Customer Loyalty is the fifth and final stage of the customer lifecycle, and it can't be reached unless all four stages previously have been executed. So in this podcast, we'll be discussing how you can apply OKRs so that your customers can have the real experiences, they need to advocate your brand.

Customer Loyalty is the fifth and final stage of the

customer lifecycle, and it can't be reached unless all four

stages previously have been executed. So in this podcast,

we'll be discussing how you can apply OKRs so that your

customers can have the real experiences, they need to

advocate your brand.

Alright, so we've been talking about all the

different phases of the customer journey, the customer

experience, starting with awareness going into engagement,

then acquisition, customer success, and now we've landed on

the fifth and final stage of the journey in customer loyalty. And

for each one of these phases, we've been talking about sort of

the analogy, the consumer related and analogy of walking

into the department store, that's awareness, how you're

treated in the store, by employees, that's engagement,

whether you actually buy something or not, that's

actually acquisition, whether you actually get value out of

what you purchase that success. And loyalty is basically whether

you're going to be a repeat customer, directly, whether you

come back or not, come back, buy the thing again, buy something

else,

and advocate, but you bought to other people, like give

recommendations of the product or service to your friends and

family spread the word basically spread more awareness.

Yep, it kind of brings it all full circle to

because we talked about awareness is that's form of

awareness is word of mouth, it's not the most scalable. You can't

run a word of mouth campaign and throw 50 grand at it. But if you

have an army of really loyal customers, that are speaking

goodness, on your behalf, that's that's as good as gold. So

that's the ultimate outcome for a customer both from a business

standpoint, and from the customer standpoint.

Exactly. That's it's a cycle. As we said, it's a cycle.

And your customer reaches the loyalty stage after being

influenced by the previous four stages. Yes. In other words, you

can't reach a stage where they're giving word of mouth

referrals unless you provide them value, you make them aware

you

so forth. And as it relates to OKRs, customer

loyalty, it's not. There's only really one sort of the metric

that's at the top of the pyramid, in my mind, and for

loyalty is just retention. From a b2b SaaS perspective, if your

retention rate if your renewal rates are, you know, in the 90s,

you're, you're doing something right. That's sort of table

stakes. For most growing SaaS companies, anything below the

90s, there's typically a challenge that needs to be

resolved. But that's at the top of the pyramid. And everybody

understands, you know, renewals retention and churn, negative

churn, all that fun stuff. But what are some of these other

metrics that can be brought to the forefront via key results as

it relates to understanding and identifying loyal customers?

Well, great, great key results or outcomes. So they're

outcome orientated, which means you're trying to drive

behavioural change to your, you're changing the customer's

behavior in order to drive your your business result. That's an

outcome rather than the output, which is just delivering a

quantity of something. But whether it benefits others or

not as irrelevant whether the outcome inherently believes

that, okay, we have to produce something of meaningful value

that then benefits others. And, you know, great measurements for

that. I think, in this stage of the lifecycle, our NPS score

been around for a while, but it's a clear Net Promoter Score

is really just the definition of of a behavioral change because

it measures an individual's likelihood of recommending your

brand to someone else.

Well, let me challenge you on that one. So

NPS measured from a lot of products, like one to 10. Right,

is the likelihood of recommendation. But that's often

can be misleading, because it's coming from an end user and not

necessarily the one that owns the business case. Yeah. So you

can have 10,000 users in a product that love it, and it

would be singing your praises, but if it's not achieving the

business results that it's intended to the business owner,

the PERT, the person that owns the checkbook, the coin coin

purse, they ultimately they're the ones that matter. That yes,

I mean, they both matter. But in terms of like, who's the

ultimate decision maker, that renewal is going through the

budget holder?

Yes. But the individual users informed the budget holder

of their experiences. And that's actually what people do

immediately, if they use the product. They analyze it. And

they articulate their analysis to the leader who's the business

purchaser, sort of us buying some new buying and marketing,

to have some description of SaaS products and then saying, hey,

KJ, this is the tool where you can, you know, send that

automated email or something, and then I use it, and I find it

really great. I'm gonna tell you great purchase, Steve, that was

awesome. I could send like 100 emails in a minute. But you're

right, you're right in that the fact like, I know, we kind of

just said it earlier. You don't get hit, whether you're using

measurements like NPS, you never, you'll never get there

unless the customer is truly satisfied in the first place. So

you have to solve the problem that they that they need

solving, and that they came to you for first. And then once

that truly satisfied, you have a you have a basis for a

relationship to grow, you have this credibility, you have

honesty, you know, the relationship can now grow into

something where people advocate for you. They've said, I've seen

this work, it's worked for me, so use it for your business.

