Customer Loyalty Thanks to Customer Orientation

April 3rd at 2:30pm by Susan Levermann

Higher, faster, further! In the digital age, life is reflected in dazzling colors on your smartphone display. Everything seems to be just a swipe and a click away. This constant availability also changes one’s buying behavior: we consume continuously, chase trends, and find products and services from all over the world with just a few clicks. For the buyer, this oversupply is a colorful cornucopia full of possibilities. For sellers, on the other hand, there are downsides: Innovation is continually needed as products blur into an anonymous mass and become interchangeable. Competition doesn’t sleep: every good idea is copied in an instant; every flash of innovative spirit attracts imitators. It often doesn’t matter very much whether these products differ in price. Because bargains no longer attract customers - after all, you can find the best price online around the clock.

So how do you manage to stand out in an anonymous crowd of interchangeable products and companies? Or in other words: How do I turn one-time customers into loyal, regular customers? The solution is obvious, but it presents with it several challenges. When a high-quality product alone is no longer enough, comfort and service must give you a competitive advantage. The keyword is, therefore: retention!

Why Are Loyal Customers Worth Their Weight in Gold?

Just why is customer loyalty so important? Why not just swim in the stream of the ever faster product landscape and invest all your resources in new customer acquisition? This is a possibility, but the acquisition of new customers involves a greater investment of both financial and time-based resources. On the other hand, it is significantly cheaper and more efficient to support existing customers. As they are already familiar with the company and its offering, consulting costs are much lower. Existing customers are also easy to maintain when it comes to pricing: They are already happy with the quality you offer and are therefore willing to pay higher prices.

Because they are familiar with the products, they shop more often and at shorter intervals. In doing so, the familiar environment also seduces to more spontaneous purchases. For this reason, loyal customers promise much greater long-term success with comparatively little effort. In addition, regular customers also tend to make recommendations to friends and acquaintances. This, coupled with effective recommendation marketing, even leads to the acquisition of new customers.

Turning a customer into a loyal regular customer is the task of Customer Loyalty Management, which is all about customer loyalty and customer orientation.

What Does Customer Orientation Mean?

The goal is set: What’s needed is a tangible recipe for good customer loyalty. However, the route to success here is a long one requiring a great deal of commitment on the part of the entrepreneur, who must first understand the concept. Customer loyalty is achieved by recording and analyzing the wishes, needs and expectations of customers at regular intervals. The insights gained from the analysis are then implemented in every area, from marketing, through to offers, products and service. Understanding the Customer Experience is an important foundation for further action. The following statistics show what consumers want. At the top of the list is customer-friendly service:

This also means that customer retention is never complete. Analysis should be constantly repeated in order to adapt to customers changing wishes and needs. Only through constant improvement can loyal customers be gained and retained. Customer loyalty does not start either with marketing or direct customer contact. A successful concept is holistic and encompasses all divisions of the company. Experts call this process Customer Loyalty Management.

The structure of customer orientation is divided into two levels, the information level and the customer level.

Information level

Companies that work in a customer-oriented manner collect comprehensive information about buyers. To get this information, the following questions help:

  • What do you know about the customers?
  • What information is collected?
  • How can the lessons learned be translated into product and service solutions?

At the information level, the internal processes are also examined:

  • How is the collected information internally stored?
  • How convenient is this data-gathering solution for employees?
  • Does every employee have access to the information?

This shows how fundamental interaction between individual divisions such as marketing, production and sales, really is. Only if all the departments are interlinked can the company as a whole build up a successful customer orientation.

Customer level

At the customer level, all the factors which from the customer’s point of view play a role are decisive for the customer orientation of a company. These factors include, for example,

  • Product quality
  • Quality of service
  • Flexibility in the delivery of service
  • Qualification of sellers
  • Reliability and friendliness of the workforce

This all-round package must be authentically lived by a company in order for a customer to feel connected to it.

The Customer-Oriented Company – What Does This Mean?

A company that values customer loyalty aligns economic thinking and action with the needs, wishes and problems of its customers – that is the quintessence of customer orientation! It is therefore a promising measure in marketing and a prerequisite for successful sales.

But customer orientation is not only outward-looking, but also inward-looking. This is how colleagues become customers. After all, all employees themselves have a social environment that needs products or services. In marketing, therefore, internal customer orientation is part of personnel marketing, as satisfied employees are satisfied customers and part of a secure marketing strategy.

