Doesn’t it seem odd that many companies will not hesitate to spend millions of dollars on marketing or celebrity endorsements, but at the same time, they consider their Customer Service function or the Customer Service Call Center as a cost-center, not a profit center?
Celebrity endorsers rarely talk to actual customers other than through a commercial, infomercial or other advertisement spot. Yet, the company’s customer service team talks to customers every day and is directly linked to building Customer Loyalty, selling product and having it accepted in the marketplace.
I agree that companies are better served in a number of ways, including return on investment, when they put employees first and do everything they can to create Customer Loyalty on the front-line level before spending millions of dollars in third-party marketing.
The Customer Loyalty Score or Net Promoter Score as noted in the book The Ultimate Question is a much touted business success score. Yet, is this really the critical score or is it blinders keeping businesses from greater growth (think increase sales) and profitability?
Recently, I came across this quote by W. Edwards Deming:
“Profit in business comes from repeat customers, customers that boast about your product or service and that bring friends with them.”
Customer Loyalty goes beyond “How likely are you to recommend this business” based on a scale of 1 to 10. Unless your customers actually take action; make that “how likely are you” recommendation and bring their friends, the best customer loyalty score is absolutely worthless to increase sales and subsequently business success.
From my perspective, this Customer Loyalty score has two inherent fallacies for lack of a better word.
Fallacy #1 – The greatest cheerleaders for your business or organization are external customers. In any business or organization the best cheerleaders are your internal customers or your employees. This is especially true for those engaged in business to business marketplace.
Fallacy #2 – Repeat customers are the profit centers. Even though it does cost far less to keep an existing customer than to acquire a new one, the true profit centers for any business are the employees.
When organizations believer customer loyalty starts and ends with the external customers, they are truly missing the opportunity to build a culture of high performance and achieve business success.
The question each small business owners to C Level executives should be asking if they truly wish to increase sales is:
How many referrals have we received from each of our employees?
If your employees are not recommending your business, then you truly have a significant problem because business success always starts up stream and flows down stream.