The Customer Loyalty Loop

by Noah Fleming

  Consistency Over Quantity (and Even Quality!)

  Customer loyalty is about connection, and the connection is about feeling. It’s the feeling my customers/readers have that I have a connection with them, and it’s the feeling that they have a connection to me. Let me give you an example.

  Every week I send my weekly newsletter to 30,000 subscribers. It’s called Noah’s Tuesday Tidbits.5 Every Tuesday morning the tidbit goes out around 7 AM. And by the way, if you haven’t subscribed, stop reading, head on over to NoahFleming.com, and subscribe now. I got serious about Noah’s Tuesday Tidbits when I came to the realization that people could not only pass through Stage Two relatively quickly, but they could also spend a long time there dependent on the product, service, or need. And in many cases, even the trust building that happens in Stage Two can take months, even years. At the time of this writing, the Tuesday Tidbit has been delivered without fail for more than 200 weeks. Every Tuesday, it doesn’t matter what’s happening, that Tidbit is scheduled and going out. Now, here’s the most important lesson to be learned: they’re not always perfect. Sometimes they contain the odd typo or two, but there’s consistency in it. If, and it’s a big if, the e-mail hasn’t hit the in-boxes of my subscribers by 10 AM on a Tuesday morning, I start to get e-mails from prospects and clients asking me if everything is okay, or perhaps they got unsubscribed, or can I check if the Tidbit went out to them. This is a sign that I’ve got the connection right.

  One prospect in particular read the Tidbit for over two years. All along the trust was building, and the ideas about how I could help were being formed in his mind. He wanted to work with me but wasn’t exactly sure when and how we might work together. Then, one Tuesday morning, one of the tidbits “hit him like a ton of bricks!” he said. I flew out to meet him, and we signed a $86,000 consulting engagement. Not a bad deal for me, and an excellent return on investment was generated for him. The point of this story is that consistency is almost more important that quality. I see too many businesses that don’t communicate with their customers consistently enough. Guess what happens? They forget about you. I see it all the time. In Stage Four, one of the crucial lessons to be learned is the concept of familiarity. My Tuesday Tidbit doesn’t just go out to my prospective customers, but my current and past customers too (among other things).

  Too many businesses look for the one-hit wonder marketing piece. They believe they can put something out there that’s instantly going to attract someone to go all of the way with them. But that’s not entirely true. So what does the science tell us as it relates to Stage Four? The science tells us the more exposure someone has to your brand, the more positive they are going to feel about your brand or your company. For big businesses, this is pretty simply understood as regular and consistent branding. The more exposure we have to a brand, the more familiar we are with that brand. But I’m suggesting that almost all companies aren’t consistent enough with valuable and engaging follow-up. Social psychologists have suggested that our frequent exposure to someone or something leads to a sense of familiarity. Big brands, corporations, and politicizations with deep pockets have the ability to penetrate our minds. But for nearly all companies, here’s the most important part: how someone feels about your company has a lot to do with mere exposure to who you are and what you do. That’s why the Tuesday Tidbit works, and that’s why I build a strong connection with my prospects and my readers. That’s why a simple newsletter can be an incredibly powerful tool for a small business. The simple fact that you’re showing up every week or every month says a ton to your current and prospective customers. Most businesses aren’t willing to engage in the extra work. Are you?

  There’s a lot of scientific evidence to suggest that the more you communicate to your audience, the more they’re going to buy, the longer they’re going to buy for, and the stronger relationships you’ll have with your customers. Even if you do show up regularly, that doesn’t mean your customers are going to buy regularly. As it relates to the recency, frequency, and monetary model, all businesses and all customers are going to have varying buying cycles. It’s crucial that you understand the cycle of your business.

  The Customer Iron Cage

  Figure 6.2 represents the Customer Iron Cage. Unlike a typical iron cage where someone might be held against their own will, customers can’t help but want to stay inside your cage. First, we offer them resistance-free selling, absent of any traditional persuasive and manipulative sales tactics. From there, we offer a remarkable customer experience in the third stage. Finally, the fourth stage is developed and continued through ongoing and consistent follow-up. See the correlation below.

  Figure 6.2: The Customer Iron Cage

  The Carousel Theory

  The Carousel Theory is the term I use to talk about the buying frequency of your products and services as it relates to the frequency of your communications with your customers. It indicates that all customers go through cycles. Think of the horses on a carousel moving up and down and also going around and around. Customers will have different needs, different levels of interest, and different requirements after the sale.

