register now and join thousands of other Corporate Finance, Accounting, and Treasury professionals. Learn more about Proformative.
A Mug, Dry Cleaning, and Customer Loyalty
Posted by (CFO), Feb 28, 2010, 21:54 PM
This is the tale of a mug, dry cleaning, and customer loyalty...Earlier today I pulled one of my favorite mugs from the cupboard and filled it with water. I looked at it and remembered it was a gift from a company that has helped me in my business. I couldn't help but think of all the times I had picked up the cup and not thought of this company. In a way, I was taking them for granted. I even found myself wondering if this was really the most effective use of their resources and if it would actually make me any more or less loyal to them in terms of my ongoing patronage of their services.
Two weeks ago I had a horrible experience with a local dry cleaning operation. I will spare you the details, but when the words of "three strikes and you're out" come out of my mouth it cannot mean they were exceeding or even meeting my expectations! After several days and all problems were resolved I picked up the dry cleaning and was prepared to let them know they had lost my business forever. Just before I could express it the store manager said: "For all the trouble we put you through I'm going to credit your account for the cost of this order." She effectively defused me and I graciously accepted the credit. And then I realized how brilliant she was.
Notice that the store manager did not waive the costs of my current order, but she credited my account for future orders. I will have to continue to go there if I ever want to use the credit, which may give them one or two more opportunities to keep my business. Brilliant!
So what do these two stories have to do with each other? Sure giving your customers a mug with your logo on it is nice and maybe even appropriate. Marketers might call it great branding as they think of all the people who might see me use it, including my 3 and 5 year-olds who have no idea what the company even does. But is it really effective? Is it going to keep me coming back for more? My argument is probably not, especially since I have used it enough to where I don't even think of the company when I pick it up.
Even though I had a terrible experience with the dry cleaner, I am going back so I can use my credit. And, if they do a good job, they will likely keep my business. Now that is an effective use of company resources to engender loyalty.
So, what is the most effective use of your resources to create customer loyalty?
- customer loyalty
- 194 reads
Comments
Ongoing Quality
A credit is great and makes up for a PAST error, but does it give you any confidence about continuing to use them? What I want to hear is a) acknowledgment of the problem and b) what they are doing to prevent it going forward. Without this, I would just expect the same problems to continue, and who wants to put up with that. My loyalty goes 1st to companies that do a consistently good job and 2nd to the ones that show they are striving to do better (yes, I will tolerate some problems in order to support someone who is working to build a good business). Those that do a consistently poor job and show no signs of improvement don't get my business, regardless of marketing/credits. I might go back to use up a credit, but I'm gone after the first problem.
Yeah, the Dry Cleaner fits that bill
Mark,
I did leave out the details. I have been using this dry cleaning service for over two years and have never had a problem until this one. I was part of a "perfect storm" of events including a driving quitting, an equipment failure at their plant, and a computer crash.
They fit your description of consistent, other than this mis-hap, although I am still unsure of their commitment to the future. I want to see how they handle the next one or two and see if they return to form. If they do, they will likely keep my business.
Customer Service is #1
I agree with Mark that one of the most important things you can do to resolve a customer complaint is to accknowledge the problem. I would add that acknowledging the problem should also include an apology. I'm sorry can go a long way towards calming an irate customer (or even a boss).
The offer of a future credit was a good idea but might only work with someone who was already a regular customer. After receiving a sandwich and paying for it at a local sandwich shop, the cashier apologized for having run out of cheese and told me he would give me a discount on my order the next time. I remember thinking to myself as I left the shop, "Buddy, there 'aint gonna be a next time."