Customer Orientation as an Important Part of the Marketing Strategy

Thus, the task for the respective company is clear: all needs and expectations of the customers must be met in the best possible and profitable manner. Nevertheless, this point is missing from many companies’ marketing strategies – or simply overlooks how important it is. In order to make the relevance of Customer Orientation tangible, we’ve broken down the quite complex strategy to four fundamental marketing points:

Data – This is the focus of every marketing strategy and is challenging on multiple levels. After analyzing data requirements, high-quality data must be collected and then professionally interpreted. Watch out! Mind the GDPR: the topic of data protection is on everyone's mind and must be taken into account. One way to collect data, for example, is to run regular multi-touchpoint campaigns.

Organization of data – the highest-quality data does not add value without meaningful data organization. It is therefore necessary to clarify how data is collected in advance to determine viable organization. Important cornerstones are the overview, timeliness and simplicity.

Democratize the data – once both the internal organization and storage of the data is clear, it must be accessible to all employees. A company usually consists of different departments, but dealing with data is teamwork! Only when all the company employees have the opportunity to use the data in compliance with data protection requirements is a holistic customer orientation possible.

Sustainability – news of good customer orientation quickly spreads itself and thus makes the acquisition of new customers a self-starter. A marketing strategy aimed at customer loyalty is therefore forward-looking, sustainable and efficient.

The goal of this whole process is to maintain satisfied customers – and this satisfaction should be reflected at all levels. It is therefore far from sufficient to offer a good product at a fair price; no, the company must be authentic. In order to implement this, company customer orientation must start internally.

Internal Customer Orientation: Factors and Tips

Internal customer loyalty encompasses the entire network involved in the company's internal processes, such as suppliers. These processes work smoothly when all parties involved cooperate and work together. In addition to professional competence, smooth cooperation is also based on the human factor. This is addressed by the entire workforce and all service providers feeling valued. One is therefore well advised to focus on the human factor.

Efficient structures are another prerequisite that should be found in both systems and individual processes. Recognition, if needed, that nothing is as frustrating as an inefficient process that prevents all parties from working instead of simplifying them. In addition, commitment, know-how and the attitude of the individual persons are also among the prerequisites. Only when these are created and can be maintained will the internal customer loyalty be established.

How well your own company is doing can be determined by these questions:

  • Is both the individual and the overall performance mentioned and rewarded?
  • Will staff be involved in decision-making and innovation processes?
  • How do you deal with conflicts?
  • How do I respond to errors?
  • How does the in-house communication work?
  • Is there clarity about objectives and tasks?
  • Is there an appropriate mission statement?
  • Is information to be classified as an asset or a liability?
  • Are there transparent and clearly clarified responsibilities?
  • How do communication structures between the individual network members function?
  • Does management live up to the given values?

The Route to External Customer Orientation

As soon as the company is internally setup for customer loyalty and orients itself within the mission statement, it is time to address the external customer orientation. This applies to all external customers, i.e. anyone who is ultimately going to buy the product or service.

The foundation for this is an open corporate culture that has a direct line to customers. Therefore, one should get to know the buyer and get into an active exchange with them. It is desirable to be human, close and empathetic. It should also be possible for the customer to easily contact the company.

All these issues can be easily dealt with through the use of digital tools. With an up-to-date social media account, the company can show itself to be close to the customer, collect their impressions of the organization and interact with them.

Customer Loyalty Through Empathy

In the past, there have been plenty of examples of criticism of a company's profile fed by slow or customer-unfriendly actions. Therefore, it makes sense to entrust customer-friendly people with in-depth knowledge of PR and marketing with the duty of running your social networks. They should approach the task with empathy, a touch of humor and openness. For most customers, a negative experience is sufficient reason to turn away from the company.

Customer-friendly staff is of course not only important on the net, empathy is fundamental to customer loyalty – and it can be learned. The task of the company is to regularly evaluate whether all employees have the necessary knowledge to deal with customers empathically. Regular training and seminars support employees in developing and maintaining their skills and also strengthen the team. In addition, the entire organization must be geared towards customers and their satisfaction. Barrier-free accessibility, for example, is still the exception today and thus gives the chance for a real unique selling point. Accessible means that contact with the company can be done by mail, on the phone, or by fax and letter, and that all these channels have the same standard of service.

