How to Develop an Effective Customer Loyalty Strategy for Your Small Business – Shep Hyken, NY Times Best-Selling Author

Loyal and repeat customers are ideal for business owners to acquire, but not all businesses have a clear strategy to bring customers back. To discuss this further, we recently spoke with Shep Hyken, customer experience expert, and New York Times best-selling author of “The Loyal Customer,” and “The Amazement Revolution.” His latest book titled “I’ll Be Back”, is set to hit shelves this September.

To get your copy of “I’ll Be Back” before it hits the shelves, visit IllBeBackBook.com or find it on Amazon.

Transcription:

Jim Fitzpatrick:
Shep, thank you so much for joining us on the show once again.

Shep Hyken:
Hey, and speaking of I’ll Be Back, it’s great to be back and I hope that I’ll be back again in the future.

Jim Fitzpatrick:
You certainly will be back. Our viewers and subscribers get so much out of your visits here so thank you,

Shep Hyken:
Thank you.

Jim Fitzpatrick:
For the contribution that you’ve given us. And so let me ask you, as you just mentioned, things are getting back to normal. People are getting back so to speak. And what are some of the things that companies and businesses out there need to focus on as they see customers coming back in? Is there a different mindset that they should have when welcoming these customers in? I spoke to one business owner, he said, oh my God, I’ve got customers everywhere. I’m concerned that I’m not able to give the same customer service that I have in the past.

Shep Hyken:
You know what, and that is, it’s a great problem to have and a bad problem to have. Isn’t it? Because when customers want to come back, that’s a great sign. But if you can’t give them the service and the experience that they expect, either from past experiences with you or from the comparison to other companies that are doing it right. So those other companies had created high expectations. You risk losing the customer. And that’s real important to understand. You said something in there also that’s really important. So let’s just make it real clear. If you’ve got customers coming in, the choice is, take care of them the way they expect or choose to potentially lose them. It’s pretty much that simple. It’s your choice. So that may mean are you staffed properly? Are your hours of operation what they need to be?

Shep Hyken:
If you’re tightening your hours of operation and there’s many more customers, may be expanding them a little bit, hiring an extra person during those peak times, teaching customers, perhaps to use your digital first opportunities. If you’re that type of business where they can go to a website, get information and be prepared when they come in, that type of thing. Think about what car dealerships did during this pandemic that we just recently had. And I’m hoping we’re coming out of it, which is why I’m really looking at it in the rear view mirror.

Jim Fitzpatrick:
Sure.

Shep Hyken:
They really adapted quite well to say you don’t need to come in, we’ll bring the car to you.

Jim Fitzpatrick:
That’s right.

Shep Hyken:
Okay. So they created some great convenience strategies, if you will. And as a result, sales really started to do quite well once we got through this turmoil of wondering what’s next. Right.

Jim Fitzpatrick:
Right.

Shep Hyken:
Now that we’re back to where customers can come into the dealerships, customers are still going online, doing all of their homework and then going to the dealership. So if you’re the type of business that allows your customers to learn and come in and be what I called the mission shopper, meaning they’re on a mission. They know what they want. Maybe they need a little bit of guidance. That may help out as well.

Jim Fitzpatrick:
Yeah. Yeah. For sure. That’s great advice. Hey, let’s talk a little bit about the book. The book is titled, I’ll Be Back. What’s the tie-in to Arnold Schwarzenegger and The Terminator?

Shep Hyken:
So I know you’re going to have graphics here, but I’ll Be Back. This is the galley copy by the way. And anybody that buys the copy in advance, it’s a shameless plug,

Jim Fitzpatrick:
Go right ahead.

Shep Hyken:
You can go to Amazon, show me that you’ve purchased it. Send me an email, or just go to my website, Illbebackbook.com. You can purchase it there. You will immediately get the ebook. If you buy it through us, you immediately get it. If you buy it through Amazon, just let us know. We’ll get it to you. It comes to you in the format that you want Kindle for your nook,

Jim Fitzpatrick:
Wow.

