A Powerful and Simple Way to Retain Customers

Customer loyalty is a huge business driver.

Selling to existing customers is typically cheaper, faster, and more effective than selling to new customers. They buy more and buy more often. Best of all, they encourage other people to do business with you too.

Unlocking the secret of customer loyalty would be gold, right?

A new study from customer experience software firm InMoment reveals the best way to ensure customer loyalty is pretty simple. I've synthesized the data with some additional research to give you a few steps you can take to boost loyalty with your customer base.

Spoiler alert: customer service plays a giant role.

The Study Results

Let's start by taking a look at the data from the study. Here's a snapshot:

  • 10,000 brand representatives surveyed
  • 20,000 customers surveyed
  • 12 countries represented (including the U.S.)

The responses to two survey questions really jumped out. The first was "What does it take to foster brand loyalty?"

Notice the differences between what brand reps said and customers said:

Data source: InMoment

Data source: InMoment

The second really interesting question was "What emotions do you associate with a bad experience?"

Data source: InMoment

Data source: InMoment

These charts reveal that the way to win a customer's loyalty is to ensure their satisfaction and avoid disappointing or frustrating experiences.

OK, so what does that really mean?

 

The Story Behind the Data

Notice what customers aren't telling us.

They aren't saying they need to be wowed or amazed. Customers aren't telling us they need to have a magical, life-changing experience.

Customers are saying they want brands to do exactly what they expect them to do.

  • A new product should work the way it was intended.
  • A service should do exactly what was advertised.
  • Getting assistance should be simple and hassle-free.

Consumers were asked to rank a number of factors in order of importance. Number one was personalization. But look closely at the statement driving this selection:

When you reach out for help, the associate and/or the self-service channels already knows who you are (name, status, loyalty, VIP, etc.) and demonstrates strong knowledge of your recent interactions.

This isn't a desire for more personalized marketing or selling. It's a desire for better service.

It's already disappointing when a service failure occurs. It's frustrating and feels disrespectful to consumers when they're forced to repeat their story over and over again in an effort to get an issue resolved.

 

Action Steps

The biggest thing companies can do is fix chronic problems. 

It seems simple, yet it isn't. Research shows 50 percent or more of customers don't complain when they experience an issue. Those who do complain typically lodge their complaint with a frontline employee. That frontline employee, for variety of reasons, probably won't share it with a supervisor.

One step you can take is to ask your frontline employees for the top complaints they hear from customers. In my experience, employees are quick to share when they're asked to help identify and solve these challenges. This exercise almost always yields opportunities for quick action.

Don't forget those customer service surveys. It's a well-known secret that most companies do very little with this data, but it's a gold mine of service improvement opportunities if you know how to quickly analyze it.

Another action step is to get better at managing customer expectations. This is both an art and a science. For example, did you know:

There's an entire training video on Lynda.com and LinkedIn Learning devoted to this topic. You'll need a Lynda.com or LinkedIn Premium account, but you can get a 10-day trial for Lynda.com here.


The Best Time to Manage Customer Expectations

We've all seen a customer blow up at an unpleasant surprise.

Many of those situations come down to expectations. The customer expected one thing to happen and something far worse happened instead.

You might know that you can often prevent the customer's anger by effectively managing expectations. The key is to prepare the customer for the worst-case scenario ahead of time using carefully selected language

If only it was that easy!

This post examines the importance of timing when managing customer expectations. Let's start with a common situation where customers get upset—air travel.

Photo credit:  Jason O'Halloran

Photo credit: Jason O'Halloran

Airlines Struggle with Expectations

There's a lot of reasons why airline passengers are grumpy

The boarding process is one of them. Passengers swarm the boarding gate and block access while other people try to squeeze past and board. Frazzled gate agents try to keep up with a barrage of requests.

A passenger inevitably tries to board with three large bags, despite the policy that you only get to bring one personal item (which must go under your seat) and one carry-on that fits in the overhead bin.

Handling this situation is a huge challenge for gate agents.

Most shirk the responsibility and leave it up to the flight attendants to sort out. They'll say they're too busy or they just want to avoid the inevitable blow-up.

Some try to address it as passengers board, which inevitably causes the passenger with three bags to fly off the handle.

They'll say:

"They let me bring my bags on the last flight!" 

Or, 

"The other airline doesn't have a problem with my bags!" 

Or, 

"Then how come I saw three other people board with even more bags than me?!"

It's a tough situation. Most gate agents make it worse with poor timing.

 

How Bad Timing Ruins Expectation Management

Passengers boarding an airplane typically face high anxiety.

They get caught up in the herd mentality and start squeezing in, even if their boarding group won't board for another five minutes. Many passengers are anxious about flying in general, so this only makes it worse.

Research shows we're less open to suggestion when our emotions are running high. That's why trying to manage expectations at the moment a passenger is boarding the plane usually backfires.

Think about situations where you have to manage customer expectations. If their emotions are spiking, it's probably difficult.

Here are some more examples:

  • A hotel guest learns about a $20/night resort fee at check-out.
  • An online shopper learns an item she ordered is out of stock after she places the order.
  • A customer spends an hour in a furniture store picking out the right fabric for a new sofa, only to learn the store's eight week delivery time is too late for his needs.

