Customer Loyalty in Self Storage | Hi-Tech Webinar 3

Welcome to the HiTech webinar on customer loyalty!

The webinar is scheduled to take half an hour, and the last 10 minutes are dedicated to you being able to ask us questions. So if any questions pop up along the way, just write them in the chat here on the webinar platform, and then I’ll answer as many questions as possible in the time we have. Ok, with that we’re ready to get going!

Who is HiTech?

Let me first tell you who we are! HiTech has been a supplier to the European self-storage industry for the last 20 years. It started out as a software company, grew to an IT company, and now it's also a consultancy company. Within the area of IT we write our own software and we offer private cloud environments for companies of all sizes. For some companies we are also their outsourced IT department, so we are very much like a one-stop-shop for IT in the self-storage industry.

The consultancy side of our business grew out of the fact that our team has about 60 years of combined experience in the European self-storage market. As we worked with our existing clients on various projects, we could see that we were actually quite unique in that regard and that there was a need to sometimes ask for a second opinion on a new perspective on something. But from someone who really knows the industry. And that’s how the consultancy side of the business start off.

We of course offer advice on IT but we also have 2 marketing consultants who have conducted research on the European self-storage market, and I’m one of them. My name is Christel, I’ve worked for one of the big self storage chains in Europe for about 7 years, and as part of my MBA, I researched how the European recession affected marketing in the self-storage industry. So we also consult on business strategy and we have certified project managers that can be hired in for both IT projects and business projects.

Our existing clients are mainly in Europe, and we service both big chains and smaller operators. We’re a team of 8 and our head office is in the Netherlands, not far from Amsterdam.

Will we sell you something?

One or two of you might have asked yourself the question if we are going to try and sell you something today, so I want to answer that question straight off CLICK and say I am not going to try and convince you of anything, but right at the end there is one slide where I will tell you how we can help with work on customer loyalty, if you want if you want us to. And say I am not going to try and convince you of anything, but right at the end there is one slide where I will tell you how we can help with work on customer loyalty, if you want if you want us to.

Customer loyalty

So let’s start with just spending a minute reflecting over what customer loyalty really is. A lot of storage operators I speak to think of customer loyalty as length of stay, and so first off I want to point out that length of stay is not the same as customer loyalty. Customers who are loyal to your company may or may not stay with you a long time; it really depends on what their needs are.

Because customer loyalty is about whether customers will choose YOU when they need storage, it’s not about how long they stay with you. So, in effect, some of your most loyal customers may not even be renting from you right now! On the other hand, you may have customers that have been with you for a long time, but they are not really very loyal at all. They might only rent from you because of the location of your store, and if a competitor opened up next door, they would be the first ones to move out. So length of stay is a measurement that can be hugely useful, and I used it for many things when I was an area manager about 15 years ago, but in terms of customer loyalty, it’s not a good measurement. We’re going to come back a bit later to some better ways of measuring customer loyalty.

Drivers customer loyalty

But first, let’s take a closer look at customer loyalty, and what drives it. It can help to think of customer loyalty and customer DISloyalty as two buckets. All the things that make customers loyal are poured in to the blue one, and all the things that make customers Disloyal are poured in the red one. So - what is in each bucket? The absolutely biggest part of the red bucket is made up of bad customer service. Now, that doesn’t mean the service was necessarily bad, but that the customer perceived it as unhelpful or aggravating. In fact, on average customers are 4 times more likely to leave a customer service interaction disloyal than loyal! 4 times more likely!

So, if bad customer service makes up most of the red bucket, then it would follow logically from that that good customer service is the biggest part of the blue bucket right? And that if you had GREAT customer service, your customers would be even more loyal. And if you had OUTSTANDING customer service, you would have the most loyal customers around. Right? That would make sense.

The thing is though, consumer research doesn’t support that notion at all. It is a widely held belief, and I have seen it myself. When I ask businesses I work with what they believe is the most important thing to building customer loyalty, almost everyone says having excellent customer service. But the research is very clear on this: customer service has a very small influence on customer loyalty. So if it’s not customer service that drives loyalty, what does?

