Tag Archives: customer retention

CX: Realities & Piftfalls

People readily acknowledge that an organization must provide “good” customer experience (CX) in order to maintain their competitive position.

In support of this perspective, here are some interesting statistics that can help quantify the value of allocating time and resources to the customer experience and to effective customer service:

  • 80-90 percent of service problems are leadership related (Deming, Juran, and Crosby)
  • Fewer than half of US executives know who their most loyal customers are (Acxiom & Loyalty 360)
  • A 5% increase in customer retention increases a company’s profits by 25% to 95%, and a 10% increase in customer retention levels result in a 30% increase in the value of the company. (Bain & Co)
  • Consumers who have stated that they have a strong relationship with a single brand, over 64% said it was because they had a “shared value” with the brand in question (Harvard Business Review)
  • 70% of buying experiences are based on how the customer feels they are being treated.(McKinsey)
  • It is 6-7 times more costly to attract a new customer than it is to retain an existing customer. (White House Office of Consumer Affairs)
  • 55% of customers would pay extra to guarantee better service (Defaqto research)
  • A 2% increase in customer retention has the same effect as decreasing costs by 10% (Leading on the Edge of Chaos, Emmet Murphy & Mark Murphy)
  • 96% of unhappy customers don’t complain, however 91% of those will simply leave and never come back (1Financial Training services)
  • 83% of consumers require some degree of customer support while making an online purchase. (eConsultancy)
  • 45% of US consumers will abandon an online transaction if their questions or concerns are not addressed quickly. (Forrester)

Common Pitfalls

Beware… while many have recognized the above-listed realities, they have also failed to make effective transitions that truly improve the customer experience or retention levels.

According to a recent McKinsey article, some of the most common pitfalls associated with ineffective customer experience transformations are:

  1. Lack of vision. “Many managers enter a transformation with no real vision for the organization’s future state,” the article explains. “Instead, they have a general desire to improve the customer experience and rush into action very quickly, before defining a more specific vision. Targets are often vague, devoid of aspiration, and lacking in specificity…”
  2. No top-level commitment. If the transformation effort doesn’t become a top priority for the CEO and the executive team, it will likely lose momentum or stall completely as other “priorities” arise, or when various stakeholders resist the “extra work,” or when general apathy materializes.
  3. Failure to quantify potential gains. Without a clear expectation of the anticipated return-on-investment, it can be difficult to secure sufficient resources or the necessary budget.
  4. Misaligned goals. Referenced as “heedlessness” by McKinsey, launching a customer-experience transformations based on assumptions about what matters most to customers can result in little-or-no gain and lots of frustration. “Some organizations set out to boil the ocean,” the article states. Similarly, and despite good intentions, trying to transform all parts of the business at once will seldom result in success.

Remind Me?

How often should / must we remind our customers of the value we bring to the table?

Is a once-per-year reminder sufficient? How about twice per year? Three times?

Most people agree that, ideally, they’d like to “remind” their customers many more times each year; in fact, they say they’d like to keep a reminder of some sort in front of their customers as frequently as possible.

This leads us to a couple of critical questions:

  1. How often should we remind our customers of the value we provide?
  2. How should we do it?

Questions about the ideal contact frequency are among the most frequently-asked (see our previous post for some added perspective…) Generally speaking, sales calls and marketing messages become “over-done” when they fail to provide value to the customer or prospect.

This leads nicely to our second question how will we accomplish this value-added approach? Here are three simple and proven best-practices that can help:

Master the practice of pre-call planning. The most successful sales people plan their calls very carefully, based on research and record-keeping (i.e., effective use of a C.R.M. system), thus their calls tend to be more value-added. These sales people are able to accomplish more during each call and have a stronger impact on each customer or prospect. Even better, they use the written pre-call plan as a post-call review tool.

Questions are the answer. If we do plan our sales calls or presentations, many of us tend to focus on our “speaking points.” In other words, the things we plan to say.

When planning and executing sales contacts, it’s better to put an equal amount of focus and thought into the things we will ask.Asking the right questions is how we learn about our customers’ needs, interests, priorities and challenges; it is how we determine what to do and say next; it is how we solidify true selling relationships. As a rule-of-thumb, try to craft questions that focus on what people are trying to accomplish rather than on what they “think they need.”

In addition, a frequent by-product of asking good questions is enhanced listening. It’s much easier to listen if we stop talking! Good listening also sends a strong implied message to our customers: we care!

Develop a proactive style. This simply means that we end each interaction with a specifically-defined consequential next step a call to action in which we take the proactive position. This helps in several ways.

  • It sets the stage for a higher contact frequency
  • It shows the customer or prospect that we care and that we value their business
  • It often makes things easier for our customer, by helping them to get things done in a timely fashion
  • It shortens the selling cycle
  • It confirms our professionalism

 

Glue X 2…?

