6. Stage Four: Happily Ever After

If you create a great experience, people tell their friends, but you don’t own the gas pedal on that. No attempt we’ve made to bribe our customers into telling more people or even inspire them into telling more people by making charitable contributions and other things, has ever given us a gas pedal on word of mouth referrals. The best gas pedal on word-of-mouth referrals is just a great experience.

—Gail Goodman, CEO of Constant Contact¹

The customer who has recently finished a transaction with you is more likely to engage in a transaction with you again. This is the power of recency. And, the more frequently a customer engages in a transaction with you, the more likely they are to continue that behavior. This is the power of frequency. The entire loop and adopting a retention/loyalty-focused mind-set is about increasing a customer’s frequency and willingness to engage in business activities with you again and again. In the business world, this is often referred to as the recency, frequency, monetary (RFM) value model. As we think back to previous stages of the book, the model makes sense on many fronts, primarily with how the customer is feeling at each stage of the process.

Back in the 20th century, German psychologist Hermann Ebbinghaus called a similar concept the serial position effect.² Analogous to the RFM model, the serial position effect deals with primacy and recency—primacy as it relates to the first stage of the loop and the ability to be preeminent in the customer’s mind, and primacy as it relates to first impressions and so on. People are more likely to remember what happens at the beginning of an experience and the end of the experience, but they often forget the middles.

Ebbinghaus was his own research subject, committing himself to learning thousands of lists of apparently “nonsense” words that had been made up of two consonants and a vowel, like HEB. Despite the fact that these words were made up and had no meaning, subsequent research showed that people would try to associate the words to those they already knew and thus ascribe some sort of sense to them. Ebbinghaus was famous for identifying the forgetting curve, which plots the rate of loss of learned information. He found that the greatest decline occurred in the first 20 minutes and is significantly larger in the first hour. Ebbinghaus also described the learning curve in which most information is learned at the first attempt, and less information is learned after each repetition. Perhaps this explains the “first impression” effect— it’s difficult to unlearn initial information or learning.

Ebbinghaus also identified the serial position effect, in which recency and primacy seemed to enhance learning. Ebbinghaus believed that the recency effect worked because the information was still in short-term memory. The primacy effect works because there is more time to rehearse and commit to long-term memory compared with items that come later in the list.

Another relevant concept that Ebbinghaus came up with is that of “savings.” What he found was that even after he had forgotten a list, he could subsequently relearn it much faster than he did learning it the first time around. He assumed that even though he had consciously forgotten a list, it was still lurking in his subconscious and was quickly recruited when he was exposed to it again. His memory had been “jogged.” This has real implications for the Customer Loyalty Loop. How you treat a customer isn’t relevant just to their immediate experience, it is also likely to recruit similar past experiences that they have probably forgotten. Customers aren’t likely to be going around constantly remembering the great customer support they received until they get it again. Of course, the same works for negative experiences. Every time you interact with a customer, you are likely to remind them of their past experiences with you, especially if they were more than neutral interactions.

Dropping the Customer Follow-Up Ball

In the Customer Loyalty Loop, recency is the crucial underpinning of your customer follow-up processes and procedures. The more recently someone has engaged in business with you, the more likely they are to be interested in what you have to say (or to do it again). Now here’s a big distinction: the onus isn’t on the customer to come back and be more “recent.” It’s not up to the customer to conduct transactions with you more frequently. Instead, the onus is on you, the business owner, the brand, to work to bring the customer back to buy, buy more, and buy again after that.

Most companies drop the ball in Stage Four because they’ve moved back to the thrill and excitement of finding new customers. It’s backward thinking. If I do business with a company and then the first time I hear from them is six or eight months later, then they were likely better off not following up at all! It creates negative associations for many customers. But if I’m contacted 10 or 15 days after I do business with you with the right type of request or reach-out, then I’m more likely to do business with you again and react positively to whatever it is you send me. The memory of our experience is still fresh at this point. So ask yourself, how soon after the transaction ends are you making your next contact with a customer? The more recently they’ve done business with you, the more likely they are to respond and be interested. But it needs to be the right type of reach-out. Many go right for the jugular, hoping the positive word of mouth starts flowing after the first experience. To do that, they use something called Net Promoter Score. which I believe is a terrible tool for measuring customer loyalty.

Stop Measuring NPS

In 2003, Fred Reichheld, a partner at Bain & Company, introduced the Net Promoter Score.³ NPS was introduced as a management tool that could help companies gauge and understand customer loyalty as it applied to revenue growth. The model was incredibly simple and became—and has remained—one of the most important tools for measuring customer loyalty over the past 10 years. Customers of a company were asked a single question, using a 0–10 scale: How likely is it you would recommend (insert brand/company) to a friend or colleague? This is the official NPS question. Respondents were then grouped into categories like:

• Promoters (score 9–10) are loyal enthusiasts who will keep buying and refer others, fueling growth.

• Passives (score 7–8) are satisfied but unenthusiastic customers who are vulnerable to competitive offerings.

• Detractors (score 0–6) are unhappy customers who can damage your brand and impede growth through negative word of mouth.

Subtracting the percentage of Detractors from the percentage of Promoters yields the Net Promoter Score, which can range from a low of –100 (if every customer is a Detractor) to a high of 100 (if every customer is a Promoter). NPS has long been hailed the ultimate customer loyalty measurement tool, but in my opinion it’s a relatively useless tool. I have a slight suspicion it makes bigger brands and organizations feel good about their efforts because it takes an average look across all customers. If most are considered promoters, then they must be doing something right. If more are passive, then they know where to focus some efforts.

