The singular characteristic that all brands with loyal customers share is high integrity. After all, who would become loyal to a business if the brand were not honest, trustworthy and willing to serve?

Here are four signs that your brand possesses a high level of integrity:

1) Your brand demonstrates a willingness to genuinely serve its customers.

Great companies don’t just create meaningless slogans like “Customer Service Excellence”—they champion customer-centric values as a way of operating every aspect of their business. These businesses go beyond expectations to stand above their competitors. In addition to creating beautifully designed products, Apple supports their Mac User Groups (MUGs) as well as Genius Bar to help educate their customers on how to better use their Apple products.

2) Your brand listens to its customers on a meaningful level.

Corporate leaders of high-integrity businesses leave their comfortable offices and directly engage their customers. Sam Walton used to say, “If you don’t know what to do, go ask the customer. If it’s not happening in the store, it is not important to them.” Costco CEO Jim Sinegal apparently agrees; he visits a different Costco store every day.

3) Your brand exhibits caring awareness and a sense of community with its employees.

High-integrity businesses view their employees as family, not workhorses. Financial analysts criticize Costco for its generosity to its workforce but as CEO Jim Sinegal explains, “We’re trying to build a company that’s going to be here 50 and 60 years from now. We owe that to the communities where we do business. We owe that to our employees, that they can count on us for security.”

4) Your brand cultivates a company culture that reflects what its brand represents.

Companies like Apple, Google, Netflix and Zappos live by certain values that ignite passion in their customers. Because the company’s values are aligned with the customer’s values, customer loyal ensues. Led by CEO Tony Hsieh, Zappos has set a new standard in cultivating a customer-centric culture.

Companies with higher integrity aren’t perfect, but they never settle—they continually strive to improve their offerings and better serve their customers. Instead of playing to the competition, they create and nurture their own unique place in their customer’s hearts and minds.

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Great brands don’t just create meaningless slogans like “Customer Service Excellence”—they champion customer-centric values as a way of operating every aspect of their business.

These businesses excite us and make us happy to conduct business with them. It’s a symbiotic relationship between business and customer. The business provides products and services customers need and, in turn, the customers willingly patronize the business and support its existence.

Have many companies forgotten about the nature of business itself?

Outstanding businesses go above and beyond to better their customers’ lives:

• L.L. Bean wants you to be completely satisfied with your purchase. Don’t like the way a shirt holds up after a few years of use? Return it—L.L. Bean has no time limit on customer satisfaction.
• Online retailer Zappos offers free shipping both ways and a 365-day return policy.
• Along with one-click shopping, Amazon offers a Prime program that gives customers free 2-day shipping on most items and their Subscribe and Save feature offers both convenient and economical shopping.
• In addition to creating beautifully-designed products, Apple supports their Mac User Groups (MUGs) and Genius Bar to help educate their customers on how to better use their Apple products.
• Harley-Davidson sponsors HOG groups around the world and annual mega-rally events.
• Search and online advertising giant Google offers a robust offering of free services that help their customers in their daily lives from Google Reader, Google-411, Desktop Search, Google Earth, News Alerts, Google Calendar and Google Docs.

What does your business do to better serve its customers?

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3. Four Signs That Your Brand Has High Integrity

Peter Drucker noted that innovation is one of the only two drivers of business (the other is marketing), yet innovation-driven efforts often get swept into obscurity in an effort to meet the demands of the moment.

To better understand the value of innovation, take a look at one of Wall Street’s most coveted metrics: the Price-to-Earnings Ratio (or P/E Ratio or just “the multiple”).

A publicly-traded company’s P/E ratio is calculated by dividing the stock price (market value per share) by earning per share (EPS). For example, Apple’s current stock price is $168 and its EPS is $5.72 yielding a P/E ratio of 29.41. 

The P/E ratio shows how much investors are willing to pay per dollar of earnings. With a multiple of 29.41 investors are willing to pay $29.41 for every $1 of Apple’s earnings.

Higher multiples imply a higher expectation of future growth. While Apple’s multiple is 29.41, multiples for Dell, Microsoft, and Hewlett-Packard all hover around 15. This means that the market expects Apple to grow twice as fast as its competitors.

Apple, Amazon.com, Google and Netflix all have staggeringly high P/E ratios as a consequence of their customer-centric, innovation-driven businesses. Their higher multiples increase the perceived value of their business today, providing them with a larger pool of capital to continue to fuel innovation efforts tomorrow.

Notice also how these innovation-driven businesses dominate within their respective markets.

It pays to be innovative.

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Here are ten reasons why your Brand Lovers are so important:

1. Your Brand Lovers choose you more often than your competitors. To most Mac users, there’s no alternative competitor to choose from.

2. Your Brand Lovers spread the word about your brand and create new customers for you. Basically, your best customers are the source of your word-of-mouth stream.