Got it. And that makes all the sense in the

world. But just kind of continue down the path of additional

things to measure against from a loyalty standpoint, you

mentioned NPS, we talked about churn, negative churn, which is,

if you don't know the definition of negative churn is basically

business that you acquire, based on expansion, that, that

dramatic pause, the business that you lose from your existing

customer base is now I'm messing this up. Now, if you expand with

a customer at a higher clip than the customers that turn, that's

negative term. Got it? Sorry. So if you if you lose 90, if you

lose 10% of your customer base or 10% of your revenue from your

existing customer base, but you upsell 50% of your customers,

then your negative turns one 440% Sorry, Bobby come at it

better.

So it was gonna keep that in. Yeah, to watch him squirm.

Yeah, no, big, big Miss Mr. Expert over here. I

can't even say the definition. I woke up at five o'clock this

morning. That's my excuse. The, but like customer referrals,

like having a referral program, or an advocacy board or advocacy

group, like an actual membership, when I was at

aliqua, they had, that they had a lot of different loyalty

related items where customers would sign up proactively to

join the program, the loyalty program, and part of it is they

got like, was it was an application, it wasn't even you

just sign up and you're selected, like you submitted an

application, you went through a vetting process you if you were

selected, then you would get all this cool swag. And you could go

around, speak at conferences and be be in marketing videos, like

it was a really cool, exclusive group. So those are just a few

things that come to mind. I don't know if there's anything

else that you're thinking of as it relates to just measuring

those outcomes.

But it's interesting, because you took the marketing

perspective on it. And so what my question came to mind is

that, if if listeners out there are actually cascading or

visualizing their OKRs through the lens of the customer

lifecycle. And they look at this particular lifecycle stage of

loyalty. What sort of teams should be present in the

development of those OKRs? Yeah, I mean, marketing for cause

loyalty purposes. What else?

Well, the interesting part, I'll touch on

a few right first, first and foremost, marketing often

doesn't make its way to this stage of the customer

experience. Like there's usually only a crumbs left of their pie

that get allocated towards actually putting any sort of

attention to this unless there's an you know, available

resources, but when marketing does get involved, some really

cool things can happen. Because you can get great stories, you

can get those advocates, you can build programs, there's customer

success, they obviously can own this part of the equation as

well. And tend to drive a lot of these initiatives forward. From

a product management product development standpoint, having

your, your development teams understand and listen to

customers and take that feedback and incorporate it back into the

product from a design standpoint, or even engineering.

That's important, uptime, obviously super critical, right?

A lot of these companies, when they're selling SAS, they're

signing up for triple nine uptime, 99.9%. It's not easy to

pull off, but it costs the customers expect that sort of

performance. And then, you know, from a sales perspective, it's

account management, building those relationships, not just

showing up when it's time to collect the check, you know,

touching, base consistently seeing if they need anything, if

there's additional resources that would help them be more

successful, or if there's additional things that would

help them be, from a product standpoint be more successful.

So like, it's a multi pronged attack. It's not just one group,

it's multiple teams looking at this. And each has to kind of

come at it from a different angle.

Yeah, totally. We were big advocates for that, I think what

exactly what you said, is think that multiple teams should be

collaborating in these stages of the lifecycle. And they should

almost be like a miniature pod of representatives going at it,

because then you harness the power of multiple perspectives

and discipline skills.

Who's a who's a brand that you feel like does

customer loyalty very well?

Trying to think of an appropriate brand for, for our

listeners, you know, say consumer oriented brands. Let's

get one that sort of

weird way ones coming to me and slack. I know, we could probably

have an entire podcast on that, but I don't know. I just feel

they they really. They really mobilized a lot of their

customers to for others than to use Slack, you know, because be

the be SaaS, you're working with a lot of other SaaS companies.

And, you know, it's like, it's like, it's hanging in the

schoolyard. It's like, quiet, you're not, you're not using

this thing. It's like, why you don't have an iPhone? It's like,

you don't have slack. What's going on you every SAS company

has slack. I feel like they may have done something. Well,

there. I don't know. What do you think?

