The Definition of Customer Loyalty – Part 2

//The Definition of Customer Loyalty – Part 2
Webinar: What does it take to DO (and Scale) Customer Success? Register Now

The Definition of Customer Loyalty – Part 2

By | 2018-06-08T13:40:11+00:00 June 14th, 2018|Customer Loyalty|0 Comments

According to Merriam-Webster, loyalty is:

  • unswerving in allegiance
  • faithfulness to a:
    • cause, ideal, custom, institution, or product.

This all boils down to constant support and manifests itself in countless ways depending on the context. If you’re a B2B SaaS company like us, we hope our customers share our vision, support us forever and are “faithful” to our product. We can’t minimize what goes into fostering loyalty. It surely doesn’t happen overnight. Company-wide intentionality comes into play. Additionally, signs of loyalty aren’t straightforward like the materialization of advocacy; if you’re paying attention you’ll find signs of loyalty without too much work. You are currently reading Part 2 of the series–read Part 1 here for the “Why, What and Who,” of Customer Loyalty. After reading this two-part blog you will leave with several actionable takeaways relating to, but not limited to, improving your internal teams, communication, honesty, and trust to garner loyalty.

Where Does Customer Loyalty Happen?

Internal Loyalty as a Precursor to Customer Loyalty

Internal employee and company-wide loyalty can be an effective precursor to customer loyalty. If your employees, who are supposed to all have customer-centric perspective within the discipline of Customer Success, are loyal from within, you can be fairly content that they’re also prompting loyalty from customers. Strong, directive and inclusive leaders within a company can reinforce loyalty–typically people are loyal to other people that make the company–not simply just the product/company itself. Think about your current workplace, are you fiercely loyal to your company? What would make you leave? Is your environment welcoming? Do you feel comfortable sharing ideas and feel like you have equality of voice to your peers? No company is perfect, but adopting agile methodology when it comes to company-wide, employee-driven feedback assessments, with evaluation & re-implementation can constantly improve your workplace to uphold internal loyalty. If employees feel like they’re being treated well and feel peers going above and beyond expectation for the company as a whole, the more likely they’ll be to do the same for customers.

 

Where does Customer Loyalty Happen in your Company?

Every customer and prospect interaction should be promoting customer loyalty. Marketing controls the brand that prospects and customers see; we mentioned before how important it is for the brand to stay consistent and build unspoken trust. Sales makes sure that customers come onboard with appropriate expectations of the work promised, the product and the extent of the partnership; the customer should be set up for success and not dumped to Customer Success in a handoff. Customer Success needs to consistently deliver quality work or services for the customer, be receptive to needs and be the owner of communicating progress and proving value; the main contact of the customer has the ability to influence the most and thus should be the most focused on establishing credibility and trust.

 

How Can a Company Help Guide Customers to Loyalty?

Actions Lead to Loyalty

Above all, actions are needed to lead customers to loyalty. You can’t HOPE for loyalty. When you were a child and wanted someone else’s attention you probably thought to yourself, “ Oh I want them to like me! I want to be impressive!” but how often did thinking alone actually attract someone to you? Make sure you talk about your relationship standards early and often with the customer. You should be working and building up for the potential to ask for a favor. This requires salespeople and CSM’s to be mature, honest, clear with their points and willing to earn customer loyalty. You shouldn’t want the loyalty for nothing and you definitely don’t want it to be artificial–this leads to unexpected churn and questions as to why a customer wasn’t involved or happy.

 

How Do You Foster Loyalty? (The Sparknotes)
  1. Trust:
    1. Fulfill your customer promises – let them know if timetables change or if there are complications that need addressing.
    2. Admit to the customer when you’re wrong.
    3. Be truthful about the situations you encounter with the customer. Don’t lie to paint a prettier picture
    4. Reassure the customer that you’ll do what it takes to meet their goals.
  2. Meet & Exceed Expectations: never over-promise. It’s better to underpromise and overachieve than to over promise and not fulfill customer needs. Rationalize this with your own opinions–what happens to your relationships over time when someone never meets the goals they’ve promised with you? For us, the relationship becomes less valuable and deteriorates.

 

How Do You Measure Loyalty?

It’s rather difficult to measure true loyalty. Standards like NPS, trend of service tickets and product usage are more related to healthscores. They aren’t real indicators of customer loyalty. As mentioned before, loyalty is best measured through actions.

 

The following are customer loyalty “metrics” for B2B SaaS. They refer to actions a customer can display to prove loyalty:

  • G2 Crowd reviews
  • A natural name-drop on a podcast, webinar, blog etc.
  • Agreeing to participate in a prospective customer reference call
  • Customer Loyalty displayed through Customer Advocacy

 

Customer Loyalty vs. Customer Advocacy

An important distinction to make is that Customer Loyalty is NOT Customer Advocacy. Loyal customers that wouldn’t go the extra mile to be advocates are harder to pinpoint and define (less noticeable action). However, a lack of advocacy does not equal a lack of loyalty. All Customer Advocates can be classified as Loyal Customers.

Customer Loyalty Doesn't Equal Customer Advocacy

 

Be on the lookout for Customer Advocacy, the next edition of the “Definition of…” blog series!

 

Leave A Comment