How companies build customer loyalty

Businesses exist to satisfy customers. Without ensuring customer satisfaction, achieving long-term corporate objective is a mirage. So, the customer is the oxygen that keeps any organization going. But some companies carry on as if the customer is not critical to their existence; they operate as though it is the customers that depend on them and not vice versa. A number of companies, especially those regarded as market leaders, run on the wrong premise that they can do without the customer but that is a fallacy that soon hits them where it hurts the most when the tide changes.


The story of NITEL

Before the advent of GSM in Nigeria, NITEL, the government agency saddled with the provision of telecommunication services in the country, was a lord unto itself and a pain to everybody else. Being a monopoly, the organization rode roughshod over its customers. It had zero respect for those who used its services and had little consideration for their feelings. Customers were treated as a burden; complaints by them were swept under the carpet. To get any service from the organization would involve either acquaintance with the company’s top shots or a willingness by the service seeker to grease the palms of NITEL staff members. To get a small problem fixed, customers would be subjected to a range of traumatic experiences and would often have to sacrifice a whole day. NITEL was a perfect example of how not to treat customers.

The reality of the importance of the customer dawned on the organization when the government liberalized the sector and paved the way for other service providers to operate therein. After the GSM licence auctions for operators, the government gave NITEL a free licence and was asked to compete with others in the provision of mobile telephone services. However, the company was worsted by competition and its services spurned by customers because it brought the same lack luster and lackadaisical attitude with which it had operated as a monopoly into a competitive environment. For over 10 years, the company was in limbo because of its disrespect to customers. The government recently sold it to private owners.


Failure of NITEL

NITEL failed in its bid to play in a competitive environment because it had failed over the years to build customer loyalty. In reality, customers have no attachment to any product; their loyalty is a function of how well the product satisfies their needs. So, it was difficult for NITEL to profit from the thirst of the populace for telephone services after the sector was liberalized because it had etched a bad impression of itself and its services on the psyche of telephone users in the country. But had the company treated its old customers excellently, it would have been the preference of telephone users when migration to mobile telephony became inevitable.


Building customer loyalty

The key to sustainable success for any company is customer loyalty. Customer loyalty, which is borne out of consistent need satisfaction, results in customer retention. Marketing experts are agreed that it is more difficult for a company to win a new customer than to retain an old one. According to a report by Harvard Business School, increasing customer retention rate by five per cent increases profit from 25 per cent to 95 per cent. So, what wise company executives do is to guard against losing the current stock of customers while working hard to win new ones. A satisfied customer will tell another one, while a dissatisfied customer will tell 10. So, it is not in the interest of an organization to leave any customer dissatisfied.

These are some steps in building customer loyalty.


Treat customers as royalty

It has often been said that customer is king but the question is how many companies give their customers royal treatment? Would anyone treat the Oba of Lagos, Emir of Kano, Obi of Onitsha or the Queen of England as a mere statistical figure? The answer is no. A visit by any of these personages to a company would be celebrated even if the monarch does not make any purchase. But customers are not treated like that by organizations. While many extend courtesies to them, customers are seen as nothing but part of a population. That is not the way to treat customers, neither is it the way to build customer loyalty. A customer must be made to feel important by the service provider. Every company should ensure that the purchase experience is unique to every customer. Although how this is done may be different from one organization to the other, the fact is that to build a sustainable business, giving each customer a unique experience must be taken seriously. This could be achieved by asking employees to spend more time with customers to ask questions or give suggestions that could help the customer to make an excellent purchase decision.

This is important because what bring back the customer to the company are these little extra efforts. People go to where they are celebrated, not where they are tolerated. Customers will always gravitate to places where they are not just treated as mere statistical figures or with pedestrian respect but rather as the essence of the business.

This is what Feargal Quinn, author of Crowning the Customer, calls ‘The Boomerang Principle’. According to him, giving personal touch to a customer makes his return a fait accompli. But when customers are treated as part of a pack or as market segments, bringing them back would be Herculean.


Turn your product into a brand

A brand is superior to a product because it offers more than a product. A brand does two things. First, it meets a need. This is the brand promise; the value which the manufacturer promises; the value for which the consumer parts with his money. The other thing is that it massages the ego of a consumer or pander to his vanity. This is also about giving something extra to the customer. This is not a brand promise; it is what customers themselves associate a product with. Consequently, it is not every product that is a brand.

