Create loyal customers by solving your competitors’ problems

Jay here.  At dinner recently, a friend talked about a service experience he had with his home theater system.  He ended the story by stating that he would “never buy anywhere else”.

Now this is one of those statements that makes a loyalty marketer perk up.  So I probed deeper and looked for the driving reasons that any company can use to improve loyalty.  Here’s the story…

About 10 years ago, my friend had purchased a home theater system at a larger retailer in the Chicago area.  That company subsequently went out of business.  He bought more components at a high end subsidiary of a big box retailer.  Let’s call them “Maverick”.  Everything was fine.

One day he found that he had problems with his TV.  He called Maverick and explained his issue.  He got “the runaround”.  We’ve all experienced it.  No one took “ownership” of his issue and no one made him feel confident in their advice.  It was days before he could get anyone competent on the phone.  They suggested he replace the TV because it was ten years old.  The back and forth went on for weeks.

My friend finally asked to have a technician come out to look at it, and they wanted to charge $150 for the visit and scheduling was not convenient.  He had enough.  So he called another local electronics retailer, Abt Electronics.  They are a family-owned one location business that is very popular in the Chicago area.  Abt answered the phone quickly and listened to his issue.  My friend can’t remember if they asked whether he had purchased the items at Abt, but felt that it didn’t matter to them.  They simply wanted to solve his problem.

After trying to solve it over the phone, Abt sent out two very qualified home theater technicians.  The visit charge was much lower than the $150 Maverick wanted to charge.  They poked around and found a wire that had come loose behind the TV.   Boom.  Done.  Problem solved.

Now, we have all heard and experienced these stories and I won’t waste your time telling you what you already know about how Maverick can improve.  I’m interested in loyalty and how specific strategies and practices can attract and retain customers.  Here’s what this story reinforces about customer loyalty:

  1. Customer service is an investment, not a cost. Most companies look at post-sale service as a necessary evil.  Smart companies understand it’s an opportunity.  What better way to be the hero?  Loyalty marketers know the old saying that “a customer is more likely to remain loyal after you fix a problem than if they did not have a problem at all.”  However, servicing prospects who bought from competitors – even if it means an hour on the phone and no revenue – may be even more valuable.  Not only do you create REAL loyalty, but you steal a customer from your competition.  Plus, you create positive word of mouth impressions.
  2. Transparency sells. For most products and just about all services, the biggest fear consumers have is that they are getting ripped off.  (Sorry, I know that’s a broad term, but it’s the best I could come up with.)  If you want someone to like you (i.e. convert and remain loyal), be honest and show that you have nothing to hide.  My friend described the experience with Abt as being “very clean”.  He said they spoke clearly and in words he understood.  They explained things.  They were patient and asked questions that made sense.  They showed through their actions that they were trying to help him.
  3. Align your interests. One of the best ways a service person can alleviate the “rip off” fear is to show the customer that your interests are aligned.  In the story above, Maverick quickly suggested my friend buy a new TV.  If that’s what my friend wanted, he would have called sales, not service.  He wanted his current TV to work.  He felt the interests of Maverick were different.  They wanted him to either buy something or go away.  Abt didn’t want to sell him anything.  They wanted to solve his problem.  They understood that if they were aligned with him on this service interest, he would align with them for future purchases.
  4. Be consistent. The three observations above must be ingrained in the culture of an organization.  For these to have any affect, they need to be universal, not part of the genetic makeup of a few enlightened employees.  Training is paramount.  This philosophy needs to be conscious and embraced throughout the company.  And be patient.  Like all forms of real loyalty, this strategy take time to pay off.  But it will.
  5. Hire right. No further explanation needed.  Seriously, you just need to have the right people.  You will know one when you see one.  When you do, get out the cloning tools.

So…the next time someone calls you for help with a product or service they didn’t purchase from you, what are you going to do?

Jay Weinberg (jay@thejaygroup.com)

For more info about customer loyalty, check out our resource center.

FYI…Abt’s Yelp page:  http://www.yelp.com/biz/abt-electronics-glenview-3

One thought on “Create loyal customers by solving your competitors’ problems

  1. Hi Jay,

    Very nice and relevant post.
    Lot of common sense but generally get swept under the carpet in the urgent and aggressive sales modes that many sales teams follow.

    Regards

    Anand

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s