All of these messages would be better received if they were delivered when the customer wasn't experiencing an emotional peak.

 

Deliver News Before the Emotional Peak

The best time to manage expectations is when emotions are relatively neutral.

This requires proactive service, where you anticipate a challenge before it happens. The specific technique is called The Pre-Emptive Acknowledgement, which is one of my all-time favorites.

For example, the general manager of one of my favorite inns called me a week before my trip to let me know my favorite room wasn't going to be available. (You can read about her master class in expectation management.) It worked out in part because her call came before the emotional peak of checking in after a long day of travel.

What should airline gate agents do?

Gate agents are much more successful when they speak to individual passengers just before the boarding process starts. This allows agents to connect with people one-on-one before emotions start running high. Passengers are much more open to checking their extra bags in this situation.

How can you make timing work for you? Think about how you can better manage expectations with your customers by addressing issues before the emotional peak. 

Here's a short video clip that provides another example. (If you can't see the video on your screen, or the size doesn't look right, you can use this link.)

The clip from my training video, The Manager's Guide to Managing Customer Expectations. You'll need a Lynda.com subscription to view the full course, but you can drop my name get a 10-day trial.


A Master Class in Expectation Management

Things can go wrong in a hurry if you don't manage customer expectations.

My wife, Sally, and I recently stayed at The Albion River Inn. It's perched on a cliff overlooking the mouth of the Albion River, about 150 miles North of San Francisco. There are sweeping views of the Pacific Ocean and no TV in the rooms.

It's a rare opportunity to relax, recharge, and take a social media vacation. We visit every two years and stay in the same room every time. Room 14.

Not this year.

Room 14 was undergoing maintenance when we arrived, despite the fact that we had reserved this specific room well in advance. 

Were we furious?

On the contrary. We were delighted. That's because Chelsea Strupp, the Inn's general manager, had just delivered a master class on managing customer expectations.

Here's what she did, why it worked, and how you can use the same technique with your customers.

View from room 12 at the Albion River Inn. Photo credit: Sally Toister

View from room 12 at the Albion River Inn. Photo credit: Sally Toister

Strupp's Master Class

We received a voice mail from Strupp about a week before we were scheduled to arrive.

She explained that room 14 was undergoing maintenance and was taking longer than expected. She acknowledged our many stays in this room and said she could make the room available if we really wanted it.

But she also had another offer. Strupp said that she would upgrade us to room 12 at no additional charge if we were willing. 

Sally and I looked online to see pictures of room 12. It looked gorgeous, so I called Strupp back and accepted her offer.

When we arrived at the inn, we were delighted! Room 12 had a better layout (for us) than room 14 and a wood burning fire place. (There's a gas fire place in room 14). 

Despite the fact that we had stayed in room 14 on every visit since 2005, we now have a new favorite room!

 

Why Strupp's Invitation Worked

Strupp did three things very well.

First, she anticipated a potential issue. She and her staff monitored the status of room 14, saw our upcoming reservation, and decided to take action before it became a problem that impacted our stay.

Customer service guru Shep Hyken makes a key distinction between proactive service and anticipatory service on his blog:

Being proactive is noticing something and responding to it... Anticipatory customer service, however, is about being one step ahead. It’s intuitive. It’s not just noticing something. It’s anticipating something.

Second, she acknowledged our value as guests.

In her voice message, Strupp told us that she understood we liked to stay in room 14 because we had stayed in that same room on many visits. This made us instantly feel as though she understood and valued us.

Third, she provided options.

Strupp told us she would make room 14 available if we really wanted it. But she also offered us an upgrade at no charge. In doing so, she made it seem like she was offering us a gift rather than taking something away.

 

How You Can Manage Expectations Like a Pro

You may not have a ready supply of beautiful upgrades to give to your guests, but you can apply the same principles when managing customer expectations.

  1. Anticipate customer needs.
  2. Let the customer know they're valued.
  3. Offer alternatives.

Steps one and two are crucial because they prevent most customers from ever getting angry or upset. 

Imagine what would have happened if we first learned room 14 wasn't available when we were checking in. There's a great chance we'd feel like something was being taken away from us, which could trigger a slew of negative emotions.

Step three is also key. If at all possible, you want your customer to feel like they are getting something better.

Here are a few examples:

  • Offer an upgrade or something extra if that's possible.
  • Suggest an alternative product, service, or experience.
  • Give the gift of attention by going out of your way to make the experience better.

Here's one example that combined all three:

I was visiting Oregon Health & Science University (OHSU) in Portland, Oregon to conduct some customer service training. Parking is a bit of challenge there, but my one of my clients offered a wonderful solution.

He explained how my visitor badge allowed me to ride the Portland Aerial Tram at no charge. It offers amazing panoramic views of Portland and takes riders from Portland's South Waterfront directly to OHSU's main campus. (Upgrade!)

My client then explained that I could save time and money by using public transportation to get to the tram instead of renting a car and paying for parking on campus. (New Experience!)

Finally, my client took an extra minute to map out my transportation options, which gave me the confidence to select the correct bus, trolley, and light rail lines to get me arround town. (Attention!)

You can learn more by watching my How to Manage Customer Expectations training video. You'll need a Lynda.com subscription to view the entire course, but you can get a free 10-day trial.