Book Summary Preview : Why Customers Come Back

The Big Idea

Do you want to build greater customer loyalty? Do you want to know what makes customers keep coming back and apply them to your business? Do you want to know how you make your business even more successful by getting more loyal customers?

If your answer to these questions is yes, then read “Why Customers Come Back” by Manzie R. Lawler. This book helps you discover the motivation and characteristics of loyal customers, and the advantages of dealing with loyal customers. This book is about working with current customers to develop lasting loyalty.

I. Customer Loyalty: Secret To Business Survival and Success

Many businesses and professionals experience lackluster performance and reduced profits, face increasing competition, and confront other difficult financial conditions.

Today, as in the past, only one thing makes companies survive such hard times – customer loyalty. This is because loyal customers are easier to do business with, are more predictable, and don’t carry the expense associated with attracting new customers. Companies with a loyal customer base enjoy greater profitability in good economic times and can depend on loyal customers to survive during difficult times.

Therefore, getting customers to come back again and again is the most important endeavor of any business. No business can be successful by continually dealing with new customers.

Repeat customers are the source of all profit. It is not until a customer buys from you a second, third, or fourth time that any profit is earned. Customer loyalty is the ultimate competitive advantage. Companies that promote and enjoy customer loyalty are more stable than companies that are forever searching for new markets and customers.

II. There Are No Loyal Customers

How do you create loyal customers? Well, the first thing you need to know is: Customers are self-serving. Their only interest is to deal with a business that gives them what they want. Loyalty is not a characteristic of customers. It is a response to the actions of your business and you.

III. What Is Customer Loyalty?

If there are no loyal customers, what, then, is customer loyalty? Customer loyalty is an activity; it is not an emotion or opinion. When customers buy from you again an again, and tell the world why everyone else should buy from you, they are demonstrating loyalty. Customer loyalty is the specific activity of buying from you or recommending you to others on a repeat basis.

IV. How Can Loyal Customers Make Your Business Successful ?

Accounting methods can show you how much profit you make, but they won’t show you from which customers you make it from. The truth is: all profit comes from loyal customers. Why?

First, you don’t have to educate repeat customers about your business, your products and services. They already know about you. This saves you time and money, which translates to profit.

Second, repeat customers are predictable. If you can predict the behavior of all your customers, you can do your inventory much better, buy and stock only what you will be able to sell within a given period, and in the process save on expenses and increase your profit.

Third, it costs more to attract new customers, which can actually cancel or substantially diminish any potential profit from them. Companies pay millions on advertising, promotions and special sales to attract new customers. And they don’t make a profit until these new customers become repeat customers. But it usually costs nothing or next to nothing to attract repeat customers.

Fourth, it takes more time and money learning how to deal with new customers – their credit habits, their service preferences, their delivery requirements – and teaching them about your business.

Finally, repeat customers are actually a great channel for marketing your business. At no cost to you. And customers’ recommendations are more credible and therefore carry more value to customers who come to you as a result. In fact, you can actually build a business through word-of-mouth marketing.

V. Toyota: A Success Story of Customer Loyalty

Toyota has built the company on the premise that all profit comes from loyal customers. It aggressively pursues loyalty. More than 70 per cent of Toyota customers return to buy another Toyota automobile. Most automakers have only a 30 per cent repeat purchase rate.

Toyota focuses on its existing customers. If you look at Toyota’s brochures, you will be sure to find an older model. The message is: It doesn’t matter if your car is old or new; if you own one of our cars, you are part of the family.”

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