Customer Satisfaction Is Worthless, Customer Loyalty Is Priceless

How to make customers love you, keep them coming back, and tell everyone they know by Jeffrey Gitomer Bard Press © 2006 256 pages

Focus
Leadership & Mgt. Strategy Sales & Marketing Finance Human Resources IT, Production & Logistics Career Development Small Business Economics & Politics Industries Intercultural Mgt. Concepts & Trends

Take-Aways
• Loyal customers are better for your business that satisfied customers. • Loyal customers regularly shop at your store or buy your service. • Satisfied customers have no loyalty. • Among customers who leave your store angry, 91% will never come back and 96% will never tell you why they left. • If you become a resource for a customer, you can make a friend even if you don’t make a sale. • If you have an incorrect mission statement or one that employees don’t understand, it can undermine customer service. • Employees who don’t want to help a customer with a problem frequently invoke company policy. • The customer’s perception drives results, no matter how hard a customer service representative or salesperson tries. • Friendliness is a customer service professional’s most important quality. • The lifetime value of a repeat customer is 20 times his or her annual sales volume.

Rating
Overall

(10 is best)

Applicability

Innovation

Style

7

7

6

6

To purchase abstracts, personal subscriptions or corporate solutions, visit our Web site at www.getAbstract.com
or call us at our U.S. office (954-359-4070) or Switzerland office (+41-41-367-5151). getAbstract is an Internet-based knowledge rating service and publisher of book abstracts. getAbstract maintains complete editorial responsibility for all parts of this abstract. The respective copyrights of authors and publishers are acknowledged. All rights reserved. No part of this abstract may be reproduced or transmitted in any form or by any means, electronic, photocopying, or otherwise, without prior written permission of getAbstract Ltd (Switzerland).

This summary is restricted to the personal use of philippe clarinval (pclarinval@hotmail.com)

[LoginContext cu:362269 asp:- aff:- lo: de co:CH] 2013-01-08 10:29:36 CET

and then you left them wondering how they got into such dilemmas. The fact is. Actually. creating memorable impressions and living up to your commitments.com) [LoginContext cu:362269 asp:. treat people as you would want to be treated. “If you listen to corporate America blow their own horn. Satisfaction ratings may be as high as 97%. Perhaps you did not show interest in their predicaments or willingness to solve their problems. assurance. Still. the more authoritative the advice. Customers pay your company when they buy your goods. rhetorical and instructional. inspirational. your customer is more important than your boss. To earn customer loyalty. it is so rare that people write books about it. Without it.” Why Customers Quit Customers terminate their relationships with your company for many reasons. Large corporations rarely offer exceptional service. but. and 3) How to improve customer service. but that still means that 3% of your customers are free agents in the marketplace.aff:.” while on others he provides questionnaires. Some pages look like poems. Maybe your Customer Satisfaction Is Worthless. Almost every page boasts a new typeface and layout. reliability. empathy and help from employees with good attitudes. he makes suggestions he calls “self tests. Abstract The Price of Loyalty Most companies mistakenly measure customer satisfaction ratings instead of customer loyalty. 2) How to build customer loyalty. advocate for your products and refer new business to you. buy only your service. plus author-salesman Jeffrey Gitomer has displayed his counsel like a visual party. The more qualified the salesperson-author. Companies should provide exceptional customer service routinely. but that does not mean they are loyal. positive connections. They will shop anywhere. Loyalty must be earned. and tell me what you’re going to do for me now (help me. In businesses of any size. This is deliberately more of a jazzy series of lists than a narrative outlining a new approach. customers might get angry and refuse to buy your product.” “The customer only wants two things – show me you care about me personally. Positive surprises can also build lasting. you have to know your customers and understand what they want. On other pages. giving small entrepreneurial companies a special opportunity to woo customers. When they don’t buy. you could get fired by your real boss: Your customer.Relevance What You Will Learn In this Abstract. poor service occurs when management provides bad training or unhappy employees act out their misery.lo: de co:CH] 2013-01-08 10:29:36 CET . Customer Loyalty Is Priceless © Copyright 2007 getAbstract 2 of 5 This summary is restricted to the personal use of philippe clarinval (pclarinval@hotmail. Customers seek value. They may be satisfied. This one has all these qualities. deliver memorable service consistently. getAbstract endorses its solid common wisdom: To engender customer loyalty. Recommendation Sales books should be a separate genre. you will learn: 1) Why loyal customers are more important than satisfied ones. Building loyalty is a process based on understanding the customer. They are meant to be easily read.” “scorecards” and “reality checks. Companies often take customers for granted. When you don’t meet these needs. your income is in jeopardy. good communication. in reality. The challenge is to develop loyal customers who shop only at your store. To deliver exceptional service. customer loyalty is at an all-time low. they’ll tell you…customer satisfaction is at an all-time high. please).