While all cars perform the same basic functions, a Ferrari is seen as a statement of wealth; top-class Range Rover and Toyota cars are symbols of taste while high-range Honda cars are perceived as symbol of exquisiteness. These automobiles do not just deliver mobility; they add other things to this basic automobile function. So, everyone that pays for any of these cars expects more than mobility though this is not part of the promise of the manufacturer. None of these cars got to this point accidentally; the manufacturers, without verbalizing these, have built these other values into the vehicles such that they have become a given.

Turning a product into a brand does not always have to do with high cost. Coca-Cola recently ran a campaign in Nigeria where it asked its customers to share a Coke with a name. What this accomplished was that everyone that wanted to pick a bottle of Coca-Cola looked for his or her name. With that the Coca-Cola bottle was not sought just to quench a thirst; it was also desired as a social statement. What the company sought to achieve with that was retaining its customers. The thought that would come to the consumer’s mind was “why pick another fizzle drink when there is one with my name on it?”

But in reality what has a name on a bottle got to do with the satisfaction the bottle content delivers? On the surface, there seems to be no correlation. But this seemingly insignificant gesture by the company went a long way in tilting consumers to picking its products.

Little things matter, always.


Take customers’ feedback seriously

Products are meant for customers. Therefore, their views about the products should not be trifled with irrespective of how the organization feels about them. One fact that appears lost to many company executives is that feedbacks provide the opportunity to keep customers, if properly handled. A customer with a negative feedback will feel gratified seeing that the company takes his feedback seriously and acts on it. He is encouraged to continue his patronage of the organization. If, on the contrary, a company fails to act on the feedback supplied by a customer, the aggrieved customer may decide to try another company.

So, paying serious attention to customers’ feedback helps a company to retain its customers.

As a way of giving feedbacks the seriousness they deserve, a forward-looking company sees to it that every feedback is documented. This makes it easy for it to make reverence to the feedback and treat it appropriately.

The claim made by the customer in the feedback should be investigated. If the complaints are found to be true, the company should without delay correct them and get back to the customer on the matter to intimate him with the steps taken to address the issue.

Some organizations do not take kindly to customers’ complaints because they overrate their products. But that is a route that leads to destruction. It should be understood that the product was fashioned to satisfy the needs of the customers. If the customer should raise any complaint about its efficacy, ignoring it is akin to telling the customer to take a dive into the nearest lagoon. And he will take the advice only that he won’t jump into the lagoon but rather drop your product into the lagoon and take his patronage to your competitor.


Develop a strong customer service culture

Your customer service personnel are the face of the company. So, your customer experience is determined by competence (or lack of it) as well as social skill (or lack of it) of your customer service staff. Thus, it is crucial that your customer service staff possess the skills required to leave every customer happy at the end of the encounter.

Perhaps the primary skill for this category of staff is the possession of a thick skin. A customer service staff should be able to take patronization by the customer. He should be able to take the customer’s excesses without getting angry or irritated. Since the customer is always right, a customer service personnel should recognize that he has no business pointing it to the customer that he is wrong. His primary responsibility is to make sure that no customer leaves with a wrong impression of the company.

Then the customer service personnel must be knowledgeable about the operations of the organization as this would go a long way in making the customer happy. The essence of a customer service department is to be able to solve customers’ problems. So, staffing the unit with those who can answer customers’ questions and solve their technical problems will build a strong customer service culture.

Customer service staff should also be able to communicate excellently. They should possess the ability to be unambiguous in their communication to avoid their messages being misconstrued and therefore creating more problems instead of solving them.



If businesses exist to satisfy customers, then they must consistently conduct researches to find out what the customers’ needs are. Great companies don’t operate on assumptions concerning customers’ needs, their production activities are based on research-backed findings. But a number of companies do not take research seriously; they base their productions on what they think the market needs.

By relying on research, a company gets to know what the trend is; it finds out before it becomes obvious to all what is likely going to happen in future in the industry where it operates. This prepares it to meet the needs of its customers. Meeting customers’ need ahead of competitors guarantees that the customers have no need to look elsewhere for what they want.



Except a company which is a premium player, appropriate pricing also helps in building customer loyalty. Every customer wants the value derived from his money to stretch for as long as possible. Therefore, to guard against forfeiting customers’ loyalty on the altar of wrong pricing, it is best to price competitively. While under-pricing may connote the unintended impression of the item or service being of inferior quality, over-pricing has the propensity of driving customers away to competitors.