There are several things wrong with the NPS approach from a simply statistical perspective. There’s the question of the reliability and validity of the standard questionnaire that asks customers to rate service on a linear scale. Reliability refers to whether someone will reliably give the same answer to the same question. If they don’t, the questionnaire is useless. Validity refers to how well a tool measures what it intends to measure, and it depends on the questionnaire being reliable to begin with. For example, does the answer truly reflect the customer’s views? Perhaps they just want to fill out the form and send it back as soon as possible and aren’t concerned about accuracy. Perhaps the answer given just reflects the mood that the customer happens to be in at the time they complete the rating scale. The scale is also very subjective, and people vary in their criteria of service so that one person’s 5 is another person’s 9. This problem is mitigated a little when there are descriptions of the numbers on the scale (e.g., “A 10 means that service was perfect,”), but then perfect is a subjective judgment. So, what correlation is there between a customer’s rating scale and the probability of them buying from you again? A rating scale is not the basis of a relationship. Completing a typical rating scale is not a peak experience; in fact, it’s not much of an experience at all.

There may be ways of making a rating scale a bit more fun and more interactive, for example, by adding an animated character to guide you through the rating. Interactivity is the key, here. But while we might have fun and even some excitement interfacing with an animated character, for example, there is nothing like the right person-to-person interaction to create a bond, trust, and ultimately, loyalty. And that personal interaction has to be authentic.

How can you make your post-sales (that is after the customer’s most recent purchase but also before his or her next purchase) communications memorable? Sending a standard form used by everyone else hardly makes you memorable. Asking the same questions in the same way that doesn’t distinguish you from the competition hardly makes you memorable.

There are other reasons why NPS is relatively useless. Some of the big reasons should be obvious. For example, it doesn’t matter how many promoters you might have based on the single survey question. Because unless you have referral programs and tools in place to encourage word of mouth, then it means nothing. In essence, by looking at averages, it misses out on looking at one-to-one perspective and experiences with a company as an opportunity to improvement. Even if 100 customers told a company their service was horrific and Johnny was a rotten account executive, they might not be willing to do anything about it, because overall NPS scores are still averaging on the high end. Johnny still continues to damage your company behind the scenes.

In 2016, in an interview with Bloomberg, Reichheld discussed how the single post-purchase follow-up survey has officially “jumped the shark” as companies merely bribe their customers by asking for 10s instead of using the survey as an opportunity to create improvement— or in this case, extend the loyalty loop.⁴ The employees don’t care what the customers have to say, so they bribe the customers to give top marks. Companies say things like “It would be really valuable for us if you gave us a 10.” What good does that do to help you improve your customer’s experience? Nothing. It’s rather damaging because it signals to customers that “we don’t truly care if you’re happy or not. We only care if we get high marks.” In larger companies, you have these huge investments into adhering to the NPS program, and then front-line employees bribing customers to give 10s. The scores end up as valuable as a bundle of Lehman Brothers stock.

The other huge issue, of course, is that the number means absolutely nothing unless you understand what’s required after the sale to bring a customer back or to extend the loyalty loop and create the next desired action from your customer. Even with all the Remarkable Moments, great memories, and positive feelings you’ve created throughout the customer’s experience, people eventually get back to real life. This means that your past customers aren’t spending 24/7 thinking about the next time they’ll do business with you. In fact, it’s almost the opposite. They return to a normal life where kids get sick, cars break down, bills need to be paid, Ob-La-Di, Ob-La-Da life goes on. Who cares if they would score you a 10 on the NPS scale? The only thing that matters is if they will actually tell someone about you and they actually do it; if they actually come back and do business with you, and so on, and so on. There are a lot of ifs. And perhaps, most important, if your company is willing to make changes if your scores are poor. A lot of people in business have a hard time understanding that people aren’t thinking about spending money with their businesses each and every waking moment of the day.

If you only ask one silly NPS question, how will you know where you’re dropping the ball? How will you know where you need to improve and do a better job? How will you know where to invest your marketing dollars?

It’s our job in Stage Four to have the right processes and procedures in place to ensure all of those things and more happen. The loyalty loop can be repeating for a single customer, and it also spirals to create new customers and new opportunities, but only when you have the right processes in place to make that happen. Consistency and familiarity are the keys to Stage Four and creating the right environment for word of mouth and referrals to happen. Just because my first experience is a good experience, does not necessarily mean I’m ready for a silly one-question survey about if I’m willing to refer. I’m likely not ready yet, and asking me at the wrong time can actually influence my memory of a great experience gone bad. Remember back to earlier chapters and the seemingly wonderful experiences ruined by a poor ending. I may be only willing to refer after my fifth or eighth purchase.