  6.3 The Carousel Theory

  For example, a customer may need a mattress today, and they likely won’t need another one for about 10 years. They don’t need one in the next three weeks, but they may buy ancillary products and services, or they refer you. They may be interested in products from your partners and learning more about improving their sleep patterns. If you’re consistent in your follow-up and continue to be top of mind, then you have a better chance at getting that next big sale 10 years from now. But if you’re only showing up trying to sell, then you’re doing it wrong. Customers may not enter anther buying cycle for a while. That’s determined by your products and services, but the Carousel Theory also suggests that it’s not just buying frequency that determines your next follow-up; it’s about constantly following up to build and nurture the customer relationship. Everyone loves to talk about building relationships with customers, but nobody actually explains how to do that. One way is showing up regularly and consistently as we’ve just discussed.

  Here’s the thing about the loyalty loop. If we make the assumption that the customer is only a customer up until their last transaction with us, then once they’ve moved into Stage Four, they’re looping back to the early stages. Now, this doesn’t mean that we’re starting from ground zero—far from it. Assuming the initial stages were all positive, we’re starting at a place of affinity. Your customers have a certain affinity to you and the previous experiences with your company. It’s only a matter of time before they’re back in the thick and thin of the third stage again, so everything that happens now is to continue to serve, benefit, and add value to the customer’s life.

  The more you communicate with your customer by adding value, which means not selling when it’s not appropriate, the more trust you’ll develop and the more peripheral benefits of the loop you’ll experience. Do you think my Tidbit readers would feel the bond and connection to me if I only showed up once a month, or every other month, or even less regularly than that? Of course not, but that’s what most companies are doing. They’re annoying to the point of trying to consistently sell, but not add any additional value. When I talk about this with clients, I hear things like “But Noah, we’re in the commercial property development industry. Why on earth would our customers and tenants be interested in hearing from us on a regular basis?” That’s easy. What if you were to communicate about trends in the local economy and marketplace, new tax implications, things to look for in older buildings, case studies of proactive repairs and things you’ve done with other clients, and other ways for them to save money or earn more of it?

  Relationship building with your clients is showing them that you care about them a bit more than just when it’s time for them to open up their wallets. Your clients are begging to be acknowledged, appreciated, and perhaps most importantly, understood! The Carousel Theory suggests you work t
o cultivate the relationship by remaining top of mind (until it’s time to buy again) but understanding that it might not be time to buy you. Yet you continue to show up, add value, build the relationship, and pitch when it’s time to pitch and sell when it’s time to sell. And that brings us to the most important point when it comes to caring for and nurturing your existing customer base, and that’s the principle of the Appropriate Reason.

  The Appropriate Reason

  Many companies believe a retention strategy simply revolves around communicating regularly and frequently with their customer base, and if they do, customers will continue to buy. That couldn’t be further from the truth. Consistency is more valuable than quantity, and recency and frequency are crucial underpinnings of customer retention—but the most important thing of all is the principle of the Appropriate Reason. This principle suggests that with all customer follow-up messaging and communication, there’s an appropriate reason why, and an appropriate time to do it. Too many companies don’t understand this, and they’re reaching out with the wrong message at the wrong times. It’s damaging to their ability to build loyalty and develop relationships with their customers.

  Communicating with your customers with the right messaging at the right time can feel like a phone call from a friend, but the wrong messaging at the wrong time is like being smacked across the face. Throughout the book, we’ve focused on how the customer is likely feeling at each stage of the customer experience. The post-sales experience should be treated no differently. The customer is experiencing certain emotions after the sale: good, bad, or ugly. The wrong messaging at the wrong time can turn even a positive buying experience negatively. Here are a few examples.

  A company I did business with delivered a pleasant experience in Stages One through Three, but they never follow up. I was quite happy they never checked in on me to see how things were going. That’s not quite true. I did finally hear from them, but it was seven months later. When they finally followed up, it was to ask me to leave a public review of my experience on a review website. This is too little and far too late. In this case, the company would likely have been better off not following up at all and instead attempting to re-engage me in the earlier stages of the cycles. It’s an inappropriate request that many months later.

  Salespeople, in particular, are often guilty of reaching out at the wrong time, but it’s usually not their fault. They assume (and their compensation is structured based on the assumption) that once they’ve inked the deal, their work is done. They get their commissions, and they’ve moved on to find more new customers.

  The care and nurturing of existing clients is someone else’s problem. As I’ve said before, if your sales and marketing people aren’t talking about what happens after the sale, then they’re only doing 50 percent of their jobs.

  Some companies even go so far as to have separate teams dedicated to customer loyalty or customer satisfaction, departments which rarely or never interact with the sales team. I cannot overstate how fundamentally flawed this practice is.

  Repeat after me: The most important work you do is done after the first sale is made. The bulk of your efforts should be in the care and nurture of your clients.

  You cannot do right by your clients if you’re reaching out at inappropriate times with the wrong messaging. And please, for the love of all that is holy in this world, never ever outsource the “satisfaction” of your clients to a department without a sales responsibility.

  When is the right time?

