July 25, 2012
The #1 Thing That Creates Loyal Customers
It would almost seem comical to limit something as important as customer loyalty to a single defining factor.
It would seem even more ludicrous to claim that there is "1 defining thing" that creates superstar customers who become self-appointed advocates for your brand.
It would seem comical: but that's before you consider the research on the matter that definitively says there is ONE essential element to creating loyal customers.
Do you know what it is?
If not, you're about to find out!
Revealed: The Social Construct that Holds Society Together
Stay with me here, you're not about to read a treatise on the rise of civilization.
The #1 thing that creates loyalty in anybody (that includes your customers) is the social construct of Reciprocity.
Reciprocity is a social norm that's been evaluated and debated since the days of Aristotle, and it has been said by many scholars to be one of the single defining aspects of social interaction that keeps society whole.
Why is it so important?
Additionally, how can it help us create loyal customers?
Why Reciprocation is Ingrained in Our Brains
Behavioral psychologists and historians have uncovered a lot of evidence that the process of giving and taking "fairly" seems to be apart of a massive majority of normally functioning people.
The classic anthropological example of reciprocity in early society is the Kula exchange, where indigenous peoples in the Trobriand islands where found to travel for hundreds of miles via canoe to trade goods with other towns (with a very distinct set of trading rules participants had to abide by).
In Prof. Robert Cialdini's now infamous Influence: The Psychology of Persuasion, he notes that:
The impressive aspect of reciprocation with its accompanying sense of obligation is its pervasiveness in human culture.
It is so widespread that, after intensive study, Alvin Gouldner (1960), along with other sociologists, reported that all human societies subscribe to the rule.
Within each society it seems pervasive also; it permeates exchanges of every kind.”
The point: Reciprocity is likely something that has evolved in the human brain in order to keep a majority of transactions "fair".
We often feel obligated to return favors, even if they are unasked for.
This is the ultimate reason why great customer service has such a fantastic ROI (return on investment).
Human beings are wired to follow the rule of reciprocity, and now that you understand it's importance, we can discuss how to use it to create incredibly loyal customers.
How to Use Reciprocity to Create Loyal Customers
Learning about the psychology of reciprocity is fun and all, but it means nothing if you can't apply it to your actual business.
Fortunately, the application of reciprocity is very practical (and already practiced by top companies around the world).
Let's dig in, shall we?
The first thing you need to know is that reciprocity comes in 3 different forms:
- One-to-many (or many-to-one)
- General reciprocity
I highlighted the one-to-one form because that's the one you need to master: interaction with customers is typically a very isolated experience, that is, you tend to deal with them individually, even if they have similar issues.
Winning customers over starts with winning their thanks on individual terms.
Although technology allows you to scale the process, the fact is this: people remember acts of kindness more readily when it feels personal.
Got that? Good! :)
The second thing you need to know is that reciprocity can be handled in two different ways:
- Through subtle gestures (aka surprise reciprocity)
- Through obvious gestures (aka trumpeted reciprocity)
Wouldn't it be awesome if I finally got to some concrete examples?
Of course it would! ;)
1. How to Utilize Surprise Reciprocity
Have you ever ordered an item that you really wanted online, and as soon as you hit the buy button, you got that (positive) anxious feeling of, "I can't wait until it gets here!"
What if that item showed up on your doorstep the next day?
You'd be pretty overjoyed, right?
Zappos recognizes that feeling, and it's done everything it can to give it to each and every Zappos customer.
Did you know that while regular Zappos shipping states the item will be delivered in "3-4 days", Zappos automatically upgrades all customers to priority shipping... without as much as a single mention on the checkout or order page?
Why would they do this?
Simple: As a company that largely began it's growth through word of mouth, Zappos understands that it pays to surprise people.
If the upgraded shipping was mentioned on the sales page, it would've become the norm; that feeling of placing your first order on Zappos and having it surprisingly end up at your house the next day wouldn't exist: people would just expect it.
As a company known for it's legendary customer service, it shouldn't be any surprise that Zappos doesn't mind the incurred cost of this extra perk.
The process of reciprocity begins here for most new Zappos customers, and there's nothing quite like getting "WOWed" on your very first order, after all, first impressions mean a lot.
The research points to this being a universal truth in social interaction and reciprocity: small surprises that feel like they were "just for you" can spawn some incredibly strong goodwill from the receiver.
I discussed this very process of the "secrets of personalization" when I addressed the psychological study that examined how waiters were able to increase their tips by 23%... simply by coming back a second time with more mints!
Talk about some incredible customer service ROI!