Oh, and the day before writing this, I got an NPS survey from a company that I haven’t given a dime to in four years. I also continue to get their “customer-only” newsletters. This is a company that’s doing north of $50 million a year revenue and has been on the Inc. 5000 list half a dozen times in the past eight years. Now you might be saying, “So what, Noah? They’re doing annual revenue of over $50 million a year.” Yeah, but they could be doing $125 million if they were doing things right. I bet they could. Is your business more about checking the boxes and less about generating meaningful results? And that’s the key distinction here. Moreover, the request from the company I haven’t done business with isn’t just blatantly wrong; it’s entirely inappropriate. I’m not a customer and haven’t been in a long time. This is just one way so many companies are encouraging negative word of mouth. I was in a meeting once where a CEO found out his people weren’t following up on quotes of about $30 million a year. He looked at his people and everyone sat in stunned silence. Finally, he said, “Here’s what we’re going to do! Every month we’re going to have a big old’ bonfire in the company parking lot. I’ll give you all $250,000 of my money. At least this way we can toast marshmallows.” Harsh example, but so true. Let’s talk about how much follow-up, how often, and why it’s important.

The 90–45 Rule

I was conducting a workshop with a B2B client when one of the attendees in the back of the room raised his hand. He said, “I’ve got a confession to make. Actually, it’s more of a story.” He told us a story about a job he was working on with a client. When the work was completed, this employee visited the client’s site, a large restuarnat, to ensure everything was performed as expected. The job went remarkably well and the client was thrilled. He then said, “And that was the last I heard from them.” So I asked him if he followed up. He said no. I asked the sales team if anyone else followed up. They said no. I asked the marketing people in the room if they followed up. They weren’t sure either. Then he told us the rest of the story. He went to the client's restaurant for lunch one day. He arrived to find one of their main competitors working on another job. They didn’t lose the business because of a poor customer experience or a customer service blunder. In fact, it was the total opposite. The Customer Loyalty Loop broke down in Stage Four because nobody followed up. Nobody maintained contact with the client. Nobody sent them anything valuable or got in touch to see how things were going. This was the only reason they lost the work. That’s it.

Another client had a similar challenge. The products they sold were more expensive and the buying cycle was less frequent, but the CEO knew they weren’t doing a good enough job developing and nurturing the relationships with their clients. With this client, we put a simple yet incredibly powerful tool into place called the 90–45 rule. I began calling it the 90–45 rule because those were the specific dates that were important to this client when creating the rule.

The rule we put into place was simple. It said that no client who had ever spent a dime with this specific company was allowed to go more than 90 days without at least a 15-minute phone call, but preferably a 30-minute, in-person meeting with their specific sales rep.

Further to that, we took the top 10 percent of customers for each sales rep and adjusted the rule so that no customer could go 45 days without the same follow-up. How does this apply to your business? How often should you be following up and maintaining contact? The Customer Loyalty Loop requires proactive effort. You get out of the loop what you put into the loop. For your business it might be a 3–7 rule. For others, it might be entirely different. The point is to keep in contact! It’s a horrible feeling showing up at a happy client’s place of business only to find your best competitor doing your work. It’s scary, but it’s happening far more often than you think.

Here’s a crucial component of the 90–45 rule: the 90–45 rule is about personal communication. The more frequently you communicate with customers in a way that adds value to them and their interests, the more revenue your company will generate. The key here is the communication is in their best interest and not your own self-interest. People smell ill-intent a mile away.

I get a lot of pushback when I explain something as simple as the 90–45 rule. People say that their customers don’t want to hear from them, or they are reluctant because such calls and “check-ins” feel awkward. But nine times of out 10, when I find customers leaving businesses to go to the competitors, I find a very flimsy sense of loyalty to certain companies; when we dig down to discover why, it becomes apparent that the other guys are showing up more often. Remember the definition of loyalty. Loyalty is about connection, and connection is about feeling. It’s the feeling that I have a relationship with you, and you have a relationship with me. This is about maintaining an open, honest, friendly, and supportive relationship with your customers. Trust me, it’s worth it. Everyone has to take part. Every single client that has implemented a simple 90–45 rule has handsomely profited handsomely. You could be next.

The Pick-3 Process

The age of high tech often reduces our ability for high touch, but of course proper use of high tech can enable high touch in the most effective ways. One of the simplest yet most effective tools I’ve ever given my clients is what I call the Pick-3 Process. I was working with a large B2B manufacturing company where everything that could be going wrong was going wrong. They were losing clients and market share to their competitors, and sales weren’t increasing either. The CEO had heard me speak and knew he needed to hire me to help. Instead of spending too much time explaining exactly what was happening, I'll keep it relatively simple: they weren’t following up—at all. I was hired to help. What I loved about this company was that they weren’t willing to allow one department to take the blame for the current state. Instead, the objective was to change the entire culture of the company to focus almost exclusively on following up, and the Pick-3 was born. Similar to the 90–45 rule, Pick-3 is about assigning specific loyalty loop–related tasks throughout the entire organization.

We do this through a simple tool designed to ensure the right things are happening consistently when they should be, and if they’re not, then management is aware of it. We know the last time John at ABC Tire was contacted because it’s in the system. Now you might be thinking this sounds a lot like a customer relationship management (CRM), like Salesforce or any of the dozens of other tools out there, but it’s not because this is all about action and activity as it relates to deepening the relationships with our customers. Without going into too much detail on the system we provide many clients, it’s not necessary to develop your own Pick-3 Process.