1. It is the quality of the product or the service that they are buying from you.

2. It is how much value they feel they are getting from being customers of yours.

3. And it’s about brand and how much they feel they can identify with what you stand for.

Building block of customer loyalty

So we are now going to take a closer look at customer loyalty, and we are going to look at some very practical things that have been pinpointed by researchers that have the biggest impact of your customer loyalty. This section of our webinar is based on a study conducted in the US, where they followed over 75.000 consumers and recorded their behaviour and measured their loyalty. It is one of the largest consumer studies on loyalty that have ever been done and we are going to look at some of their findings that are relevant to self-storage.

First of all the study showed that all customers really want is a simple and quick solution to their problem. Especially with so much business moving online, consumers’ expectations to having simple, quick and seamless ways of taking care of their affairs has gone through the roof. So customers expect things to be simple, quick and easy, and when they’re not, they feel like they need to put in an effort to be a customer of yours. So, what do customers think takes the most effort? What is effort in their eyes?

The first thing is calling or contacting you several times about the same thing. So you can go a long way to giving customers a more effortless experience by analysing why it is people call more than once, what kind of issues they are calling about, and then put processes in place and train your staff to deal with some of the common reasons for call backs the first time around. In fact, this study of 75.000 consumers showed that on average 1 in 5 calls are related to a previous problem, not a new one? If you don’t know what the number is for your business, it might be a good idea to consider measuring it for a period of time, so you can get a feel for what your numbers are in this area.

Anticipate on issues

So, try to anticipate possible issues for the customer before they happen, and have processes in place so that your team can deal with them, no matter who is at work that day. For example, if you find that customers who do not sign up for direct debits are usually late payers the first few months they rent from you, from a customer loyalty point of view, you would be helping yourself a lot by anticipating this problem and either sending a friendly email or calling these customers a few days before the first or second rent is due and just explain that you can see that they haven’t signed up for direct debit yet, and are they in in doubt at all about how to make their payment. This is just one example but there are many, many ways in which you can anticipate issues for customers, and through a few simple processes change the customer’s experience quite profoundly. If you can explain things by phone, then that is of course great but it might also be that…

…sending a follow up email after a phone call with a customer helps avoid issues down the line. Customers might be driving, in a rush or distracted when they speak to you and by sending an email after the call confirming the answers you gave them, means they can just look at that if they happen to forget some of the detail of what you spoke about.

So a good question to ask yourself is ‘What will it take to solve a customer’s problem at their first interaction with us?’

Train your staff

The next area is about the human side, and how your team interacts with your customers. Now, I mentioned earlier about bad customer service and I want to be clear: although I have worked with and consulted for over 100 businesses around Europe, I have not yet come across a business who doesn’t care about servicing their customers well. So I want to be really clear here, that I am not speaking about intention or effort: you have most likely chosen your team members because they have a natural flair for service and sales, and I have no doubt they are good at it.

But we all have our own personalities, our own ways of communicating, our own ways of approaching different situations. And while one style can be perfect for one customer, that same style, that same approach, can aggravate another customer. That is why all the sales training we do at HiTech is based around training teams on how to spot different personality types quickly, and how teams can adapt their approach slightly to each type in order to get the best interaction with them. So make sure your team has some really practical tools for how to deal with any kind of personality, also the ones that might be very different to their own. In fact, one UK company did just that and this one change reduced customer call backs by 40%, because customers were simply more content after the interaction they had with them.

Another thing that makes customers feel like they have to make an unnecessary effort when they are customers of yours is switching service channel. If they try to solve an issue through your website or via email, and they end up having to call you. Or if they call you but end up having to come by the store to fix something. If they can’t solve their issue through the same communication channel as they started off, it feels like an effort to them.

So it is a good idea to review each of your service channels and ask yourself what needs to be done in order to be able to solve most of my customers’ questions or issues in the same channel? What would it take to solve problems in one place?

For example, adding a live chat to your website, or expanding your website to also include a customer portal where customers can reprint invoices, give their move out notice etc, could be examples of this.

This large scale study also showed that the companies that had the highest customer loyalty were companies that actively used feedback from disappointed customers.

- And here, the first step is a cultural one. Your team needs to feel like it is ok, actually MORE than ok, to collect and pass on negative feedback from customers.

- Your team needs to be trained on how to speak to disappointed customers, like I spoke about just now about different personality types. Being able to adapt your style to the kind of customer that you’re dealing with is especially important in a situation where the customer is disappointed, upset or just generally more emotional.

- And whatever feedback and information about customer disappointment that you get, make sure that you use it to influence your decisions about which improvements you make. If your team can see that the feedback is being put to use, they won’t feel reluctant passing it on to you the next time it happens.