This uncomplicated reachability also includes smooth exchange between responsible persons. No customer wants to re-express their concerns at every point of contact. A well-managed customer register enables even newly assigned employees to address them individually and provides access to the most important data and information. If there are any problems, a cordial and open feedback procedure is the key to success. A customer who finds a competent and understanding contact person for his criticism will quickly forget his anger.

Customer Loyalty: Collecting Data with NPS®

If, as an entrepreneur, you want to improve customer orientation, it is a good to first measure customer loyalty in order to have a starting point and be able to record your progress. The Net Promoter Score® (NPS®), which is an important metric for determining customer satisfaction, is ideal for this purpose. In addition, the Net Promoter Score® can be used to increase customer satisfaction. Thanks to the appropriate system, it is possible to collect and evaluate the feedback of all participants on a single scale. The basis of the NPS® is the question:

"How likely is it that you would recommend our product/service?"

Various studies in recent years show that simplicity is the great advantage of the NPS®: Customers must click on the question on a scale from 0 = very unlikely (detractors) to 10 = very likely (promoters). It also provides an empty field for your own responses. From the sum of all the answers, the NPS® is created by calculating the percentages and then subtracting the percentage of detractors from the percentage of promoters. The result is the NPS®, which is therefore between -100 and 100.

Which NPS Is Desirable?

A value of +100 is not realistic, because never will all of your customers be 100 percent satisfied. In order to avoid frustration in the company, a realistic objective is therefore important. In principle, the company should have more promoters than detractors. This is the case as soon as the NPS is positive, i.e. is above 0. This review should be carried out at regular intervals in order to respond to current developments.

The First Steps to More Customer Loyalty

This is a wealth of information about customer orientation, but how do you start implementing it? In the course of this, a few steps should be taken in order to get closer to the goal of an optimal customer orientation.

1. First inform, then communicate

The most important facts about customer orientation and building customer loyalty are now available. Before you start, however, you have to collect more information and only then switch to the communicative phase.

2. Developing a strategy

In order to increase success profitably, it is necessary to develop a comprehensive strategy that is valid for the entire company. This strategy must be communicated in a comprehensible manner to all employees. This strategy is then based on the mission statement under which customer orientation is implemented.

3. Instruction of all employees

If all your employees have the strategy, you can start. To ensure that all stakeholders have the skills they need, it's time for training, more guides, guidelines, and even control bodies to respond quickly to problems.

4. Connecting all departments

Customer orientation concerns both internal and external customer loyalty. Therefore, all business units, from management, marketing, or service to sales, must be considered as a unit. There must be no limits or divisions, otherwise the strategy will not be implemented in a uniform and holistic way.

5. Focus on internal and external customers

All internal customers must feel valued in order to feel a connection to the company. This also includes actively integrating them into developments and processes.

6. Fine-tune the overall picture

The overall picture of the company reflects the mission statement. This, in turn, is geared to the strategy. The overall picture also includes the perception of employees as well as communication to the outside world. Therefore, one's own public relations and marketing must also be aligned and, if necessary, changed on the basis of the strategy adopted.

7. No standing still

Customer orientation is a process. Therefore, the whole strategy must be viewed as continuous and not considered to be complete. This includes, among other things, that suggestions for improvement are desired, that everything is regularly questioned and that criticism is transformed into improvements.

With the Optimal Strategy to Loyal Customers

With a well-thought-out strategy on the way to optimal customer satisfaction, a smart business need not fear the competition. Loyal customers prefer to rely on familiar and beloved products and services.

This makes customer orientation in today's fast-paced consumer world the ideal way to drive customer loyalty, making your own company (and with it all your products and services), unmistakable. The prerequisites for this encompass the entire company structure. To do this, the process must begin internally by developing a sound strategy and directing the remaining employees as role models. Data is fundamental in order to implement the wishes and needs of your customers. When collected and organized in a practical manner, any employee can access them to ensure a customer-friendly process. This ensures that they understand the customer. All this makes customer orientation an important tool, far beyond a pure marketing and sales strategy: It becomes the foundation for entrepreneurial success!

Susan Levermann

Content Marketing Manager