Speakers’ Panel unanimous on the vital importance of building customer loyalty for long term success
6 March 2018
Henley Centre for Entrepreneurship hosted the latest in the Leadership Insights Speakers’ Panel series at the Henley Business School on 19 February 2018 to address the topic of building customer loyalty, a focus for many SMEs. Sponsored by James Cowper Kreston and supported by Thames Valley Business Growth Hub, the panel shared their insights on how they have built customer loyalty in their organisations.
The panel featured three speakers: Zabetta Camilleri, CEO and co-founder of Shopological, a personalised digital platform where shoppers can find out the latest updates and promotions from their favourite fashion and beauty brands and retailers, from ASOS to Net-A-Porter; James Malone, VP of Worldwide Sales at Opsview, a software company specialising in enterprise systems monitoring software for physical, virtual, and cloud-based IT infrastructures alerting users to any breakdown, failure and malfunction; and Sandra Sassow, CEO and co-founder of SEaB Energy, a renewable energy company developing compact, easy to install, turnkey Anaerobic Digestion Systems in shipping containers which turn farm and food waste into energy and fertilizer.
Jurek Sikorski, Executive Director of the Henley Centre for Entrepreneurship, opened the panel by highlighting why customer loyalty is so important by pointing to the strong correlation with profitability and the growing risk and impact of losing customers. Jurek went on to say loyal customers on average are worth up to 10 times as much as their first purchase and cost less to keep than the cost of winning new customers. He explained that building customer loyalty is all about delivering an excellent service, which in turn is about making the customer happy and rewarding them with a service that goes beyond what the customer expects. Very often it is doing lots of little things, like making a non-sales visit to find out how the product is doing and checking whether the customer is deriving value from the product, which help to simultaneously address any concerns and keep close to the customer.
Jurek shared a simple rule… practice the ‘Lagniappe’ principle, meaning ‘a small gift given a customer by a merchant at the time of a purchase’. We see many companies successfully practice this principle like Hotel Chocolat which serves chocolate pieces as a taster when you visit their shop and ASOS which offers purchase vouchers. Excellent customer service is what keeps customers and maximises life time value, which is critical when compared with the cost of acquiring a customer. Jurek stressed that the goal of every organisation must be to grow life time value and reduce the cost of customer acquisition.
Jurek also reminded all not to forget about the cost of delivering a bad customer service stating that delivering a bad service carries a high cost. For example news of a bad customer service reaches more than twice the number of people as praise for an excellent service. A bad service scares away customers and the worst part is that the company will lose customers and not know about it.
The first of the speakers to present was Zabetta, who shared examples of how Shopological works with retailers to give customers a great experience so that they return to shop again. Zabetta, who lives and breathes shopping, said the experience you offer customers should be truly unbelievable and that technology should help deliver such experience – her team measures and analyses a stack of customer metrics.
Zabetta continued that she has every member of her team focused on making the customer happy at every encounter. She said that whilst working at Orange she learned about the importance of life time value, which she continues to focus on today, and she spoke eloquently about how ‘we should not forget about the cost of acquiring the customer’.
Jim followed Zabetta and showed a similar passion towards building customer loyalty. He spoke of his pride about how Opsview has created a Customer Success department and company culture to ensure that customers are getting value from its products and services and renew their annual subscriptions.
Jim echoed the importance of customer loyalty, pointing out that Opsview was an annual subscription-based software business which was all about repeat revenue. Jim went on to say that subscriptions and upsell revenues from existing customers are the bulk of the company’s sales today.
In addition to its focus on ‘customer success’ Opsview launched and works routinely with ‘unlimited support’ agreements, which serves to please customers and a ‘customer value programme’ designed to proactively call every one of Opsview’s customers every quarter to ensure they are getting value from their products.
Jim sounded an important note that companies can lose customers in a number of ways and need to watch out for and guard against these:
- providing a product/service which doesn’t address what customers actually need
- providing an unreliable product/service
- not fixing problems quickly as they arise
- increasing prices without adding value to your products/services
- not continually developing products/services to meet your customers’ future requirements
- ignoring more agile and new entrant competitors
Concluding, Jim talked about the retention measurements Opsview uses and much like Zabetta is proud of achieving the highest scores that testify to strong customer loyalty.
Sandra closed the presentations with some revealing insights into SEaB’s approach to building customer loyalty.
Sandra demonstrated an interpretation of customer loyalty to the assembled audience by showing them a photo of the SEaB shipping container (its ‘solution’) located next to a customer’s building. To Sandra, this is what customer loyalty is about: a ‘close relationship that is difficult to move’.
For Sandra, managing expectations and delivering what you say you are going to do is what builds customer loyalty. Making sure customers get what they want and ‘helping them look good’ is at the heart of customer loyalty.
Sandra’s answer to building long lasting customer loyalty was to work very closely with the customer and not leave anything to chance and she closed her talk by quoting Sir Richard Branson’s mantra, ‘are we delighting our customers?’ Sandra emphasised that every company should ask this question of itself and of its customers, with her final message that if you make your customers happy you will keep them for life.
The Q&A session that followed the presentations was particularly insightful. A multitude of questions were addressed, including ‘how easy is it for a customer to do business with a supplier?’ ‘how do companies manage customer complaints?’ ‘how well do you know your customer?’ and ‘what are the critical measures of customer loyalty?’
Customer loyalty is a topic that every company needs to address proactively and have it at the centre of its business strategy.
A stream of positive comments were provided by attendees in feeding back on the event:
Alex Tatham MD Westcoast said: “Excellent speakers… always love coming to these events.”
John Estdale, Founder IT Architecture Specialists said: “Three extraordinarily interesting markets – very well chosen.”
Max Fenton, KAM Ascot Racecourse said: “Great speakers, engaging and wide variety of examples… fantastic event.”
Jurek Sikorski recommends the book ‘How to Win and Keep Customers for Life’ by Michael LeBouff as an essential read for those seeking to develop their customer loyalty.
Henley Business School is delighted to have hosted the ‘Building Your Customer Loyalty’ speakers’ panel and moved the debate forward.
The next Speakers’ Panel titled ‘Bolstering and Balancing Your Technical and Soft Skills’ will be on 21 May 2018 starting at 5.30pm.
The University of Reading is committed to work with the SME community in the Thames Valley Region for mutual benefit. Read more here.
Contact and Notes:
Jurek Sikorski, Executive Director of Henley Centre for Entrepreneurship
Henley Centre for Entrepreneurship is part of Henley Business School at the University of Reading which provides a hub for teaching and research in the subject, inspiring students from across the University to embrace, develop and apply their entrepreneurial abilities.
Sponsors and supporters of the Henley Centre for Entrepreneurship Programme of Events include:
James Cowper Kreston (JCK) is a leading firm of accountants and business advisers. James Cowper Kreston sets itself apart from the rest of the UK’s top accountants and business advisers through its unique approach of combining professionalism, flexibility and passion. JCK supports entrepreneurs. Read the new guide compiled in conjunction with Henley Centre for Entrepreneurship - ‘The Entrepreneurial Business: From Start Up to Exit’.
Vital Six is a business services firm that helps ambitious early stage businesses grow their business. Since its launch in January 2014, it has helped hundreds of businesses in Berkshire to grow in size, access new markets, increase profits and raise finance.
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