Is customer loyalty dead?

For decades, I’ve preached the importance of customer service and customer experience, with the goal of getting the customer to say, “I’ll be back.” And for years, top research firms such as Forrester and Gartner have confirmed that customer experience is one of the most important investments a business can make.

However, their research was done when external challenges such as Covid-19, labor shortages and supply chain issues were not affecting many companies. Now, as we enter the third year of the pandemic, the world is getting used to the idea that dealing with Covid-19 has become a way of life. But many companies are grappling with the abnormal economic challenges of the past year, including supply chain issues and labor shortages, also known as “The Great Resignation”, “The great migration” or other clever names for a very serious business issue.

This is where customer satisfaction becomes essential. The typical customer experience that keeps customers coming back is based on a quality product that works and a pleasant and easy service experience. While quality/reliability and good customer service remain key, we now need to add availablity.

First, you must have the product. Supply chain issues have crippled some businesses and, in some cases, entire industries. If you don’t have the product to sell, you don’t have sales. It’s bad for business.

Second, you need employees to sell, maintain, and operate a business. The hospitality, food and retail industries appear to have been the hardest hit, but that’s because they are the most visible to the average consumer. Many other industries are also affected by employment problems. If these challenges are not resolved, they will drive customers away. So what is the solution ?

The labor issue is not as simple as throwing lots of money at people and hoping they show up for work. A chain of restaurants offered a good salary with a signing bonus of $1,000 and another bonus of $1,000 every six months. Unfortunately, there were very few takers. That’s when they realized it was more than money. It was flexible hours and other benefits.

If we look at Target, one of the largest employers in the country, we’ll find that they’ve cracked the code for hiring and keeping great people. There’s money, benefits, flexible hours, good promotion opportunities, and good management. According to a Article from RetailWire, Target might be the best place to work in retail. Study it and other companies that do it well to learn how to keep your best employees.

The supply chain issue is a bigger challenge. Even with a fully staffed business, if you don’t have inventory, you have nothing to sell. This is where you have the chance to prove to your customer that you are more interested in taking care of them than making the sale. This is where businesses can retain their customers even more. Imagine a customer comes in and asks for something you don’t have. You have options. Here are a few to start thinking about:

1. Shame: You can say “Sorry, we don’t have what you want” and let the customer go. It’s your worst option. This is where any loyalty you might have with the customer is up for grabs. You just effectively said, “Too bad, go somewhere else.” You can only hope that the customer will come back one day.

2. Suggest alternatives: You can suggest alternatives that would work. Customers know the situation and appreciate you suggesting other ways to meet their needs. Often they are unaware of these options. I was recently at a restaurant that couldn’t get the ingredients for a dish it was known for. They created something new that was close. Customers were keen to try it, and some said the new dish tasted even better.

3. Use the contest: You can help customers find what they’re looking for in a competitor. It really proves that you are interested in taking care of them more than making money from a sale. There is a right way and a wrong way to do it. Don’t just send a client to the competitor. Consider partnering with competitors in these difficult times to take care of each other’s customers. Or buy a competitor’s product and resell it (with little or no markup) to your customer.

4. Delay purchase: It might fall under alternatives, but it’s more than that. Find a way to offer the customer a temporary solution until you have what they want to buy. For example, a manufacturer that did not have inventory implemented an extended maintenance program allowing its customers to defer the purchase of a newer product.

Whatever option you choose to use, other than the first, must come with non-negotiable behaviors. Communication is paramount. Be transparent about the issue. Set realistic expectations for when you will have inventory. Give customers continuous updates, giving them a sense of control over the situation. Be proactive with other bad news. With good communication, you let customers know that their needs don’t “fall through the cracks.”

Customer loyalty is not dead, especially for companies that manage their customer relationships properly. Take care of them today in a way that will keep them coming back tomorrow. Be more than a supplier. Become a partner. Work together on current economic issues. It bears repeating. Prove that you are more interested in taking care of the customer than taking their money. The money will follow, and in the end the customer will say, “I’ll be back.

Joseph P. Harris