Transcripts

Dianne Durkin:
Particularly right now where the cost of getting new customers is like 6-10 times more versus keeping existing customers.

Dianne Durkin, author of the book, The Loyalty Advantage says it isn't just a low price that will make customers loyal and she has a great story from Nordstroms department store.

There was a woman that walked into Nordstroms, she found this pair of shoes she absolutely adored. She wanted them and she said to the salesperson," You know I really love these shoes but," she says," I really can't afford to buy two pair." And he says, "Why would you have to buy two pair?" And she says, " Because one of my feet is seven and a half and the other one is eight and a half." He said," Madam, this is Nordstroms, you pick out the shoe you want and we will make it fit."

The store may not make any money on that sale but they have a loyal customer for life.

And that customers going to tell other customers and word of mouth marketing is the most powerful marketing in the world.

But most stores would never do that, not because they don't want loyal customers, but…

They have policies and procedures in place and they don't give people the flexibility within the organization to use their heads. When it comes to a situation like this…and in the reality of the situation if they gave more power to the salesperson, to use their judgment, they will act more like it's their company and they will make solid judgments

Tomorrow, why it's critical for businesses to develop employee loyalty as well. I'm Mike Carruthers and that's Something You Should Know.