One of my favorite things to harp on is a more strategic approach to building customer loyalty.
There are some key things it requires:
- A DNA shift in your company
- A solution rather than product/service mindset
- Striking the balance between aggressive and predatory practices
Innovation plays a big part -- and companies which bet big -- like Apple has with the Genius Bar at its large scale stores, can also win big.
By way of personal experience, in one of our companies, we began to realize that more than 50% of customers came through to our support team for setup help about 1 week after they purchased a software product.
Looking across our range of products and accompanying services, we realized that the setup help actually represented a key part of our solution (rather than fitting with our support function).
It was the frequency of that interaction that forced us to more closely manage the immediate post sale period and incorporate the support offering into our marketing materials.
Another similar example arises in the retail business in the form of return policies.
Many companies take a remarkably aggressive approach around product returns -- likely because of abuse by customers of more lenient policies.
Innovation can play a role here as Neiman Marcus demonstrated with its recent change to its return policy
Recognizing that customers appreciated, valued and in some cases needed a return period as part of their retail shopping experience, Neiman was seeking a way to balance out its own internal inventory challenges from returns of merchandise that were more than several months post sale
In what we would call an innovative move, Neiman managed to blend both the needs of the customer and internal constraints into a simple but uncommon return policy.
Rather, than simply shortening its returns period, the company instead developed a tiered refund amount structure where by the customers would continue to enjoy a 6 month return period but would receive a declining percentage of the purchase price as a refund over the course of the 6 month period.
As companies like Amex and Apple have demonstrated, when a company gets closer to providing a complete solution for customers -- which gets much closer than competitors to matching their needs -- then their willingness to alter their spending limits to accommodate a significant price difference also increases.