Build Your Pick-3 Process

Pick-3 is simple. Every day, you and your team each engage in three simple tasks related to the Customer Loyalty Loop. That’s it. Three tasks, all of which should take no less than 15 minutes. Now you might be thinking, this seems pretty simplistic, but this is where you take advantage of the power of compound interest. When we get an entire division or an entire company engaged in these tasks, the results are incredible. If you really want to be a customer-centric company, this is how you do it. You can stop worrying about all that other stuff, because Pick-3 is about the rubber meeting the road in terms of actionable tasks designed to build and develop the relationships with your customers. So, we have tasks every single day, for everyone taking part. You then need to track that the tasks are being done every single day. And you rinse and repeat, and you add new tasks as you go. Think of a diagram like the one in Figure 6.1. This could be filled with dozens of different options for your people. The goal is to complete three tasks per day, per employee, that drive customer loyalty and customer satisfaction. Just imagine if thousands of these actions were being completed each day! Now that’s what you call customer centricity.

Figure 6.1: Pick-3 Process

Here are a few examples.

Pick-3 Example Task 1: Call three of your highest-value clients in terms of revenue.

Pick three of your best customers and clients based on revenue and call them. Review their client record to understand the last time they purchased and what they purchased. Review the last time someone else spoke to them. Spend another 30 seconds conducting a quick Google search to see if there’s anything about them in the news. Make a note of the last time they purchased or anything newsworthy about them. Remember, this call is about putting the customer’s interests ahead of yours. If you call them to pitch your latest offering, then you’re doing it wrong.

Pick-3 Example Task 2: Send Three Handwritten Notes

Don’t underestimate the power of the handwritten note. In our day and age of high tech, we’ve lost touch with low-tech, high-value follow-up that’s meaningful and memorable. One company built a thriving business by sending 13,000 handwritten thank-you notes. I routinely send things to my top clients. I might send a small handwritten note with a newspaper article I’ve clipped that’s relevant to their business. Send three small postcards or handwritten notes to your new customers, existing customers, suppliers, and so on. The cost is minimal, but the ROI can be massive. I closed a $45,000 project after sending a handwritten note to a client with an article I thought was relevant to him. I have yet to find another marketing tool that can generate a $45,000 ROI for a cost of about a dollar and about five minutes of my time. Remember, you can replace “customer” with supplier, distributor, joint venture partner, and others. All of these are valuable to creating remarkable and memorable customer experiences. For example, if you have joint venture partners where you’re sharing customers via referrals, it’s critical that congruence is maintained, and that expectations the referee is creating are met.

Pick-3 Example Task 3: Call Three Inactive Clients

Find three customers, suppliers, distributors, retailers, or others who have recently stopped doing business with you or haven’t done business with you in a while. Call them to see how they’re doing. If you don’t know why they’ve stopped doing business with you, attempt to learn why. See what you can do to win their business back.

Pick-3 Example Task 4: Solicit Three Testimonials From Existing Clients

Call three existing customers and solicit three testimonials from them. I cover testimonials in detail in a later section. Use them everywhere. Use them to express your customer’s joy to your employees and people. Use them in your preemptive Stage One marketing, and utilize them throughout the experience to emphasize the overwhelming social proof that people love your business.

Pick-3 Example Task 5: Contact Three New Clients

Pick three relatively new customers and call them to see how things are going. See if their expectations are being met. Ask them if they have any specific questions or concerns. Do what you can to address those concerns earlier rather than later.

Pick-3 Example Task 6: Create Your Own Tasks

As you can see, these are relatively simple tasks all designed to add value to the existing customer experience. You can create your own. With some of my clients, we’ve created dozens of simple yet powerful nurturing tasks that are completed on a daily basis. What tasks could you do on a regular basis to add more value and enrich the experience of your customers after the initial sale? That’s what the Pick-3 is all about.

Track Your Results

The key thing to remember is that everyone needs to be responsible for completing these tasks on a daily basis. The reason we chose three is that doing one task three times is relatively easy. In addition, as you can see, all the tasks are incredibly simple. The main thing is that they’re getting done. Our application allows for exception reporting when people are falling behind. The objective is to make sure the tasks become habitual. Think about the compound effect here: If you have 10 employees reaching out or doing three tasks a day, that’s 30 customer touch points a day, and that’s 900 customer touch points a month and over 10,000 a year. Now imagine that when you’ve got 40 employees in your office or 80, or 100. Most people can’t even comprehend this much focus on retention and loyalty efforts, but there’s immense power in this type of follow-up.

The tool we’ve provided to many of my clients is incredibly simple. Every day they log in and they’re given their three tasks at random. If they truly don’t love the task they’ve been given for the day, they can spin and request a new task. The task is laid out and there’s a video, from me, describing how to complete the task as effectively as possible. They then complete the tasks, making note of what they did. If they don’t complete the task, they’re reminded throughout the day to get it done. And then, of course, we have exception reporting delivered to owners, managers, CEOs, and others. This is less about compliance and more about doing things to grow the business. Imagine expiring the power of compound interest when it comes to nurturing your customer base! That’s what the Pick-3 is all about. Don’t just claim to be the friendliest company on the planet. Don’t just claim to offer a wow experience. Don’t just claim the customer is number one. Back it up. This is how you do it. If you’re interested in our Pick-3 tool, send me an e-mail.

Consistency Over Quantity (and Even Quality!)

Customer loyalty is about connection, and the connection is about feeling. It’s the feeling my customers/readers have that I have a connection with them, and it’s the feeling that they have a connection to me. Let me give you an example.