Well, my opinion is slack. My opinion of Slack

has greatly changed since I've used it differently with

different companies.

Right? That's, that's really interesting. Like my

opinion of slack was very much related to the

colleagues around me and how they use Slack.

So, but it interrupts so what you're actually saying is,

it's not the product, it's the behavior of the humans

projecting that onto the product that was really the

the whole, I mean, Slack is an amazing

product. It really is. I mean, it's, it's early on, people sort

of said, well, this is just, you know, aim Instant Messenger

again, you know, that's, that's all it is. It's just a chat

application, but it's not now it's like a critical mission

critical business application that's connected to every corner

of your organization, and is the lifeline and the lifeblood of

your business, and is the antithesis to email

and communication,

you know, quick kit, asynchronous communication.

And you know, you said we can have like a whole podcast about

Slack and we probably could, and maybe we should, but for for

like the when we decided to do this whenever ages ago, we

actually created a Slack channel. Like that was like the

like that when I know, let me rewind that. The first, like

real application that was ever acquired was slack at this at

this company. But that's really the reality of it like because

it's necessary. Not really making a lot of sense

right now, but I think you're right. I think that's a great

example of a company that does maybe indirect loyalty very

well, like you don't realize you're a loyal customer. But

now, I can be real as a millennial customer. That's

exactly what was going on.

And the opposite of that would probably be

Salesforce.

Why is the opposite because you're super aware?

Just I mean, once again, it might just go

back to just my experience and how the thing was built in the

way people use it. But I've never met a Salesforce

implementation that was clean. The sentiment behind Salesforce

is much different. Sorry. Yeah,

what other companies then would you say have really nailed

the brand?

Yeah, I'm, I'll give a shout out to one of my

old companies, Eris. And Eris isn't very well known that

they're not really a I mean, they do product lifecycle

management. But the reason why I bring them up is they really

focus heavily on creating a community of customers and the

community existed exist of both free open source users that

don't pay a single, single cent. And then really large enterprise

customers that are paying big contracts, right. And they've

created a community around that. And they have a community event

every year called ACE, it's the Eris community event. That's

what stands for, and they get tons of stories and peep

customers going up. They're just talking about how much they love

this technology because of how flexible it is for their

business. And it stood the test of time, because the company's

been in business for over 20 years. And they continue to sign

these really big companies. And I think it's an unknown example.

But it's one that I've personally experienced. And I

think they did a great job with it.

What's the consumer brand the consumer wants to know a lot

easier, because everybody just knows what they personally like.

Yeah, my iPhone. I'm a loyal iPhone. I've had every iPhone

version since the iPhone one.

Exactly. Yeah, what else? Yeah, exactly. I feel like cars

are a big one too. Because they go deep with people, I think

maybe we didn't touch on the emotional aspect of this stage

in the lifecycle, probably the most important aspects to to

bring in marketing, folks. Because marketing folks are

really great at providing the customer a way to communicate

the emotion they felt when the problem was solved. So I give

you a great example. Like, if someone is leaving for college,

and they have to get their first ever car, and it's like, no

Ford, or whatever it is. And it just lasts them all the way

through college. And it's a banger of a car, you know, but

they fall in love with it. You know, everyone, a lot of people

out there, remember their first car and they fall in love with

it, the radio sucks, but they still love it, you know, you

know, 2040 30 years, whatever. And if anyone asks him, what car

should I get, they'll always recommend us because it goes

deep with them. It's and it goes deep back to that time when they

were, you know, youthful and loving that. So it's sort of

that emotional. It's not just about okay, look, you've you've

been able to help me automate an email. Maybe what you're saying,

like our heirs have this event where people get really

emotional. And they say, Hey, this actually changed a lot of

my life when I was working. You know, that's the sort of thing

that really spreads it.