Key takeaway: Sometimes the best way to approach reciprocity and to build goodwill with your customers is to surprise them; chest-thumping about every single good aspect of your business makes people blind to the benefits you may truly offer.
Zappos takes a BIG loss on shipping just to "surprise" customers and create reciprocity. Find out why here - http://hlp.sc/M610zb
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2. How to Use Trumpeted Reciprocity
Surprises are great, but sometimes it does pay to let customers know just how far you will go to make them happy.
I could go on and on about what this process looks like, or I can just give you what I believe is a fantastic example of going "above and beyond" for the sheer purpose of telling an amazing customer service story.
If you've never heard of this tale before, allow me to be the first to introduce you to the adventures of Joshie the Giraffe (story previously featured on the Huffington post):
Joshie is a toy giraffe that got left behind by the son Chris Hurn.
In an attempt to appease his upset son, Chris assured him that Joshie was simply taking an extended vacation at a Ritz Carlton Hotel, where the Hurn family had been staying.
After receiving a call from the Ritz customer service team with news that they had found Joshie, Chris was unsure about how to approach his son now that he knew that he could get the giraffe back: after all, he had told a little white lie to make sure he wasn't upset, and was in an understandable predicament.
Mr. Hurn then had an idea: he told the Ritz staff what he had told his son about Joshie's "extended vacation", and wanted to know if his plan of making that happen could be done.
The Ritz staff, in a testament to their notoriously good customer service, acquiesced every request, taking Joshie around the hotel and even photographing what he was up to on his "extended" stay!
First things first, they knew Joshie couldn't just be wondering around the Ritz without a staff card... so they made him one!:
After that, Joshie headed over to the pool area to relax until his owner's picked him up:
Not one to sit around and do nothing, Joshie is given a job in the loss prevention department during the day:
Noted for his very mellow personality, Joshie then decided to melt away some stress with a spa day:
What a story!
To top it all off, the Ritz sent Chris Hurn and his son a booklet filled with information about Joshie's stay, and it included the above pictures along with quite a few more.
What does the tale of Joshie teach us about "trumpeted" reciprocity?
Here's the thing: the Ritz staff didn't help Mr. Hurns out in the hopes of getting some free press, the main goal was to provide the level of service that they are known for (and what allows Ritz Carlton Hotels to charge such high prices).
Despite that, the Ritz staff didn't hold back on their support.
Nothing about this tale is "subtle", while Mr. Hurns may have been surprised at the results, this isn't the same as adding "surprise" to an order like Zappos does with it's shipping.
What actually happened was that the Ritz was able to "show off" their amazing customer support by using storytelling.
The immediate takeaway from this story is that the Ritz Hotel company cares about their customers to the point of being fanatical: in our minds, only a company that truly cares would make this big of an effort for a boy and his giraffe.
The best part?
There was no "chest-thumping" coming from Ritz Carlton's marketing department.
The story did the talking for them: it's apparent now why people are willing to pay Ritz prices without a single word from the company having to justify them.
Why do you think using case studies and profiling superstar customers is so popular?
Stories such as these are noted by psychologists as being incredibly persuasive.
They allow you to "brag" without directly saying a single world: there's nothing quite like letting your actions do the talking.
How can you utilize this form of reciprocity?
When opportunities present themselves, don't be afraid to do the 'outrageous' to bring satisfaction to your customers... and also don't be afraid to tell the story about what happened either!
You can bet that Chris Hurns and his family feel immensely obligated by the kindness shown by the Ritz, but this story created by the Ritz staff has reached far more people than Mr. Hurns and his son.
Even though they only helped one family directly, the story has likely resonated with thousands of people, it's a fantastic example of building rapport through word of mouth. (You can bet that when the story went live, Ritz did it's part to promote it)
"If the Ritz is willing to do that for their customers ... maybe I should consider staying there ..."
Could you think of any better way for your business to be introduced to new customers?
Key takeaway: Psychologists have noted that an incredible story is often the most persuasive way to take advantage of "trumpeted" reciprocity, or highlighting just how far your company will go to make sure people are happy and satisfied.
Joshie the Giraffe: Ritz Carlton shows (through this heartwarming tale) what it means to give GREAT customer service - http://hlp.sc/M610zb
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First of all, as always, thank you for reading! :)
Now I want to hear from you...
Why do you think reciprocity has seemingly evolved in the human mind across all cultures? Is the rule of reciprocity really that important? (Would love to hear your thoughts, feel free to wax poetic!)
What's something specific that your business does to keep your customers happy? If you need some ideas, be sure to check out our free e-Book on 25 Ways to Thank Your Customers, which you can download instantly.
Thanks for stopping by, and I'll see you in the comments!