How to maintain customer loyalty on the road out of lockdown

In a recent blog, we talked about competition for business on the route out of lockdown. It won’t escape anyone’s attention that, if your business is planning to attract new customers over the coming months, your competitors are doing the same.

That means capitalising on customer loyalty to make sure they stick with you during the road out of lockdown.

Many of the experts in the loyalty world will tell you that keeping customers is about more than short-term campaigns, and in just about any other time they’d be right. The good news is that you don’t have to choose between the two.

It’s possible to use the same ideas that generate long-term customer loyalty but briefly turn them up to 11 while we navigate the economic sugar-rush of coming out of lockdown.

More good news is that by and large, customers are more loyal than they might get credit for, and they have more bandwidth for brand loyalty than you might think. That just leaves the question of what you have to do inspire that loyalty.

We’ll outline a few things you can develop and deploy in a short time-frame that will give you an edge over the next few weeks and months.

Exclusivity

According to research from Yotpo, a key desire from loyal consumers is exclusivity. Customers expect to be rewarded for sticking around, and the research shows they want to be rewarded with things not available to the public.

Do a quick audit of what promotions you have planned, what products or services you’ll be offering, and what you expect business to look like for the next few weeks and months. Then decide what you can offer as an exclusive, or as an early-access treat, for your loyal customers.

It might seem counterintuitive to make something available only to loyal customers, but you don’t have to close the public out completely. Just making something available first would do the trick to reward customers for coming back.

Whether it’s new products, new services, or early-access to sales, exclusive access is what audiences are looking for in exchange for sticking with your brand.

Supercharged schemes

We often hear that loyalty is more than points and cards, and we agree with that sentiment wholeheartedly. But, importantly, it’s “more than” cards and points, not “instead of” cards and points.

In fact, we work with a lot of companies in industries where a favourable points-mean-prizes loyalty scheme is the foundation of any serious loyalty effort.

Rewards, either delivered through a scheme or attached to promoted products and returning customers, have an important place in generating repeat business.

Boosting the rewards on offer for loyalty gives you two immediate benefits. First, you make your own offering more competitive during a time of steep competition. Second, it’s a reason to put yourself in front of an audience and promote yourself.

Depending on your industry, it might also be a reason to put your brand in front of your competitors’ audience – for instance if they’re coming to the end of a points banking cycle around the financial new year.

If you don’t have a loyalty scheme or returning customer promotion in place, there’s no time like the present to start. Even a quick, makeshift scheme that rewards customers for coming back after lockdown would make a difference in the next few weeks.

It would also form a convenient springboard for more long-term efforts in the future.

Align with values

Consumers make lifestyle and values-informed decisions, meaning brands need to incorporate and highlight values for their customers.

Not every brand has the same ethical underpinning as a brand like Lush, but whatever you do have should be highlighted and put in the spotlight.

Your community efforts, any sustainability projects you’re working on, any time you give your staff to volunteer is worth getting in front of your customers. If what consumers are saying is to be believed, values-alignment makes customers want to stick around.

Be good today, try perfect tomorrow – use what you have available and get it in front your customers.

It will give you an edge when you’re talking to customers in the short-term future, and tip the scales when existing customers are thinking about switching loyalties.

Over to you

Long-term customer loyalty means time, investment, and quite possibly changes to how your business runs to stay relevant to your audience.

In the short term, however, there’s a needle that needs moving. These ideas are achievable for a business with a lot of business to keep, and little time to make long-term changes.

If you have any questions, or want to talk about deploying any of the advice in this article, feel free to get in touch. We’re always up for a chat.

Could screwing up, and making it right, be the best thing you do for customer loyalty?

It sounds like a joke, right? Why would anyone be more loyal to a company that messes up, even if they make it right later on?

Many people out in the world would agree – once trust has been damaged once, you’ve made a permanent and indelible mark on your reputation with a client, shifting the balance of your relationship for a long time.

Well, that might not be so. In fact, many have claimed for years that recovering after a fumble may improve your relationship with clients. It’s a theory called the service recovery paradox.

There’s always been a bit of debate about just how much of the phenomenon is fable and how much is fact, but a recent meta-analysis in the Journal of Service, taking in data on the subject from a wide range of sources, gave us some interesting results.

