| September
15, 2005:
Myths About Customer Loyalty II
Interview
with Terry Vavra co-author of Loyalty
Myths |
Want
more on this subject? Click
this Tip Mike
Carruthers:
Customer
loyalty isn't what it used to be. Take Kraft Foods for example…
Terry
Vavra:
Kraft in the 1970's and 80's could define about 40% of their
customers as highly brand loyal to the Kraft brand. Today that number has dropped
to about 15%. Terry
Vavra, co-author of the book, Loyalty
Myths ,says businesses need to understand who their customers really are. You
can divide businesses into two categories, those who will lead by price, like
Wal-Mart, those who will lead by high service. And you can divide customers in
a similar way. There will always be price driven customers. Let's identify those
and let's not try to reach out to those customers with a loyalty program. All
they want is a low price to buy on deal. Today
you hear a lot about customer relationships. CRM,
customer relationship management is the buzzword these days. But let's get back
to what we said earlier. Let's understand first which customers we want to build
relationships with. And let's turn the coin, not every customer really wants a
relationship. And
Terry believes a lot of businesses lose customers unnecessarily. We've
preached for a long time reaching out to lost customers. Ask them what you could
have done to keep them, ask them what you could do to have them back. And you'll
find that you can win about a third of your lost customers back. At
somethingyoushouldknow.net I'm Mike Carruthers and that's Something You Should
Know.
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