allowing the Florida breeze to rush in. As the ship sets sail, and all of your stresses would just float away.

  The butler becomes the guest’s personal concierge who knows how to get things done, even for the most discerning clients. This is remarkable! This is the type of thing I want to tell others about!

  He handles the booking of daily excursions, reserves the best seats for ship’s shows and makes dinner reservations for you, and fine-tunes the housekeeping services specific to the customer’s liking, all while answering the guests’ every question, concern, or request.

  In essence, a modern ship’s butler does all the hard work, raises the level of luxury a notch, and plays the perfect host, freeing those lucky passengers to enjoy a cruise to its fullest. Surely it must be expensive for a ship to offer such a service? There’s no way most companies could offer such an extreme, lavish perk, right? Surely not your company.

  Well, here’s how the math and economics
might work in this example. For each massive ship, the cruise line would likely have a small team of butlers, each of which would handle a small block of rooms and a certain number of guests.

  At first, the experience might seem a bit incongruent with the expectations of the cruise. For many of us, the thought of cruises is not always one of luxury. We think of busy ships and cramped rooms jammed together. We regularly turn on the evening news to see another ship stricken with ill passengers. We’ve all heard horror stories. The butler, however, becomes a memorable experience and a Remarkable Moment. But how can a cruise ship afford to provide such remarkable service? There’s no way your business could provide an experience of equivalent value, right? Well, let’s do the math.

  Let’s imagine for a moment the butler is paid $80,000 a year from the company. He’s required to do approximately 25 cruises per year, and for each cruise he’s provides his services to 12 rooms. For a little more than $250 per room, the cruise line has provided a fantastic perk with a tiny price tag. Now ask yourself, is the real purpose here to increase profits and generate more revenues? Partially. We can assure the cost is being paid for by the consumer one way or another, but let’s suppose it’s not. What’s inadvertently happening is that for almost no cost at all the cruise is implanting an indelible memory into the customer’s mind. For next to nothing, the cruise ship is creating its word-of-mouth marketing.

  On a popular cruise website, one author shares the following story:

  The best I ever had was “Papa” on Crystal Serenity. Papa never felt intrusive to us. He suggested dinner to us in our stateroom on a night when he knew he could provide us with a table for the verandah. He wheeled in the table and served every dish piping hot. When we later asked for some caviar to entertain one of the guest speakers in our stateroom, Papa brought us caviar, champagne, brie, fresh fruit, and ended it with red wine and chocolate-covered strawberries. Never have I been more spoiled. I will never forget that experience on Crystal Serenity.

  She will never forget Papa. Is this sinking in yet?

  The key point is that the cost of the butler is irrelevant. The butler is the thing people remember. The butler is the thing people go home and talk about. The butler fuels word of mouth. If a customer was spending $10,000 with your company, would you be willing to spend $250 on that customer to create an experience that’s never forgotten, to create an experience that people can’t stop talking about—ever? You would be foolish not to. What if a company could spend considerably less, and create an experience with equal impact? It’s not a question of if your company can do it, it’s merely a question of what you will do to create the Remarkable Moments.

  Remarkable Moments are the unique, fascinating experiences that allow a company to stand out from their competition. Sometimes these are high-value items, but the real key to Remarkable Moments is they create an emotional connection, and most importantly, a story that your customers want to tell others.

  Many marketers espouse the idea of random moments of surprise and delight. I’m suggesting we take the concept of surprise and delight to another level, but it’s shocking how many companies do this poorly. The most beautiful thing about this strategy is that just being good and better puts you way ahead of the competition. One of the core learnings of Stage Three is that it’s up to you to define and create your company’s Remarkable Moments. You can define the type of word of mouth your best customers spread about you. You can let word of mouth happen passively, or you can create it yourself.

  How can you create your Remarkable Moments?

  Action Step: Create Remarkable Moments

  1) Write down the best and most memorable experience you’ve ever had with a business. Perhaps you’re going to mention a company that is known for exceptional customer service. Companies like Disney, Nordstrom, Apple, and Amazon are routinely the ones that come to mind. But maybe you have a more interesting example. Ask yourself, what made that experience so remarkable? What were the specific things that made it memorable and created a lasting impression? What can you do in your business to create memorable moments across the entire experience?

