Focusing On Your Customer

Studies show that the longer customers are loyal, the more profitable they become. Why? The answer has to do with what are known as the three Rs of customer loyalty:

• Retention
• Related sales
• Referrals

In fact, the original product may generate a minor profit compared to related sales over time. For example, an elevator company's installed elevator is only the first of a long stream of revenue from service contracts.

Many software companies sell add-ons, new releases, and extra features that enhance and upgrade the original software. Costs are reduced, because new sales to existing customers require less marketing, no new credit checks, less paperwork, and less time. Furthermore, loyal customers are often less sensitive to price than new customers.

Outline

• The Economic Facts about Customers and Loyalty
• Targeting the Right Customers
• How Does Customer Loyalty Affect Profitability?
• Building Employee Capability
• Knowing the Customer
• Delivering Value

Steps for Focusing On Your Customer

• Steps to Calculate the Lifetime Value of a Customer
• Steps for Developing Listening Posts
• Steps for Improving Listening Posts
• Steps for Mapping Out a Service Process
• Steps for Achieving Excellent Service Recovery
• Steps for Creating a Customer-Focused Design Proces s

Tools & Forms

• The Lifetime Value of a Customer
• Customer Value Equation Worksheet
• Basic Employee Turnover Calculator
• Employee Turnover Calculator
• Customer Feedback Chart
• Developing Sa tisfaction Goals for Internal and External Customers
• Improving a Work Process Worksheet
• Service Quality Survey

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