The paradox explained

Sometimes, your service fails beneath where customers think your service level should be. This could be down to a variety of factors, some of them inside and outside of your control.

First, the company has to fix the problem, restoring service to at least to the level before the failure occurred.

Once the service dissatisfaction is gone, the company can build trust, and build the perceived value of the company according to customers. For some clients, this will make them see your company as more valuable to them than they did before they experienced a dip in service, and be more loyal to your company. In turn, increasing their value to you as repeat customers.

That’s the claim made by the service recovery paradox.

Reality bites

The findings of the study we cited above and others, unfortunately, found that while they could find evidence of the paradox working, it’s not something you should bank on.

Both the meta-analysis, an inductive analysis of all available information to the researchers, along with previous studies, paint a tenuous picture for the customer recovery paradox, with too many contingencies and moving parts to be considered reliable.

A previous study from Mangini found that the customer service paradox relied on:

  • Customers having not experienced previous service failure.
  • That the service failure was not thought of as severe by the customer, and;
  • That the failure was largely out of the company’s control.

Even when these criteria were met, and this effect is produced, the meta-analysis found that the paradox did increase satisfaction somewhat, but didn’t impact buying intentions, word of mouth behaviour, or the brand image.

However – you still have to recover that service. Like many of the things we talk about on this blog, there’s no silver bullet out there, or in this case a convenient paradox to make it easy. But keeping customers in the fold is more important than ever, and paradox or not it’s important to get a grip on it.

Service failure and recovery is a bit of a big subject to get into here, but there’s three big things you can start thinking about this week now to make it easier.

Making amends

Words and demeanour

Too often, companies scramble to offer effusive apologise and prostrate themselves on the good will of their customers. They believe that one mistake, even if they recover from it, should be treated as fatal.

The result is customer service teams that flail from one crisis to the next. Treating every small fire as a towering inferno, and passing that sense of insecure panic on to their customers.

Knowing that your own mistakes aren’t the end of the world, and that for some customers they might even be made happier than when they initially complained, should change the mind-set to helping unhappy customers.

Approach the situation with confidence that you’re a quality provider, that you’re in control of the problem your customer has, and that you can fix it and make amends for the inconvenience. And equip your staff to carry that into their interactions with customers.

Access and actions

Your company needs dissatisfied customers talking to your recovery staff. This is to demonstrate as early as possible that you’re in control, that you can make the problem right, and that you can make repair the problem.

Service recovery hinges on being able to talk to customers, and vice versa. Customers can talk amongst themselves, they can quietly leave, they can even complain on public forums like Trustpilot.

You can try to intercept as much third-party negativity as possible, but your service recovery effort is only effective when you’re in direct contact.

That means having clear, well-signposted and well-maintained channels for complaint, manned by knowledgeable, conscientious employees. Not having these in place makes it impossible to run effective service recovery, and takes the idea that customers will be more loyal to your company, regardless of any paradoxes, off the table.

Amends

Rewards make excellent service recovery tools, particularly when dealing with individuals’ complaints. Over a long period, an occasional cash-value reward as a sign of gratitude or, sometimes, apology is a great investment. It’s a relatively small outlay for you but isn’t easily forgotten by customers.

This is particularly effective when you can personalise how you reward. It’s not practical to try and warehouse a gift fit for everyone, so it’s most likely that you’ll be using a multi-choice product like a gift card or reward code. You can’t “personalise” the gift itself, but you can personalise the message around it.

For instance – if you know a customer uses your insurance company to insure a vintage vehicle, you can deduce they have a passion for cars. While you’re delivering them a reward, it might be prudent to point out the customer can enjoy their gift at a track day.

You’re not just showing that you’re reticent about a service failure, you’re showing that you see and appreciate that there’s a human being behind the account number and complaint.

Summary

If you’re not sold on the science when it comes to the service recovery paradox, you’re not alone. There’s definitely more research to be done into the phenomena, but it’s an idea worth talking about.

However, regardless of your opinion on customer service phenomena, service recovery should be a priority. Especially as the world heads into uncertain economic times – money and time spent keeping customers now is money exceptionally well spent.