Building lifetime customer loyalty is the primary purpose behind any good rewards program. The points should be easy to earn and be redeemable for a variety of rewards – rewards that are valuable to your customers. Members should be recognized and treated as if they were the most important customers out there – because the are! The more valued they feel, the better relationship you will be able to build with them – and that valued relationship is what will keep them coming back to your business for a lifetime.
At Zane’s Cycles, focusing on the relationships with customers has been the foundation for proven success. “We started with the fact that we were going to solve problems for customers. We were going to create this environment where they wanted to be,” says Chris Zane, founder and President of Zane’s Cycles in Branford, CT. Zane Cycles was recently featured online at Inc.com.
“When you change your thought process and go to thinking about the relationship with the customer, and the service that you’re providing the customer, then all of a sudden transactional liabilities go away,” explains Zane, who expects to wrap up the year with $21 million in sales. “If I don’t make money on one individual transaction but the customer’s satisfied and the customer’s happy, then he’ll come back over and over and over again.”
As with any entrepreneur, he has tried things that didn’t work, and one of his earliest mistakes was thinking he was in the bike business. “Over time,” Zane says, “you come to realize that you’re really not selling a specific product, you’re selling a solution to a problem.” This realization “made it so that we could recognize the value of the relationship with the customer and not just the bicycle stuff that we were selling.”
Here are some practices Zane’s Cycles has implemented to earn customer loyalty
It’s important to paint the perfect picture of possibilities for your customers. Show them what “could be” if they give you their business. Zane tells his customers that riding the bike for the first time for a 7-year-old isn’t just a minor accomplishment. It’s the “first real freedom that kid has ever experienced away from the parental grip.” He creates encounters that will make customers feel good about purchasing the products.
Don’t Nickel & Dime
Many business require extra costs for additional services or products. However, Zane decided a long time ago to stop charging for any add-on that would cost less than a dollar. “We’re looking at the lifetime value of the customer. Why ostracize someone over one or two things that might cost us money when understanding the lifetime value gives us the ability to justify it?”
Take Customer Satisfaction Seriously
Inevitably, every business runs into dissatisfied customers. Whether they’re in the right is irrelevant to the resolution you and your associates come up with. If possible, make sure your customers leave knowing you did everything you could to prevent their unhappiness, within what your policies allow. When Zane hears of a customer had a negative experience, he empowers his managers to go above and beyond to change the unhappy customer’s mind. He says a happy customer will shop at his store for years to come – and tell their friends about it. This lifetime loyalty more than makes up for the initial expense of making the customer happy.
Not every policy Zane has tried worked out. Zane has encouraged new entrepreneurs and less experienced business people to take things step by step. “Put things into place that are customer focused, that are lifetime relationship focused. Then you can tweak them,” to do what needs to be done “to move the company to the next level.”
Look Forward to The Future
Although your customer may not buy thousands of dollars worth of merchandise in one visit, their purchase is still significant. If they appreciate your services and prices, they’re bound to return. Before you know it, you’ll have made those thousands of dollars based on their loyalty alone. “How many different transactions will I have with a customer?” Zane asks. For Zane’s Cycles, the average lifetime customer brings in $12,500 in revenue. He claims, “That subsequently turns into about $5,600 in profit… I need to look at that first-time customer like a $5,600 profitable customer, and not the $2 I might make on a tube because he just happened by the store to get a flat replaced.”
In his book, Reinventing the Wheel: The Science of Creating Lifetime Customers, Chris Zane writes, “No matter what kind of business you run, you should always be in the relationship-building and experience-selling business because that’s where you find the greatest success.”