Article -> Customer Loyalty: A Key to Your Strategy
Date Added: May 2006
Customer loyalty should be a large part of your overall business strategy.¹ Most businesses value their customers; therefore, it’s important to include customers in your organizational strategy. If you move customer loyalty to the center of your strategy, you are in a better position to have a competitive advantage.¹ For example, Wal-Mart competes on price. Their customers are the center of this strategy and Wal-Mart continually strives to have the lowest price to meet the needs of all customers.
With customers in the middle of your strategy, everything else should align – people, strategy, and customers. Loyalty will be embedded in everything your organization does, and employees living the brand will become organizational motivators.¹ Other strategies such as customer service, your products/services, and employee communication, will all fit together and be based upon your customers’ needs.
Whether you have “regular” customers or loyal customers depends on their last experience with your organization. Winning and retaining customers is based on the reputation of your brand and the experience customers have with your organization over a lifetime.¹
Voice of the Customer is a process to achieve loyal customers and ensure a lasting experience with your organization. Voice of the Customer identifies, measures, communicates and implements what the customer really wants. It will achieve customers having a great experience with your organization.
To build a strong base for customer loyalty and move it to the center of your strategy, there are some key strategic questions you can ask:
- How would the organization be affected if we could create more loyal customers?
- How could a loyalty strategy strengthen overall growth and market share?
- How could it effect our competitive market position?
- How could it effect incremental business growth?
By answering these questions, your organization will position customer loyalty as a central piece of your strategy.
Organizations that invest in understanding customers’ needs will become market leaders – or widen their gap if they already are a leader. It is far more expensive to market to new customers than keep existing customers. The “right” existing customers offer the greatest profit to your organization.
¹Crosby, Lawrence A. and Sheree L. Johnson. “The Heart of Your Strategy.” Marketing Management. September/October 2005.