Every week I send my weekly newsletter to 30,000 subscribers. It’s called Noah’s Tuesday Tidbits.⁵ Every Tuesday morning the tidbit goes out around 7 AM. And by the way, if you haven’t subscribed, stop reading, head on over to NoahFleming.com, and subscribe now. I got serious about Noah’s Tuesday Tidbits when I came to the realization that people could not only pass through Stage Two relatively quickly, but they could also spend a long time there dependent on the product, service, or need. And in many cases, even the trust building that happens in Stage Two can take months, even years. At the time of this writing, the Tuesday Tidbit has been delivered without fail for more than 200 weeks. Every Tuesday, it doesn’t matter what’s happening, that Tidbit is scheduled and going out. Now, here’s the most important lesson to be learned: they’re not always perfect. Sometimes they contain the odd typo or two, but there’s consistency in it. If, and it’s a big if, the e-mail hasn’t hit the in-boxes of my subscribers by 10 AM on a Tuesday morning, I start to get e-mails from prospects and clients asking me if everything is okay, or perhaps they got unsubscribed, or can I check if the Tidbit went out to them. This is a sign that I’ve got the connection right.

One prospect in particular read the Tidbit for over two years. All along the trust was building, and the ideas about how I could help were being formed in his mind. He wanted to work with me but wasn’t exactly sure when and how we might work together. Then, one Tuesday morning, one of the tidbits “hit him like a ton of bricks!” he said. I flew out to meet him, and we signed a $86,000 consulting engagement. Not a bad deal for me, and an excellent return on investment was generated for him. The point of this story is that consistency is almost more important that quality. I see too many businesses that don’t communicate with their customers consistently enough. Guess what happens? They forget about you. I see it all the time. In Stage Four, one of the crucial lessons to be learned is the concept of familiarity. My Tuesday Tidbit doesn’t just go out to my prospective customers, but my current and past customers too (among other things).

Too many businesses look for the one-hit wonder marketing piece. They believe they can put something out there that’s instantly going to attract someone to go all of the way with them. But that’s not entirely true. So what does the science tell us as it relates to Stage Four? The science tells us the more exposure someone has to your brand, the more positive they are going to feel about your brand or your company. For big businesses, this is pretty simply understood as regular and consistent branding. The more exposure we have to a brand, the more familiar we are with that brand. But I’m suggesting that almost all companies aren’t consistent enough with valuable and engaging follow-up. Social psychologists have suggested that our frequent exposure to someone or something leads to a sense of familiarity. Big brands, corporations, and politicizations with deep pockets have the ability to penetrate our minds. But for nearly all companies, here’s the most important part: how someone feels about your company has a lot to do with mere exposure to who you are and what you do. That’s why the Tuesday Tidbit works, and that’s why I build a strong connection with my prospects and my readers. That’s why a simple newsletter can be an incredibly powerful tool for a small business. The simple fact that you’re showing up every week or every month says a ton to your current and prospective customers. Most businesses aren’t willing to engage in the extra work. Are you?

There’s a lot of scientific evidence to suggest that the more you communicate to your audience, the more they’re going to buy, the longer they’re going to buy for, and the stronger relationships you’ll have with your customers. Even if you do show up regularly, that doesn’t mean your customers are going to buy regularly. As it relates to the recency, frequency, and monetary model, all businesses and all customers are going to have varying buying cycles. It’s crucial that you understand the cycle of your business.

The Customer Iron Cage

Figure 6.2 represents the Customer Iron Cage. Unlike a typical iron cage where someone might be held against their own will, customers can’t help but want to stay inside your cage. First, we offer them resistance-free selling, absent of any traditional persuasive and manipulative sales tactics. From there, we offer a remarkable customer experience in the third stage. Finally, the fourth stage is developed and continued through ongoing and consistent follow-up. See the correlation below.

Figure 6.2: The Customer Iron Cage

The Carousel Theory

The Carousel Theory is the term I use to talk about the buying frequency of your products and services as it relates to the frequency of your communications with your customers. It indicates that all customers go through cycles. Think of the horses on a carousel moving up and down and also going around and around. Customers will have different needs, different levels of interest, and different requirements after the sale.

6.3 The Carousel Theory

For example, a customer may need a mattress today, and they likely won’t need another one for about 10 years. They don’t need one in the next three weeks, but they may buy ancillary products and services, or they refer you. They may be interested in products from your partners and learning more about improving their sleep patterns. If you’re consistent in your follow-up and continue to be top of mind, then you have a better chance at getting that next big sale 10 years from now. But if you’re only showing up trying to sell, then you’re doing it wrong. Customers may not enter anther buying cycle for a while. That’s determined by your products and services, but the Carousel Theory also suggests that it’s not just buying frequency that determines your next follow-up; it’s about constantly following up to build and nurture the customer relationship. Everyone loves to talk about building relationships with customers, but nobody actually explains how to do that. One way is showing up regularly and consistently as we’ve just discussed.

Here’s the thing about the loyalty loop. If we make the assumption that the customer is only a customer up until their last transaction with us, then once they’ve moved into Stage Four, they’re looping back to the early stages. Now, this doesn’t mean that we’re starting from ground zero—far from it. Assuming the initial stages were all positive, we’re starting at a place of affinity. Your customers have a certain affinity to you and the previous experiences with your company. It’s only a matter of time before they’re back in the thick and thin of the third stage again, so everything that happens now is to continue to serve, benefit, and add value to the customer’s life.

