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One challenge all businesses face is creating loyal customers. As business owners, we try to analyze our customers to figure out what methods we can use to build that base of customers which is so important to future growth. Without loyal customers, your efforts at customer acquisition quickly go from growing your business to replacing defecting customers.

 

James Kane is a behavioral scientist that has advised top businesses about customer loyalty. He studies the brain and what triggers loyalty in people. According to Mr. Kane, there are three triggers that influence loyalty in a person.

 

A Sense of Trust – According to Mr. Kane, “…trust is obtained by doing the things that people expect you to do anyway…” This is especially important for car dealerships. While people are hoping to be treated fairly and honestly, there is a stereotype that has instilled distrust in car dealerships. This is why it’s especially important to ensure that you treat every customer just as you would expect to be treated in a transaction where you are buying something from Nordstrom’s that costs $30k. You would expect to be treated in a professional manner and to be appreciated for your business. Make all your customers – sales, service and parts – feel appreciated for their patronage and live up to their expectations.

 

A Sense of Belonging – Businesses build a sense of belonging in their customers “by showing that a business empathizes with the worries that make customers lose sleep at night,” says Kane. Just like you, customers have a lot going on in their lives. They have bills to pay, have kids to take to soccer practice and work long, stressful days. The last thing they want is a business adding to those worries. Whether your service customers arrive for regular maintenance or come in because something is wrong, they want you to help alleviate their worries. Don’t add to them by failing to live up to any promises you’ve made or failing to solve their problem correctly. Your sales customers worry that they aren’t going to get a good deal and that they will spend too much time at your dealership. If they’re at your dealership, they’re obviously in market for a vehicle. Be an actual advisor and help them find a vehicle that fits their needs. Then facilitate an efficient transaction in a friendly manner that is mutually beneficial.

 

A Sense of Purpose – Show your customers a sense of purpose by operating in a manner that says, “We stand for something beyond just the exchange of money…” Don’t focus solely on what a customer brings to your business. Examine what you can give back to your customers. If you don’t already have one, create a mission statement and display it in your showroom and in your service waiting area. Show your customers that you are committed to them by sharing your organizational beliefs; (they should include customer-centric ideals). Ensure that your customers know that they are more than just dollar signs to you. Demonstrate how you appreciate their business and will do everything in your power to make sure they leave satisfied. Then live up to your promises.

 

In this industry, we use psychology all of the time without knowing it. We listen to a customer’s needs and help them down the path of the sale. We have sales processes designed to encourage the customer to buy… and buy now… and we have service processes designed to better assist our customers to make choices that keep their vehicles operating at optimum levels. Customer loyalty is imperative in our hyper-competitive industry. Many companies are advising businesses to shift their focus from customer acquisition to customer retention. Not only is it less expensive, but it also ensures that money spent on acquiring new customers is actually leading to growth, rather than the status quo.

Views: 307

Tags: James, Kane, brain, customers, loyalty, psychology, retention, science

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Comment by Mike Gorun on September 24, 2013 at 6:21am

Thanks for the comments, everyone. Great stuff!

Comment by Brian Bennington on September 19, 2013 at 1:57pm

Mike, A real thought provoker in the tradition of your Aug. 6 "Customer satisfaction is worthless..." Gitomer post.  But, it makes me remember a Clint Eastwood comment about "over-thinking things."  Something that academics, like James Kane, are prone to do.  His explanation that "...trust is obtained by doing things that people expect you to do anyway..." reads like double talk.  As to "understanding" the science of loyalty, I'd think understanding the methodology (how to generate it) is considerably more important than understanding the "science" of it.  Call me "Old school," but I want to get to the "How can I do this to make more money" part of it ASAP.  

My personal experience is that, unless there's an existing relationship, the easiest, most effective way to instill trust (calm fears, build confidence, make the sale, etc.) is with believable reassurance.  My favorite way of doing it was with testimonials.  Supporting that is the fact that testimonial messaging predominates all types of advertising, primarily because it works.  I've always used it.  My last rep job was four years with Lexus, and I had so many testimonials, I divided them up by model, so if a customer was buying an LS, I'd let them peruse my "LS" testimonial binders while I was away, working on the deal components (appraisal, vehicle availability, "working the desk," etc.).  (Of note, I still have these testimonial books, and each testimonial has an attached photo with me either shaking hands or having my arm around the customer.)  You know, I can't get over how many reps don't use their past customer comments to help make their future sales.  I think they'd rather play "call that up" or "race you to the phone."  By the way, taking a book or two of testimonials to rep job interviews really shows their power as a "closing tool."  New employers love 'em!

About his "A sense of belonging" and "A sense of purpose" paragraphs, both are so general they are, at best-unrelatable, and at worst-counter productive.  With his statement "...The last thing they want is a business adding to their worries" shows that he's a "genius for the obvious" and must think most people are "way dumber" than academics like him.  Can you believe he suggests taking time to "...share your organizational beliefs"?  This is from a guy who probably never overcame an objection or asked a closing question in his life.  Forget the "belonging" and "purpose," and concentrate on finding out as much about the customer as you can.  The goal being to discover and believable recognize their admirability.  Simply stated, there are only two things people really want to hear; admiration and reassurance.

Mike, This is a great post, and I admire you for taking time to share it.  It stopped me from my regular work and really got the "juices flowing."  In closing, I've been saying the following for years, and have never heard anyone else take credit for it, but I'd think I'm not the first to say it.  It's that "A good salesman (or woman) can always use the truth to their advantage."

Comment by Igor lima on September 18, 2013 at 9:13pm
Great texto man. Thanks!
Comment by Big Tom LaPointe on September 18, 2013 at 4:40pm

I love the philosophy here - though I think you have to do all this AND be aware that price will often trump all the best intentions, especially with Gen X and Y buyers - and probably millennials, too

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