Yeah, no, you're right. It's that's always like

those below the surface things that you don't recognize until

somebody points it out. But your car example is great, because

I've only owned three vehicles my entire life and they've all

been GMC Sierra's a yes. I mean, that's pretty much I and I

actually, I think I emailed them years ago to tell them that

like, I've bought only three vehicles. I think I was hoping

that they would give me Oh, that's what I was. I emailed

them they they released a brand new truck, and I said, I bought

three GMC Sierra, that's all I've ever driven. And I asked

them if they would send me a free but they did not oblige but

it's funny you bring up the you know the vehicle that

you just like when you bought when you're a kid because I

mean, I just paid yesterday to have my first truck shipped down

from Massachusetts where it's been at a spare mechanic shop

for seven years. So it's coming down to Florida, and I'm gonna

go work on it and tinker with it and think about all the crazy

stupid shit I used to do in it. Yeah, I fix it up and then maybe

one day, I'll give it to my kid, you know? Who knows?

Yeah. Yeah, that part of it. You know, it's really important

for the, that's how those big that's how those companies

sustain themselves, you know, where we're in the business and

b2b SaaS, and people in that sort of domain can just be a

fucking get as much ARR for the next three years and then piss

off at air. It's like, well, no, why don't we try to sustain this

thing like GMC, or like a Ford color, I found that it lasts

longer, it makes a bigger impact than just a quick sell to

Microsoft and earlier, you know,

who would you be referring to? Just

just stare down off some salads.

Everybody's got a price there. Okay, Everybody's

got a price. Yeah, well, the, what I was gonna say, is the

consumer brand. So like, I remember, when I worked at

aliqua, they were really big into loyalty. And they had this

marking automation platform that would send emails and social

stuff automatically based on groups of customers based on

buyer buyer characteristics. And we got really big into the

loyalty play, because there's a great opportunity to use data,

to drive automation to be in front of the customer at the

right time with the right message. And a lot of companies

that are that do a lot of the rewards points like airlines or

credit card companies, or grocery stores or whatever. But

those types of companies, they accumulate all these data

points, and then they try to translate that into programs

that that are geared towards creating a more loyal customer

to the point where it doesn't piss people off, too. So like,

that's a great example from from a marketing automation

standpoint of how like data and technology can lead to add more

loyal customer, but from an OKR standpoint, I'll give you a few

thoughts and you tell me what you think. Yeah, I think from an

OKR standpoint, there's a lot of internal discussion around Okay.

At this particular stage, or the customer lifecycle, how will we

measure a loyal customer? Okay, well, it's Arr, its or not AR

its retention, its net promoter score, its referral program,

blah, blah, blah. I'd be curious to just ask a customer, what

would make you loyal? Yeah. How would you measure? Becoming a

loyal customer? Right? What is that, that emotion that you're

you're seeking? Is it is it just to check the box and survive?

And on to the next thing? Is it to really drive change? Somehow?

It's like, what is that? I think we got to figure that out.

Totally. Yeah. Yeah, I think, must come back to the

emotional thing. I mean, you setup with the customer in that

previous phase, you know, a vision for what you're going to

do together as partners. And they realize value, you hope in

the stage before, so this final stage to link it back, which is

the beauty of the customer lifecycle. It's not linear, it's

cyclical, you know, you can actually, by executing

effectively, you could actually get someone to them to make your

company more aware, to drive awareness, you can get your

customer to drive awareness and started all over again. And I

really think for someone to take that step of driving awareness

on your behalf, there has to be an emotional connection, more

than just logical, you know, has to be an emotional, sort of

these guys, you know, this company. They just somehow made

my life better, you know, more than just my email a little less

busy, but maybe that can you know what I mean?

Yeah, I would, I would say another company that

is positioned pretty nicely and helps customers, helps their

customers to to generate more loyalty and satisfaction is the

company that we used to work for thought industries, and the

product is all geared towards learning and training. And

there's a lot of really interesting SAS companies that

are using thought industries. To create content and get in front

of customers and help them be more educated and trained, so

that when they have a problem, or they have a question, or they

need to learn something, whether it's a short micro learning that

pops up at the right time, or a long form certification, based

on a series of courses and content, whatever that might be,

those customers are using that platform. And that channel,

really to try to create a more loyal and educated customer. So

there's a lot of interesting inroads there. And perhaps we

can get Barry on the podcast to talk about, you know, how he

views customer loyalty as it relates to learning. But there's

a lot of data points that can be extracted out of those types of

programs that would, you know, show and highlight the value and

benefit of doing that.

Yeah, suggesting here is that executives at the top of

the company, don't just say, okay, customer was the this what

we're gonna do, we're gonna do this, we're gonna do this, we're

gonna do this. And here's how you do it, blah, blah, blah,

blah, blah. And then the customer success, people fail.

