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Where Small Businesses Get it Wrong When it Comes to Customer Loyalty – Carol Roth

Gorden Henry • Jul 29, 2021

Today's Guest

Carol Roth is a content creator, “recovering” investment banker, New York Times bestselling author, entrepreneur, TV pundit, and host. Carol Roth’s experience overlaps content creation, on-camera and in-person hosting, finance, business, economics, pop culture, and even comedy. She advocates for small businesses, small government, and big hair. Carol gave us an overview of her latest book The War on Small Business and tips on how small businesses can create true customer loyalty.

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Episode Summary

I was a first-generation college graduate and, like a lot of graduates, I had dreams and ambitions for what I wanted to do with my life. Unfortunately, also like a lot of graduates, I had a mountain of student debt that threatened to crush me if I didn’t find a way to pay it down. I ended up taking a role in investment banking and during my time there I noticed a reoccurring theme of small business owners desperately needing help but unable to pay the typical fees of an investment banker. After a few years, I decided to make a transition in my career and looked for a way I could leverage media to provide financial advice to small businesses at scale.

 

My book, The War on Small Business focuses on the tilting of the playing field towards big business and away from small businesses. Over the past several decades we see time and again big businesses being favored over small businesses by regulators and government agencies. All of this came to a head last year during the height of COVID when the government picked winners and losers, not based on science but based on political clout and connections. That left the small businesses underrepresented and frankly out of luck which resulted in many small businesses closing their doors for good.

 

We often try to talk about small businesses collectively but the industry is so decentralized those broad statements don’t mean much. Over the past year, it's estimated we lost 1 to 2 million small businesses and millions more are struggling to survive and on the edge of closure. On the other hand, if your business services include anything related to facilitating remote work or home services your business is likely to be thriving. Then you have those businesses that may have survived the last 15 months but as they reopen and customers start to come back they cannot find the staffing needed to operate, due to the labor shortage.

 

When it comes to customer loyalty I believe it is based on relationships, not transactions. A relatable example I see is a small business using a rewards system to try and incentivize customer loyalty. The issue with this model is the relationship is based on what your customer is getting from you and if someone else offers to give them more you will lose them. The businesses I see doing much better with customer loyalty programs have taken the time to gain a deeper understanding of their customers and the true drivers behind their loyalty.

 

If you want to be successful in business today you must regularly assess how you are leveraging technology to improve employee productivity and your customer’s experience. What are the tasks that are taking you too long to complete or could be done via technology, both to increase the speed of delivery and reduce manual friction. The concept of CRM (customer relationship management) can sound scary but it doesn’t have to be and most systems are designed to be easy to use for all skill levels. Remember the goal of implementing these systems is to help you understand and personalize your customer experience so that you build true loyalty through deeper relationships with your customers.



Resources Shared

Jay Schwedelson | Winning on Main Street Small Business Podcast
By Jay Schwedelson 04 Jan, 2024
Today, we’re sharing some big news and some bitter-sweet news. After hosting this podcast for over four years and 200+ episodes, we’re moving on and passing the baton to a new host who will be launching a new show. Thanks to all our loyal listeners and those who contributed to the show. Wishing you all success, and we invite you to check out Jay’s new show, Small Business Quick Wins.
Malcolm Peace | Winning On Main Street Small Business Podcast
By Malcolm Peace 28 Dec, 2023
Malcolm Peace is the founder and president of Tsetserra Growth Partners. He’s a native of Austin, TX. He is passionate about assisting family-owned small businesses in building enduring legacies. He specifically works with acquiring and running blue-collar industrial businesses in Texas and working with small business owners to drive long-term growth and profitability. He takes pride in helping family-owned small businesses sustain a lasting legacy. Succession planning is an integral part of his efforts. As a result, he focuses on building businesses up instead of tearing out people and processes.
Matt Murray | Winning on Main Street Small Business Podcast
By Matt Murray 21 Dec, 2023
Matt Murray is the Founder and CEO of Evolution Mechanical, Inc., which serves the commercial and industrial HVAC/R market. He is also the founder and CEO of Blue Collar King Coaching & Consulting, through which he guides owners and would-be owners of service-based businesses in the blue-collar trades to succeed personally and professionally. As such, Matt’s expertise goes far beyond “just” his technical expertise in the HVAC/R field. Matt is also an expert in leadership, business development, business systems & strategy, operations, strategic planning, sales, and more. Matt runs his life and businesses based on strong core values and is passionate about helping others live happy, successful, and fulfilling lives.
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