Management 2000 Blog

The keys to VERY satisfied and loyal customers are!

1. To have a business model designed to create VERY satisfied and loyal customers,

2. To have well trained, loyal and satisfied team members who love to create these experiences for customers and to execute the business model; and

3.  To have well trained managers and franchisees that know how to select, orient, manage, lead and coach team members to be engaged in the pursuit of VERY satisfied and loyal customers. 

 These very satisfying customer experiences result in three things:

1. The customers are VERY satisfied and loyal,

2. They return frequently, and

3. They recommend your business to everyone. 

 Determining the sustainable competitive advantage [how we go about creating and keeping VERY satisfied and loyal customers] is the primary goal and function of the planning process.  Once discovered, the sustainable competitive advantage puts a company in an advantageous position in creating more economic value for its customers vis-à-vis its competitors.  The results of creating more economic value for its customers are: 

• Greater profit and growth
• More new customers
• Higher retention rates of existing customers
• Increasing numbers of VERY satisfied customers
• More loyal customers
• Increased frequency of customer purchases
• Lower employee turnover
• Increased employee satisfaction, loyalty and engagement
• Higher average unit volumes
• Higher margins
• Greater market share
• Increased Brand equity of franchisees and franchisor
• Easier to find more qualified new franchisees 

Competitive advantage is founded in the differences between a company and its competitors.  These differences are often never found in the business model itself.  These differences are found in the perceptions, emotions and feelings the Brand’s customers have when experiencing the implementation of the business model by loyal, satisfied and engaged employees, managers, franchisees and team members.

 The business model is defined as the systems, processes, programs, policies and procedures that make up the delivery systems for the Brand’s products and services. These systems, processes, programs, policies and procedures include administration, marketing, operations, support, performance improvement and technology. 

 Therefore the business model is more about the mechanics of the business through which the business delivers its products and services and less about what differentiates it in the eyes of customers and gives it a sustainable competitive advantage.

 The business model is not a strategy.  The business model describes, as a system, how the various pieces of the business fit together to produce a profit.  But the business model does not factor in a critical dimension of performance: competition.  This is the job of strategic and operational thinking and planning.  It results in adding to the mechanics of the business model the dynamics of the business model which include: 

• A Customer-Driven Mission
• Core Beliefs and Values
• Vision
• Strategy Positioning Statement
• The Customer Experience Defined and Measured
• Selecting and Orienting Customer-Driven Team Members
• Leading, Managing and Coaching Customer-Driven Team Members
• Implementing Customer-Driven Experiences for Customers
• Getting Feedback and Monitoring the Perceptions of Customers and Team Members

 Strategic thinking and planning, as noted above, differs from operational thinking and planning in the following ways: 

• Strategic thinking and planning fundamentally changes the business model,
• While operational thinking and planning deal with how to do what we already do more efficiently and effectively.

 It must be noted that once a strategic direction is determined, there are most certainly operational implications.

 

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