Baseline Magazine - September 2009

Inspire Your Customers
COMPANIES THAT HAVE DEVELOPED EXCEPTIONAL CUSTOMER LOYALTY WILL
THRIVE DESPITE THE CURRENT ECONOMIC TURMOIL. BY JIM CHAMPY

I’VE ALWAYS ADMIRED THE OPTIMISM of economist Paul Samuelson. When asked about the impact of an impending monetary crisis, Samuelson replied, “The sun will rise tomorrow, and the bridges will continue to bear traffic.”

Despite the current world financial crisis, markets will return and customers will come back. Customers may change their buying habits and demand more value in what they buy, but the challenge for companies will be to keep customers coming back.

In researching my latest book, INSPIRE! Why Customers Come Back (FT Press, 2009), I found many examples of companies that have developed exceptional customer loyalty. Not only will these companies survive the current crisis; they will also grow right through it.

Like most business challenges, there is no single formula for maintaining customer loyalty, but the smart companies I’ve studied engage their customers by displaying a higher sense of purpose and being authentic in all they do.

What makes these companies special is their fidelity to long-expressed beliefs. They consistently uphold their own— and their customers’—values in their products, services and actions. These businesses adopt a mix of strategies to inspire their customers. Here are some examples of how they do it.

Launch a crusade with broad appeal. Traditionally, companies have thought of marketing in terms of a campaign: Define your product, segment your audience, appeal to each segment, craft the messages, select the advertising medium and go for the

customer. That approach is not sufficient to inspire customers today.

You must think in terms of mutual interests and a common cause, not the hype and spin of a conventional campaign. You must be seen as an advocate for goods and services truly worth buying and using. You must promise value and excellence—and deliver on that promise. It’s not a campaign. It’s a crusade.

Consumer companies like Stonyfield Yogurt and Honest Tea come to mind. Stonyfield is committed to the environment and respects the environment in all that it does. Honest Tea has engaged customers on a platform of good health, rejecting the notion that beverages require 10 teaspoons of sugar or chemical additives for good taste. The firm uses high-grade teas to produce high-quality products with little or no sugar additives. These two companies don’t just sell; they inspire their customers.

Deliver layered benefits. Different customers have different needs and expectations. So layer the benefits that you deliver—especially if you are in a services business.

Zipcar does just that. This innovative company, which says it is in the business of “shared ownership” of automobiles, places its cars in local neighborhoods. After “joining” Zipcar for a minimal fee, members are charged on an hourly basis for the use of a car.

A user-friendly Web site enables a member to reserve a car. The reservation travels directly to the car’s on-board computer via a satellite link, and the member flashes his or her membership card to open the reserved car’s door. Once the member is done

with the car, he or she returns it to its neighborhood space.

Zipcar initially offered Volkswagen Beetles and Honda Civics. Today, it offers Mini Coopers, Prius hybrids and BMWs. From the customer’s perspective, Zipcar keeps improving its business model.

Leverage a trusted channel. A channel partner can add to or detract from a customer experience. Auto dealers come to mind. Many customers select a car based on the quality of both the vehicle and the dealer service and experience. But companies don’t always pay enough attention to their channel partners.

Inspired customers enjoy quality in both the product they buy and their purchase experience. Consider Member Health, which leveraged its relationships with several thousand local pharmacies to enroll more than 450,000 members in its prescription benefits program.

The company’s management understands that many people, particularly in rural America, turn to their pharmacist first for health care advice. So Member Health has processes and programs that benefit both patients and pharmacists. It even enables participating pharmacies to give some drugs away for free.

Although Stonyfield Yogurt, Honest Tea, Zipcar and Member Health are very different companies, they all demonstrate how you can inspire customers by sharing their values and building those values into the products and services your company delivers. 3