To keep customers and clients long-term, you need to have the right systems in place to manage customer expectations and respond to problems in a timely fashion. Let’s look at two key issues of client management: customer satisfaction and customer loyalty.

Satisfaction and Loyalty Defined

Customer satisfaction is how happy your customers are with your solutions and your pre-sales and ongoing support. Do they feel they got their money’s worth? Did you resolve any issues or concerns in a timely manner? One way to measure satisfaction is to look at how many people cancel your service, stop doing business with you, or drop out of your program.

Customer loyalty is what your customers think about you and your services. How likely are they to purchase from you again? Will they refer business to you?

Why Customer Loyalty Matters

Customer satisfaction is a good measure of how you deliver your products and service, but just because your clients were “satisfied” with the results they received doesn’t mean they will purchase from you again or refer business to you. Here are three reasons why customer loyalty is important.

1. Loyal customers are repeat customers. It is far easier to sell to existing customers than to continuously attract new clients. Your existing customers already know what to expect from your solutions and the advantages of doing business with you.
   
   
2. Loyal customers buy more. Most people are hesitant to make major purchases. They want to try out your low-cost option before they spend lots of money with you. As they try out your products and services, they evaluate how satisfied they are with your delivery, results and support. If they like the provided solution, they are much more likely to spend more money with you.
   
   
3. Loyal customers refer business. As you build rapport and trust with your customer, you also build relationships with your customer’s family, friends and co-workers.

How to Build Customer Loyalty

Your current customers are the lifeblood of your business. Here are six tips to keep them coming back.

1. Create a positive first impression. Loyalty begins with a first impression. If your prospect has a negative interaction with you, it will impact all future interactions. Be professional and polite.
   
   
2. Listen. What are prospects and clients telling you? Do they feel you understand their problems and concerns? Don’t suggest your services until you have a clear understanding of what your prospects and clients want. Be empathetic and honest about whether your solutions can help.
   
   
3. Figure out what matters most. What is your client’s top priority? What does “satisfaction” mean to them? What are their expectations? Your prospects’ and clients’ expectations and priorities can change over time, so make sure you listen and ask for clarification.
   
   
4. Respond promptly. Whenever someone calls or emails, respond with in two business hours maximum. Also, consider creating an online “help desk” to resolve common customer issues when you are not available.
   
   
5. Resolve complaints quickly. Inevitably, if you work with someone long-term, you will face issues and obstacles. Sometimes, they will want to return a product or change the terms of the delivered service. Have a fair change or cancellation policy in place so customers know what to expect (such as a project delay or a cancellation fee).
   
   
6. Learn why customers left. If you have past customers who have stopped doing business with you, find out why. Many people won’t switch vendors solely because of price. Often, they switch because they are unhappy with your service or don’t feel valued.

Customer loyalty develops over time and is based on how satisfied customers are with your products and services. By providing high-quality solutions and great customer service, you will build much more loyal customers.

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Author: Bob Burg
Publisher: McGraw-Hill
Year Published: 2005
Rating:
Buy From Amazon.com

Finding that next person to do business with can be a challenge for salespeople and entrepreneurs alike. There’s nothing worse than constantly worrying where your next rent or mortgage payment will come from or how you’ll pay your employees this month.

That’s why referrals are so coveted. When prospects are referred, they tend to come to you later in their buying process and are virtually sold on working with you. After all, someone they trust recommended you, so you must be good. In Endless Referrals, Bob Burg lays out a system for cultivating a business based primarily on referrals so you never have to worry who you’ll be working with next.

Burg’s system is based on networking, which he describes as “the cultivating of mutually beneficial, give-and-take, win-win relationships.” Despite the business clichés, Burg’s system is actually very practical. He notes that networking has nothing to do with aggressive, sales lines like “Gimme a call – I’ll cut you a deal” that people use when they push business cards into your hands. That’s hard selling, not networking, and that doesn’t work.

Networking starts with your sphere of influence – the 250 people you know directly or indirectly that you interact with. They can include anyone from immediate family members to casual acquaintances to your hair dresser to your mailman. And everyone on your list also knows about 250 more people. If you doubt you know 250 people, Burg has you start with exercises to prove to yourself that you do indeed know about that many.

Why is focusing on a sphere of influence so important? Because today’s buyers want to do business with people they know, like, and trust. Pushy sales tactics that worked in the past don’t work in today’s internet economy where virtually any information is available through a quick Google search. Today, buyers want relationships with the people they do business with. As Burg states “All things being equal, people will do business with, and refer business to people they know, like and trust.” Of course, if things aren’t equal, you won’t get the business regardless, so you still need an excellent product or service at a good price.

The next step to building a referral business is to focus on developing a system – “the process of predictably achieving a goal, based on a logical and specific set of how-to principles.” That generally means introducing yourself or having someone introduce you to the person you’d like to meet and then focusing the conversation on her and her business. Most people like to talk about themselves, so you give them the opportunity to do so by asking questions that make them want to keep talking.

Burg likens this to how famous talk show hosts ask open ended questions to keep the dialog flowing. If you ever watch Oprah or Barbara Walters, they always have something new to ask that keeps their guests engaged in the conversation. Burg provides a list of 10 questions as examples to use including standards like “how did you get started in the widget business” and “what do you see as the coming trends in the widget business” – questions you can easily adapt to any situation that help you learn more about the person you’re talking to, build rapport, and keep it interesting. You can adapt these questions to family life, recreation, or important issues and concerns in that person’s life such as charity, religion, or politics (so long as you don’t argue with them – just listen to what they have to say.)

Then, instead of pitching your services, you ask the powerful question “How can I know if someone I’m speaking to is a good prospect for you?” Just by asking, you separate yourself from everyone else and demonstrate that you are concerned about her success.

Burg provides a wealth of suggestions on how to meet people at Chamber of Commerce or other professional networking events, how to craft a good Personal Benefits Statement that clearly describes what you do and how it benefits others and how to follow up so that the other person wants to stay in touch. Burg also emphasizes the sound advice “The best way to get business and referrals is to give business and give referrals.” By giving a referral, you show the person that you’re thinking about them. They’ll appreciate that and realize that if they return the favor, you’ll probably continue to give them business.

What I most liked about the book was that Burg writes like he genuinely cares about the people he interacts with. This isn’t a book about how to subtly manipulate people. It’s a system that has others’ concerns in mind. You benefit from the system because you are focused on giving to others and building relationships with them. The byproduct is that others get to know you, like you and trust you so they feel comfortable referring business your way.

Burg also is quick to give credit to others. He constantly refers to other books, authors, and people to support his statements rather than writing in a know-it-all tone so common in business books.

This book is a must read for anyone looking to generate more referrals to grow their business. The book is laid out in 18 chapters and is packed with useful tips and practical advice. I would highly recommend it to all professional service providers, sales people, and anyone else who wants to grow their business through referrals.

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