3. Your Brand Lovers are by nature loyal customers. Customer loyalty is a better determinant of profitability than mass appeal. (Again, just ask Apple.)

4. Focusing on your Brand Lovers and cultivating customer loyalty can help you double your return on assets (ROA).

5. Similarly, serving your best customers can lead to explosive return on investment (ROI). Example: When Apple opened their retail stores they expected to generate $1,000/square foot. They actually generated $4,000/square foot.

Ultimately, your Brand Lovers drive the profitability of your business.

6. In The Loyalty Effect, Frederick Reichheld explains how a 5% increase in customer loyalty can increase a company’s profitability by 40 to 95%.

7. Think about what would happen if you turned just 10% of your occasional customers into Brand Lovers. For large enterprises, this shift represents billions in additional revenue and radically higher profit margins.

Need more reasons?

8. By focusing on your Brand Lovers, your cost of acquiring a new customer decreases.

9. Your marketing effectiveness soars as a result of building a stronger brand presence focused around the needs of your best customers.

10. By focusing on your Brand Lovers you can build a powerful brand that stands for something meaningful to your special customers. This gives you clear differentiation and helps you organically attract more of your most profitable customers.

The bottom line is that serving your best customers is the surest way to grow a profitable business—in any economic climate.

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2. The Willingness to Genuinely Serve Your Customers
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Consciously or not, you are constantly asking yourself questions, and it is the quality of these questions that defines your ability to think and act creatively.

Your business is destined for mediocrity if your main question is What is my competitor doing today? or How can I cut costs or better manage inventory? These questions are important, but they are secondary to the bigger questions that drive your business forward such as:

• What do our customers want more from us than anything else?
• What is the primary problem we’re solving for our customers today? How can we totally eradicate that problem in the next generation of our products/services?
• What will our customers want tomorrow (even if they don’t know it today)?

Notice how all of these questions are customer-centric. Do you think Apple’s Steve Jobs or Proctor & Gamble’s A.G. Lafley try to innovate for the sake of innovation? Without a crystal ball (although Jobs does seem to have one), they create new products in anticipation of the customers’ needs.

With the power of superior questions, there are no boundaries to what you can create.

Think differently. Ask the questions others are afraid to ask.

What if you were one question away from a major breakthrough in your business? What might that question be?

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The key, then, is to first recognize these three decisions and then respond in the best interest of the organization.

Think back to February ‘08. Apple’s iPhone became an international sensation. Programmers, however, wanted to do more with the cool smart phone and found ways to hack the iPhone.

Since the iPhone’s release in June ‘07, Steve Jobs’s team attempted to thwart the hacking community to no avail.

Then came Jobs’s BIG decision in March ‘08. He announces a software development kit that allows programmers to create applications for the iPhone to be made available in the new iTunes AppStore. Programmers get to keep 70% of the revenue.

It’s difficult to appreciate the power of this single decision. Apple recently celebrated its 1 billionth download from the AppStore, which has over 25,000 Apps and 5,000 more added monthly.

More importantly, with the new App Mania, Apple is now well positioned for the next wave of mobile innovations while their competitors play catch-up.

Effective leaders value the power of a decision. Be deliberate and thoughtful in your decision making. Choose well.

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Zappos offers new hires a $2,000 bonus to quit after week one of four weeks of paid training. CEO Tony Hsieh explains, “It’s best to know early on if an employee doesn’t buy into the vision or the culture.”

You also won’t last very long in companies like Southwest Airlines, Netflix, Apple, Umpqua Bank, or Google if your attitude isn’t aligned with the company’s core values.

It isn’t easy to find the right people, but it’s impossible if you don’t define what your culture stands for.

With a distinctive, clearly-defined culture your job gets much easier. By being the best expression of what your culture represents you’ll naturally attract employees aligned with your culture and repel those who are not.

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3. How Do You Achieve a 62,400% Growth Rate?

Many business owners and executives fail to realize growth results when they set up the right conditions. Profitability and customer loyalty are consequences of a business’s commitment to evolve, innovate and exceed their customers’ expectations.

Ironically, a focus on obsessive growth can often stifle innovation, the lifeblood of a business’s growth and expansion. Just ask companies like Apple, Google, Netflix or any company that thrives in a competitive landscape. Or talk to Microsoft, Yahoo! and Blockbuster to learn how the aforementioned competitors have trampled their market share.

Consider Proctor & Gamble: In 2000, the company issued several profit warnings, sending the stock tumbling to half its value. A.G. Lafley arrives as the new chairman and CEO and shifts their focus to customer-centered innovations. Profits tripled and P&G is now one of the most valued companies in America.

Conducting “business as usual” is a surefire way to make your business obsolete. Innovation and growth requires unbridled creativity to ask questions, solve problems and create an extraordinary customer experience, which in turn requires the proper inner and outer conditions to manifest.

Learn to eliminate the barriers to rapid creative innovation, but first learn to appreciate the Capital of Creativity as the source of your business success.

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