Innovation: A key to Customer Loyalty and Growth
Recently we posted a link on our Facebook page which discussed about a restaurant which Googles its guests before they arrive so that they can serve them in best possible way. The article was published on Forbes website here.
This is a great example of how a business can use latest available simple and free technologies in innovative ways to be the best service provider. Usually, it does not seem much relevant in short term. Its real importance is realized in the long term when the business not just grows, but grows sustainably. We have all seen lately that “sustainability” is the new buzzword in the business world.
If we talk specifically about hospitality industry, it is a B2C business where customer retention is very important factor for the success of a particular company. Here, a good service experience results in customer loyalty which is a very important asset for any company.
A lot of growing service providing companies have large share of revenue from returning customers. While returning customers help the companies to sustain the market share, it also helps in the growth of the company.
To support the above statement, a research published in the April 2013 edition of Colloquy, a monthly newsletter of LoyaltyOne research group explains how enterprise loyalty can result in revenue growth by about 20% in 3-5 years.
Now it brings forward a very good question- how to increase customer loyalty for a firm. Well, there can be no generalized answer for this, as it depends on the type of industry and the targeted market. However, one can surely say that innovation is a very important factor for this. Companies like Amazon and Starbucks are the biggest examples which show the importance of innovation in increasing customer loyalty. Few very good examples of innovation are reward programs, unique customer experience, new ways of providing customer support etc.
Apart from this, one can also do some research to identify the factors which are most important from a customer’s perspective. For example, a research published on Statista.com highlights the relative weightage of various factors which may influence a customer to return to a restaurant. This data is very important for a restaurant to focus on the key areas for a better customer experience and thus increased loyalty. Here are the detailed results of the research:
Find more statistics at Statista
Likewise, every company should try to figure out such parameters so that they can focus on improvement areas while reducing the wastage of resources on not so important factors.
So, to sum up, we can say that the growth of any company is highly dependent on how innovative a company is, may be in terms of improving the existing services/products, or bringing out an altogether new service/product. Obviously, it is easier said than done, but in the present competitive markets, it is the need of the hour and company with the right attitude should be able to do this.
It reminds me a great quote by Thomas Jefferson. He rightly said, “Nothing can stop the man with the right mental attitude from achieving his goal; nothing on earth can help the man with the wrong mental attitude.”
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