Do we all deserve loyalty?

From an airline company, to an architect, to a factory or a taxi driver, all industries, businesses and professional offices can develop a good loyalty strategy.

Loyalty is a theme that is complex and full of different views and opinions. But the question that must be asked is whether it is relevant to us all.

In a conceptual manner, one can ask: Are all industries susceptible to loyalty strategies? Or, more pragmatically: Can my business, profession or trade benefit from a loyalty initiative?

The indisputable answer to both questions is, YES! From an airline or an architect, to a factory or a seamstress, all industries, businesses, professional activities and professions can benefit from a good loyalty program.

Let´s test this! We may think that an independent taxi driver is not susceptible to loyalty initiatives for its customers:  When an independent taxi driver thinks about his next passenger, he must rely on strangers that signal him from the sidewalk to carry them from one point to another, and then disappear without possibly ever seeing them again. The reasoning for this taxi driver is that the customer is simply the result of a coincidence of space and time, virtually impossible to replicate, and therefore irrelevant to deal with any loyalty strategy. Sometimes, the attitude is enough .

Now let's look at the situation from the client’s viewpoint. When the person is on the street and needs a taxi, does he simply approach the sidewalk, signal for a cab and climb into the first vehicle that stops for him? Of course not. First of all, the passenger considers whether he should take a taxi from the street or call for one. If he chooses the first, he gets closer to the sidewalk, begins to wave his hand, and when a taxi approaches, he enters the second phase of the evaluation.

After the taxi stops, the man considers: does the cab look legal and does it have it badges and documents in order? Is the exterior clean? Does the cab arrive at high speeds or moderate speeds? Does the driver approach the sidewalk prudently or negligently? Consciously or not, all these criteria have crossed the client's mind, all before even coming into contact with the service.

After the second evaluation phase, comes the third with these questions: Does the driver seem clean and pleasant? Did he greet the client with kindness and look the client in the eye? Does the driver start the meter as he should and does he specify the rate that applies to the trip? Is the interior of the car clean and neat?

Assuming that this stage passes and the client has reached a decision to take the taxi, the questions continue: Does the driver handle the taxi well? Does the driver offer route choices to reach the destination? Does he offer to open or close the window to make the trip more enjoyable? Does he play music? Does he smoke without asking if it bothers the client? Upon arriving, does he request payment pleasantly? Does he thank the client for choosing his taxi and does he wish the client a good day? We could continue to provide all the factors or criteria you use to evaluate customer service.

And finally, if this client were you, and you had an extraordinary experience in the taxi and know you’ll have another trip soon, do you ask the driver to wait or return at a certain hour? Or ask for his card so that you can call for him at another time? And then we ask the last question regarding the taxi’s service: Is he prepared to give you details so that he can be contacted for services in the future? In short, these taxi drivers have executed, knowingly or not, a good strategy for achieving customer loyalty.

Turning back to the pragmatic question with which we began this exploration: Can my business, profession or trade benefit from a loyalty initiative? YES, any situation where there is a relationship between a supplier and a consumer of a product or service presents an opportunity for loyalty.

Of course, complexity and implementation of the strategy changes depending on the trade or business and the customer profile. But if an independent taxi driver, an alleged victim of chance, can generate loyal customers through a good attitude, imagine what a proper loyalty strategy can do for a tailor, pharmacy, clinic, multinational financial services company, or the government. We all deserve loyalty.

The secret weapon of successful business cases

The secret weapon
What helped increase the original Aeromexico purchase offer by more than 2.5 times? The answer: its customer base and brand loyalty. The buyers know this and are preparing to do what is takes to retain them.
In past months we have witnessed one of the most controversial chapters in the history of the Mexican business community: the process of acquiring the country's largest airline, Aeromexico. The players were Saba Group, a group of businessmen led by José Luis Barraza, and Grupo Mexicana.
The outcome was a public purchase conducted through, what many describe, as a process riddled with irregularities that left a bitter taste for the bidders and the public spectators--a very bad precedent for future bids.
There are many reasons why the sale of Aeromexico captured the interest of political and business communities in Mexico and around the world. One reason is that it affected the transportation and communication industries —which are key in the development and competitiveness of Mexico— but also threatened value and competitive strategies, and even national security. However, there was one point —a very critical point— in the deal that was overlooked by all: the airline’s customer base and brand loyalty.

The basis of it all
When you think of Aeromexico’s assets, you immediately think of its fleet of planes —which individually cost hundreds of millions of dollars, its airport and landing equipment, hangars, sales offices, and even its flagship Premier lounges. However, were these the assets that attracted the final $250 million for the acquisition of the airline?
The first offer made on August 22 by Mr. Saba —based on what they defined as a thorough valuation of the airline’s assets— didn’t even reach $100 million.
So what helped increase the original purchase offer by at least 250%? Without doubt it was its most important asset, both quantitatively and qualitatively: its strong customer base, which was forged almost 20 years ago through its Premier Club and Aeromexico-branded American Express card.
The Premier Club customer base is an important one because it represents a segment of people that travel more frequently than most. But most important, in theory at least, is that the airline has what I call the three basic rules to ensure customer loyalty:
a) Client information: Who are they, where do they travel, with whom and how much time does each spend on the road?
b) A process to exploit such information and thereby deduce patterns and significance of services and benefits for customers.
c) Professional and efficient communication with the client.
It is obvious that Aeromexico has executed the basics well and has reaped its rewards. This is clearly reflected in the number of members that benefit from Premier Club offers and services. So much so that today its customer base can be divided into two groups: Premier Club (CP)-only customers and those who are members of the club by virtue of Aeromexico-branded American Express card (CP/AE).
How much then is the Premier Club client base worth? It is very hard to say. It alone does not have much value, but with CP/AE it is very valuable. So much that Dario Celis reported that American Express was afraid that the airline would end up in the hands of the group backed by Banamex and lose its relationship with the clients.

The road starts here
Now that the airline is under the command of José Luis Barraza, will American Express’ fear materialize? Will the new management know how to approach and retain program customers and partners? How patient will the new administration be?
In the case that CP/AE clients are migrated to Banamex, will they be willing to change the method of payment recommended by Aeromexico? How many of them will end their relationship with the airline?
Only time will tell. Yet, we can be certain that Aeromexico, American Express and Banamex know what they can gain and lose in this new chapter and in the interesting battle in which the winner will not be defined by an opinion from the Federal Communications Commission, but by what they define as the continuous and recurring consumer preference. In other words, customer loyalty.

You can be in touch with us through: mailto:info@8ampersand.com

How can you retain customers?

With the right approach, you can develop and implement a loyalty strategy to strengthen the relationship between your product and your customers, and in doing so, raise the profitability of your business.

Believe in loyalty!
If we transport ourselves into the world of management, statistics, major tactics and methods, I’m sure you will read or hear much about focus groups, consumer-focused organizations, one-on-one marketing and many other concepts and models that teach how to create relationships with customers.

If you have read all of these concepts, I am sure that you have wondered exactly how they can be applied to your business or how you can make them work for your clients and your actual business practice.

The truth is that all these concepts can be extremely beneficial for business, but the accurate and systematic implementation of the concepts is not what make them successful. They are successful if they are used as tools to achieve a broader strategy: to connect with customers and create loyalty.

Establish a real connection
In today’s world you can establish a real connection with buyers, meet their needs each day and learn more about their preferences through a well designed and focused loyalty strategy. http://www.8ampersand.com