Understanding Customer Loyalty

The Goal of Every Business

Understandably most businesses everywhere are constantly looking to increase and consolidate the level of customer loyalty they have with both individual  customers and the group as a whole and when you consider that numerous research reports have consistently reported that it is many times more difficult to win a new customer over rather than keep and existing customer, you can fully appreciate why. But two important questions that arise from this underlying premise are:
1. Does every customer have the same potential for being loyal  and
2. Of those customers that are loyal, are there different groupings of loyalty?

Does Every Customer Have The Potential For Loyalty

Simply stated, the answer to this first question is no and rather than take this as an admission that the business is unable to provide quality service or the customer is unable to respond in kind with loyalty, the issue is often one of pure practicality where it is unreasonable to be loyal.

For example let's assume you are taking some time away from work and taking an extended road trip where you have chosen to drive around the country and experience first hand the many wonders your nation has to offer.  When you are on the opposite side of the country you pull into a petrol station to fill up on fuel before starting the long trek back. At this station you receive an excellent level of customer service, an excellent meal, the opportunity to withdraw cash from an ATM, and so on. Kudos to the management and staff but are you now loyal to this business. Clearly not, because no matter how well your needs were met her you probably wont be back any time soon and realistically the best the business could hope for is a favorable review on a review site such as Urban Spoon or Trip Adviser.  So no not all customers have the potential for loyalty, but for those that are what types of loyalty exist?

Loyalty by Default and Loyalty by Design

There are two key types of loyalty, namely Loyalty by Default and Loyalty by Design.
So what is the difference?  As the name suggests customers through repetition may be loyal to you by default where it is for the most part out of habit that they continue the association but  in truth see no great advantage in dealing with you and feel no great degree of connection with the brand or business.

Customers who are loyal by design on the other hand have made a conscious choice to do business with you and are overtly aware of and appreciative of the value that you provide for them and will therefore be much less likely to look elsewhere for a replacement provider or service regardless of what other alternatives may present themselves, whereas the customer that is loyal be default will much more easily be swayed to try and potentially adopt another alternative provider with only marginal improvements to what you are offering.

In a recent training session to CEO's I asked the group to write down on a piece of paper what percentage of customers they felt where loyal by design versus those that were loyal by default.
Suffice to say you could have heard a pin drop as the people in the room started to ponder their situation and realise that for most people, the answer lay squarely in the default category where the potential to lose significant amounts of business was only as  far away as a rival business uncovering some part of the need that was still undelivered and provide it to a higher level than them.

If you're reading this and thinking this dynamic also applies to you, you have plenty of company. The good news however is that the business can proactively do something about this situation and gradually position itself squarely in the other camp. On our next blog post we will fully explore the strategic change needed to drive this change in approach to further enhance and maintain your customer loyalty.

And until then, good luck and good marketing.
Regards,
Daniele

The FDA Release Social Media Guidelines for Pharmaceutical and Medical Device Firms

 Some of you who have been following the Road Scholars Marketing blog since it started several years ago may remember that one of the first posts involved the important issue of what rules and guidelines would be placed on the pharmaceutical manufacturing firms by the FDA in terms of how they could and couldn't promote their medications to the market.

New FDA Release

I'm now pleased to report back to you all that after five years last week the American Food and Drug Administration (FDA) has now formally released two key guidelines that will control how both pharmaceutical and medical device companies will need engage with the market utilising social media.

The Two New Areas

1. Instructions on how companies go about correcting any erroneous product information on any digital platform controlled by third parties.
2. The way in which both the positive and negative aspects of a product are to be presented whereby the key risk or potential hazard along with the key benefit are presented in an open digital forum which can be any form of website, networking platform, blog or discussion forum as possible examples.

The FDA has spoken directly about the fact that these guidelines were developed whilst working in conjunction with pharmaceutical industry representation as well as that from other key stakeholders.

In the case of prominent third-party websites such as Wikipedia, companies when correcting errors that have been made in ddesribing a device or medication must be done so in a balanced way and always validated with a source from which the information is given such as the official product information for the product or a reference from a key clinical study.

Specifically the revised text would be placed along side the flawed text and would be included purely as a means of correcting a previous mistake and in no way to promote the brand in question.

The FDA guidelines go on to say that when any proprietary firm finds any mistake in content, they should immediately contact the website, blog or form to  provide the correct information so that the misinformation can be quickly and completely addressed to provide accurate information.

In the absence of these formal guidelines before now, many companies have understandably been somewhat reserved and have been less than fully engaged within the digital space, however with this much needed and somewhat overdue arrival of rules, would be now in a much better position to proactively leverage this powerful promotional tool to above all else, provide more accurate and meaningful information to the market and by extension better customer service.