  2) Develop your Remarkable Moments. Brainstorm and have fun with this one. I want you to think about Remarkable Moments from Stage Three. What could you test that would positively shock your customers? What level of service could you deliver that would not believe is part of your standard process? For example, could you create a lavish perk reserved exclusively for your customers? Could you embrace the Zappos or Nordstrom ways and accept (almost) all return requests? Think outside the box and get creative. Remember nobody cares about the hotel room, but everyone talks about the Bentley and the butler. What’s your Bentley? Who’s your butler?

  3) Test a Remarkable Moment. Remember the key Remarkable Moments. These businesses have carefully thought through the one single thing that’s going to make your customer pick up the phone, call someone else, and say, “you won’t believe what just happened at...” Remarkable Moments can be negative too, so why not control them?

  Consider a few more examples.

  When guests arrive at the Las Ventanas al Paraiso in San José del Cabo, Mexico, they are instantly whisked away to the spa’s tranquil solarium, where they enjoy a surprise 10-minute neck and foot massage that releases any stress and worry from their flights and prepares them for a relaxing and rejuvenating stay in paradise.6 Now that’s a prime example of starting the customer experience right! On top of that, you’re offering something guests are surely going to talk about. Remarkable Moments are exactly like they sound: moments worth making remarks about! If you want word of mouth, you often need to create the marketing to go with it.

  Or how about the Viceroy Riviera Maya Hotel, also in Mexico, where a few minutes after checking in, the soap concierge arrives in your room to provide some informative information the different types of soaps available. The concierge explains the scents and the benefits of each soap. After that, the guest makes a selection, and personalized bars of soap are provided to each guest. Soap concierge. Remarkable Moments are just one part of the customer experience that you embrace in your business. Let’s switch gears and talk about another important aspect of the science of customer experience—and that’s the appeal to the customer’s senses.

  Let the Incense Burn

  Love him or hate him, Donald Trump’s hotels are second to none. While I’m not a fan of the way that Trump uses divisive language in the political arena, I am a huge fan of the attention to detail and experiences that are created at the hotels that brand his name (most of which are privately owned and operated without his direct involvement). I’ve stayed at a few of them, and when you enter from outside, you’re usually suddenly thrust into a dimly lit lobby where the smell of incense burns, leaving an incredible aroma of eucalyptus through the air. The doorman quickly grabs your bags and sends them off to your room. After greeting you, the front desk clerk takes your credit card and then hands you a silver platter with a scented hot towel for wiping your hands and feet. Next, you’re taken to your room where you’re given a tour of the room, shown how the controls for lighting and window shades work, are introduced to the pillow menu, and a few other neat perks.

  Why go to all this trouble with the customer experience? I mean, I’ve already decided to stay there, so why do all these extras? I’m beyond Stage Two of the Customer Loyalty Loop and well into Stage Three. Well, it turns out there are quite a few reasons to do this, and in this section, we’ll look at the atmosphere and feeling your prospects and customers have when entering your business, or visiting your website. More important, we’ll discuss ways in which you can utilize this powerful concept to have your customers spend even more money with your business.

  In 2011, a study found that the more relaxed you are when entering a business, the more money you’re likely to spend. As I think back to my stay at a number of Trump’s properties, it’s evident that while the service is incredibly warm and attentive, it’s obvious that the entire guest
experience has been carefully considered, from the moment we arrive, to the moment we make it to our rooms, to the moment we leave the property. It’s as if the experience has been choreographed, where whimsical ballet dancers know when and where to hit their marks at which part of the experience.

  This is the type of thing my clients are continuously thinking about. In this case, though, it was the way the experience started that left an impression on me.

  Here are some key questions to consider:

  1. How do your customers feel the moment they walk into your business or visit your online store?

  2. Are customers always quickly greeted and welcomed?

  3. Is the atmosphere of your business calming, or overwhelming, stressful, and busy?

  4. Can my customer quickly find what she is looking for or do we present ourselves like a disheveled, messy closet?

  Have you ever been to an Apple store? Most Apple stores I’ve been to are almost always completely jammed with people. It doesn’t matter what time of day it is. They’re usually just full of people enjoying the opportunity to play with Apple’s latest product. The one thing I’ve noticed, however, is that almost every Apple store has one or two people who immediately try to speak to every customer that comes in. They can quickly reduce the levels of stress by simply greeting the customer and sending them in the right direction. Contrast this to a large home improvement warehouse where you’re looking for something as simple as light bulbs, and there’s no help in sight. The store is overwhelming, and you’re unable to find anyone to help you. Which experience is more pleasant? Almost all of us have been through both scenarios.

 

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