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Publisher's Outlook
August 2004

Nadji Tehrani 8 Steps For: Taking Customer Loyalty To The Next Level
Because Companies Live Or Die From Repeat Business


In last month's editorial, we covered some unbelievable practices that are going on in some companies. I urge you to read that editorial as a prerequisite to this column.

The Vital Necessity Of Customer Loyalty
Conventional wisdom dictates that customer loyalty is the most vital aspect of every business because companies live or die from repeat business. No company can exist without customer loyalty and retention. I would like to draw your attention to the following eight guidelines that are only a few of the principles that will enhance your customer loyalty. I urge you to consider each and every one of them and incorporate them, if you agree, into your organization.
  1. Keep in touch frequently. It has been proven that if you do not keep in touch with any account for more than 30 days, you do not own that account. Your salespeople must live and breathe with this principle.
  2. Build the relationship. Unfortunately, many salespeople have the mistaken attitude of 'Let me get the business now and I will worry about the relationship later.' That kind of philosophy is doomed to fail because customers are smart and can figure out whether or not you are sincere about your relationship with them. I could state emphatically that business is all about relationship. If you don't have it, you have no business.
  3. Nurture the relationship. Much goes into nurturing the relationship once you have established a relationship. Unlike the common belief, the relationship will not be nurtured if you constantly ignore the customer's needs and interests. The only way to nurture them is to genuinely show interest that you're concerned about addressing their interests and needs on a regular and continuous basis. And'there is no shortcut in this concept.
  4. Manage your customers' expectations. One of the most common mistakes made by salespeople is to over-promise and under-deliver. This phenomenon must be completely and categorically eliminated in every sales department. I recall a meeting that I once had with the legendary Jack Welch, perhaps the best CEO of the century, who once said that, 'Sales managers should be evaluated as follows:
    a. 'If the salesperson meets the budgeted numbers and upholds the company's values; i.e., integrity, being truthful with customers on their promises and over-delivering, then that salesperson must be kept with the highest esteem and should be rewarded time and time again to keep that person employed by your company.'
    b. 'If the salesperson does not meet corporate budgeted sales numbers, but upholds corporate values, that salesperson needs a second chance.'
    c. 'If a salesperson meets corporate numbers but does not uphold corporate values, that salesperson must be fired.'
    d. 'If a salesperson does not meet corporate budget and does not follow the guidelines, that person should be immediately terminated.'
    I believe these words of wisdom coming from General Electric's legendary CEO should apply to every corporation, and as the CEO of your company, you need to make it abundantly clear that without exception, each and every member of the sales, marketing or any other department, for that matter, must live with the above principles, otherwise, customer loyalty and retention would be nothing more than wishful thinking.
  5. Anticipate your customers' needs and do something about them. One does not keep a customer by simply forgetting about him or her once the transaction has taken place. A savvy salesperson must anticipate the needs of his or her customers on an ongoing basis and, more importantly, do something about it. There are too many salespeople out there who promise everything and deliver nothing, let alone anticipate the needs and respond to those needs. I am sure that practically every sales department has a few people like that, all of whom should be terminated as they have no value and they can only serve as a cancer to the sales department.
  6. Hire sales staff with character. In one of the recent documentaries about successful coaches in pro football, Joe Gibbs, the famous coach of the Washington Redskins, was asked the question, 'What criteria do you value the highest before you select a football player for your team?' Joe Gibbs responded, 'Character is by far the most important attribute that I look for when selecting team members for my team.' A reporter asked him, 'How do you define character?' He stated, 'I want people who care the most about what is in the best interest of the team and not about what is in the football player's best interest.' Therein lies a tremendous amount of wisdom that every employee of every company must respect. Salespeople who care only about their own pockets have no place in any corporation in today's highly competitive and customer-savvy environment. If the salesperson does not care about his team or his company, the customers or prospects will have no reason to do business with that salesperson. Consequently, there is no reason for that salesperson to exist in any company. As simple as this sounds, one always encounters salespeople who don't give a damn about what is in the best interest of their companies; they care only about their own selfish gains.
  7. Go the extra mile. In today's globally competitive environment, one of the most powerful attributes that separates your company from others is for your sales and customer service staff to go the extra mile. Customers will always remember if your sales or customer service department really cares about them or their business. If the representatives of your company do not show a genuine interest in helping the customer on a continuous basis, then there is absolutely no foundation for customer loyalty.
  8. Help your customers save money. By showing the customer how to reduce costs by recommending ideas and new processes or know-how, the customer might change or adopt to save considerable cost. This type of concern goes a long way towards generating loyalty.

The Anatomy Of Customer Acquisition To Customer Loyalty
Given that customer loyalty and retention are the life-blood of every corporation, it behooves us to look at the anatomy of customer acquisition to get a greater understanding of the process. In my humble opinion, Figure 1 above is the process that initiates customer acquisition and follows it through customer loyalty.

In Business, Reoccurring Revenues Are The Only Thing!
Vince Lombardi, the legendary coach of the Green Bay Packers pro football team, whose team won several Super Bowl championships, once said, 'Winning isn't everything, it's the only thing.' This great principle of business, coming from one of the greatest, if not the greatest, football coach of all time, is equally applicable not only to winning companies, but also to all companies that wish to survive in this highly competitive economy.

In the past issues, we have covered the subject of marketing extensively. In the May issue, for example, we addressed the importance of Integrated Marketing. In this issue, I would like to focus on effective advertising.

Effective Advertising Begins With Innovation
In addition to reaching the right people, any advertising program must be innovative if it is going to make an impact on your audience. It has been said that an average person is exposed to in excess of 1,000 advertisements per month. Consequently, the only thing that will stay in anyone's mind is the ad that is truly innovative.

McGraw Hill Had The Right Idea
McGraw Hill's legendary advertisement, which was created some 46 years ago, is the all-time best justification for advertising. I would like to invite you to take a good look at Figure 2 and analyze its words of wisdom when it comes to advertising. I think every person of reason would agree that effective advertising is vital to the survival and growth of every organization. In business, there are numerous success stories where advertisements have made companies successful, and a lack of it has prevented growth or even the existence of some companies.
We need to apply the same principle to all other advertisements. In other words, if you are unique and innovative, you will get attention and new business from your ads. If, however, your advertisement is the usual boring and ineffective style, nothing will come out of it. The sad fact in this case is that those who place useless ads and get no response don't blame the ad, they always blame the concept of advertising by saying, 'Advertising doesn't work for us!'

Integrated Marketing Is The Only Way To Go
Having said all of the above, I firmly believe that in today's highly sophisticated advertising environment, the only effective way to market is to use the concept of integrated marketing, which incorporates print, e-mail, the Internet, trade shows and assorted other components of integrated marketing, which were discussed in my editorial in the May 2004 issue of this magazine.

If you understand that, you cannot lose sight of the fact that your advertisements must be innovative and benefit-driven and must clearly differentiate your products and services from your competition. If these guidelines are followed, then success and proper lead generation will follow.

I felt that describing the process of lead generation, which is a direct result of effective advertising, was necessary in order to understand how difficult it is to get quality sales leads (which lead to customer acquisition) to help us appreciate how hard we have to work in order to generate customer loyalty and customer retention.

As always, I welcome your comments. Please e-mail your comments to [email protected].

Sincerely yours,

Nadji Tehrani
Executive Group Publisher
[email protected]

[ Return To August 2004 Table Of Contents ]

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