You may have done it “your way” but it didn’t work for me

“Yes, there were times I’m sure you knew,
When I bit off more than I could chew
But through it all when there was doubt
I ate it up and spit it out, I faced it all
And I stood tall and did it my way”
Frank Sinatra

During hard times, tough decisions must be made in order to maintain profit margins and deliver the best possible business results. Decisions such as United and Delta made about charging for bags have become the poster children for this type of dilemma, but they are certainly not alone. Unfortunately, however, decisions that worked well yesterday have become today’s problems for many organizations.

As a result, many companies are facing three major challenges with engaging customer commitment:

1. Customers still have less discretionary income then before

The good news is that, on average, people are starting to spend money again. The bad news is that, even if the number of people who are spending money is higher, the amount of money being spent per person is lower than it was before. This means that customers are more protective of their limited available cash flow, which leads to the second point.

2. Competition in the marketplace is fiercer

The math on this one is obvious. When there are fewer gazelles on the Savanna, the competition between the lions and hyenas becomes more intense. But that is only part of the story. Too many times, decisions were made that worked for the short term, but did long-term damage to brand credibility and customer loyalty. Too few companies were positioned or brave enough to take risks to protect their images and customer commitment as Southwest did by maintaining its “bags fly free” policy. Although it may have been a tough call to make at the time, as a result of that bold decision, Southwest has grabbed substantial market share in a struggling industry.

3. Customers are less trusting than they were before

This means that the challenges companies find themselves facing in today’s competitive environment are far more formidable than they were before. This is because there is less discretionary income available to consumers, so they have become more discerning about how they spend it. Like people coming out of a bad breakup, they will be less likely to trust as readily as they did before. Continuing with the relationship analogy, before the recession you may have been on the brink of marriage with your customers. Now, you have to muster up the courage to ask them out on a second date, when the first date may not have gone all that well.

So how should a leader deal with potentially jaded customers and a competitive marketplace?

1. Review recent decisions that were made and be brutally honest – did those decisions encourage or harm customer commitment and loyalty?
2. Ask your customers – seek feedback on how they feel about you and your brand.
3. Learn from the experience. Study companies like Southwest who did an exceptional job fostering customer commitment and loyalty and choose applicable best practices that will fit your company.

The bottom line

You have a choice. Yesterday’s decisions can be perceived either as problems that stand in your way or as opportunities that can be capitalized on. Research shows that good customer recovery is a fantastic opportunity to win customer loyalty. You are not constrained by choices you made in the past as long as you change your perspective and start taking positive steps toward building customer loyalty for the future.

Are you ready to take your organizational effectiveness to the next level? Check out the other resources available online at www.acceleraconsultinggroup.com or give us a call at 407.376.8522 for a free consultation. We accelerate results by igniting leadership and organizational potential!