You may have rules about dealing with customers. Customer Loyalty Is Priceless © Copyright 2007 getAbstract 3 of 5 This summary is restricted to the personal use of philippe clarinval (pclarinval@hotmail.” response was too slow. find out why. This breach of trust raises serious issues about the basic buyer-seller relationship. you can make a friend even if you don’t make a sale. In one case. Focus on customer loyalty – Reorders are easier to get than new business laboriously drummed up from costly advertising or cold calls. but no guiding principles.aff:. Customer Satisfaction Is Worthless. Customers also leave because employees can’t solve their problems. However. or you were unavailable or unfriendly. This fact reveals a major inconsistency in customer marketing: Businesses spend 90% of their marketing budgets attracting new customers rather than satisfying existing ones. “In service. 80% of dissatisfied customers will return if their problem is corrected.000 customer translates into $200. The seller called a real estate agent who refused to give him a blank contract.” How to Become a Customer Service Success Use these 12 methods to deliver outstanding customer service: 1. your company or your company policy.“The customer could care less about you. act unprofessionally. Studies indicate that 91% of customers who leave your store angry will never come back and 96% of them will never tell you why they left. Continuous education and service are the keys to this long relationship. The cost of replacing a lost customer is 10 times more than the expense of attracting a new one. This is the first step in building customer loyalty. and even less about ‘why you can’t’ give them what they want. Then the seller contacted another agent who gave him a blank contract. answered his questions and helped him complete the form. 2.com) “Shouldn’t it really be called ‘customer helping’ rather than ‘customer service’?” [LoginContext cu:362269 asp:. When that deal went sour and cast him back into the market. When employees understand the principles behind customer policies. The buyer and seller reached an agreement but then realized that they did not have a real estate contract. Recognize that your customers are your paycheck – Acknowledge their importance. Swiftly provide assistance when a customer calls – List the reasons why customers call. or offer poor products or services. they have more latitude to deal with problems. 3. develop good responses to each inquiry and show your willingness to help. Tales about terrible customer service can take on lives of their own and become local horror stories that survive for years. the lifetime value of a $10. citing company policy. When your customer service begins to degrade. To secure a reorder. 5. they frequently blame company policy. a man wanted to buy a house directly from the owner without using a real estate agent. Service also suffers when management is out of touch with customers or employees are poorly trained. it all boils down to the one word customers want to hear…yes. 4. “Service is a feeling. he naturally called the agent who had helped him.000. the more you will get out of the relationship. If you develop a positive.” When employees don’t want to help customers. That’s a powerful lesson.lo: de co:CH] 2013-01-08 10:29:36 CET . and you know what it is – whether it’s good or bad. Customers grow increasingly more disgruntled when they hear excuses about why their problem occurred or when they encounter rude employees. Maintain a good attitude to reap positive results – Customers who observe your enthusiasm will respond in a friendly manner. Customers often complain about being treated rudely or being given promises that employees fail to keep. develop a strategy that keeps you in front of the customer as a constant resource. The more you do for a customer. The common refrain is that company policy prevents the employee from solving the customer’s problem. use high-pressure tactics. productive relationship. Develop repeat customers – Their lifetime value is 20 times their annual sales volume. Thus. When you are a resource for a customer. the customer will reorder. The most common reasons are because you have an incorrect mission statement or one your employees don’t understand.

