Customer retention is very important to service-based businesses. If you can keep your customers coming back, running a business becomes a lot less stressful, even fun; and certainly more profitable. The problem is that today’s customers, according to Susan M. O'Dell and Joan A. Pajunen have become butterflies...customers with no loyalty, who flit from one store or service provider to another, and they're constantly searching for lower prices or to have a new shopping experience.
This sort of situation can be compared to a bee that gets released in a forest filled with azaleas and amaryllis, dahlias and daffodils, fennel and forget-me-nots – if you get my drift – and all these flowers smelling like roses; and beckoning, and baiting, and bribing to win your senses!
I may have mixed my metaphors there, but never mind…
But, the book’s authors have some good news… Among these butterflies, you will find the Monarch butterfly, who is a breed of customer that is tolerant and who can be loyal – perfect for service businesses if you can retain them.
One of the most important services marketing tips from this book in my opinion is how to assess your business to see can it attract (and retain) monarchs – the breed of loyal, long-term customers who buy from you again and again and also give you referrals?
Monarch customers, according to the authors, are remarkably tolerant for many of the shortfalls that beset service business “They know the coffee won't always be at exactly the right temperature and even the perkiest of airline attendants sometimes has a bad day."
When you have loyal customers such as these you get to enjoy some elasticity in the transactions you have with them. These types of customers "allow you to screw up once in a while and often even pitch in to help when the going gets rough." (p.39)
These are the diamonds in the rough and if you run a services business you want to learn how to attract this breed of customer because it is disheartening to serve the butterfly kind. Maybe you have some experiences with them…
The book lists the characteristics of the monarch customer:
The Monarch is still a butterfly, according to the authors. This means that they're intelligent people, they're curious, they're suspicious of the good intentions of businesses, and they're also conscious of their worth. But the Monarchs can be "counted on to return to the familiar on a regular basis.”
It gets more interesting:
“[Monarch customers] are less expensive to attract, [and you can entice them back into your business without having to resort to expensive promotion campaigns] They take less transaction time from your staff and are quicker to buy because they are less skeptical and don't need a large amount of convincing. They are more willing to buy and [they're are] less price-sensitive..." (p.35-36)
Meet the Monarchs
Monarchs are your ideal customer, one you want to attract whatever it takes; also one you want to “clone” when they give you referrals (check out How to Convert Referrals into Buyers & Fans of your Services Business).
The authors describe five characteristics of Monarchs:
- they always return to use your services at some point
- they often give you referrals (they recommend and refer other customers)
- they always have an opinion (butterflies on the other hand show disinterest and they would "rather switch than fight") Monarchs always have an opinion... and they will share it if you ask
- when they've done their homework, the Monarchs will share it, plus, they will freely give you information on what your competition are doing
- they're forgiving... and giving
All the things you really want in a customer or client, right? The challenge then is, how do you attract, and even more important, how do you retain these sorts of customers – because, according to the authors, a Monarch can revert to being an ordinary butterfly!
How do you prevent your existing loyal monarch customer from abandoning you and becoming a butterfly?
According to O'Dell and Pajunen "it boils down to building (or re-building)trust with the customer". They propose the idea of the “service kaleidoscope” – which is a 3-dimensional way of looking at your business to determine the extent to which it inspires trust in your customers.
The three dimensions are: the media dimension, the physical dimension, and the people dimension. These three need to be perfectly balanced because if they aren’t, customers will distrust your business.
“If the three dimensions are in harmony with one another, then the customer knows what to expect (and gets it), and develops a feeling of trust with the business. If the three dimensions are out of synch, then a feeling of discomfort and distrust will develop.”
As an example, if the media message (or the marketing message) about a business suggests that it offers high-end and quality products, yet the physical surroundings suggest that it’s a “bargain warehouse” and the staff are rude or ill-tempered and poorly trained, the customer will experience dissonance and not trust the business. As O'Dell and Pajunen have put it, the customer’s "trust account" will be depleted.
This means the customer will likely not come back, because they have turned into a butterfly for someone else. Monarchs thrive in an environment where the three dimensions mentioned above – media dimension (what customers expect from interacting with your marketing message), the physical dimension (what they see and experience when they come into your business), and the people dimension (the quality of your service as well as the quality of the customer-experience process) – are well-matched and support one another.
Attracting & Retaining your Ideal Customers
How do you know if these three dimensions are in accord in your services business?
O’Dell and Pajunen have developed a self-assessment tool for a business. They call it a 3-D audit. The 3-D audit assessment tool for businesses focuses on these three dimensions mentioned earlier. A big section of the book covers the questions you have to ask as well as the procedures you need to follow to do the assessment of your business.
The authors also make the point that you need to have a different 3-dimentional balance in place for a retail or service business to work. This second 3-D harmony exists between the managers of the business, the employees and the stockholders.
The leadership within the business has to create an environment that inspires trust in the customers. This happens when a business is profitable and the employees are happy and well-paid and the equity owners of the business are getting return on their investment. This applies especially to big businesses, not so much to the one-man or one-woman operation – just that in that case the business owner is the stockholder.
In closing, the majority of customers today are butterflies. They have too much choice – too many options.
This is a great time to be a Butterfly customer according to the authors because retailers and service businesses everywhere are vying to attract this elusive new breed of customer. What this means is that customers are getting bombarded on a daily basis with new concepts, new products and new services to try.
The Butterfly Customer can show service professionals how to identify the butterfly customer, and the monarchs among them – also how you might go about turning a butterfly into a monarch.
“Know your customer” is always great advice when you run any kind of business. The business environment today has, according to the books authors, “transformed customers from loyal, reliable and predictable patrons into transients – here today, flitting across the street tomorrow."
These service marketing tips in The Butterfly Customer will help you put your services business on a strong, solid footing if you take the time to learn how to attract and keep monarch customers – because butterflies are especially bad for the service business:
“Butterfly Customers are expensive to win (as there are significant costs entailed in getting their attention in the first place), difficult to service (as they are highly demanding), and almost impossible to keep.”
The Butterfly Customer is interesting, the information is actionable, it’s a short read, and highly recommended for service professionals and owners of service-based businesses.