At NextCon17, Carol Roth Suggests Ways to Create Customer Loyalty 3.0

The Evolution of Customer Loyalty - Customer Loyalty 3.0

There’s no question small businesses today have to fight harder to maintain customer loyalty.

At the NextCon17 conference organized by cloud communications company Nextiva in Scottsdale, Arizona Oct. 23 -25, 2017, customer experience was certainly center stage.

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But when it comes to customer loyalty specifically, business advisor, media personality and entrepreneur Carol Roth said in her presentation, “customer loyalty 1.0 is old news.”

Roth maintains that “customer loyalty is key to attracting and retaining customers and should be at the core of any marketing or selling activity.” And that applies more broadly to customer experience too. Certainly this is nothing new.

What is different is that consumers today are “overwhelmed” by the number of messages they receive from everyone, which has made them tune out and ignore messages from companies they do business with.

The Evolution of Customer Loyalty

To improve overall customer experience, it’s crucial to understand the difference between Customer Loyalty 1.0 and Customer Loyalty 3.0.

Customer Loyalty 1.0

  • Looks like bribery. The traditional buy 9, get one free, is essentially giving your customers a 10 percent discount you have to work very hard to get, Roth said.
  • Competes on price. Small businesses should never compete on price. You can only compete on value, Roth added.
  • Makes customers loyal to the program and not the brand. The idea is to create loyalty to your company, said Roth That’s the key to creating a better customer experience.

Customer Loyalty 3.0

  • Pays attention to the customer. You have to know what your customers are thinking.
  • Creates authentic relationships. It’s about making customers loyal to the experience they have with your business, each time they interact with you.
  • Understands the difference between spenders and senders. Just because a customer spends more money with you doesn’t necessarily make them your best customer. Customers who spend less, but share their positive experiences with others (senders), can drive more revenue.

Once you understand how Customer Loyalty 3.0 works, how do you put it into action? Roth believes you need to follow the 5 pillars of customer loyalty.

The Evolution of Customer Loyalty - Customer Loyalty 3.0

The 5 Pillars of Customer Loyalty

When working to improve customer loyalty, as a broader approach to improving customer experience, start with these 5 pillars.

Products and Services

Are your offerings best of breed in your industry? The key is selling specific products and services that meet your customers’ needs.

  • Do you have IP (intellectual property) that no one else does?
  • Is there a certain “cachet” that is attached to your business?
  • How does your business specifically meet customers’ needs? What can they find there that they can’t get elsewhere?

Customer Service

Put yourself in your customers’ shoes? They’re asking, “I can get this anywhere, why should I shop with you?” One way to separate yourself from the pack is to offer the best customer service. In her presentation, Roth cited Nordstrom as the prime example of this. People shop there, not necessarily for the products the company sells, (which can be found in many places), but for the above-and-beyond service the retailer provides.

How can you follow Nordstrom’s strategy for building this awesome customer experience? Roth suggested business owners and managers think about what “more” they can offer their customers. For example, offer add-on services, extend your hours, or go mobile — bring your products or services to them. Or it could be as simple as bringing donuts to the next meeting you have with your customers, Roth added.

Community and Affinity Groups

People want to feel like they’re part of something, whether that makes them feel “cooler,” “smarter,” or more important. They want to connect with something bigger, or get access to something they wouldn’t otherwise have. Does doing business with your company say something about them? Think of Harley Davidson, Roth says. There’s a cachet about a Harley owner. They automatically become part of a culture.

This kind of enhanced customer experience is not as hard to implement as you may think. How can you add value to your customers’ lives? Can you form a mastermind group where they can share experiences and learn from one another?

The Evolution of Customer Loyalty - Customer Loyalty 3.0


How can you transform the mundane into something extraordinary? The answer may be as simple as making doing business with you fun. Or create a VIP category for your best customers.

Look at your business from a different perspective and seek ways to create a better customer experience.


Consider what else you can offer to your customers. You may not be best of breed, but can you address their pain points? You need to know what challenges your customers are facing. Are they time-strapped? Is money tight?

If you show them you understand their needs, it makes your business important to them. Here are some ideas:

  • Help your customers get more customers. Simply introducing your customers to one another, or making referrals to them can increase their perception of you.
  • Help them save money. Create special deals for VIP customers.
  • Help them save time. Offer access to your store before normal hours once a quarter or so. Or create how-to content, explaining how to best use your products.
  • Make it easy for them. Be their one-stop shop.
  • Build your relationship. Never take your customers for granted. Keep showing them how much they mean to your business.

Tying it all together, Roth advises a simple “engagement formula”:

Decipher what customers want. Apply the “pillars of loyalty.” Then build relationships. All these things together, Roth says, make it easier for customers to do business with you. And it should improve customer experience in the process.

Images: Rieva Lesonsky, Small Business Trends

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Rieva Lesonsky Rieva Lesonsky is a Columnist for Small Business Trends covering employment, retail trends and women in business. She is CEO of GrowBiz Media, a media company that helps entrepreneurs start and grow their businesses. Visit her blog, SmallBizDaily, to get the scoop on business trends and free TrendCast reports.

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