Customer Loyalty: A Two-Way Street

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customer loyaltyIt’s generally considered poor form to ditch your date at the school dance — it makes a poor impression on your date (and people will talk!) Likewise, it should be considered poor manners to ditch the customers who brought you to the dance — who made you what you are today.

We want our customers to be loyal to us, of course. We want them to come to our shops and spend freely and often. “Give us your email address and we’ll send you occasional coupons!” (and then we inundate their inboxes with “offers.”) “Sign up for our rewards program — the more you spend, the more you save!”

But it seems that customers want more than that. An article in Forbes found that it’s not just those plastic rewards key fobs that truly make the difference to customers — it’s the whole set of experiences that the company offers. It’s how the company makes them feel when things go wrong, and what they do to make it right. The relationship is the thing.

Throughout my years in business, I’ve encountered situations that tested my own idea of customer loyalty. In my first start-up, a great opportunity came along: I learned through a consulting company that a much larger company wanted to join forces with me, and they wanted me to bring my loyal customers along. The deal would have made me a lot of money.

But after I flew across the country to discuss the idea with the consulting firm, I discovered this golden opportunity was not so golden for my customers, or my employees, for that matter.

I had a choice: Make the deal (and make lots of money) …. or stay loyal to the customers who helped me become successful in the first place.

I turned down the offer.

On the face of it, my decision probably made no financial sense at all. What was worse, the consulting firm and the larger company didn’t approve of my decision and threatened to squash my business. But I didn’t give in. Why?

Without those customers who believed in me, I couldn’t have afforded to sit down with the bigwigs in the first place. I decided that I had to stay loyal to the ones who helped me get there.

Another time, a long-time customer was having trouble using our software. He decided he was just going to quit our service. He was ready to retire soon anyways, and I could have easily cut him loose to serve a younger, more lucrative market. His outdated computer was not my problem, right?

But the trouble was, he knew me when. He helped me when I was just getting started, and I just didn’t feel right about letting him end his business on a sour note.

I asked him to give me 24 hours, and sent an employee out to purchase a brand-new computer which we set up with our software. We made sure everything was working properly and shipped it overnight.

Even though he was only paying me $125 a month, it was worth it to me to spend an extravagant amount — almost $3,000 — to surprise him with this gift. He was thrilled, and stayed with us until he retired 18 months later. I’ve always been glad I made that decision, crazy as it might seem.

Sometimes, the decisions we make as business owners have nothing to do with what makes financial sense. We have to look beyond the numbers, to the people who helped us get where we are.

Want to be happy in business, in life? Do your level best to be loyal to everyone: your family, your customers, your employees. Then you’ll be able to sleep at night.

photo credit: kleuske via photopin cc

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Mike Kappel
Mike Kappel is a serial entrepreneur and president of Patriot Software, Inc., one of five successful small businesses he has started in the last 25 years. Mike still enjoys the challenge of a start-up, and is passionate about supporting small business and helping others reach their goals. He shares his experiences in his blog, Small Business Expert. You can follow him on Twitter @MikeKappel and Google+.
Mike Kappel

@MikeKappel

CEO, Business owner, and serial entrepreneur mostly in cloud computing/SaaS. My passion is to help American businesses succeed.(http://t.co/Azpv9MCz1S)
What is a 1099-MISC? http://t.co/NBKL4oXnPv - 4 hours ago
Mike Kappel
Mike Kappel
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