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Simple fact of life, we all have customers and people that we serve, be they be customers in the “normal” sense or in the wider sense, such as employees for the Personnel Department, or even partners, and with each of these it is very rare that we serve and deal with them only once, so customers come back, that is a matter of life.

So if you speak to any marketer about customers and loyalty they will virtually ALL tell you they have loyal customers, some even stretch as far as to define them by a loyalty index, and then run all clever algorithms to define the “churn ratio” of their customers.

I have been to seminars where BIG marketers talk enthusiastically about how loyal their customers are, and how low a churn rate they have, and all the audience are sat there glued to their seats wondering “how can we do that?”, and look up to these people as almost demigods.

Very few, and I can count on my fingers of one hand the number of people, who have actually asked the question (always in a coffee break, never in the Q&A session), do these customers actually have a choice?

The real question that marketers, or anybody who cares about happy “customers” is, Do they have a choice?” are they coming back because they have too, such as in the Personnel Department, or are they coming back because they want too?

Are they “Hostages or Believers”?

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Some people claim it doesn’t matter, “as long as they keep coming back and “spending” money I don’t care.” That might be a legitimate strategy for people focused on the revenue of today, but not for those who are caring about the share price of tomorrow.

Hostage based strategies are not the ones to follow, as hostages will always want to escape at some time, unless they suffer from Stockholm Syndrome, and you can’t run a business on that hope.

That said, you can always find new hostages to snatch, by price grabbing, trend defining, or other such tactics, but running these models are very expensive, and have to be rerun and executed on an increasingly regular basis, agencies have based a lot of their business models on this hope (finance departments have not).

Weather forecast for tonight: dark.George Carlin

Yes, it is as simple as that,

Hostage strategy bad, and expensive,

Believer strategy good, and profitable, (once you have it up and running.)

Please note I said Believer strategy good, not easy, as if it was we would all be doing it.

Believer based strategies are easy to spot, because they are so relatively rare, and so really STAND OUT,

Apple is a great example, when they launched the iPhone 4, which didn’t really work as a great phone (without the case, which ruined the lines, and changed the entire design) but they still had queues outside of their doors, with the believers knowing full well the “features” of the product (have to be careful in case lawyers are reading) but they were still evangelising about it, a phone that didn’t work as a phone, if you held it in a “certain” way.

Understanding your customers and delivering what they want, deserve and desire is the key to running a successful and growing business.

The question you need to ask is are your customers with you because they want to be, or there because they have to be.

Are they Hostages or Believers?

Come and see me at SapphireNOW in Orlando May14-16!

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  1. Former Member

    Great post John.This is great question, that I feel is not asked enough. Looking at the customers I deal with on a daily basis brings out the importance of customer relations. As I see it, when a customer does not have a choice, product/service reliability and support should be actively improved. Unfortunately this is not always the case, which I see as the ultimate downfall of not asking yourself, or your company this question. 

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