Interesting post on the Harvard Business Review blog today: ‘Why Your Customer Loyalty Program Isn’t Working’ by Michael Schrage.
I found the following particularly relevant to law firms:
Organizations need to identify the loyal behaviors that most deserve explicit recognition, reward, and investment. How should loyalty from the best and/or most valuable customers be recognized and rewarded differently from that of typical or average customers?
However, leaving aside internal facing Client Account Teams, which are typically created for cross-selling or cross-serving purposes, or even client facing Client Listening Programs – both of which I strongly advocate – I do wonder how many law firms run a client loyalty program? And if so, what does that entail and what are the criteria used to qualify for the program (and are clients aware of how they can qualify for the program?)?
For example, are discounts offered on volume work a form of client loyalty program?
You may initially think this to be the case, but I if I were to run an audit of your firm’s client files I bet I would discover that partners offer NEW clients much better discount offers than they do EXISTING and LOYAL clients.
If so, then volume discounts aren’t a loyalty program as I could probably do better going somewhere new (even with you) than I do staying with you.
Are invites to golf days a means of a client loyalty program then? Again, possibly, but by what criteria are invites to such events made? I’m not sure there are any – in which case, they aren’t a form of client loyalty program really.
All of which is to say, I think it will be interesting to see whether or not law firms adapt to implement formal ‘client loyalty programs‘ in the future as I definitely see them as being a differentiator.
As Schrage says:
True loyalty doesn’t just serve and preserve valuable customer relationships; it creates and inspires more valuable customers. Loyalty is a mutual investment, not just an exchange.
If you haven’t read the post, I would like to suggest you do.
And if you are a law firm thinking of implementing a client loyalty program, then my cousin just happens to run one of the very best in the world.