topThe Quill

August 2013 Issue
Customer Loyalty, A Key to Business Success
A Customer's
Perceived Value
Patriot Business Coaching

Patriot Business Coaching

P.O. Box 6945
Shallotte, NC 28469
(910) 575-1286
Linda Stinson

Bob Stinson 

Bob Stinson



in The Association Executives of North Carolina's Success Magazine



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As of the first of September, Patriot Business Coaching will be changing its name to RLS Focused Solutions. This new name is more closely aligned with our primary purpose of partnering with organizations and individuals to achieve higher levels of success through focusing on issues which impede progress. We continue to appreciate you interest in our firm and its activities.


This month's issue of The Quill, as well as our blogs during the month, will explore the subject of customer loyalty. This subject should be of interest to all organizations whether it is a business, a professional office, or a non-profit. The concepts are the same; just replace the word "customer" with "client" or "donor".


The first article, Customer Loyalty, A Key to Business Success, discusses the reason this subject is important and some ideas on starting a program to improve that area of your business. The second article, A Customer Perceived Value, considers how a customer relates to the product or services you provide. We always welcome you comments, ideas and questions.



Patriot Business Coaching

Customer Loyalty, A Key to Business Success

Business owners and managers must be focused on building a successful organization. Let's define success as a business which is profitable and sustainable. All businesses must be profitable in order to cover their costs and provide the owner with an appropriate income. Sustainability refers to the ability for a business to survive tomorrow, next week, next month and far into the future. Having loyal customers is key to both profitability and sustainability. The questions are, therefore, why are loyal customers important to success and how do you create loyal customers?

Why are loyal customers important to business success?

customer loyalty  
Loyal customers are those who appreciate doing business with you and return over and over again. They appreciate the value of your product or service. They are the people who tell their friends and neighbors to do business with you. It is a common business understanding that it costs three times as much to find a new customer as it does to keep a current one.

It is difficult to count the number of companies we have visited who tell us about the aggressive pricing of competition. They tell us about the potential customer with whom they worked and then went to a shop down the street for a lower price. They tell us of the impact of the big box retailers out on the highway or of the increased pressure from those shopping the internet. They have reduced selling prices and used promotional discounts, but there was no effect. Their margins are being eroded and they are not sure they can stay in business. (Profitability and sustainability). Being the low cost leader may work for Wal-Mart, but will it work long term for your business?

One can hardly think of an organization or business that can prosper in the long run without loyal customers. Whether it's Apple, Starbucks, or McDonalds, their success is based on the continuous return of customers. They stand in line to buy the latest leading edge devise from Apple. They spend $4.00 for a cup of coffee at Starbucks. They appreciate the consistency of the product and service at McDonalds.


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A Customer's Perceived Value

Perceived value as defined by customers creates loyal customer relationships, and customer loyalty is the best predictor of your future strength and growth potential.


The value you provide to your customers is always compared to the value your competitors provide: therefore, value is your customers' perception relative to similar products or services in the marketplace-your competitors.


Perceived value occurs at the intersection of what customers want and what they get from you versus what they could get from your competition. You can only sustain customer loyalty by continually meeting your customers' product/service qualifications, specifications, or expectations. You also need to meet their needs in the order that customers deem important while maintaining a favorable comparison between you and your competition. In your marketplace, your competitors are the alternative suppliers your customers use to form their comparative value perceptions.  


How would your customer define perceived value?




For example if your customers expect your product to perform error free, to be delivered on time, to be supported by timely and personal technical support, and to be properly billed at a fair price, you must be good in all categories to get an "A," and you must be at least as good as your competitors. If you deliver a product that meets all of their design specifications but are unable to provide personal technical support, you failed in meeting an important criteria; therefore, the perceived value will decrease. For every mark you miss, the value as defined by your customers decreases and you slowly lose the ability to develop a loyal customer relationship. To create and sustain loyal customers it is necessary to consider every contact with each customer as an opportunity for you to provide value-every time. Every service point is critical and every service point has a level of expectation from the customer that must be understood and managed. We call these contact points-points of connection.


Every point of connection gives your organization the opportunity to emotionally connect with your customers. Your customers will judge your value and their emotional tie at every point. Developing and implementing a strategy of creating a consistent emotional connection with your customer creates value, which creates loyal customer relationships.


We know that loyal customers will always return to purchase your product or service, which create a long-term stream of revenue. Another advantage of loyal customers is that they will consistently boast about your product or service creating the most effective and least expensive form of advertising for your organization. Additional advantages of developing a loyal customer base is their willingness to pay more for your product or service, and they are also more forgiving when your organization makes a mistake. Why? As loyal customers, they trust your organization and have faith that you are fair.


Making the strategic decision to create a loyal customer base is one of the most important commitments you can make to the success of your organization. Your individual contribution is also a large part of that success.


Contact us to learn more! 


Article written by Tammy A.S. Kohl, President of Resource Associates Corporation. For over 30 years, RAC has specialized in business and management consulting, strategic planning, leadership development, executive coaching, and youth leadership. For more information visit or contact RAC directly at 800.799.6227.

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