Shep Hyken:
Or for your desktop computer free of charge. That way you can start getting your customers to say, I’ll be back before the book actually comes out.

Jim Fitzpatrick:
That’s fantastic. Thank you.

Shep Hyken:
But tie into Arnold Schwarzenegger, when I started to write the book, there was no tie in whatsoever, but it started into the wow, I’ll be back, who made those words famous? Arnold made them famous. Even though that’s what we want our customers to say,

Jim Fitzpatrick:
Sure.

Shep Hyken:
Anytime somebody says it inadvertently, they’re not even thinking about Arnold. And then they all of a sudden say, huh, that’s a line from The Terminator. So I started playing around with that and sure enough, I came up with lots of ideas. Like, what are the reasons customers would terminate the relationship with you? So I actually, in one of the chapters have 10 ways customers would, or reasons customers would leave you. And why would you terminate that relationship? If you’re a business, why would you want to terminate the customer’s relationship? But really the concept of I’ll Be Back, it’s fun. When Arnold did the first movie, The Terminator, I’ll be back was not a good thing. I’ll be back was I’m coming back and I’m going to get you.

Jim Fitzpatrick:
That’s right.

Shep Hyken:
And he came back to that big police station and just blew it up. But the next movie Terminator two, it was the line of the movie, right? The first one. And when he was the good guy, he said, don’t worry, I’ll be back. And that was a good thing.

Jim Fitzpatrick:
That’s right. That’s right.

Shep Hyken:
He’s used in like eight movies, Terminator movies, other movies, and it’s become almost a great catchphrase. But other than that, it’s really a book about creating a great experience that gets your customers to say, and if you want to use the German accent, I’ll be back.

Jim Fitzpatrick:
That’s exactly right. So you discuss the most important measurement in business that leaders should consistently be monitoring or monitor. What is that? What do you mean by that?

Shep Hyken:
Yeah. So traditionally we want to find out if customers are happy. So we send surveys, they call them CSAT, customer satisfaction surveys. On a scale of one to five or one to 10, were you happy? Were you happy with this service? Were you’re happy with whatever. There’s NPS, net promoter score, would you be willing to recommend us? So that’s the intent to recommend because you were that happy. My opinion is very important measurements. However, what they’re really measuring is history.

Shep Hyken:
So you’re getting a history lesson. And you can learn a lot from history and you can do a lot with that history to make the experience better in the future. But the measurement I want you to be looking at is behavior. If they say I’ll be back, do they come back? And that’s really important. I have clients that start to look at what repeat visitors are worth versus one time visitors. And when you start to recognize what the behaviors are of those repeat customers, not necessarily loyal, but repeat, then you start to understand typically repeat customers and even loyal customers will spend more money. Each time they come in, they come in at hire a greater frequency, obviously. So those are what you want to be measuring, the behaviors, not just the history.

Jim Fitzpatrick:
Yeah. Yeah. Very good point. In chapter seven, you covered the shortest customer speech you ever gave. It was two words long. What are they and why are they important?

Shep Hyken:
Sure. Sure. So to me, those two words are fundamental to any customer experience, especially as you’re dealing people with people. And the quick little background is I was hired to do a speech, which is a lot of what I do going around the world,

Jim Fitzpatrick:
Sure.

Shep Hyken:
And deliver keynote speeches. And the clients said, you have to end right on time. You cannot go over, no matter what time you go on. I said, if I get on early, can I stick around until the end? Absolutely. But if you start late, end on time. So I could tell the speakers ahead of me, I was the closing speaker, we’re running late. And I finally looked at the client. I said, Matt, it’s so late. And he goes, I know, two minutes left. Two minutes.

Jim Fitzpatrick:
Oh my God.

