“Save one customer and pay for the program many times over.”

The Loyalty Rating

Suppose you really knew the state of affairs in your company; that is, which customers were likely to renew, which were not likely to renew, and which were on the fence? That would be powerful information wouldn’t it?  From that point you could set about to identify the source of the problems and correct them before contract renewal time.

 Loyal customers are terrific to have. They tend to buy more and keep buying more. They are less costly to serve, they tell their friends about the great supplier they have. They become the company’s marketing department. What is needed is a way to identify the loyal customers and subsequently those who are not loyal. We need a measurement of loyalty. Let’s call this the Loyalty Rating. From there we start building loyalty.

 Customer Satisfaction Does Not Equate to Loyalty

 Companies are fond of calling their customers and surveying them for customer satisfaction. What does it mean? We are not sure. We certainly don’t think it means they are loyal. The surveys are often complicated, vague, confusing to the customer, difficult to understand and, perhaps, statistically unreliable. Consequently these survey results may not be taken seriously.

 There is an answer. Research conducted regarding the loyalty of customers indicates that there is one question, which when answered correctly, would indicate a customer’s inclination to be loyal. Furthermore, research in one case showed that loyal customers are three times more likely to repurchase than those who are not loyal.

 Proposal

 We propose to sample your customer data base; that is, call your customers, ask them a question and establish a Loyalty Rating. The Loyalty Rating measures customers as Advocates, Neutral, or Critics of your company. Action plans are devised to move Critics into the Neutral group and Neutrals into the Advocate group. Continuous monthly sampling would tell whether ongoing actions are having a positive effect on loyalty.

 The Loyalty Rating can be representative of your entire company. Or, we could establish a Loyalty Rating for each route. We think this is a better idea. Research shows that 70% of customers who quit do so because of having been treated indifferently by front line employees. It is a well known truth that the Route Sales Representative (RSR) is the front line employee who has the most influence with a customer. If the customer likes the RSR, he can make mistakes and everything is still okay. If the customer does not like the RSR and he makes a mistake, you have a problem.

 By establishing a Loyalty Rating by route we can identify a cause effect relationship between the Loyalty Rating and the RSR. The company can engage the RSR with new training and special action plans to bring about different and better results. Also, the customers who are critics can be identified for special attention.

Benefits

 1.                  You discover the loyalty make up of your customers. You will know the size of the Advocate, Neutral and Critic groups.

2.                  You will have the information to problem solve. A User Guide will help you to track down the sources of disloyalty and eliminate them.

3.                  You will be able to hold managers and RSR’s accountable for loyalty. You can’t manage what you don’t measure! No one has ever before been able to track the RSR’s relationship with a customer. This program does just that.

4.                  You will be able to grow the top line. One could make the case that you cannot grow the company without a strong Advocate group.

5.                  You will be able to grow the bottom line. Loyal customers are much more profitable than disloyal customers.

 Third Party Measurement

 Research shows that a certain amount of bias is introduced into the answers of survey questions when there is no independence between the person asking the question and the person answering the question. The fox is guarding the chicken coop so to speak. Our independent surveyors are professionally trained to extract the most reliable information from your customer. We will hotline you to any extra information the customer volunteers about your service. The surveys are professionally executed and well received by the customers.

 Arrangements

 We offer several levels of service. These are:

 1.          Monthly Subscription – Each month we will sample 40 customers each from a predetermined number of routes, usually one or two. We will continue this monthly survey until all routes are measured, at which time the process will repeat itself for ongoing tracking.

Next we will forward to you the results which would be:

             A.        Number of customers submitted

             B.        Number of contacts with the;

                        1)         Designated person

                        2)         Someone other than the designated person

             C.        Response;

                        1)         % Advocates

                        2)         % Neutral

                        3)         % Critics

                        4)         Ratio Advocates to Critics.

             D.        Also, we would hotline to you any important information shared with us by your customers

             E.        We would provide bar charts or run charts comparing RSR to each other and to the industry

             F.        We would compare your performance to an average industry index by service type

             G.        A Users Guide would be provided to assist with problem solving.

             Please contact our office for pricing information.

            We suggest starting the program by submitting two routes to have surveyed. Perhaps one you judge to have a very good route representative and the second to be the opposite. Repeat the process for each of the next two months. You will now have a good reference point. We will help you assess the results and the next steps.

 2.          On Site Survey – This service involves a visit to your location. The purpose of the visit is to provide personal    assistance to raising the Loyalty Rating. These steps are taken:

             A.        Learn about your company and meet the people involved

             B.        Study the Loyalty Ratings in whatever form they are in

             C.        Interview RSR’s and DM’s

             D.        Conduct a 36 point audit to include:

                        1)         Products and product quality

                        2)         Inventory control procedures

                        3)         Service procedures

                        4)         Communication system

                        5)         Hiring procedures

                        6)         Training procedures

                        7)         RSR turnover.

             E.        Identify the source(s) of the problem

             F.        Offer solutions.

            Upon conclusion we will present to you suggested action plans to improve loyalty and improve customer retention.

             Please contact our office on the cost of this on-site survey.

3.          Marketing Information – In this level of service we would work with you to establish a Loyalty Rating in a number of different areas; i.e., by:

             A.        Customer type or SIC

             B.        Territory

             C.        Customer Size

             D.        Or any other classification.

             The fee for work is based upon the work involved.