A Formula for Building Loyal Customers

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In case you’ve been wondering, yes, there appears to be a particular set of ingredients for creating trust.

By Craig Honick and Dr. Rubens Pessanha

The brass ring for any business is having a critical mass of customers who would rather do business with your company than any other, even if your price or fee may be higher than competitors’. We typically call this “loyalty.”

Is there a formula for building customer loyalty? We’re not talking about the “gotcha” kind, where customers feel they must stay because they’ve stored all their data with you or built up points of some kind, but rather the organic form of loyalty, where customers want to work with you because they trust you and feel respected by you.

It turns out there just may be.

Ongoing research we’ve been conducting at Council of Better Business Bureaus since 2015 has yielded the 5 Gestures of TrustSM (Honick, Pessanha, & Chng-Castor, 2017). The 5 Gestures were derived from our analysis of stories consumers told us about how they respond to business interactions, and they were validated with surveys of 2,000 consumers in the United States and Canada.

We found that consumers use a mental framework to evaluate their experiences with businesses. Perhaps subconsciously, consumers ask themselves if, in dealing with them, a business has been:

When consumers – as all humans – feel respected in a relationship, they tend to value the relationship.

Honest – Does it give me complete information I need at the moment it is important for me to have it?
Transparent – Is it willing to be vulnerable by sharing its processes and procedures, and is it willing to admit when it has made a mistake?
Proactive – Does it focus on bringing me value and attempt to deliver the highest value to me without my asking for it?
Humble – Does it credit others for its success, including customers, partners, employees, and the civic infrastructure that supports its business?
Equitable – Does it attempt to share power with me, leveling the playing field in dealing with it at every opportunity?

These 5 Gestures by businesses — including behavior and communication — signal to consumers that the business has a culture that values respect for consumers and others. When consumers — as all humans — feel respected in a relationship, they tend to value the relationship.

When it comes to loyalty, the 5 Gestures are more important than a business’s competency and consistency. If consumers trust a company and feel respected by it, they may stick with it even if it, on occasion, proves less competent or consistent than consumers prefer.

This reality presents an opportunity for any business to establish practices that engender a critical mass of loyal customers. If a company can practice the 5 Gestures and establish them as cultural norms, it is likely to increase the chances of keeping customers through thick and thin.

The 5 Gestures as an Operational and Communications Framework

We labeled the components of the consumer mental framework “gestures” because gestures are things one does — they are actions. Consequently, to put the 5 Gestures to work building a loyal customer base for your company and an overall positive working environment for your employees, think about how to incorporate them as a framework that guides your everyday operations and communication.

Different types of businesses have different levels of direct interaction with customers. Whatever mechanism your business has in place to evaluate customer experience and satisfaction is the natural home for the 5 Gestures framework.

Here’s our four-stage model for how to integrate the 5 Gestures framework into your customer relationship practices:

Listen – Look and listen for behavior and language that suggest that the driving force behind positive or negative customer feedback is one or more of the 5 Gestures. Often, our motivation in responding to customer feedback is to solve the customer’s issue or, if positive, take stock of a compliment, pass it along to staff, and perhaps publicize it. This is likely a good practice. But is that sufficient? The 5 Gestures provide a model for categorizing the driving force behind customer complaints and compliments, enabling your company to take set actions to address behavior and communication at a foundational level. If you learn to listen for the gesture or gestures that are likely driving an interaction, you can use this insight to foster your customer relationships.

Identify – Once you’ve listened for the gesture or gestures that are behind customer interactions, you can accurately discern the gestures or combination of gestures at play. This process of identifying also trains your staff to constantly think in terms of gestures of respect and can therefore ultimately have a positive cultural impact.

Gesture – Here “gesture” is used as a verb. Once you’ve identified the gesture or gestures that are behind the customer response, you can assertively address them. For example, if a customer complains about what they perceive as an unfair return process, the customer is likely experiencing this as the company’s failure to be proactive. By identifying this, your company representative can move quickly to resolve the problem and “name” the issue — that is, say something along the lines of “You must feel like we did not put your needs ahead of ours on this one. We recognize that and are going to change that by …” This behavior actually engages three gestures: being proactive, humble, and transparent.

Build – If you have listened, identified, and gestured in your interactions with customers, you will naturally be building your relationship with them. We suggest acknowledging the build phase as a necessary step in the process of integrating the 5 Gestures framework into your customer relationship practices. It is a continuous process, with the goal of building long-term, trust-based loyalty in your customer relationships.

There are many ways to use the insight we’ve gained from our research to encourage customer trust and loyalty. Your strategy will vary depending on your type of business. At a minimum to start, consider using the 5 Gestures as a daily mental framework.

Learn more about Better Business Bureau’s 5 Gestures of Trust at bbb.org/5Gestures.

REFERENCE
Honick, C., Pessanha, R., & Chng-Castor, A. (2017). 5 Gestures of Trust: A new framework to evaluate customer-business relationships. Retrieved from Better Business Bureau’s website: https://www.bbb.org/5Gestures

Craig Honick is Managing Partner of Metro Tribal, a market insight and brand-story development firm based in Charlottesville, Virginia, and Seattle. He is an applied ethnographer and veteran marketing consultant. For more than 20 years, he has surfaced and reconstructed the narratives that individuals and groups use to guide their daily choices. With this insight, he has helped corporations, nonprofits, and government agencies successfully position their brands, products, and services to customers as well as their own employees.