Oh, my God, I'm being given this mandate from my executive who

hasn't been on the phone with this customer since they signed

in three years ago. But I'm on the phone with them every week.

I know the better than you do. But you're telling me I have to

do it this way. Now, you know, it's it's a messed up way of

doing it. It should be flipped it should the executive should

ask the customer success person, hey, you talk to them every day?

Can I join you on the calls? Can you can you tell me what's the

latest with this customer know this the problem that happened?

Okay, well, if we can make them more loyal, let's do it this

way. And then there's this sort of autonomy from the bottom up

to say, here's how we can get them to be more loyal. And the

executive listen, and okay, let's formulate the OKR this

way.

Yeah. Now you hit the nail right on the head

with that one. It's it's often lacking because it's an

illogical approach to doing business to start at the bottom

and totally ration it. Yeah. And take, take some boots on the

ground type feedback and apply that to your big fancy strategic

model. It's, it's a logical, right? Like, why would you? Why

would you take the feedback and the opinions of somebody making

a quarter of what you make probably, and apply that. But

the reality is, it doesn't have to be set in stone, like, you

don't have to just take that person's direction and just say,

that's what we're doing now. But it should be considered and it

should be factored in. And it should be that data should be

aggregated and surface to the top and OKRs. If you are doing

it, right, that bottoms up approach where you can take that

feedback, and you can surface it, and you can say yeah, okay,

well, that's your company wide OKR. But this is how I'm viewing

the world that I'm in and what I feel like the customers need.

And it's, you know, the another example of that is when you get

into really large companies, especially companies that have

distributed locations, so I think of retail stores or

franchise restaurants or anything, anywhere where there's

1000s, of locations, and they do corporate rollouts of certain

roles and changes and it goes down to, you know, each store

manager, right, who has to, they have to execute against that

that's their job. Whereas, if it was flipped, in that you were

taking the data aggregated from those people that are talking to

customers every day that could really influence and inform a

much better strategy, because it's close more close to the

customer. It's much it's more difficult to do it that way.

That's for sure. Yeah, it's way easier to just say I'm at the

top of the pyramid. And this is what you got to do and do it and

do a good job. Yeah, that model has worked for the last 100

years since Henry Ford rolled off rolled the Model T off the

assembly line. But now, the way we work in the operate, it's

much different. We have the data, we have the technology, we

have the speed of communication to make these, get these

insights and deliver that backup stream back and create a more

happy customer. Because right now, there's a lot of customers

that don't like the companies they do business with, that's

for sure.

Definitely. Yeah. It's a feedback feedback mechanism

upstream that we're talking about. And if there's a

unanimous and there is at our company, it's benefited us in so

many ways. It's just incredible, a unanimous submissiveness to

the customer, like there's no Steven has a better idea than KJ

or so forth. It's what's best for the customer. And if

everyone from the guy at the top of the pyramid to the person at

the bottom of the pyramid can I can relate to this, then there's

this commonality where it's like, okay, not going to tell

you how to do your job, you know, make this customer a lot

more loyal. You tell me, let's collaborate on it. And you're

right. I'm not saying that executives are in a boardroom

not listening to anyone. And I'm not saying they have a critical

role to play there. We believe that they're the most competent

individuals. That's why they sit at the top. And we follow them

if they're leaders, but there's people are in the forefront or

the frontline of your business who have equally good ideas, and

the best idea should win. And the best thing for the customer

should come out of it. Both or both should be considered.

Yep, totally. And to kind of put a bow on it,

because there's a lot more we could always talk about. But I

was just thinking that, you know, in our six steps to OKR

success, right. Step two is naming a taskforce. And part of

that is going through an exercise of looking at what is

what is something within your company that has sort of been

hanging around, that hasn't quite hasn't quite gotten done

yet. And something interesting, you may maybe like to try or

some new program, you'd like to roll out just something

different, where you bring together a collection of unique

individuals into one task force, whatever you want to call it.

Something really customer facing, there would be

very interesting. Go you know, if you have 10 people on your

Task, Task Force, go talk to three customers apiece, and

collect that feedback and see what comes out of it. You might

be very surprised.

Definitely, that should inform your OKRs all the time.

Yep.