There’s No Such Thing as a Loyal Customer

This post is in preparation for our exhibition at the 2010 Business Opportunity produced by the New York & New Jersey Minority Supplier Development Council, Inc. We are the MBE Co-Chair for this event and we have clearly defined our objectives.

If you think your customers are loyal to your product/service you are living a lie.  There is no such thing as a loyal customer and as a small business owner the sooner you accept this the faster you can develop strategies to keep your customers and grow your business.

I’ve always been finicky about who cuts my hair. I’ve had 5 barbers in my lifetime and my last barber was in the neighborhood, cheap at $10.00 for a haircut and good.  However, his shop was an eyesore with fold up chairs that look like they were stolen from a school, hair accumulating on the floor and messy counters where they keep their supplies and clippers.

One day recently my daughter treated me to a an upscale men’s hair saloon.  It was a 180 degree difference from my barber.  This shop is kept clean with a wine bar and big comfy leather chairs.  The woman who cut my hair was pleasant, courteous and a true professional in hair cutting.  To my surprise the price of my haircut was only $19.50. I was expecting to pay $25.00 to $30.00 for that haircut and would have gladly paid it.

I now have a new barber my 6th.  So here’s a shoutout  to my new barber Margret at BBraxton in Harlem, NYC.

Yes I was loyal to my old barber until I was introduced to something better.  And that’s the myth about loyal customers, they are only loyal until  your competitors expose them to something better.

How do you keep your long time customers from jumping to your competitors especially in this climate when businesses are pulling out all of their tricks to stay alive?

Here are several strategies to keep your customers and ward off your competitors.

1st lets be clear that not all of your customers will jump ship because your competitor has lowered their price to compete with you.  There must be other benefits because no business can compete on price alone. Read my earlier Blog “Your Selling Price is Not a Value Proposition.”

The trick is too add value that your customers will appreciate so they can respect and feel good about paying a premium price for your product/service.  My hair cuts cost me more and what’s more I  schedule appointments so I’m getting haircut more often. BBraxton’s offered a lot of value that justified their price and my perception is that I’m getting a bargain because I valued the service higher that what they are charging

To offer true value to your customers you need to know what value do they currently place on your product/service. Yes that means talking to your current customers or polling them. You should know what they think of your product/service and where they see as your strengths and weaknesses.  If you don’t communicate with your customers regularly about you can you improve their use of your product/service then I can guarantee your competitors will swoon your customers with tales of how they will always communicate and assist them with getting the most value from their product/service.

2. Stop doing the same old thing the same old way because it used to work. Change is a good thing and a strength overused becomes a weakness.  Customers today are savvy and are looking for true innovation, quality and real benefits for what they purchase. If you are not approaching each day with how your product/service can be better than yesterday then you are heading for extinction.

Talking with your customers will reveal some of the ways you can implement innovation.  Our company started as a video production company but because of opportunities that was uncovered through conversations with our clients we are now a new media boutique agency developing and executing media campaigns for our clients.

3. Be innovative. Innovation is not a buzz word,  it require you seeing the trends in how your customers can and will use your product/service in the future and meeting those needs.  Finding ways to use social media to assist your customers in using your business is innovation. If your customers are using smart phones then look to develop an App that will allow them to use your product/service more often.  Create a fan page on Facebook so your customers can network.  See what other services/products you can bundle with your service/product to build value.

If you constantly communicate with your customers see the tends and innovate you will hold onto your customers for a long time but believe that they will never be loyal.