8 Ways to Build and Sustain Customer Loyalty by Going “Lean”

Here's how small businesses can leverage a lean way of thinking to streamline their customer retention.
March 20, 2012

As a small business consultant and practitioner of the “Lean” set of tools and techniques for increasing an organization’s ability to continuously provide customer value, I learned many ways to understand what customers want. Another side of the same coin is: How simply and effectively can this value be created? Most companies don’t have the time to devote to a data intensive endeavor, so here are my tips for how small business owners can leverage the Lean way of thinking to build and sustain customer loyalty.

Identify what Customer behaviors you want to attract and retain

You probably have an idea of your target demographics. But have you thought about what types of customer behaviors you want to attract and retain? You might think, “all of the below,” but each may require a different approach—so focus on what is most relevant for your business.

  1. Customers who consistently pay on or ahead of time
  2. Customers who consistently spend over the average amount of your typical customer spend
  3. Customers who refer others
  4. Customers who purchase additional items that go beyond typical core offerings (e.g. gift certificates)
  5. Repeat customers who have purchased your product/services for a significant amount of time

Build or enhance loyalty intelligence systems

Loyalty Intelligence systems provide tips on how to customize products or services for each customer. If it’s not in the budget to develop this system, consider providing your staff with an easy way to look up what the customer values are or send an internal communication noting:

  1. What the customer typically orders
  2. What the customer typically complains about
  3. The customer’s interests and important dates
  4. Names of the customer’s family/friends

Prevent problems before they start

If you’ve ever changed your address with American Express, it’s likely their Customer Service Representative (CSR) told you to remember your new zip code the next time you go to the gas pump with your card. Their CSR “thought ahead” and prevented you from calling them back wondering why your card didn't work. You can grow your business by conducting an informal focus group with your best customers. Ask them to describe the steps (or activities) before and after they purchase or engage with your products or services, and any roadblocks they might have encountered.

Understand why your customers go to competitors

It could be a life situation like moving, for budget reasons, perhaps your competitors bundle products and services better, or maybe you didn’t make your customer feel special enough. The important thing here is to be courageous enough to ask your previous or dissatisfied customers if they would be willing to participate in an anonymous survey by an objective third party so you can improve your products or services. After that, you can implement process improvements or on the flip side, decide if you really wanted those types of customers anyway.

Understand your Customer’s Customer

My company provides Business Process Facilitator and Analyst resources. Recently, we asked a technology client to explain their customer engagement strategy. They didn’t have one! If your customer understands their customer, take time to listen. Especially if you’re in the Business to Consumer sector (or your Customer is), find out what efficient customer service looks like for them and how their customers expect to be treated. If they respond, make sure you implement the same for them. If they are at a loss, help them to implement success metrics and tracking mechanisms to ensure an efficient process.

View your business from the customer’s perspective

In the television series Undercover Boss, executives take time to see their businesses through the eyes of their employees. This helps bosses a) understand their employees’ perspective, and b) understand what their customer sees. As a small business owner, you probably can’t go undercover; however, you could hire a secret shopper. Please remember, it’s important to be open to this feedback even if you don’t agree with it. Our Employees are just as important as our customers; the time you spend developing your employees will result in stronger brand value.

Streamline internal processes for a unified message

Conduct ongoing analysis to see how well your internal team is supporting the customer behaviors you are trying to elicit. How do the capabilities of your people, processes and tools measure up with what your customers’ value?

For example, the sales department may need a direct communication channel with Research & Development to advise them of customers’ wants/needs. Or customer service leaders may need to understand key selling points to save a customer. These feedback loops create “one corporate face” to the customer so that they hear the same message from anyone they speak with in your company.

Refine the organizational infrastructure to manage change

Now that you have an idea of what’s working and what can be improved, it’s time to create an organizational action plan so that your people, processes and tools meet or exceed what the customer values. This will be an ongoing process; however, be prepared that any change is likely to face resistance at first. If you want to receive widespread internal support consider answering the following questions prior to proposing any changes:

  1. Who and what needs to change?
  2. How can the people involved in the proposed change be motivated?
  3. What do they fear?
  4. Who do they listen to?

People tend to listen to those that have the most influence over the consequences and rewards that impact them. If you want to sustain any change, be clear about what specific actions need to be taken and ensure those that are influential over consequences and rewards have the tools they need to support your business needs and goals. Both customers and employees are loyal to businesses that treat them well and are clear in communicating and meeting expectations.

Please discuss your experiences using these and other tools for creating customer value by leaving a comment below.  

OPEN cardmember Nina Segura is the Founder and Engagement Manager of Metaspire Consulting; a boutique consulting firm focused on Performance Improvement from strategy to execution.

Photo credit: Vosges Haut-Chocolat, Katrina Markoff, Chicago, IL.