This is the opportunity you have been waiting for. For as long as I can remember, there has never been a better chance to prove to your customers why they should always do business with you. In addition, there has never been a better chance to steal customers from the competition.
Let’s talk about loyalty for a moment. True customer loyalty is more than repeat business. Loyalty is tied to an emotion. If customers are truly loyal to you, they will give you the chance to redeem yourself when problems arise. They are more tolerant. They want to keep doing business with you. And they will, at least up to a point.
Repeat customers are not loyal, even if they appear to be so. They come back because your prices are lower, you’re more convenient than a competitor or some other reason that you may not know about (unless you ask).
Today there are three main issues pushing loyal and repeat customers to competitors. The first is the employee shortage. Bad service due to lack of employees frustrates customers. The second is product availability — actually, lack of product availability. If you can’t get the merchandise your customers need and want, they may find someone else who can. And the third is inflation. Rising prices can cause greater price sensitivity than usual.
All three of these issues open the door for a competitor to disrupt whatever loyalty you’ve created — or for you to take a customer from a competitor.
Related Article: Innovate, Pivot or Stay the Course: How Customer Experience Responds to Disruption
Lack of Employees
Some call this The Great Resignation. It’s not as much a resignation as it is a realignment. And if your employees aren’t sticking around, it could have something to do with how they are treated and compensated.
Customers notice this. They show up at a restaurant and the service is slow, which is another way of saying the service is bad. Businesses are reducing their hours due to difficulty finding employees. Customers leave frustrated or go to a competitor that’s open.
Yet, with all the talk about an employee shortage, some brands don’t seem to be impacted. For example, Target is experiencing record low turnover. Just study the top companies to work for on Glassdoor.com, and you’ll see a list of companies bucking the employee shortage trend.
Lack of Merchandise
Supply chain issues have impacted many industries, in both B2C and B2B industries. The problem is straightforward. If you don’t have the merchandise, it doesn’t matter if your customers are loyal or repeat, they are going to find what they want elsewhere.
This is where it gets dangerous, especially if the only reason they do business with you is because of what you sell, not how you sell (and service) the customer.
As if employee and supply chain issues weren’t enough, we’re now dealing with inflation at levels we haven’t seen in decades. We can’t ignore a problem that is forcing customers to become price sensitive. Rising costs force rising prices. And while a great customer experience can make price less relevant, it doesn’t make it completely irrelevant.
Related Article: You Can't Get Loyal Customers Without Loyal Employees
3 Ways to Capture and Keep Loyal Customers
These three problems have come together to create a perfect storm that is disrupting customer loyalty. Now that we know about them, here are a few thoughts on keeping customers — or how to amaze new customers who are defecting from your competition.
- Don’t Skimp Where It’s Obvious: Today’s economic climate is tough on many industries. For some, the answer is to cut costs. Don’t cut where it’s obvious. Find places to save money that customers won’t notice.
- Look at Employee Compensation: The Great Resignation is the wrong name. It’s more about a great realignment. Employees are quitting work. They are leaving for better opportunities. Often those opportunities are tied to a better compensation package, which includes salary, insurance, PTO (days off) and more. Sometimes it’s a flexible work environment (home versus at the office, or a combination of both). If compensating employees more (with dollars and benefits) will keep them, it might be worth it. You should consider whether paying employees a little more is less expensive than losing customers or tarnishing your reputation with bad service.
- Get Customers the Products and Merchandise They Want: If you don’t have what customers are asking for, find alternatives. If the other options don’t make the customer happy, then help them buy from a competitor. Or go to a competitor and buy the product for the customer. If you do this right, the customer will realize you’re more interested in getting them what they want and need than making a few dollars on one transaction. This can prove you are as loyal to them as you want them to be to you.
These three ideas only scratch the surface of preventing customers from leaving you for your competitors. Use these ideas as a conversation starter for the next meeting with your leadership team. It’s more important than ever to keep your customers. Don’t let short-term problems, as big as they may seem, ruin your long-term relationship with your customers.