The more you communicate with your customer by adding value, which means not selling when it’s not appropriate, the more trust you’ll develop and the more peripheral benefits of the loop you’ll experience. Do you think my Tidbit readers would feel the bond and connection to me if I only showed up once a month, or every other month, or even less regularly than that? Of course not, but that’s what most companies are doing. They’re annoying to the point of trying to consistently sell, but not add any additional value. When I talk about this with clients, I hear things like “But Noah, we’re in the commercial property development industry. Why on earth would our customers and tenants be interested in hearing from us on a regular basis?” That’s easy. What if you were to communicate about trends in the local economy and marketplace, new tax implications, things to look for in older buildings, case studies of proactive repairs and things you’ve done with other clients, and other ways for them to save money or earn more of it?

Relationship building with your clients is showing them that you care about them a bit more than just when it’s time for them to open up their wallets. Your clients are begging to be acknowledged, appreciated, and perhaps most importantly, understood! The Carousel Theory suggests you work to cultivate the relationship by remaining top of mind (until it’s time to buy again) but understanding that it might not be time to buy you. Yet you continue to show up, add value, build the relationship, and pitch when it’s time to pitch and sell when it’s time to sell. And that brings us to the most important point when it comes to caring for and nurturing your existing customer base, and that’s the principle of the Appropriate Reason.

The Appropriate Reason

Many companies believe a retention strategy simply revolves around communicating regularly and frequently with their customer base, and if they do, customers will continue to buy. That couldn’t be further from the truth. Consistency is more valuable than quantity, and recency and frequency are crucial underpinnings of customer retention—but the most important thing of all is the principle of the Appropriate Reason. This principle suggests that with all customer follow-up messaging and communication, there’s an appropriate reason why, and an appropriate time to do it. Too many companies don’t understand this, and they’re reaching out with the wrong message at the wrong times. It’s damaging to their ability to build loyalty and develop relationships with their customers.

Communicating with your customers with the right messaging at the right time can feel like a phone call from a friend, but the wrong messaging at the wrong time is like being smacked across the face. Throughout the book, we’ve focused on how the customer is likely feeling at each stage of the customer experience. The post-sales experience should be treated no differently. The customer is experiencing certain emotions after the sale: good, bad, or ugly. The wrong messaging at the wrong time can turn even a positive buying experience negatively. Here are a few examples.

A company I did business with delivered a pleasant experience in Stages One through Three, but they never follow up. I was quite happy they never checked in on me to see how things were going. That’s not quite true. I did finally hear from them, but it was seven months later. When they finally followed up, it was to ask me to leave a public review of my experience on a review website. This is too little and far too late. In this case, the company would likely have been better off not following up at all and instead attempting to re-engage me in the earlier stages of the cycles. It’s an inappropriate request that many months later.

Salespeople, in particular, are often guilty of reaching out at the wrong time, but it’s usually not their fault. They assume (and their compensation is structured based on the assumption) that once they’ve inked the deal, their work is done. They get their commissions, and they’ve moved on to find more new customers.

The care and nurturing of existing clients is someone else’s problem. As I’ve said before, if your sales and marketing people aren’t talking about what happens after the sale, then they’re only doing 50 percent of their jobs.

Some companies even go so far as to have separate teams dedicated to customer loyalty or customer satisfaction, departments which rarely or never interact with the sales team. I cannot overstate how fundamentally flawed this practice is.

Repeat after me: The most important work you do is done after the first sale is made. The bulk of your efforts should be in the care and nurture of your clients.

You cannot do right by your clients if you’re reaching out at inappropriate times with the wrong messaging. And please, for the love of all that is holy in this world, never ever outsource the “satisfaction” of your clients to a department without a sales responsibility.

When is the right time?

At the start of Stage Four, I included a quote from the CEO of Constant Contact. I included this because the very name of the company denotes Constant Contact with your customers. The more you communicate, the more you add value, the more you show up, the more likely they are to do business with you. I think Gail Goodman understands this. I want to believe she understands this. She says the single-most important thing is providing a great experience, and I have to believe she recognizes consistent communication as part of the whole experience.

Your customers want to be acknowledged and appreciated. They want to know you recognize their patronage and value it. You need to think through your Appropriate Reasons carefully and strategically. For example, is it appropriate to reach out for a testimonial the day after your product is delivered? Maybe, but maybe not. If you sell a product or service where the customer isn’t likely to experience the benefits for 30, 60, or 90 days, then it doesn’t make sense to ask for a testimonial a week after purchasing. But does it make sense to get in touch right away and ensure they understand the product and don’t have any specific questions or need any customer service? Of course it does. That’s an appropriate time with an appropriate reason. If you truly believe you’re a customer-friendly, service-oriented, Zappos-like company, and you truly believe that you provide a wow experience, then you have a duty to your customers to communicate frequently and consistently.

Typically, when you get unsolicited contact from a business, the initial presumption is that they are reaching out because they want something from you. This puts most people immediately on the defensive, preparing them to be resistant to the pitch that they expect. This is not a good thing because that resistance can extend beyond this particular call or e-mail, to your brand in general. That initial resistance may be almost inevitable but the real question, once again, is how do you overcome that resistance?

