Clients don’t measure it in their earnings per share. they have theirs
measurement. The important thing to have from customers is their loyalty. companies
that ignores this important element faces a bleak future of low growth, weak earnings and
shortening of business life.
Frederick Reichheld, a customer loyalty guru and author of the best-selling books, Loyalty
Rules of effect and loyalty! he argued that loyalty is the guarantee of your competitiveness
advantage and survival. According to their study, a 5% increase in customer retention
will translate into growth of between 25 and 95 percent of profitability.
When you put your own interests aside and do something extra for a client, when the
the client perceives that you have helped them in some unusual way and have put in effort
mile – the result is often loyalty. The extra mile can be represented by many different
gestures and acts. Sometimes they have little to do with your formal contract. This can
include helping your client get their children to school. Going that extra mile builds
customer loyalty because it increases trust. It shows that you are focused on your customer.
interest rather than his own agenda. There’s something more behind going the extra mile
and it’s called reciprocity.
The problem in business today is that they don’t measure or evaluate loyalty.
Accountants have devised sophisticated measures for assets, costs, revenues, and
inventory. However, they do not distinguish between revenue from sales of new with
old clients. Investments in old customers and the acquisition of new customers are
considered as costs, instead of being amortized over the life of the relationship with the customer.
This hides all the value from loyal customers.
The most effective CEOs start with a market vision, then go back to work to create a
organization focused on satisfying customer needs. The best example is Dell Computer, a
company that puts the customer at the center of practically everything it does. michael dell
He said that he did not create what became known as the direct model from a grand vision.
However, that model is what makes the company unique and has helped it expand. “Tea
direct model has a number of attributes,” said Michael Dell. “Of course, being in touch
with customers’ needs is one of its most fundamental principles.” It is difficult
Imagine a more customer-focused organization than Dell, as each product is custom ordered,
and the company is structured around customers or groups of customers.
Wal-Mart’s success against all odds was due to the pride of founder Sam Walton
commitment to offer its customers the lowest prices, no matter where they live.
Sam Walton once said, “Every time Wal-Mart spends a dollar foolishly, it comes out
out of our customers’ pockets.” He also said, “There’s only one boss. The client. And the
you can fire everyone in the company from the President on down, simply by spending your
money elsewhere.” That feeling is still deeply ingrained in the psyche of
company, more than a decade after Walton’s death. In 2003, Wal-Mart was voted for the
Fortune Magazine as America’s Most Admired Corporation.
In his book: Who Says Elephants Can’t Dance? former IBM change CEO Lou
Gerstner said that by 1990, IBM had lost touch with the market and its customers.
When the company failed to understand the microcomputer revolution and other important
changes within its industry, the company nearly went under.
Lou Gerstner got IBM to refocus on the market as the only valid measure of success.
He began by telling virtually every audience in the first few months that he had
a client running IBM. He wanted to rebuild the company from the customer’s point of view.
Perhaps Jack Welch, former chairman of GE, gave the penultimate word on the importance
of clients when he said: “Companies cannot provide job security. Only clients can.” In
In other words, make it big in the market or you’re out of a job.
Herb Kelleher, CEO of Southwest Airlines, was quoted in Fortune February 1994 in a
pilot’s decision to return to a gate to pick up a late passenger: “The rules are
great, but the bottom line is doing the right thing.” PepsiCo’s Sally Price, quoted in
Business Week, March 21, 1994: We’re taking customer service out of the essentials
necessary evil that it was in the past and turn it into a competitive advantage.
the customer is no longer king. The customer is dictator.