August 11, 2011

What are the elements of a successful relationship? (Just remove "loyal customer" from the equation for now; we'll get back to that.) Successful relationships require: trust, communication, shared interest and time/togetherness.

Now, if you'll humor me, let's just get very basic here.

A relationship is a relationship is a relationship. Creating loyal customer relationships starts with creating strong relationships.

We can translate those touchy-feely relationship terms into something more comfortable for the business world, but the concepts are the same. (Telling your customers you want more "togetherness" will probably hurt rather than help that relationship...)

Here are four keys to the business-customer relationship:

1. Be trustworthy

Say what you'll do, then do what you say. This is called having integrity and is a cornerstone for lasting business.

2. Communicate

Be clear about the purpose of your business. Let people know who you are. LISTEN to your customers. Find out who they are and what they care about. This is not a monologue.

3. Establish common ground

Where is the common point between the mission of your business and the needs/demands of your customers? Communicate that and you will attract the people who will be your best customers.

4. Stay front-of-mind

This is the business version of time and togetherness. Stay in touch. Make customer outreach part of your regular schedule. Don't just sit there and expect your customers to think of you on a rainy day. You bear the burden of reminding your customers that you exist.

The business relationship difference

Here's where the business-customer relationship model diverges from other relationships.

In B2B or B2C relationships, there isn’t the same strong moral or cultural obligation to remain loyal that there exists in a romantic relationship, or even in a friendship.

That's why, even though building a strong relationship is essential to keeping your customers, it is not sufficient in and of itself. Your customer might love you, love your business, love every employee you have and every product you make; but your customer will still love you and leave you for a better deal, a more attractive offer, something new, shiny and discounted.

Making customers loyal to your business

Reward the behavior that you want your customers to repeat. In this case, the key is to reward loyal behavior.

We're not talking about printing up another batch of customer loyalty punch cards. To be effective, rewards or incentives of any kind have to have actual, significant value for the recipient in order to be effective.

Your job is to think of rewards that your customers will actually value, and then offer them at the right time in order to reward loyalty.

Three features of valuable rewards

No matter what business you're in, good incentive rewards include three common features.

• Immediacy
• Convenience
• Monetary Worth

And, generally, customers value the features in that order. Immediacy is nice, convenience is even nicer, and actual money, or perceived monetary value? That's the best.

A basic reward will include at least one of these features. A better reward should involve two or provide a greater advantage (i.e., immediacy plus convenience is great, immediacy plus more convenience is better).

The greatest reward will meet all three requirements and thus will be most highly valued.

1. Immediate rewards

A reward that gives immediacy is something like a tangible trinket; you hand it to the customer right away. It could be cheap, but useful, or funny, or interesting in a small way. The point is that the gift is a tangible reward in the now. Your customer buys, or signs up for the mailing list, or brings a friend, or refers someone, or joins a customer club, and walks away with an immediate reward.

2. Convenience rewards

A reward that offers convenience might be pick up or delivery service, free gift wrapping, a personal shopper, exclusive late-night or weekend shopping hours. Rewards of convenience make life easier and simpler for the customer. Lucky for you, convenience rewards usually make it easier and simpler for the customer to buy.

3. Monetary rewards

A reward that gives monetary worth could be something as simple as, well, money. Try returning a $5 or $10 bill from a customer's most recent purchase and see what happens. There's something about cold, hard cash, even in small amounts. Of course, worth isn't in cash alone. Discounts, freebies and package deals all provide worth; the key is that they must be worthwhile to the customer.

The greatest rewards

The greatest reward is one that provides immediacy and/or convenience as well as monetary worth.

For example, free delivery. You're providing convenience (the service of delivery) as well as monetary worth (the value of delivery, since the cost is waived as part of the reward). If you can add immediacy (we're leaving now to deliver this to you), then you have a reward people will remember, a reward that will turn one-time customers into loyal customers.

Annie Mueller is a freelance writer based in St. Louis. She covers small business topics with a focus on lean/zero budget startups, business blogging and simple (sane) ways business can use social media without selling their souls to Facebook. Her work can be seen online at Investopedia's Financial Edge blog, Young Entrepreneur, Wise Bread, Organic Authority, Modern Mom, and her own site, AnnieMueller.com. Find her on Twitter: @AnnieMueller.

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• MSNBC Your Business 9 months ago

  

  Do loyalty programs work with customers? Carol Roth talks to us about it on MSNBC's YOUR BUSINESShttp://www.openforum.com/idea-hub/topics/managing/video/getting-customers-loyalty-programs