Currently this release is being used by the FDA as a starting point for on going discussion and as needed the basis for further discussion, review and change. Naturally as any new information is released, the Road Scholars Marketing Blog will present a full evaluation and review.


So until next time, good luck, (good health) and good marketing.
Regards,
Daniele.

The Need For SSL Certificates

As I have mentioned in a previous post, there are an amazing number of businesses nationally still don't have a website. Specifically forty four percent. Yet as incredible a statistic as that is, perhaps a more stunning and concerning one is that of the businesses that do have a website and are actively involved in transacting eCommerce on line and / or taking non financial, personal information through their site, still do so without having an SSL (Secure Sockets Layer) certificate on their site.

The SSL certificate is the necessary layer of security that needs to be set up to provide communication security over the internet and ensure that no unauthorised party is able to illegally listen into a discussion that they have no right to hear.

The technology works through the use of a symmetric key between the server and the user. This session key is then used to encrypt data flowing between these parties. This ensures that the message or information being transmitted is encrypted and thus unable to be understood by anyone eavesdropping on the conversation. 

There are various versions of the SSL protocols that are widely used in different applications such as web browsing, email, faxing, SMS messages and VOIP communication.  One of the key elements to ongoing security is forward secrecy which protects against a session key can not be generated from the long term asymmetric secret key.

 From a functional point of view having the SSL Certificate in place adds key steps to the communication process as described in the picture below. If there is no SSL security layer in place you simply have the blue and green steps performed. 

However by protecting your internet portal with an SSL or TLS (Transport Layer Security) Certificate, your system adds the additional layers of Sessional Key Exchange and Cipher Suite Negotiation that establishes the authenticity of the parties and ensures that they alone access messages that are not encrypted and therefore unusable.

The cost of not having an SSL if you’re routinely take personal or financial data online can be very high but thankfully the cost of having it is fairly modest and can be easily afforded by most businesses including SME's.
A business need only approach their Internet Service Provider (ISP) to have this installed at around $120 for an extended validation SSL that is a premium level protection as used by major businesses.

To learn more about SSL certificates, e-commerce, data privacy and all key aspects of digital media please feel free to go to the Digital Enterprise Program website on:  
 http://www.vecci.org.au/business-solutions/digital-enterprise-program/workshops

You will be eligible to attend any of the seven, free, two hour workshops, after which you will also be offered a free 4 hour one on one coaching session specifically on how to plan, position and promote your business with both digital and traditional marketing tolls.

So I hope to see you all there and until next time, good luck and good marketing.
Regards,
Daniele Lima.

Yet Another Wonderful Example of Exemplary Customer Service and Selling Skills

It’s fair to say that few of us these days expect exemplary customer service and salesmanship from any particular business because frankly despite the fact that everyone certainly deserves it, it simply so often so far from that level that we just get used to the bar being set so much lower.

With this in mind I’m delighted to be able to pass on and discuss with you an example of a young man who has truly understood what selling should be and how every sales person should approach the role each day.

To set the scene like many others I was looking to upgrade my car last week as we came to the end of the financial year and after much analysis decided the new VF Calais was the ideal car for me in Prussian Steel. With this I went into a local dealership and am grateful to have met an honest and genuine broker in the form of Sam Innes at Booran Holden, in Nepean Highway Cheltenham.

Sam basically makes a mockery of the long standing stereotypical behaviours many people attribute to car salespeople. Quite the opposite he understood from the outset that the greatest attribute of any salesperson is the ability to actively listen to what I was saying to him. Hear it, understand it and ultimately act on it in a way that supported my needs and desires and accounted also for any concerns or issues that I was facing in the decision of buying my new car whilst concurrently selling the old one.

As an interesting footnote to this story the word selling itself is a word from the Scandinavian region which means ‘To Serve’ and when I look back at Sam’s approach it is not surprising that every element of my time with him did just that.

His openness, transparency, fairness and desire to want to help me get what I wanted stood out strongly and coupled with his professionalism and attitude, made it a very simple choice for me in the end.

AS a little icing on the cake after buying the car and awaiting delivery I realised that one item that had always come standard with this make of car was now an optional extra. Sensing my disappointment at this, Sam negotiated to get it for me at no cost despite the fact the deal had already been done, ensuring that as well as my overall level of satisfaction, there was also a little Wow factor thrown in for good measure.

I suspect Sam Innes will go a long way in both his current role at Booran Holden and where ever the trail leads him because he has as his central focus the customers and their needs not just those of the business, and so any success based on this approach will be well earned.  As a final question how much does your approach to dealing with customers mirror Sam’s. A little or a lot?

So until next time, good luck and good marketing.

Regards,

Daniele.