Shep Hyken:
And he goes, can you do anything for us? I go, I’ve got an idea. And I walked out and here’s Shep. People applauded. Hey, thanks. Hey, I don’t know if you realize it, but there’s only two minutes before we have to walk out of here. And so what I want to do is I want to start over and I want to give you the shortest customer service speech in the world. Are you ready? Just pretend I’ve just been introduced. Ladies and gentlemen, Shep Hyken. A round of applause. They applauded, I go, thank you. Thank you. Be nice. And I turned around and started to walk off stage and then I stopped. I go, okay. Be nice. Pretty fundamental, pretty much common sense. But I think most of you would agree, this is not necessarily the most common experience you have. You hope it will be that way. I’m looking at my watch, by the way, I have another 45 seconds left.

Shep Hyken:
So let me just add to the concept of be nice. I’ve written eight books now on what it takes to create a great experience. A lot of which is the way people interact with each other. Be nice is fundamental. Start with the idea that you have to be nice to your customers. A matter of fact, this year, we asked some questions, last year, I did a survey and did the same thing this year, repeated it. 1,000 consumers in the US weighted to age, ethnicity, geography, gender, et cetera, et cetera. It’s a US census. And the number one reason customers will leave you, has to do with basically rude, not nice, apathetic behavior. That’s the number one reason. So there is foundational concept right there. Two words, be nice and go up from there.

Jim Fitzpatrick:
That’s right. That’s right. And you are so right about that. And I know that just that a consumer myself, it could be a situation where the food was great, and the atmosphere was great, but boy, if that waitress, or that waiter, or that hostess, or whatever, just, maybe he was having a bad day and they took it out on you indirectly, you may not return. You just right away, you’ve got a bad feeling about that place because of the way that you were treated. And it didn’t have to do with the product or the environment.

Shep Hyken:
Right. And the flip side of that is what happens if, let’s use the server for example, if that food came out and it wasn’t right, but that server was so friendly and was fun and,

Jim Fitzpatrick:
Exactly.

Shep Hyken:
Enjoyable to be around. And he or she went back took care of it, brought you out another meal. You don’t think for a moment about a bad experience. You think about how great the experience was even though there was a little hiccup. So the positive attitude, the be nice side of things becomes really important. There’s a technical side of service, and there’s the more behavioral side of service. And most of service comes from attitudes and behaviors, not necessarily technique. And the technical aspects. Still, I believe training is really important. I did, interestingly enough, I wrote something down. I’m going to pull it. This came to me in the middle of the night and it doesn’t look like much, but there it is.

Shep Hyken:
So I wrote down the percentage of helpful and friendly and those attitudes, overtake the next, most important reason, the customer, this is what customers want, helpful and friendly, and that’s easily trainable, people to people. But then they also want, and they expect people to be knowledgeable, customers do. That’s trainable, but it’s more technical training, the knowledge of the product and the system. And then there’s convenience, which you and I’ve talked about that in past, with my other book, The Convenience Revolution. Convenience, and some of the other things are more of a process. But if you look at what it is, helpful and friendly is more than half of it. This is why it’s so important to recognize that you can have a great process, but if your people aren’t helpful, knowledgeable, friendly, they’re going to lose the customer to a company, or you’re going to lose a customer to the company that is helpful, friendly, and knowledgeable.

Jim Fitzpatrick:
That’s right. And companies and businesses spend so much time on making the meal right, or making the product right. Or making the environment right, the retail environment or the location of the office, whatever the case might be. And they don’t spend as much time in the training of their people. It’s almost like they assume that those associates just get it. They understand it. That’s what they’re doing there. When in reality, you talk to a lot of employees of companies and you ask them how much training have you had for this particular position? And they’ll say, well, not a lot. They kind of put me out there the first day and showed me a few things that I need to pay attention to. And now I’m off and I’m taking care of customers or they think they’re taking care of customers. And then the business owner is surprised if that didn’t go well.

Shep Hyken:
Yeah. I know it amazes me. People say, tell me about all the companies you’ve helped turn around. And I go, the truth of the matter is I don’t do much. About maybe 15% of the clients that call us need serious help. The other 85%, maybe even closer to 90%, they’re already playing at a pretty high game. They just want to keep,

Jim Fitzpatrick:
Sure.