Selling is a process, not a one-time event, and it is best to adopt the proper long-term perspective if we’d like to achieve long-term success.

Using the sample circular visual below as a guide, there are two important yet often over-looked fundamentals to consider:

  1. The selling process never ends; once we meet a prospect and go through the cycle once, our goal is to maintain an appropriate contact frequency based on a number of need-based variables, and to both retain the customer and identify a new need at some future point
  2. The ability to move at an optimal pace from one step to the next and to do so in unison with our customers is the key to success

Once we adopt the proper long-term view, the means by which we will move from step to step is follow-up. In fact, we often refer to effective follow-up as the “glue” that keeps the process together and moving forward. If we follow-up diligently, on a value-added basis and with the right frequency, we’ll be able to keep the process (and the customer) moving toward our ultimate goal.

But be advised! If we move too slowly, we run the risk of losing-out to a competitor or to shifting priorities; if we move too quickly, or skip steps, we’re likely to alienate or lose the customer.

Therefore it is imperative that we maintain a keen awareness of the process steps, establish goals for each, continually seek customer feedback, and master the art of value-added follow-up.

You can review a detailed summary of the activities and goals associated with each step on our website.

glueIn addition, and as noted in an earlier post, others have used the “GLUE” analogy with respect to managing customer relationships, and have suggested it is an acronym for Give Little Unexpected Extras!

Please note, these little “extras” need not be material in nature – the simple act of “thinking” of someone and sending or giving them information or recognition can go a long way…

Customer Engagement?

engagement1Customer engagement has become a key objective for many companies and organizations.

The primary goal, according Jon Nace of Rosetta, a global marketing agency, is to not only satisfy clients, but to also “gain a commitment from clients to interact with your brand… make a transaction and, ultimately, to choose your brand repeatedly.

Yet data shows that many B2B companies offer a generic customer experience with few, if any, targeted follow-up actions.

The three recurring challenges to engaging customers are:

  1. Lack of corporate alignment, as departments operate in silos, which leads to an inconsistent user experience and to one department not knowing what customers have done or experienced.
  2. Marketing focus and budget is allocated more to advertising and promotion rather than direct or online customer engagement.
  3. Passive lead management, often involving automated responses rather than customized, value-
    added follow-up.

Satisfied Customers

customer service and retention is a primary responsibility for us allIn a recent article, our associate Alan MacNaughton noted that the primary functions of any business are to get customers and keep them.

While getting customers is primarily the job of sales and marketing personnel, KEEPING those customers is the responsibility of EVERYONE in the organization, from those involved in producing the product or delivering the service, quality assurance, customer service, technical support, credit and collections, right through to the shipping personnel.

All these functions can impact (positively or negatively) how the customers perceive your company. The best (perhaps the only) way to keep customers is to insure that every customer is a SATISFIED customer.

Regardless of the type of business, insuring customer satisfaction has many benefits:

  • A dissatisfied customer is easy prey for your competitors. Conversely satisfied customers resist vendor changes
  • Satisfied customers can be your best and lowest cost sales force. They may recommend your company to others or allow you to use them as references
  • Satisfied customers tend to be less cost sensitive, and may believe that paying a modest price premium for superior service is worth it

Comment…

Lagniappe: Customer Service GLUE

lagniappeWe recently visited marketinglagniappe.com, an intriguing blog that focuses on customer service and the practice of G.L.U.E., or “Giving Little Unexpected Extras” in order to engage customers, promote customer loyalty, and drive word-of-mouth.

As you may know, a lagniappe (pronounced “lan-yap”) is a Creole word. It is a small gift or “extra,” often given to a customer by a merchant at the time of a purchase.

The website lists a number of examples, such as a 13th doughnut when buying a “baker’s” dozen, the free peanuts provided by 5 Guys Burgers & Fries, or the free warm chocolate chip cookies given to guests at Doubletree Hotels.

GLUE for Sales Professionals?
As sales professionals, what “little unexpected extras” might we give to our customers or prospects?

I’m thinking these lagniappes need not be products or tangible gifts, but rather extra service, such as:

  • Going the extra mile when assessing needs with which we might help
  • Providing a useful referral to help our customers address needs in other areas
  • Identifying and implementing ways that make it easier for our customers to do business with us… possibly streamlining order processing, more straightforward scheduling, or providing concisely-written post-meeting recaps
  • Presenting proposals versus simply submitting them, so that we help our prospects and customers sift through the boiler-plate and more easily understand the relevant benefits, terms and conditions
  • Consistent post-sale follow-up to ensure satisfaction
  • Added support in implementing our solutions…

 

 

The list could go on… maybe you have an example or an idea to add?