Enhancing Customer Loyalty: Four Priorities for Marketing Leadership

For marketers in IT services and solutions, loyal customers have always meant faster sales cycles, greater lifetime value, easier acceptance of premium pricing, and all-important references and referrals. In short, as loyalty guru Fred Reichheld has argued in multiple books (and in a recent E-ZINE interview), loyal customers are the most important driver of profitable growth.

Today, however, the loyalty issue has become even more central to marketing strategy. For one thing, loyalty itself has become more important. Along with the traditional reasons, two new realities in particular have put a greater premium on loyalty:

• Globalization and the corresponding need for deeper, more reliable insight into a faster-changing marketplace
• The growing importance of co-creating new solutions with customers

In both of these areas, companies with truly loyal customers are much better positioned to succeed.

Unfortunately, as customer expectations rise and market alternatives proliferate, its perhaps not surprising that loyalty scores are going down. According to a recent survey from CIO Insight, CIOs today are “disgruntled and disappointed” with vendor performance. And ITSMA’s own research with the CIO Executive Council last spring showed that a vast majority of CIOs believe marketers over promise and under deliver.

It’s not as though marketers are ignoring the challenge. Indeed, ITSMA members and other top firms are investing in a wide range of customer relationship, satisfaction, and loyalty-oriented programs, from new monitoring initiatives and reference management to key account planning, executive forums, and advisory councils. Too often, though, such programs suffer from disconnected management and a one-sided approach. If customers are hit from multiple directions with fragmented programs ostensibly designed to help them, the effect can be more negative than positive. And if most of those programs are focused more on “getting” value from customers than on giving value to them, as is typically the case, their positive impact will be severely limited.

The foundation of loyalty, of course, is excellent services and solutions. Without that, the rest hardly matters. But delivery excellence is table stakes. Marketers need to do what they can to ensure it, but they should also supplement delivery excellence with four key initiatives:

1. Deliver value at every touchpoint. Marketers should take the lead in auditing the entire customer experience, from initial pre-sales contacts through the sales cycle into delivery and through post-delivery engagement. Consider all the touchpoints from all relevant groups, including sales, marketing, delivery, accounting, customer service, and even partners, if they’re relevant. Are you helping customers improve their business at every touchpoint? Are you investing enough in thought leadership that provides useful insight for customers and prospects, rather than simply promotional material or events?
2. Cultivate key accounts and individuals. Customer satisfaction and loyalty programs often focus on identifying and reacting to problems and complaints. Surely this is important; you want to keep customers happy and minimize the risk of negative word of mouth. But it is also important to focus on your best and most satisfied customers, too, cultivating them further to support greater market insight, advocacy, and co-creation. Reference programs are a key initiative here: Are you providing enough value to sustain your best customers’ excitement about participation? Are you building executive-level relationships to foster ongoing loyalty and advocacy on your behalf?
3. Leverage communities. Customers are often more interested in talking with their peers than with you. Investing in community-oriented initiatives can make a substantial contribution to improved customer loyalty by facilitating meaningful interaction across your customer base. Your customers benefit from peer insight and connections; you benefit as well from the halo effect, insight, and relationships. Well-planned events, councils, and user groups have often done this, but the intensity of competition for your customers’ time suggests that the bar is quite high for effective community building these days. Are you tapping into the newer online conversations and social networks? Have you refreshed your executive council and event programs to ensure that they are providing real ongoing value to the right customers?
4. Integrate programs to improve the total experience. ITSMA research suggests that those marketing organizations with authority over customer satisfaction and loyalty have a more significant impact on the business than those that do not have such authority. Having this authority is a critical step toward a more integrated approach that maximizes the benefits of multiple initiatives and minimizes confusion and cross-purpose. Do you have a program office and director—ideally at a senior level—that can help ensure that satisfaction research, account planning, relationship marketing, customer councils, and the like are all moving in the same direction and not stepping on each others’ or the customers’ toes?

Ensuring customer loyalty in today’s market is not easy, but the rewards are well worth the investment. Doing this well requires careful attention to the entire customer experience and an intense focus on delivering real value to customers at every stage of the relationship. Marketers have a great opportunity to play a leadership role on the loyalty issue, thereby making a strong contribution to both their own role within the business as well as to the business overall.

‘

Comments are closed.

ITSMA specializes in helping companies market and sell services and solutions more effectively. We work with the world's leading technology, communications, and professional services providers to generate increased demand, strengthen customer relationships, and improve brand differentiation. ITSMA annual program clients include business leaders such as AT&T, Cisco, Deloitte, EMC, Fujitsu, Hewlett-Packard, IBM, Microsoft, SAP, and Tata Consultancy Services, among others. Our comprehensive research, consulting, and training on topics including ITSMA Account-Based Marketing℠, Brand Positioning, and Solutions Development provide the insight and experience companies need to improve business results. ITSMA is based near Boston, and has offices in London and Tokyo. Learn more at www.itsma.com.