Much is written about dealing with customers at the front end of a relationship or transaction. Now there is evidence that an open and liberal return policy also has a tangible payback.

Most people have a built-in “radar” to detect how someone feels towards them. Seemingly insignificant words or gestures can have a large impact. For example, with a return policy based on the goal of minimizing fraud, customers will emotionally detect that they are not trusted. Conversely, if the company’s underlying assumption is that customers are honest and fair – and that when they need to return something they have a genuine problem – then their policy will make customers feel cared for and valued.

A research study recently published in the Journal of Marketing reflects the longer-term financial impact of return policies. And it’s not good for those strict policies. Customers who paid for the return of a defective or unwanted items decreased subsequent spending at that retailer by 75 – 100%. On the other hand, retailers who offered free returns to their customers saw subsequent spending by those customers at 158% – 457% of pre-return levels.

Short-term actions have long-term consequences to your Zealots. Zealotry actions should demonstrate ongoing “appreciation” to customers.

Let’s think about typical marketing examples that do just the opposite. Nickel-and-dime charges. Fine print exceptions. Exaggerated promises. In every research group we’ve conducted, participants voice their disdain over such practices. If the goal is building loyalty, ignoring these fundamental issues while spending heavily on so-called loyalty programs is not only wasted dollars, it is counter-productive.

Julie Schlack of Communispace says it well: “True loyalty exists when a company has made its customers feel safe, appreciated and smart. These emotions are the anchors that will keep your customers close whenever the next guy comes along with a better deal.”

Guest Relations Marketing has long advocated a more personal, authentic and cost effective approach to igniting your “Zealots.” Coming in January, we will be launching a program that any company can implement. An authentic alternative to traditional loyalty programs. One that builds loyalty the right way.   Stay tuned for ZealStorm. Get ready to ignite your Zealots in 2013!

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