Luxury Institute News

January 8, 2012

Management Consulting: Building Brand Loyalty Sweeps Clients Off Their Feet

By James D. Roumeliotis
WCW Insight
January 7, 2012

We constantly hear remarks and stories of deplorable customer service. I would think that brands would be more attentive and proactive. Unfortunately, this is not the case. You would have thought that they would make “devotion” a coherent strategy.

It should begin with the “trust” factor. Seth Godin, the highly respected marketer, asserts, “Institutions and relationships don’t work without trust. It’s not an accident that a gold standard in business is the “handshake”. Today, it’s easier to build a facade of trust. Not delivering impacts not on a firm per se but on an entire industry.

Some firms react to this by telling customers to “Read the fine print”. Financial Institutions cruise ship operators, and discount outlets are some of the most negligent in the customer service department.

Building “devotion” on the other hand, should be instinctive. If you cannot forge and emotional bridge to your client base your strategy needs a serious rethink. Branding strategy by definition means creating the right attitude to maintain loyalty to ethos of the firm, its products or services.

If you question this principle, think again. The internet and blogging throughout the social networks makes this imperative.

CRM is the key competitive differentiator CRM should be your first line of defense. Customers know the difference and it will separate your firm from your competitors. Loyal customers buy more and serve as de facto advocates of your brand.

Marty Neumeier states this clearly in his book, The Brand Gap:

“The brand is not what you say it is. It’s what they say it is.”

Talking either to prospects or current customers is paramount. If you do not recognize what your clients want or think how can you serve them better?

Not every firm takes the time to do this. You should if you wish to stand apart. It is worth the time and energy.

Take the example of Best Buy v. Amazon. The differences between the two organizations are transparent. If you buy something at Best Buy and decide you do not want the product or made a mistake and try to return the product, the response you will receive is “Sorry”.

Amazon, on the other hand, understands the context of online buying and has put into place the model for CRM. Make the wrong purchase or change your mind, the response is “No Problem”.

The end result is you will not think twice when buying a product Amazon sells or promotes.

Luxury Brand Management: The importance of customer loyalty

You would think that the situation would be clearer in luxury brand management. Guess again. Clients may be more discerning and have more DPI. But top products are not enough. CRM should accompany the product.

“Hermès has impeccable products, the top-tier of luxury goods,” said Milton Pedraza, CEO of the Luxury Institute, New York. “In terms of what customers want, they have the top design, quality and craftsmanship. What Hermès may need, however, is a refresher course in customer experience.”

“Consumers tell us in research that Hermès is the pinnacle of product delivery, but they could become far better in customer experience,” Mr. Pedraza stated.

Audi, the German automobile manufacturer focuses relentlessly on making its cars the number one premium car brand of choice. CRM is clearly one of their keys to success. They understand that the right product and after service and you win a client for a lifetime.

The Audi approach delivers excellent customer satisfaction. Internally, they made the firm the “best” place to work as well. Why?

By attracting the top-notch people, they can deliver customer experience in line with expectations. Spending money on appropriate marketing to attract new clients is not enough. Staff must have the skills to close the deal. An inadequately trained sales force will botch the sale. A positive buying experience is fundamental. It is what I refer to as ‘human marketing” not “buy this carpet, this carpet flies”.

The name of the game is to build a lasting, profitable relationship with them, and turn them into loyal and devoted repeat customers. If you do this with élan, then you have created a cadre of brand ambassadors.

Whether it’s B2C or B2B, sales and marketing people should co-exist. Every one in the sales chain needs to be brought on board including the receptionist, delivery team, and oddly enough those who work on the financial side.

Take the case of YO! Sushi established in the UK. They initiated the Japanese concept of “kaiten” sushi bars in the West. They serve Japanese style food on a conveyor belt travelling 8cm (about 3 inches) per second. It is the original and most famous sushi brand in the UK.

The experience is fun and exciting. Clients love the place.

Simon Woodroffe, the firm’s visionary entrepreneur and founder totally understands the nature of CRM and building brand loyalty. By doing so, the enterprise not only attracts new clients via marketing, it gains their continued patronage, which covers advertising costs.

Employees are well trained and know that they are the “marketing” team.

On the basis of these examples, it is necessary to take into account:

1) In a progressive customer driven entity, training and developing the human assets should be an ongoing process

2) Companies should be an enemy of the “status quo”

3) Mystery shopping (in person and/or by phone, as well as online) should be frequently conducted to get a sense of what an actual customer experiences – then taking action to rectify and improve the experience.

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