Shep Hyken:
That level up. And the way to do it is continuous reinforcement of what they learned and what they were hired for in the beginning. We hire people with the right attitudes and the right skills. We put them through training. Part of that training might be specific to the company, but some of it might be onboarding on the customer service and customer experience side of things. And then we don’t go back to that. The best companies are putting it in front of their people over and over again. Some companies like the Ritz Carlton, every single day.

Shep Hyken:
There’s a restaurant Vince Bommarito at Tony’s here in St. Louis said, every single day, before those doors open, we have a pre opening meeting with the entire staff. We talked about what happened yesterday, what we need to improve on. It’s always about customer service at that point. And then he says, I read the accolade letters and emails from our clients to give people a little boost of energy. I tell them what the daily specials are at the restaurant. And then we opened those doors. But he also says something else or he used to, he passed away recently. He used to say, and remember when those doors open, we start over. No matter how good we were yesterday, we got to be that good or even better today. And I love that speech that he did every shift or every day prior to that to the opening shift.

Jim Fitzpatrick:
Absolutely. They need that.

Shep Hyken:
Pretty cool.

Jim Fitzpatrick:
They need that all the time. There’s so many different loyalty programs that are out there that companies come up with to bring customers back in. You say that not all loyalty programs drive loyalty, even if they seem to get customers back in. Can you elaborate on that?

Shep Hyken:
Yeah. And I mentioned this just a tiny bit at the very beginning of our conversation. I talked about repeat customers and loyal customers. Most loyalty programs really are marketing programs. They’re meant to drive repeat business. If you think about what frequent flyer miles are to the airline, once a passenger realizes, if I stay on the same airline, I’ll accumulate more miles. If the airline were to take those miles away would the customer still want to stay on that airline, or would they be interested in switching to a different one for whatever reason? Now I have no problem with that. So please don’t understand that this is something bad. No, actually anything that drives repeat business is great business. Let’s take it to the next level though, if you can create loyalty, which means there’s an emotional connection. And that means, oh, I love the person on the inside of that company.

Shep Hyken:
If it’s an inside salesperson and a manufacturer as a vendor to a company, that’s why you choose because you just love the way that person treats you. That’s some type of an emotional connection. Amazon, even though they’re pretty much all digital, has created a lot of positive emotions because you trust Amazon. Their experience is so predictable that confidence and the consistency actually,

Jim Fitzpatrick:
That’s right.

Shep Hyken:
Gives you a feeling of trust in the company. That’s emotional. That’s why they can say, hey, if you want to buy this somewhere else, it’s cheaper over here. How many people really click and go outside the Amazon Prime system to do that? And they don’t call, people refer to the Prime membership program as a loyalty program. They never call it that. They call it a membership program. And once you pay a little bit of money to be a member of something, you typically want to take advantage of what the offers are, one of which is free shipping, two day shipping, whatever it is. And so that’s how Amazon is driving repeat business, but their confidence and consistency that they create is what’s driving loyalty.

Jim Fitzpatrick:
Shep Hyken, New York Times bestselling author. One of the premier speakers out there on the topic of customer experience and just an all around good guy. I want to thank you so much for joining us once again on the show. I know,

Shep Hyken:
Thank you.

Jim Fitzpatrick:
As I mentioned, our viewers and subscribers get so much out of your visit here with us today. So thanks so much. And hopefully we can bring you back on because I got a whole nother list of questions here as it relates to the customer experience.

Shep Hyken:
Great. Well, let’s count on it. So.

Jim Fitzpatrick:
There you go.

Shep Hyken:
Like the title of the book,

Jim Fitzpatrick:
That’s right.

Shep Hyken:
I’ll be back.

Jim Fitzpatrick:
We’re going to show,

Shep Hyken:
Thanks again for having me. I really appreciate you.

Jim Fitzpatrick:
All the information you need to take advantage of Shep’s offer to you to get the book in advance and download it. So thank you so much Shep, for making that available to our viewers. We very much appreciate that. And for those of you that download it, you’re downloading an incredible piece of content there that’s going to help you run your operations and your businesses better. I’ll be back. So, and we hope that you’ll be back. So thanks so much.

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