Hartford Business Journal

www.HartfordBusiness.com February 9, 2015 • Hartford Business Journal 21 Biz BookS Building customer loyalty requires more than quality products, services "E vergreen: Cultivate the Endur- ing Customer Loyalty that Keeps Your Business Thriv- ing" by Noah Fleming (AMACOM, $26). Fleming lays the foundation for custom- er-centric principles with "3 Cs" — charac- ter, community and content. All of the 3Cs involve two other Cs, connection and con- sistency, which entrench customer loyalty. Character embodies the personality of the brand. It presents the traits that shape the perception of products/services. That per- ception starts with your company's stories. These deal with the who and why of the firm. They explain the what and how behind the company's vision, commitment and purpose that makes it unique. To craft your stories, Fleming provides a series of questions; your answers write your story. The stories aren't just for the customer. They're for your employees; the company's stories remind them that how they do their jobs reinforces the customer's perception of your brand. Community provides a sense of belonging to customers. It shows the company's inter- ests in their interests, viewpoints and values. Community deals with interaction and show- cases how well the firm listens. Showing that you learn from the customer's voice improves connection. Your responses freshen your sto- ries; you can be sure that the customers will spread the word. Fleming's research discovered that "as con- nection to the brand and community increas- es, customer support and service requests may actually decrease." Why? Customer input helps you nip potential prob- lems in the bud. He offers a word of cau- tion about creating com- munity: Don't think just in terms of obtaining feedback, provide information and things that bring community members together. Example: Ferrari Chat provides an online communications forum for Ferrari owners. It's the go-to place to post event infor- mation, and tech and restora- tion questions. This community also includes service providers that connect their expertise. "Content is the core 'thing' that the cus- tomer receives in exchange for money." Most companies believe that content is the only thing that keeps customers coming back. Far from it. An engaged-customer experience requires the support of char- acter and community. Without ongoing customer involvement, a business becomes transaction-based. Only relationships cre- ate loyalty. Chapter 7, "Getting Loy- alty Programs Right," alone is worth the price of the book because of its counterintui- tive approach to loyalty pro- grams. Most of these focus on rewarding their best cus- tomers. Yet, when it comes to ROI, the best customers offer diminishing returns because they're already using the product/service. While the best are impor- tant to maintaining com- munity, they're only the tip of the iceberg when it comes to expanding com- munity — and profits. Not-so-loyal customers offer a higher ROI because their use of content can grow. Starbucks realizes this. Like all loy- alty programs, it tracks and categorizes members by spending, number of visits, products purchased, etc. Based upon the data, Starbucks creates specific market- ing programs for the not-so-loyal, and can tailor the programs by store. Its programs don't just target increasing frequency of use. They ask customers about their perception of Starbucks and its com- munity. By including brand-interaction and customer-experience opportunities, it invites customers to the community. Once they join, sales and profits increase. Fleming discusses the loyalty ladder. It has multiple rungs so the customer wants to climb. The airlines got that part right. The part they got wrong was making it dif- ficult to use the perks. That said, it's not all about the perks. There should be intrinsic rewards. Fleming cites a restaurant that offers a members-only menu along with its regular menu. The members are recognized and non-members see that signing up for the loyalty program has a benefit. You can also literally sell loyalty. Ama- zon Prime is an example. You don't have to be Amazon: a craft brewery/restaurant near me has a $20 "Mug Club" and hosts Mug Club-only events every month. Key takeaway: It costs less to strengthen relationships than it does to develop them. n Jim Pawlak is a nationally syndicated book reviewer. Jim Pawlak exPertS Corner Strategic planning: opportunities for leadership and organizational success By David Buckman O rganizations of all sizes and types, from Fortune 500 companies to grass-roots non-governmental organizations, peri- odically turn to strategic planning to reconnect with their core val- ues, articulate their mission and chart goals and objectives to help them achieve their long-term vision. Strategic planning has been defined as a sys- tematic process of envisioning a desired future and translating this vision into clearly defined goals or objec- tives and a sequence of steps to achieve them. An effective strategic planning process can be a transformative moment in the life of a company. It is also challenging and complex, and many companies struggle to do it effec- tively. If not conducted carefully and intelli- gently, the results may send the organization down the wrong path, wasting resources and imperiling its future. However, when successful, an effective strategic plan can be a positive force that drives results for years to come. Strategic planning also presents an impor- tant opportunity for the executives involved in the process. As companies convene high- performing teams to wrestle with their most fundamental issues, participants who can demonstrate collaboration, analytical ability and a capacity for innovative, strategic vision will establish their reputation as thought leaders, indispensable to the senior team. While there is no one-size-fits-all process for strategic planning, there are proven meth- ods that optimize the process. Before a strategic plan can be crafted, it is imperative that there be a comprehen- sive SWOT analysis of the current state of affairs, which includes an examination of the company's strengths, weaknesses, opportunities and threats. This analysis must measure the organiza- tion's qualities. What are the predominant traits of the company's culture? What are the personality types of its leaders? What is its external leadership brand? Successful strategic planning requires a deliberative, disciplined process. Fundamen- tally, strategic planning identifies the compa- ny's mission, vision and core values and uses them as the foundation for specific, measur- able and achievable strategic action plans. The critical, initial step of a successful pro- cess is development of a mission statement that articulates the organization's core reason for being, and a vision statement guiding where the company will be in the future. The former must be timeless and true, regardless of chang- es in company tactics or structure. The latter should be aspirational as well as inspirational. A clearly honed strategic vision frequently depends on clearly identifying and reinforcing core values and operating principles. Why do so many strategic plans fail? Because they lack commitment, persistence and follow through, long after the planning is finished. While all strategic plans tend to roll out with a great deal of fanfare, to sustain a strategic plan you must have a specific road- map to take it beyond banners and desk toys until it is engrained in the company culture. Tasks and responsibilities need to be assigned and the multi-disciplinary leadership team that helped develop the strategy must remain involved. Real steps, altered behavior and hard work must be applied and sustained to allow a strategic plan to come to life. Measurement is equally crucial. Without accountability, the strategic planning pro- cess is an empty exercise. The strategic plan must include quantifiable success indicators with measurable impact on the overall com- pany performance. Defining a company's strategic plan requires more than developing lists, goals and desired results. It is about creating a culture that sup- ports what the company believes in and what its people stand for. At the end of the day, a strategic plan, if executed well, will result in the creation of an organizational framework to ensure future success and growth. n David I. Buckman is executive vice presi- dent and general counsel at Philadelphia- based AlliedBarton Security Services, which has offices in Connecticut. David Buckman ▶ ▶ An engaged-customer experience requires the support of character and community. Without ongoing customer involvement, a business becomes transaction-based. Only relationships create loyalty.

• Cover