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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!

Frequent buyer programs are frequently misdefined as loyalty programs.   Zealotry is not about “frequency of purchase”.  Your best Zealots may not be heavy spenders or most frequent customers.  But, they remain extremely valuable in terms of referral.   True loyalty is earned by the brand, not bought by frequency of purchase.  Read on …

From Reveries.com

Let’s just get this straight once and for all: There is no such thing as brand loyalty. Each of us likes certain brands and may even love them. We may buy them most of the time, or perhaps even every time. But the idea that we have a true bond with any brand, like the kind of commitment we have in real life with our friends and family, is a farce. This doesn’t mean we shouldn’t try to create that kind of loyalty; most of us tell ourselves that’s the end game and it’s always important to aim high.

What it does mean is that we should take a harder look at how we go about creating what we call loyalty. We need to admit that coupons, discounts, points and prizes are just beanbags. We ought to spend more time thinking about the stuff that really matters to people, and serve that up each and every day.

That means products and services that really and truly solve problems and help people live happier lives. Providing a helping hand when someone really needs it, and smiling because we truly mean it. It’s not because the customer is always right (nobody’s perfect). It’s because it’s up to us to make it right. We may not get the same kind of loyalty we enjoy with our family and friends, but we’ll have more fun, and so will everyone else. Loyalty is what we make it. Your thoughts? ~ Tim Manners, editor.

Let me start by saying that I’m a Zealot for Publix, so posting on Kroger is certainly not something I’ll plan to do often. However, this article on loyalty got my attention.

They say the cost to acquire a new customer is five to ten times more than keeping a current customer. Kroger has done the math and dedicated themselves to creating loyal customers by creating more than people just looking for a discount.

Read the below excerpt from Tim Manner’s “reveries” blog. What do you think? Is Kroger creating loyal customers? Are they building Zealots for their brand?

“We don’t need to draw in others who don’t shop with us because the biggest opportunity is with our loyal customers,” says Kroger chief David Dillon in a Cincinnati Enquirer article by Laura Braverman (10/8/09). David says Kroger realized this almost ten years ago, and has been on a path ever since “to put the customer first, and permanently.” Most famously, Kroger engaged with London-based dunnhumby to build a database of 45 million shoppers, using the data to “create advertising campaigns and provide targeted coupons to its most loyal customers.”

Click here to read the full story

For more on Zealotry Marketing, visit us at GuestRelationsMarketing.com

What to do to follow through effectively with customers to create zealotry?

1. Collect data and use it.

First rule of effective marketing is to build a database of your prospects and customers. The more information collected the better. Analyse it. Learn from it and shape your subsequent tactics.

2. Personalize it.

No eblasts. This guest willingly provided you with specific details of their preferences and background. Approach them accordingly.

3. Integrate it.

The worst thing as a customer is to come back for another visit/transaction and have to repeat the whole dialog like its your first-time. Make the data you collected available to all employees. “Nice to see you again, Mr. Tyre. How is that software program working out?”

4. Respond in kind.

If you have asked for a response – survey for instance, or if a note or phone call has been made, then respond. Net Promoter suggests your top people should be responding to the negative comments, not merely those that are gushing praises. Addressing negative situations helps prevent negative word-of-mouth and often gains the respect of the person.

5. Don’t give them another card.

Promotional and loyalty companies will no doubt disagree, but do consumers really want another “loyalty/frequency” card to keep up with? It has become me-too marketing and most often has a negative payout. Again, a well-planned and executed database and directed strategy can accomplish more, at less cost and without requiring your customer to jump through hoops in order to be delighted.

6. Announced “loyalty” rewards are expected. Unannounced rewards delight.

An announced/promoted loyalty program is done so to help make the purchase in the first place. An unannounced reward is more of a true “thank you” for your loyalty. Is your objective one of discounting to gain multiple purchases or to thank your guest for attending, purchasing or sharing their experience with others?

Trip Advisor boasts 25 million reviews.  They claim that their 25 million monthly visitors are a loyal and passionate community.

But, are the reviews merely a way in the door to create advertising viewers? Critics, including us, have long maintained that Trip Advisor content is suspect and that it is being manipulated by properties themselves, allows reviews of those unqualified and has operated on the premise “more is better.”

Now, long-time travel reviewer Arthur Frommer has called out Trip Advisor.  Based on warnings on certain reviews by Trip Advisor itself, Frommer has said Trip Advisor is basically done.  Certainly, their brand credibility, as witnessed by their own actions, is now under serious scrutiny.   A core tenet of any brand is authenticity. When that is violated, you are rocking the very foundation of the company.   Read more …

Most companies are indeed confused about what is customer loyalty. Most metrics regarding loyalty are simply tracking behavior and not intent.

For instance, you can be a “captive” customer because there are limited options, yet data describes you as a loyal customer.  As noted in the linked article, many companies buy a more frequent customer through discounting. As soon as the deals stop, so does the buying from this particular customer.

Any definition of customer loyalty has to include attitudinal issues. “Will they buy when there is direct competition?”  “Will they buy without some sort of deal in   place?” “Do they sway their friends to visit your business versus the competition across the street?” “Do they actively want to learn more about your business?”

Harvard Business Review has noted that the most profitable brands have the highest concentration of customer referrals. “How are you measuring that?”

Check out this article  http://www.reveries.com/profitable-loyalists

“In this economy” must surely be the phrase of the year, but Major League Baseball understands it to be true. With falling ticket sales and decreased attendance, they are getting back to the basics and talking to the true, loyal, long-time fans of the sport – their Zealots.

The Wall Street Journal published a wonderful look today (Full Article Here – Loyal Fans Are Batting Cleanup) at the actions MLB is taking across the board to focus on the long-term strategy of recognizing the Zealots for their brand, actions that don’t just include price cuts, but also include value-added benefits like early entrance to games and invites to exclusive player gatherings.  “In an age of fallen circumstances and concerns about revenue, major-league baseball teams are training their attention on a long-overlooked and increasingly endangered species — those unfailingly loyal fans who buy tickets for every game,” states the WSJ.

It is true that loyal fans are often those that all brands most often overlook, especially in the “good times” when they can more afford to so. So brands reach for other targets, the short-term money makers who are true loyalists but will play ball (pardon the pun) for the time being.  “In the past, when attendance was rising, the clubs’ marketing departments focused on big-dollar sales, such as corporate suites and stadium-naming rights … Suddenly, clubs remembered that nobody matters more than loyal fan.” It is the Zealots that talk about baseball, that come to every game they can, that immerse themselves in the details of their team and share with their friends. And, at the end of the day – MLB teams are still in the entertainment business.

There comes a point when selling all their tickets to un-interested fans who don’t actually attend games or support their team starts to detract as a whole from the brand experience, from the sport of baseball overall. Building more Zealots for the teams and sport of baseball ensures long-term success for the brand as a whole.

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Guest Relations Marketing
Transforming Prospects to Guests, and Guests to Zealots

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