Is Customer Loyalty Dead?

For decades I’ve preached the importance of customer service and CX, with a goal of getting the customer to say, “I’ll be back.” And for years, top research firms such as Forrester and Gartner have confirmed that customer experience is one of the most important investments a company can make.

However, their research was done when outside challenges such as Covid-19, labor shortages and supply chain issues weren’t plaguing many companies. Now, as we’re entering into year three of the pandemic, the world is getting used to the idea that dealing with Covid-19 has become a way of life. But many businesses are struggling with the abnormal economic challenges of the last year or so including the supply chain issues and labor shortage, also known as “The Great Resignation,” “The Great Migration” or other clever names for a very serious business problem.

This is where customer satisfaction becomes essential. The typical customer experience that gets the customer to want to return is based on a quality product that works and a service experience that is pleasant and easy. While quality/reliability and good customer service continue to be essential, we now have to add availability.

First, you must have the product. Supply chain issues have been crippling certain companies, and in some cases, entire industries. If you don’t have the product to sell, you don’t have sales. That’s bad for business.

Second, you need employees to sell, service and operate a company. The hospitality, food and retail industries seem to have been hit hardest, but that’s because they are most visible to the average consumer. There are plenty of other industries that are also being affected by employment problems. If these challenges are not resolved, they will drive customers away. So, what’s the solution?

The labor issue is not as simple as throwing a lot of money at people and hoping they show up to work. A restaurant chain was offering good pay with a $1,000 signing bonus and another $1,000 bonus every six months. Unfortunately, there were very few takers. That’s when they realized it was more than money. It was flexible hours and other benefits.

If we look at Target, one of the largest employers in the country, we’ll find that it has cracked the code to hiring and keeping great people. There are money, benefits, flexible hours, good opportunities for promotion and good management. According to a RetailWire article, Target may be the best place to work in retail. Study it and other companies doing it right to learn how to keep your best people.

The supply chain issue is a more significant challenge. Even with a fully staffed company, if you don’t have inventory, you don’t have anything to sell. This is where you get a chance to prove to your customer that you are more interested in taking care of them than you are in making the sale. This is where companies can develop even stronger customer loyalty. Imagine a customer comes in and asks for something you don’t have. You have options. Here are a few to get you started thinking:

1. Too Bad: You can say, “Sorry, we don’t have what you want,” and let the customer go. This is your worst option. Here is where any loyalty you might have with the customer is up for grabs. You just effectively said, “Too bad, go somewhere else.” You can only hope the customer comes back someday.

2. Suggest Alternatives: You can suggest alternatives that would work. Customers know the situation and appreciate it when you suggest other ways to meet their needs. Often they aren’t aware of these options. I was recently at a restaurant that couldn’t get the ingredients for a dish it was known for. They created something new that was close. Customers were willing to try it, and some said the new dish tasted even better.

3. Use the Competition: You can help customers find what they are looking for from a competitor. This really proves you’re interested in taking care of them more than making money on a sale. There is a right way and a wrong way to go about this. Don’t just send a customer to the competitor. Consider partnering with competitors in these tough times to take care of each other’s customers. Or purchase the product from a competitor and resell it (with little to no mark-up) to your customer.

4. Delay the Purchase: This could fall under alternatives, but it’s more than that. Find a way to get the customer a temporary fix until you have what they want to buy. For example, a manufacturer that didn’t have inventory put together an extended maintenance program that allowed its customers to postpone purchasing a newer product.

Whatever option you choose to use, other than the first one, it needs to come with some non-negotiable behaviors. Communication is paramount. Be transparent about the problem. Set realistic expectations for when you’ll have inventory. Give customers ongoing updates, which gives them a sense of control over the situation. Be proactive with further bad news. Through good communication, you’re letting customers know their needs are not “slipping through the cracks.”

Customer loyalty is not dead, especially for companies that manage the relationships with their customers the right way. Take care of them today in a way that will get them to come back tomorrow. Be more than a vendor. Become a partner. Work through the current economic problems together. It bears repeating. Prove you’re more interested in taking care of the customer than you are in taking their money. The money will follow, and in the end, the customer will say, “I’ll be back.”