What is Customer Loyalty and can your business benefit?
Let me outline an example I came across a few years ago.
A bank was spending a substantial sum in advertising its “Customer Loyalty” program. Under this program NEW customers were offered additional interest on deposited funds. Existing customers adding new funds to their accounts did not benefit from this program.
Here is one definition of “Customer Loyalty” from BusinessDictionary.com:
‘Likelihood of previous customers to continue to buy from a specific organization. Great attention is given to marketing and customer service to retain current customers by increasing their customer loyalty. Organizations employ loyalty programs which reward customers for repeat business.’
After having the potential misuse of the phrase pointed out to the bank, including the fact it was ‘existing’ customer deposits and the earnings from them that funded this program for NEW customers, the bank elected to continue its program unchanged.
Shortly thereafter, a group of “existing” customers closed their accounts.
Most business people know that it is more costly to acquire new customers, so it is critical to keep the “existing” customers coming back. This is even more important if your business depends on their deposits.
Words have meaning. Are you using WORDS appropriately?
Steve Koenig, SCORE Counselor
Visit us at: www.scoresouthflorida.net