So when you want to improve your customer loyalty, the places to start are by identifying what it takes to create a seamless customer experience by you, by training your team on how to handle different personalities, even those who are a natural ‘people’s person’ .Review which data you have about your customers, and see how you can use it to get to know them better. And be consistent in your branding and your communications: customers want to know what to expect when they rent from you, so make sure that whatever values or branding that your company stands for, that this runs through every interaction your customer has with you.

Once ALL of that is in place, then you can start looking at how you can delight your customers by building in WOW factors in how you deliver the storage solution to them. Maybe there is a little welcome gift waiting for them inside the storage unit when they move in? Maybe they get a phone call a week after they moved in, just to check that everything has worked well and they didn’t run in to any questions or issues. There are lots of ways that you can build in WOW factors to your customer experience.

You can create loyalty programs that reward your most loyal customers, a bit like airmiles, and you can make it easy and attractive to refer others to you. With referrals, remember that the most effective referral systems are the one where both sides get a reward: in other words both your customer and the new customer that they refer needs to get a rewards for doing or being the referral. That is how you get the best results for referrals.

And why not take the whole ‘seamless customer experience’ one step further, and offer all inclusive options online, where customers can handle their entire moving experience in one place: they can book the transport, the storage and the packing materials in one place.

Measure customer loyalty

Now we are going to spend a few minutes talking about how to measure customer loyalty. Because two years of research at Harvard Business School showed that it is actually possible to measure customer loyalty by asking only ONE question.

Would you recommend this company to a friend?

No need to ask them how satisfied they were, what they think of your security, your service, your processes. If they are willing to recommend you to friends and family, then they are a loyal customer. So another question to ask yourself is what can you do actively to turn your customers in to promoters? And going back to what we talked about earlier about effort actually being the biggest turn off for customers, the Customer Effort Score is now widely accepted as the best metric for measuring customer satisfaction.

In a Customer Effort Score, the customer is asked about the effort involved in their purchase or interaction, instead of asking how satisfied they were with it. So it could be for example ‘How easy was it to move in today?’ Or pay today? Or move out today? Just think for a minute about your customers, and whether you ask them at any point how easy they have found something. If you aren’t asking them, it is a great idea to start.

Now, before I open the floor up to questions I just want to spend a couple of minutes on the loyalty-profit link. Because just because customers are loyal, doesn’t necessarily mean that they are profitable for you. It is a balancing act, where you’ll need to manage they profitability and loyalty at the same time. And this is where customer segmentation is so important. Splitting customers up in to ABCD categories and working out who your A-grade, first class customers are, and who are your D-class, borderline dead ones. Chances are, your profitability will do better from either getting rid of the D-customers, or working on some strategies to turn them in to more profitable ones.

One study showed that something as small as a 5% increase in customer loyalty increased profits by between 25% and 85% across different companies. So, there is huge potential in customer loyalty, if you approach it in the right way.

Our services

Now, like I said at the beginning, I will tell you how we can help in the area of customer loyalty.

Loyalty workshop

If you feel like there are areas in customer loyalty that you would like to work on, but you would like a little help structuring the process, then we have set up an online loyalty workshop in about 2 weeks. We provide you with a workbook, and then you log on to a 3 hour workshop where we’ll take you through all the different areas of your business that you should be looking at.

The purpose of this workshop is for you to create an action plan for yourself about what you are going to do when to work on customer loyalty, and there is the possibility to ask questions all along the way.

This workshop is 129 euros and if you have several people from your company who want to do this, then get in touch with us since we can then give you a team rate instead of an individual rate.

Training: How to sell to everyone

If you feel like there are areas in customer loyalty that you would like to work on, but you would like a little help structuring the process, then we have set up an online loyalty workshop in about 2 weeks. We provide you with a workbook, and then you log on to a 3 hour workshop where we’ll take you through all the different areas of your business that you should be looking at.

The purpose of this workshop is for you to create an action plan for yourself about what you are going to do when to work on customer loyalty, and there is the possibility to ask questions all along the way.

This workshop is 129 euros and if you have several people from your company who want to do this, then get in touch with us since we can then give you a team rate instead of an individual rate.

With that, the only thing remaining is for me to thank you all for joining us!

If you have questions relating to anything in this webinar, then feel free to get in touch with us anytime, and we’ll be happy to answer your questions.

Thank you, Christel Land