What is Customer Loyalty?
Customer loyalty is a customer's "feeling" that directs a buying decision toward
your company’s services over a competitor. This is the heart of what you are
trying to get at. The problem with this is that it is a feeling and customers
can change their feelings. So what you want to do with a loyalty program is to
build and cement a strong feeling about your car wash.
The Benefits of Loyalty
- Over 64% of U.S. households said that loyalty programs were important in the shopping decisions
- Loyalty members average 2.6 washes per month versus 0.5 washes per month for average customers
- Merchants can increase revenue by nearly 50% from retaining only 5% more of their customers
Loyalty BEHAVIOR and Loyalty ATTITUDE
There are two parts to loyalty – loyalty behavior and loyalty attitude. Loyalty
behavior is the customer’s response to market conditions. If there is a
competitor that has a better wash or better offer or likes that person better,
that is a market perception of where that customer will take their business.
Loyalty behavior is measured by customer retention - the customer’s act of
making a repeat purchase at your site and choosing a specific car wash over the
competition. The second part of loyalty is loyalty attitude. Loyalty attitude
is the judgment and perception about a company, brand, service or product. This
is typically measured in terms of customer satisfaction and is actually a
predicator of customer behavior.
To have a successful loyalty program, you must monitor it and know how it is
doing. With loyalty behavior, there are a set of informal measurements.
Everyone has customers that come to the car wash every Saturday. You’ll want to
monitor your good customers and make sure they are coming back to your wash.
This can be measured by consistent car counts. If suddenly you see things
varying way outside your range and can’t allow for that by weather or any other
factor, this is a flag that needs to be watched in making sure your customers
are behaving loyally to you.
Formal measurements include customer surveys for loyalty behavior. You’ll want
to monitor data are far as the wash frequency of customer’s coming to your
wash. Some of the questions of a customer survey include: Have you washed your
vehicle with use before? How often do you wash your vehicle? Would you expect
to return to use this wash again?
Measuring loyalty attitude is fairly easy to do. This is the core of customer
satisfaction surveys. How satisfied were you with the wash? Were the
instructions easy to understand? Was the wash a good value? This is based on
past experiences. This is to make sure you are meeting and setting up their
attitude correctly for them to come to your site. Customer attitudes are most
often weighted by the most recent experience that they have had. If the
customer had a recent bad experience, they may forget how everything was great
the previous ten times they used your wash.
Making Them Special
Good operators are good at customer satisfaction which is the foundation of
customer loyalty. Customers have to be satisfied before they can become loyal.
However, the common view of customer loyalty is that if I satisfy my customer,
it will lead immediately to loyal behavior by the customer. You may satisfy
your customer; however that doesn’t mean that they will come back to you over
and over again. You have to do some extra incentives to really make sure they
are loyal, such as doing more than expected; making them feel “special” by
giving them a special car wash lane, or sending them e-mail incentives. These
all can help build customer loyalty.
Some things to keep in mind with loyalty are that some customers will not show
you loyalty at your wash no matter what you do and you need to understand that
you cannot get every single customer. Also, an unsatisfied customer will never
be a loyal customer.