Building Customer Loyalty


 No matter how good your product or service is today, there are going to be problems with it. It will not work the way it is sup- posed to work. It will break down. It will give rise to unexpected problems and frustrations on the part of your customer.

Because of these unavoidable product or service problems, your customers will complain. This complaining is actually a good sign. The worst customer of all is the dissatisfied customer who does not complain but instead goes somewhere else. If you have too many of these, it can sink your business.

John D. Wanamaker who founded the first great department store in Chicago, once said, “The most expensive customer of all is the one who, though dissatisfied, walks away without saying anything, and never comes back.”

In a Harvard study, they found that fully 58% of customers who change suppliers said that they did so because of indifference or lack of caring on the part of someone in the company. They didn’t complain; they just took their business elsewhere. Dissatisfied customers tell an average of twelve to twenty other people about you. This is the worst advertising you can have.

However, when you respond quickly to customer com- plaints, you actually build greater customer loyalty than before. You increase the likelihood that the customer will buy from you again and recommend you to his friends. Satisfied customers tell an average of five to eight other people about their experience with you. This is the best advertising you can have.

Customers are not unreasonable. They expect to have problems and challenges. The only part of this “challenge-response” situation that you can control is how you respond when a customer has a problem of some kind. When you respond quickly, politely, efficiently, and effectively, customers appreciate you even more than customers who have never had a reason to complain in the first place.

Fergal Quinn founded and built the immensely successful Quinn Grocery Store chain throughout Ireland. He explains that one of the keys to his success was his careful analysis of customer complaints. He found that very often, a customer complaint revealed either a new market opportunity, or a problem that could be resolved to increase customer loyalty and attract additional business.

Complaints are often an indication of the ways that you must change your products or services to make them even more attractive to your customers. The insights that come from customer comments and complaints can point you toward terrific ways to increase sales and profitability. For this reason, the best companies use every feedback mechanism possible to solicit complaints and suggestions from their customers. Microsoft Corporation gets fully 80% of its new product ideas from customer feedback.

Ask for Customer Feedback

Hewlett Packard has become one of the most successful hi-tech companies in the world as the result of its virtual obsession with eliciting customer evaluations and responses. HP sends out customer comment cards, conducts customer telephone surveys and meets with customers both individually and in focus groups to find out in depth exactly how they think and feel about their product.

The developers at Hewlett Packard then take these customer comments and suggestions back to the factory and use them as the basis for product improvements. They incorporate them into new research and development activities. As a result, they continually produce high quality products that even more customers want and will pay for.