Customer Loyalty and 'Moment of Truth'​

The purpose of a business is to create a Customer who creates Customers. - Shiv Singh

Foundation

In today's world 'Customer Loyalty' has been identified as one of the four factors to achieve 'Organizational Greatness'. Here, the 'Greatness' is not considered from financial perspective only, rather from a different perspective, which includes growth, sustainability, people development etc.

Now, the question is, who are 'Loyal Customers'? Today the meaning of loyalty has been changed. It is no more inherited, means I'm buying from you only because my dad used to buy from you! Rather we can define 'Loyal Customers' as - 'Customers who create more Customers', means those who not only buy our products/services repeatedly, but also promote us by saying good things (good word-of-mouth) about our products/services to others.

Here we have another term to define - 'Moment of Truth'. Jan Carlzon, President of Scandinavian Airlines System (SAS) coined this term and claimed it as 'any point of customer interaction where a customer can form opinion about you is a moment of truth'.

The customer’s perception is your reality. ~  Kate Zabriskie

Customer Interactions

According to Ron Kaufman, author of 'UP Your Service!' customer interactions are of 04 types: one-shot deal, transaction satisfaction, reliable relationship and powerful partnership.

One-shot Deal

The interaction happens just one moment. When we buy a newspaper from a hawker while walking in the street or do mobile recharge from a bus stop. In both cases, we interact with the seller for a moment and none of us- buyer & seller remember the interaction. We do numerous one-shot deals in our daily life.

Transaction Satisfaction

Multiple interactions or perception points. When we visit a newly opened restaurant to explore, we experience several perception points, starting from entering the restaurant. We experience the warm greeting by the door-keeper, the background music, the ambiance, the table we sit, approach of the hotel staff, ways of taking orders, presentation of dishes we ordered, smile of the staff while serving etc. All these happen before we even taste the food. And, all these perception points create 'Moment of Truth' (MoT) and it will impact our decision of whether we'll visit the restaurant next time or not.

Reliable Relationship

The interaction continues, time & time again. From our earlier example, if we have a fantastic experience from the newly opened restaurant and we liked it very much, we'll surely go back to the restaurant again. And, if the experience is again fantastic, the restaurant will be one of our favorite one! At a point of time, a slightly rise in price by the restaurant? Never mind! We keep going there!

In real life we often do this. More example can be drawn from our daily life: we go to the same saloon, we purchase books from the same shop and many more. The relationship will be intensified, if the buyer remembers our preferences, what is exactly done by amazon.com and many of our local online shops like rokomari.com!

Powerful Partnership

The interaction keeps growing more & more and benefits both sellers & buyers. Linked with previous instance, if we come to know that our favorite restaurant offers catering service or home delivery, then what happen? Whenever need arises either for ourselves or others, we refer that restaurant! Thus the relationship grows and new service avenue created for both. Another example, an airlines company partners with a bakery shop to offer snacks to its domestic passengers; or a college partners with a bank for easy banking support for its students.

So, in powerful partnership, both parties obtain greater value over time and the partnership becomes more positive, productive, important and proactive.

Customer Loyalty through Interactions

Customer relationship starts & grows up to 'Loyalty' with the course of interactions, starting as 'Transaction Interaction', to 'Reliable Relationship' and ultimately to 'Powerful Partnership'. If we can identify all the 'Moment of Truth' through a structured approach and work on those MoT, more & more loyal customers will be created; which is a MUST for a sustainable & growing business.

Every contact we have with a customer influences whether or not they’ll come back. We have to be great every time or we’ll lose them. ~  Kevin Stirtz

Reference Books:

1. UP Your Service! by Ron Kaufman

2. The 8th Habit: From Effectiveness to Greatness by Stephen R. Covey

[Published on LinkedIn on 25 February, 2017]