Many businesses are making a big mistake when it comes to winning customer loyalty. Don’t be one of them.
Last week, I shared a lesson from my local dry cleaning business about making a great first impression on your customers.
Today, I want to tell you a little bit about my barber.
I’m not fussy about my hair, but I don’t like to let it get too long, as it tends to go from “normal” to “mad scientist” without much warning.
And so, once a month or so, I pay my barber a visit.
I always look forward to these visits. We’ve become friends over time, and it’s a chance for me to disconnect for a bit and chat about things that have nothing at all to do with work.
The barbershop where he works is a pretty nice one… about as nice as a barbershop can be, I guess. Big brown leather chairs, free drinks for clients, and the shelves are lined with all sorts of products that do their best to look as fancy as possible.
(You know what I mean: the kind of stuff that’s made in L.A., sold exclusively in the US, and yet inexplicably contains French translations of everything on the label.)
I’ll never forget one visit last year where I overheard another employee telling her client about this “great new product” they’d just gotten in.
“It’s great for the winter,” she gushed to him. “It’s got enough hold to keep your hair in place when you wear a hat, so you don’t have to choose between cold ears or hat hair.”
Thinking back to the messy mop of hair that revealed itself every time I took my own beanie off, I was sold.
“That sounds awesome,” I told my barber. “I think I’ll grab a tube of that.”
Without missing a beat, he leaned in: “Don’t.”
“I’ve tried it, and it’s not going to work for your hair. Plus, it’s a lot shinier than you like. Look for [different product] on Amazon instead. I’ve been trying to get them to carry it here, but I don’t know if we will.”
Here’s the thing: employees here—and in most places like it—earn commission on the products that their clients buy.
If my barber didn’t say that, he’d score an easy few bucks without doing any work at all.
But instead, he passed up the cash in exchange for something that made me even more loyal to him. I live in a new neighborhood now with its own barber shops in easy walking distance, and still I get in the car every month and drive to my old standby.
The biggest reason for my loyalty?
Taking Your Clients Under Your Protection
In Jay Abraham’s fantastic book Getting Everything You Can Out Of All You’ve Got, he highlights a profound shift in thinking that can change the way your business operates:
Customer: A person who purchases a commodity or service.
Client: A person who is under the protection of another.
The difference in the meaning is massive. And there’s a massive difference in the way a person who does business with you could or should be treated.
If in your field these people are referred to as customers, that’s fine. But whatever you call them, always think of them as a client.
What exactly does “under your protection” mean?
In this case it means that you don’t sell people a product or service just so you can make a large one-time profit.
A better option is to understand and appreciate exactly what your clients needs when they do business with you—even if they are unable to articulate that exact result themselves. Once you know what financial outcome they need, you lead them to that outcome—you become a trusted adviser who protects them.
And they have a reason to remain your client for a lifetime.
Instead of thinking about the value of the transaction, my barber was thinking about the value of me being his client for a lifetime.
That’s a very different way than most people think, but it can actually transform your business.
Here’s why: customer lifetime value may just be the most important metric for any business, because even tiny increases can lead to huge gains in overall revenue.
If your SaaS customers pay you $50 per month, and the average customer stays with you for 10 months, then your average CLV is $500.
With 1,000 customers, simply increasing that average to 12 months — just 20% — would add $100,000 in revenue to your business.
Keeping your customers happy and loyal by taking the long-term view and placing them under your protection can pay off in a big way.
3 Ways To Place Your Customers Or Clients Under Your Protection
Here are five places to start ensuring that your customers or clients feel protected by your business:
1) Un-Sell Your Customers
Just because you can sell something to someone, doesn’t mean that you should.
Ramit Sethi sells popular personal development courses like Earn1k and Dream Job to help students start businesses, get better at interviewing and finding better jobs, and earn more money.
But many of his sales pages come with a very important stipulation:
Ramit knows that his courses aren’t the most valuable thing that someone with credit card debt could be spending their money on, and he actively steers them away, making it clear that he’d be happy to welcome them back once they’re debt-free.
We do something similar often at Groove. If someone does not get many customer support emails, we tell them that they shouldn’t pay for Groove.
It’s not that we don’t want to help them; it’s that we know that if you’re fielding three support emails per week, you simply don’t need a help desk, and Gmail will do the trick just fine.
Often, when these businesses grow big enough to get value from support software, they’ll come straight to Groove because of how we treated them.
2) Don’t Let Policies Get Between You and Your Customers
Your customers’ problems don’t always happen during 9am and 5pm.
When customer service expert James Lloyd arrived at a speaking gig, he realized that he had forgotten his shirt and tie.
With only 40 minutes before he was scheduled to take the stage, James panicked. It was 8:20AM, and none of the stores in the area would be opening for nearly two hours.
After being turned away from a Banana Republic, James was running out of options. Finally, he called the local Nordstrom. Immediately, the woman on the other end of the phone jumped into action, picking out a shirt, having it pressed, and meeting James in front of the store with the clothes he needed to get up on stage and deliver his talk.
The video where James shares his story is worth watching…
By taking James under her protection, even though the store wasn’t even supposed to be open, the Nordstrom manager earned a customer for life.
3) Don’t Just Tell Your Customers How to Do Things; Show Them
People love to joke about Whole Foods and how the chain can be pricier than its’ competitors.
Some have even taken to calling it “Whole Paycheck.”
But here’s a challenge: go into your neighborhood Whole Foods.
Walk up to any employee in any section, and ask them where a particular item is.
They won’t say “aisle 4.”
They won’t point you to another part of the store.
They won’t give you directions on how to find it.
Instead, the employee will walk you to wherever the item you’re looking for is.
You can apply this example online, too.
Does your customer need to follow a link and fill out a form to make updates to their account? Make the updates for them.
Do they need to take steps to troubleshoot an issue they’re having? Set up a screenshare on Skype or Google Hangouts and walk them through it.
In fact, a 2007 survey by the Customer Contact Council found that the single most important factor to increasing customer loyalty is reducing the amount of work the customer has to do.
Become A Protector
For many businesses, it’s instinctive to want to make a sale, no matter what.
And so often, a business will sacrifice incredibly valuable long-term customer relationships for short-term profit, without even thinking about it.
Don’t be that business.
Place your customers or clients under your protection and keep their best interests in mind.
Even if it costs you today, it’ll ensure that you win big in the long run.