authentic responses – Your customers will respond to you in the same way and will want to do more business with you. If you ignore it. For instance. When you encounter angry customers. Have them create a friendly greeting or solve a problem. A woman went to a Les Schwab store to buy tires during a rainstorm. be memorable and extraordinary. turn a negative into a positive by making an extra effort to rectify it. or you call a customer. Customer Loyalty Is Priceless © Copyright 2007 getAbstract 4 of 5 This summary is restricted to the personal use of philippe clarinval (pclarinval@hotmail. if an Customer Satisfaction Is Worthless. make it permanent. 9. Compare the answers and proceed accordingly. 8. agree emphatically and say. She later told her friends about this exceptional service and the store gained more business as a result. so be positive when you start conversations. no matter how hard a customer service representative or salesperson tries. Take responsibility for the problem.” [LoginContext cu:362269 asp:. Making Friends Customer service professionals must be friendly. “Oh. Once you establish this attitude. Offer solutions – not excuses – when you serve customers – People appreciate your genuine attempts to help them. yet many companies don’t spend as much on the messages these face-to-face encounters transmit as they spend on advertising. The reality is that. Be empathetic. shows that you concur and sets the stage for resolving the problem. become a resource they can’t live without. go the extra mile. The customer’s perception is always right. When you hear a customer’s complaint. creative. the customer’s perception drives results. Respect the power of word of mouth – What customers say about your company is 50 times more powerful than advertising. not a personal attack. Find out what customers are saying about your company – You may be surprised. fastest way to resolve problems. ask your suppliers the same question.” 6. that’s horrible. 12. you’ll generate a positive response. offer prompt. This trait is hard to teach. Ask your customers what they say about you and why. You want customers to say “Wow.” For example. but remember that you can determine what others say about you. Don’t ever cite company policy to a customer or list reasons why you cannot help.com) “A re-order is 100 times easier to get than a sale from an ad or a sale from a cold call. 7.” This defuses the situation. When you can “bend” the policy to help customers. To create memorable customer experiences. Word-of-mouth has more credibility than ads. keeping her dry. “If you want customers forever. positive or negative. honest or knowledgeable.“Every time a customer calls you. ask your 10 best customers why they like dealing with you. you will lose the customer. Act professionally. enthusiastic.” To differentiate your level of service. you have an opportunity and a choice to be great. Realize that having a satisfied customer is not a valid goal – Satisfied customers will not necessarily become repeat customers. Avoid using the word “policy” when dealing with customers – They know that a policy is written to benefit the company. To learn how to convert a satisfied customer into a loyal one. When a mistake occurs. 10. A salesperson with an umbrella ran to her car in the parking lot and walked her into the store. but employees can learn some techniques by practicing good responses to common customer problems. Be a friend and a resource. If they say negative things. Provide good service so the customer has a positive reaction – This warm feeling improves your customer’s sense of self-worth. recognize that their anger is business-related. and quickly suggest the best. Then.lo: de co:CH] 2013-01-08 10:29:36 CET .aff:. stay engaged with the customer and then solve the problem. “wow” moments can happen when a representative is especially helpful. courageous.” “The easiest way to breed a loyal army is to recruit them one at a time – here’s the magic answer – have every person in your company who talks to a customer ‘make one customer ecstatic every day’. address those problem areas quickly. To test how others see you. genuine. Hire people who are cordial and positive about helping people. call your company’s customer service department and see how they treat you. She was impressed by the service she received even before she made a purchase. become valuable. 11.

good speaking skills. call other stores and have it delivered to the customer.” Hilton thought the notice was inadequate. No Service” or “No Parking. “Your ability to accept change is at the fulcrum of your ability to succeed. “No Rooms Available Without Reservations. offer a voucher for a complimentary breakfast. have the right attitude about money and set personal goals. To deliver memorable service in the hospitality industry. Customer Loyalty Is Priceless © Copyright 2007 getAbstract 5 of 5 This summary is restricted to the personal use of philippe clarinval (pclarinval@hotmail. when hotels were scarce and many people were traveling. For example. when a guest checks into your hotel. Constantly improve your everyday ways of doing business. sincerity and a good reputation. important and at home. so he set up an accommodations desk to help guests without reservations find rooms at a competing hotel. No Shoes. Turn a negative into a positive. you must have a vision. the “father of the hospitality business. Hilton also provided a temporary room for guests who checked in before their rooms were ready.” Few businesses have a “Welcome” sign on the door. you will have difficulty finding signs that say “Welcome” or “Thank You. study what you want to be. If you want to set a positive tone. He wrote the bestsellers The Sales Bible and The Little Red Book of Selling. If you go to a hardware store’s sign department. good product knowledge. love what you are doing. and runs annual sales meetings and customer service workshops. During World War II.lo: de co:CH] 2013-01-08 10:29:36 CET . Build a favorable set of stories that happy customers can share with their friends. To achieve your goals over the long-term. to give them a place to change clothes.” made a name for himself by providing exceptional service. “If you wouldn’t say it to your grandma.aff:.com) [LoginContext cu:362269 asp:. Sign Language Most businesses post signs telling customers what they should NOT do: “No Shirts. make guests feel special. Then. He won the admiration of many travelers. Conrad Hilton. but if you want to improve any shortcomings. Encourage employees to acknowledge customers when they enter the store. everyone can address the guest by name. strive to be the best. If you work at a hotel and a guest’s room is not ready when he or she checks in. a desire to be helpful. remove any sign with “don’t” or “no” on it. and show them that the hotel is interested in their well-being. You can become a better service provider if you have a positive attitude. why would you say it to your customer?” At the individual level.” Repeating Successes Build a repeatable high level of customer service by establishing benchmarks that help you elevate standard service responses into exceptional events.” In fact. starting with the way you greet customers and handle complaints. a positive attitude. employees and visitors. introduce yourself and ask the customer’s name. This simple process creates a memorable mini-event. the ability to establish a relationship. such as Dale Carnegie’s How to Win Friends and Influence People. Customer Satisfaction Is Worthless. read some of the classic books on self-improvement. perform a self-assessment by asking yourself if you have these skills and present these qualities: A pleasant personal appearance. most business owners never review their signage. at every handoff to another hotel employee until the guest actually enters the room. Most people have some of these traits. Hilton noticed that the hotel he was managing had a sign in the window reading. About The Author Jeffrey Gitomer gives seminars and speeches. Replace those signs with a positive message to set the tone for guests.item is out of stock. a sense of humor.