  At the start of Stage Four, I included a quote from the CEO of Constant Contact. I included this because the very name of the company denotes Constant Contact with your customers. The more you communicate, the more you add value, the more you show up, the more likely they are to do business with you. I think Gail Goodman understands this. I want to believe she understands this. She says the single-most important thing is providing a great experience, and I have to believe she recognizes consistent communication as part of the whole experience.

  Your customers want to be acknowledged and appreciated. They want to know you recognize their patronage and value it. You need to think through your Appropriate Reasons carefully and strategically. For example, is it appropriate to reach out for a testimonial the day after your product is delivered? Maybe, but maybe not. If you sell a product or service where the customer isn’t likely to experience the benefits for 30, 60, or 90 days, then it doesn’t make sense to ask for a testimonial a week after purchasing. But does it make sense to get in touch right away and ensure they understand the product and don’t have any specific questions or need any customer service? Of course it does. That’s an appropriate time with an appropriate reason. If you truly believe you’re a customer-friendly, service-oriented, Zappos-like company, and you truly believe that you provide a wow experience, then you have a duty to your customers to communicate frequently and consistently.

  Typically, when you get unsolicited contact from a business, the initial presumption is that they are reaching out because they want something from you. This puts most people immediately on the defensive, preparing them to be resistant to the pitch that they expect. This is not a good thing because that resistance can extend beyond this particular call or e-mail, to your brand in general. That initial resistance may be almost inevitable but the real question, once again, is how do you overcome that resistance?

  If you’re on a phone call, what you say immediately after your customer has answered is very important. It can either drive the customer’s resistance up, or it can completely disarm it. For example, if your first words after your introduction were, “I’m delighted to tell you that you have just won $1,000 in our sweepstakes for the entry you completed when filling out your customer service evaluation!” then their resistance is likely to disappear quickly! Unfortunately, you can’t do that for everyone, but is there an emotional equivalent, or at least an approximation, that can defuse resistance and increase the connection rather than fight it?

  Authenticity is one of the keys to building rapport. Customers understand to a degree that a business has its goals, too. However, unless that interaction is authentic and shows the customer the benefits that might accrue to them, resistance is more likely than engagement. And that means showing the customer that your contact is for an appropriate reason.

  What Is the Appropriate Reason?

  One of my cardinal rules of marketing is that if you don’t have anything useful and valuable to say, you’re likely better off not saying it at all. Too many of us are willing to forgo the opportunity to provide immense value in hopes of simply getting out the next promotion. The goal of all communications should be to serve, add value, and enhance the lives of our customers. Frequency increases liking and familiarity, but valuable information with an appropriate reason increases trust. When I look at my Tuesday Tidbit readers, I can see a direct correlation between those who read most often and those who have gone on to become clients. For my private clients, I have a private newsletter and membership called Noah’s Roundtable. The only way to get access to the roundtable is to become a client. I don’t promote it, and I don’t tell my prospects about this, I simply introduce it to them once we start working together. I can also find a direct correlation between those who read and watch most regularly and those I seem to have the greatest bond with.

  I was in a meeting recently where one of the VPs who was quiet for most of the discussion finally chimed in. He said, “Our customers don’t want to hear from us regularly! They don’t want us calling or e-mailing or checking in with them. They’re busy people. They only want to hear from us when they’re ready to buy!” He couldn’t be more wrong. Customers don’t want to hear from you if it’s inappropriate to contact them or at inappropriate times.

  If we consider the loyalty loop, then the most appropriate type of communication begins to look a lot like what was valuable in Stage One. We continue to position ourselves as the preemptive provider and expert in our respective industries. We can do
this by providing valuable, useful, educational material post-sale. We should ask for things like reviews, referrals, testimonials, and word of mouth only when the time is right. For every business, that’s going to be different. For Appropriate Reason material, ask yourself what else you can offer that adds value and enhances the lives of your customers. Here’s a hint: it’s always appropriate when it’s not self-serving. When it’s serving your interest over theirs (buy this, review this, give us this) you have to be far more discerning about right place and the right time.

  Can You Really Love Your Customers?

  There have been a lot of books over the past couple of years that talk about the concepts of “loving your customers” and “hugging your customers.” I’ve read dozens of them. The major problem I have with most of them is the focus on solving customer-related issues after they happen. They’re reactive in nature, and almost all major business improvements I’ve been involved with happen when we’re proactive in our efforts. With the loyalty loop, we’ve taken a far more holistic view of the customer experience from start to finish. In the final stage, the key to the customer’s mind is quite simple. You owe it to your customers to communicate frequently, not just when it’s time for them to buy. You owe it to them to continuously add new value and show them that you care about them. And if you don’t do this, then you’re doing your customers a major disservice. Most of the loop is about staying top of mind and in the customer’s mind. It’s got very little to do with the tactics of influence and more to do with just understanding what the customer is feeling at each stage of buying experience, and how you can make the experience as positive as possible.