In a Recession, a Loyal Customer is Your Best Friend.

Posted: February 24, 2009 in customer loyalty
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The recession is now a very ugly reality and it’s hitting from all sides. Orders are being canceled. Projects are being delayed. Cash flow is in the tank. Margins are under pressure. The Board wants to know your survival plan. Employee productivity is down as they wait for the next round of layoffs.

So, what’s the bright spot in this otherwise cyclone of gloom? Well, it may not be the bright light at the end of the tunnel, but there is still one asset that you can count on to help grow you business. It is your Loyal Customer.

Now, more than ever, your Loyal Customers represents a source of profit and growth and they deserve to be hugged, nurtured and protected. Yes, your Loyal Customer is experiencing all the body punches that the recession has to offer, but they have been with you through the good times and the bad times and they will be with you in the future. It is not the time to turn your back on your most valuable asset.

As bad as it is out there, people still need to buy products and services and they should be buying what you have to offer. If they are not buying from you, then whom are they buying from?

Loyal customers are still very profitable customers. They buy more frequently (just maybe not as often as in the past). They buy more of what you have. They are less price and promotion sensitive. They put more money in the bank for you. They are emotionally engaged in your business and want to see you succeed. And, most important, they promote your business to their friends and family. They are Promoters of your business and they can be an effective extension of your marketing and sales departments.

On the other hand, you most likely have customers who may not have bonded with you as you had hoped. In fact, they may take every opportunity to disparage your products or services to anyone who will listen. These are your Detractors and they can cost your company money.

The concept of Promoters and Detractors has been well developed and documented by Fred Reichheld in his book, The Ultimate Question. If you have read it, then tracking customer loyalty may already be in your recession survival tool kit. If you haven’t read it, buy it or borrow a copy. You may just find that one nugget of gold that can help you make it through the night.

In a time when many companies are cutting back on spending, it may seem counter intuitive to suggest that limited resources should be invested in understanding customer loyalty. But it is one of the best investments you can make right now. Spending to understand the profit generated by Promoters while identifying how to stop the profit loss caused by Detractors may give you the highest ROI of anything you can do during this financial maelstrom.

Tracking customer loyalty doesn’t need to be expensive nor messy. You only need to ask a few well crafted questions to get the insight you need. Reichheld’s book, The Ultimate Question, explains the theory of Net Promoter Score™ (NPS®) in detail, but in a nutshell, only one question is asked to identify Promoters and Detractors: “What is the likelihood that you will recommend our company to your friends and family”. Promoters would give you a rating of 9 or 10, while Detractors would give you a rating of 0 to 6. Simple arithmetic subtracts the percentage of Detractors from the percentage of Promoters to yield a Net Promoter Score (NPS) which can be used to measure and track customer loyalty.

NPS has proven to be an effective tracking metric but it does need a supplemental survey question to uncover the real nuggets of gold needed to improve your offering to Promoters and Detractors. A simple question such as “What are the two or three things that we do well?” and “What else could we do to make you recommend us?” It is this types of question that provides insight into the drivers of satisfaction for Promoters and dissatisfaction for Detractors. Take the insights from the Promoters and incorporate them into your marketing messages to acquire more customers. Learn from your mistakes with Detractors to fix the operational issues that are costing you money. You may not make your business entirely recession proof (even if there is such a thing) but you will be in much better shape to weather the storm.

As mentioned previously, measuring and tracking customer loyalty doesn’t need to be expensive nor complex. New services such as the Consumer Contact Loyalty Monitor (CCLM) provide affordable, convenient and actionable turnkey solutions to track and measure loyalty. Consumer Contact is one of the largest independent data collection companies in North America, offering both CATI and Online services. With over 38 years of experience, Consumer Contact has become a leader in customer satisfaction
tracking for B2C and B2B. CCLM allows small to medium sized businesses to track and measure loyalty with the effort and expense involve with many of the large, full-size agencies. More information on Consumer Contact Loyalty Monitor can be found at

We all need to have a best friend when times are tough and it is just as important to find and protect Loyal Customers when the economy is hurting. Your Loyal Customer may be just the friend you need to hold your hand and guide you to the bright light at the end of this dark, scary economic tunnel.

Keith Chapin is a Certified Net Promoter® Associate and Consultant with over 35 years of experience in research, marketing and customer insights. He can be reached at

Net Promoter, NPS, and Net Promoter Score are trademarks of Satmetrix Systems, Inc., Bain & Company, Inc., and Fred Reichheld.


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