If you’re on a phone call, what you say immediately after your customer has answered is very important. It can either drive the customer’s resistance up, or it can completely disarm it. For example, if your first words after your introduction were, “I’m delighted to tell you that you have just won $1,000 in our sweepstakes for the entry you completed when filling out your customer service evaluation!” then their resistance is likely to disappear quickly! Unfortunately, you can’t do that for everyone, but is there an emotional equivalent, or at least an approximation, that can defuse resistance and increase the connection rather than fight it?

Authenticity is one of the keys to building rapport. Customers understand to a degree that a business has its goals, too. However, unless that interaction is authentic and shows the customer the benefits that might accrue to them, resistance is more likely than engagement. And that means showing the customer that your contact is for an appropriate reason.

What Is the Appropriate Reason?

One of my cardinal rules of marketing is that if you don’t have anything useful and valuable to say, you’re likely better off not saying it at all. Too many of us are willing to forgo the opportunity to provide immense value in hopes of simply getting out the next promotion. The goal of all communications should be to serve, add value, and enhance the lives of our customers. Frequency increases liking and familiarity, but valuable information with an appropriate reason increases trust. When I look at my Tuesday Tidbit readers, I can see a direct correlation between those who read most often and those who have gone on to become clients. For my private clients, I have a private newsletter and membership called Noah’s Roundtable. The only way to get access to the roundtable is to become a client. I don’t promote it, and I don’t tell my prospects about this, I simply introduce it to them once we start working together. I can also find a direct correlation between those who read and watch most regularly and those I seem to have the greatest bond with.

I was in a meeting recently where one of the VPs who was quiet for most of the discussion finally chimed in. He said, “Our customers don’t want to hear from us regularly! They don’t want us calling or e-mailing or checking in with them. They’re busy people. They only want to hear from us when they’re ready to buy!” He couldn’t be more wrong. Customers don’t want to hear from you if it’s inappropriate to contact them or at inappropriate times.

If we consider the loyalty loop, then the most appropriate type of communication begins to look a lot like what was valuable in Stage One. We continue to position ourselves as the preemptive provider and expert in our respective industries. We can do this by providing valuable, useful, educational material post-sale. We should ask for things like reviews, referrals, testimonials, and word of mouth only when the time is right. For every business, that’s going to be different. For Appropriate Reason material, ask yourself what else you can offer that adds value and enhances the lives of your customers. Here’s a hint: it’s always appropriate when it’s not self-serving. When it’s serving your interest over theirs (buy this, review this, give us this) you have to be far more discerning about right place and the right time.

Can You Really Love Your Customers?

There have been a lot of books over the past couple of years that talk about the concepts of “loving your customers” and “hugging your customers.” I’ve read dozens of them. The major problem I have with most of them is the focus on solving customer-related issues after they happen. They’re reactive in nature, and almost all major business improvements I’ve been involved with happen when we’re proactive in our efforts. With the loyalty loop, we’ve taken a far more holistic view of the customer experience from start to finish. In the final stage, the key to the customer’s mind is quite simple. You owe it to your customers to communicate frequently, not just when it’s time for them to buy. You owe it to them to continuously add new value and show them that you care about them. And if you don’t do this, then you’re doing your customers a major disservice. Most of the loop is about staying top of mind and in the customer’s mind. It’s got very little to do with the tactics of influence and more to do with just understanding what the customer is feeling at each stage of buying experience, and how you can make the experience as positive as possible.

Treat Customers Like Members

Many companies make decisions about their clients based on total revenue spent. They take their top 10–20 percent of best spenders and work to surprise, delight, and care for those customers. There are times when this works and times when it doesn’t. Consider, for example, Bill Gates’ party at your fictional nightclub last night. Bill had all the ladies swooning over him and dropped $100,000 on incredible bottle service. Bottles of Remy Martin Louis XIII Cognac were flowing at $6,000 a bottle. This morning, he’s your best and most valuable customer. Regardless of how he got to your club, the likelihood of him coming back again, and again, and again, are pretty much next to none. I’m sure Bill loves to party, but this is the fallacy of using total revenue spend to determine your “best customers.” Contrast that now to the 836 25- to 35-year-old guys who come in on a weekly basis dropping $600 to $800 like clockwork. They are your best customers, but using total revenue, they’re likely to be missed. You’re focusing on the wrong customers and it’s costing you money. Bill Gates is not your best customer. You can’t always focus on the individual customers. Look to understand what groups of customers you have that are preferred in terms of current value, future business, and referral potential. You need to understand who your best customers are and make offers that are exclusive to them.

My good friend Robbie Baxter released a wonderful book in 2015 called The Membership Economy: Find Your Super Users, Master the Forever Transaction, and Build Recurring Revenue. In the book, she shares various examples of businesses using the membership model to grow and retain customers. The membership model is one of the most powerful tools you can consider in the loyalty loop. If your customers can benefit by doing business with you on a regular, ongoing basis, then it makes sense to offer them that solution. Very few businesses think this way, but Robbie offers dozens of less traditional examples of businesses embracing the model. For example, I can make a strong case that if customers love a restaurant, then offering them a membership with a repeat monthly purchase can make a lot of sense. We can influence the loyalty loop by delivering a remarkable and memorable customer experience that appeals to the mind of our customer, but if your buying cycle and frequency is rather short, think about all the ways you can offer customers a longer-term commitment.

Spiraling the Loyalty Loop

The core philosophy of this book is pretty simple. Instead of spending the bulk of your time, energy, and resources in new customer acquisition, you should invest heavily in ensuring you’re doing whatever you can to deliver an amazing, remarkable, and most important of all, memorable customer experience. If you want to grow your business, increase your competitive advantage, and create dramatic profit returns, then the Customer Loyalty Loop is one way to do it.

