If you haven’t tried to measure customer loyalty, don’t worry – it can be tricky to quantify. One of the best ways we have found to measure something that seems so abstract comes courtesy of the book The Ultimate Question by Fred Reichfield.
His theory is that there are 3 types or levels of customers, with each level corresponding to their experience with your company. To determine the category your customers fall into can be measured by simply asking, “How likely is it that you would recommend us to a friend?”
Responses are measured on a scale of 1-10, with 1 being “not at all likely” and 10 being “extremely likely.” The 3 levels are based on their answer:
9 or 10: Loyal Customers
They love your products or services and had a great experience during the entire sales process. They will provide word of mouth marketing and repeat purchases.
7 or 8: Neutralizers
Their experience was just OK. They are not loyal and will buy from either you or your competitor next time, depending on the promotion or situation.
0 to 6: Diminishers
They had such a disappointing experience that it is highly unlikely they will buy from you again – and they may badmouth you.
By identifying the percentage of your customers who fall into each category, you have your Customer Loyalty Score or CLS. This critical information will help you understand your customers’ future purchasing behavior, which is directly connected to your future success.
Developing a strategy of creating loyal customers must become ingrained in your company’s culture. Avoid focusing on profits, because the drive to increase revenues can come at the expense of the customer. Instead, focus on aligning the promises you make to your customers with what you actually deliver. You can do this by exceeding expectations, creating strong relationships through frequent points of connection, and providing a unique service experience.
If you can consistently deliver an exceptional experience based on what you promise in your marketing and advertising, your customers won’t even consider the competition.