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Small Face

Client loyalty: the winning formula

Added 24 June 2009

During a kick-off meeting with a new client recently, the inevitable question of ‘what makes you stand out?’ came up. We talked through a number of elements, but the thing that stood out for me related to customer loyalty. The client in question doesn’t tie its customers into long-term contracts – in fact, for the most, part it doesn’t have contracts at all. What it does have is long-term clients. And lots of them. Why? It’s simple – the company delivers its promises. It doesn’t set unrealistic expectations it can’t hope to achieve. It is proactive. It’s creative. It calls back when it says it will. It adds real value to its customers’ businesses. And in turn, it is viewed as a true, long-term strategic partner by its customers. You could argue that the formula is simple.

Over the past 18 months Six Degrees has taken part in a very in-depth analysis project conducted by Dr Bill Nichols, as part of his Henley Business School thesis. His goal was to try to identify a model for client loyalty in service businesses, particularly within PR agencies. Essentially putting some science behind the experience I had with my client. It's taken him a long time, but listening to his findings, it sounds like he's cracked it. And it matches my experience completely. One of the key findings was that the difference between the reactions you get from one client or the other - to potentially the same situation - is based on the build-up of goodwill you have within that client organisation. He's called it the goodwill model. So, while one client may use a typo in a press release as an excuse for your dismissal (typos are never a good thing, but occasionally they do slip through the net!), another client will flag it to you and carry on as usual. Ultimately, Bill has identified four key criteria within the goodwill model - expectations, empowerment, equity and engagement. Looking at how the four interconnect to ultimately create goodwill is common sense, but until Bill's work, it hadn't been systematically measured and tested before. Why then do so many companies get customer relationships wrong?

In the PR industry today, the average client–agency relationship is only a couple of years. Perhaps we need to take the formula, at it's most basic level, and apply it to our own businesses. You never know – it might make a positive difference. I’m sure many of us are executing some elements of the formula already (our oldest client has been with Six Degrees for 30 years so we must be doing some things right) but imagine what a difference it would make if we go all out and deliver every single promise we make to our clients. It could change our businesses for the better. In fact, I’m sure it will.



Submitted By Lesley Booth

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