The loyalty loop is about providing value throughout the entire customer experience and recognizing the entire customer experience encompasses the whole experience from the first time the prospect hears about your business, to happily ever after. Let me share a brief story with you, a true story, but one that offers us a perfect parable to close out the book.

The Loop in Action

Last year, I needed to get some work done at my house. I needed a general contractor, so I decided to look online to see who was local and who might be able to help. I visited many of their websites, filled out contact forms, and called a few of them. Out of the 10 I called, only one got back to me promptly. At least four still haven’t gotten back to me at the time of this writing months ago; five more were confusing and instantly tried to get me to commit to things before even coming out to see me. They wanted to quote pricing without seeing the work or even asking enough questions to understand what I truly needed. Only one of them offered to come out and review exactly what I needed. He was incredible. There were some things he nailed.

First, when I reached out to him, he got back to me quickly. It was within 90 minutes. We had a friendly chat, and he said something that got my attention. He said, “You know; there are a lot of great contractors in town; I know them all, and I’m sure any of us would do a great job! But because of what you’ve explained you need to have done, here are the six things you need to watch out for....” He went on to explain six things that I was going to need to look for in my job. He wasn’t badmouthing his competition. He was providing value. Preemptively, he created a story and told it to me in a way that was vivid and fascinating. That’s Stage One of the Customer Loyalty Loop.

A day or two later, he showed up and walked me through all of the options. He was just how I expected him to be. He was clean cut, drove a nice clean truck with his company’s logo on it, and he was well dressed. He took his time to help me understand everything that was wrong. He explained the options I had available, and which would be the best value. He showed me the cheapest options and the more expensive options. He took his time to explain each one. He also reaffirmed everything we had discussed on the phone in regard to what to watch out for. Finally, he took the time to listen to my concerns and answer my questions. Needless to say, he removed all the resistance from the conversion process. That’s Stage Two of the Customer Loyalty Loop.

When the day came to do the work, his people showed up in a similar truck. They were clean cut, professional, and courteous. When they arrived, one rang our doorbell to let us know they were about to start working. It was early morning, and my kids were just waking up. They wanted to let us know that we might hear some equipment, but overall it wouldn’t be that loud. A couple of hours later, my children were playing in our driveway while the guys did the work. They didn’t litter my lawn with cigarette butts, use inappropriate language, or listen to loud music. Instead, they did the job, and they did it well! My kids got a kick out of watching them enjoy their lunch break. A couple of times throughout the day, they showed me how things were progressing. I was impressed! About half way through the day, the owner whom I had I talked to earlier arrived to inspect his team’s progress. I saw him talking to the guys and looking at a few things. He called me over and pointed out a few additional repairs that I should have done. Was I being upsold? No. In fact, he said he couldn’t do the work himself, but he could recommend a few people in town that could do it. He then explained if I used any of the people he suggested, that he would get a referral bonus from them, and I would get his discount. He assured me the work would be top-notch, and he would only recommend people he knew could do the job well because his reputation was on the line. To me, this was truly a Remarkable Moment! Never before had I been treated by a contractor like this.

He left, and then returned at the end of the day to inspect the work. Needless to say, they did a fantastic job. When I asked if I could write him a check right then and there, he stated that they would invoice me, and there was no rush. The invoice came days later with a handwritten note from the contractor telling me to contact him directly if I had any issues. That's Stage Three of the Customer Loyalty Loop.

Months went on, and my life returned to normal. During that time, I think I had referred the contractor at least a dozen times to people who needed various jobs done. About three months later, my daughter said, “Daddy, someone is here!” I looked outside to see the contractor inspecting that old repair. I went out and said hello. He was friendly and stated that he just wanted to stop by and personally thank me for the referrals I had sent him. He said he was just checking in to ensure the work they did was holding up. It was. And then, he asked if I’d be willing to provide a testimonial he could use on their website. Of course, I happily gave the referral. And there you have Stage Four of the Customer Loyalty Loop.

This contractor provided a customer experience that was leaps and bounds above what I’ve seen and witnessed with my own eyes in multi-million and even billion-dollar companies. The best part of all? He had developed it himself, and most importantly, he stuck to it every single time. He understood each stage of the Customer Loyalty Loop and treated each part of the customer experience with a level of gravitas and respect leaps and bounds beyond any of his competitors.

During the past 10 years, I’ve worked with some incredibly talented people, in some extremely successful companies, but I’ve had to fight tooth and nail to implement even some of the ideas in this book into their businesses. But when we do get them to execute even a fraction of what’s required, the results are always dramatic and they’re always grateful that they finally relented and listened.

Big companies often get stuck in internal politicking, inability to challenge some departments, or paralysis by analysis in that they don’t know how to look objectively at the entire customer experience, from initial contact to happily ever after. Now there’s no excuse.

Your company might be big, or your business might be small. That doesn’t matter. What is important is that this short story serves as a great reminder to all of us that whether you’re a giant or a one-man show, the basic structure of successful sales and marketing is all the same. If you can get the customer experience right, you win. And you’ll win every single time.

So let’s end right here with one simple question: How does your customer’s experience match up to my local contractor’s? Is it as good as his? If not, we should talk.