Satisfaction Guaranteed

Customer loyalty comes from consistently good service

In this era of tough competition, more businesses are seeking to differentiate themselves through customer service. But how many businesses show this in ways customers recognise and genuinely appreciate?

The truth is that service excellence is not something one does on an ad hoc or piecemeal basis. It requires a sustained effort, perseverance and consistency.

In many markets, businesses strive to acquire “loyal” customers. The simple reason is because loyal customers bring in the most profit. They are satisfied with your products and services, and patronise you repeatedly. They then recommend you to their friends and associates.

The global research company, Gallup, showed that “loyal” customers typically spend twice as much as “satisfied” customers. They defect to the competition at half the rate.

The customer loyalty challenges

The first challenge that companies face is to achieve differentiation from their competitors. While such product differentiation is apparent in industries like consumer electronics, most service industries find it difficult to sustain any competitive advantage based on product features alone.

In the financial services industry, a product can be emulated by a competitor within hours. As a result, businesses are seeking to differentiate by improving on customer service.

The second challenge is to understand what customers really want by shifting them from being merely “very satisfied” with product features to becoming loyal to your business and your brand.

The third challenge is to organise product and service delivery in such a manner that customers recognise and appreciate the value that is being placed on them.

They will reward you in return, with their loyalty and follow-on business. This means customers must experience something beyond the traditional “Greet”, “Smile” and “Thank you”.

Loyalty roadmap

A four-stage management model can help meet these challenges and move organisations towards building a differentiated customer experience, and delivering it deliberately and consistently across all touchpoints.

1. Understanding the problem and the opportunity

This means learning and understanding what makes for a “customer experience”.

Employ motivational and behavioural research techniques to analyse customer feedback and complaints.

2. Identifying what customers really want

Customers enjoy a bewildering choice of alternative suppliers. A business that is “good” at what it does is unlikely to truly succeed.

Organisations must learn about what it takes to make customers “feel important” and “cared for”.

This makes them truly enjoy the service experience. It is this “emotional engagement” that makes the overall experience memorable.

3. Designing a compelling customer experience

Design your business processes from the “outside in”, from the perspective of the customer.

This ensures that tasks are completed more efficiently according to the customer’s requirements.

Advertising and marketing collaterals, along with the process of delivery, fulfilment and after-sales service, must be mapped to ensure that potential “combustion points” are removed and “emotional rewards” are introduced to deliberately make the overall experience much more memorable.

Ensure that everyone in the process flow, from the business units to each individual colleague, knows precisely which element of the customer experience they are tasked with.

The result is that delivery will be consistent, across all direct and indirect touchpoints. In a bank, for example, this includes branches, contact centres, ATMs and even the Internet.

4. Assuring service exceeds customer expectations

Focus on customer outcomes when it comes to measuring the customer experience. The outcomes of routine operational activities should align with the organisation’s customer experience strategy.

Ensure that performance indicators such as customer complaints are regularly reviewed by a service council, chaired by the chief operating officer.

The purpose of the council is to seek constant improvements in customer service.

Give staff incentives for sales and service. For example, a bank’s branch performance indicators demonstrate that branches with higher levels of customer engagement achieve higher revenues.

Implement customer-based competencies into the annual staff performance appraisal so that staff can better understand the role they play in delivering a great customer experience.

Equip all staff with emotional quotient-based training so that they know how to build emotional engagement with customers.

The payoff

While the efforts may seem considerable, the potential benefits are equally considerable.

A bank’s recent customer engagement survey, conducted by Gallup, showed that “fully engaged” (loyal) customers were more than twice as profitable as average customers, and over 50 per cent more profitable than customers who are “satisfied” with the bank’s financial products, services and processes.

— Source: Straits Times/Asia News Network

Article by Mark Grieves.

In Love For Life

Corporations always want loyal and lifelong customers

IF you look at some of the fastest growing businesses and brands in the world today like Google, Facebook and iPod, you will notice one thing in common – their customers are so in love with their products that they have become a free sales force.

These customers are totally smitten. Just as any teenager experiencing love for the first time, they cannot help but talk to anyone who will listen about their newfound love.

Fleeting interest

Take a look at most other businesses and what you will see millions of one-time customers who, after the initial seduction, one-night stand and promise of a long-term relationship, find themselves bitterly disappointed.

There are others who, after being a loyal customer for many years, decide to divorce the business because of a lack of care. Then there are many others who remain customers until an attractive, understanding and easy-to-deal alternative gets their attention.

At the heart of the most profitable and fast-growing businesses in the world is a positive emotional connection between three groups – the company or brand, its people and the customers. There is an emotional engagement between them. The customers are captivated by the product.

Making the connection

In the 1980s, several Harvard Business School professors started looking in depth at what explains superior profitability between companies operating in a specific service sector.

They looked at airlines, financial services, retailing and professional services. The professors asked themselves why one bank operating in the same geographic area with the same products was 40 per cent more profitable than its competitors.

Their discovery is summarised in a framework they call the Value–Profit–Chain. In simple terms, superior growth and profitability was the result of significantly higher levels of customer loyalty from profitable customers.

I call these customers who “stay, say and pay”. “Stay” means they actively choose to do business with you rather than feel handcuffed by some financial “loyalty bribe”.

“Say” means that they defend the company when others complain about it. “Pay” means that they believe that people do get what they pay for.

So if the business has a price increase and it is explained as being required to continue delivering a superior product and experience, they are more than happy to pay the premium.

The Harvard professors discovered that if customers perceive the value of your product and service to be superior, both in promise and in delivery, they would be emotionally engaged.

While products are easy to copy, the element of perceived value is not. The overall “customer experience” is how they feel when they start thinking about your product through to when they are using it.

The personal connection

When your customers deal with your company, the quality of the experience is largely a function of what it’s like to deal with your front-line employees – the customer service people, the people in the outlets, on the telephones and making the deliveries.

Now let’s go into people’s brains and nervous systems.

What is it specifically that gets customers emotionally engaged with your company and brands? At the heart is a particular brain cell or neuron called a “mirror neuron” and it is automatically activated every time one person deals with another. It is the basis of what the scientists call “emotional contagion” and it can be positive or negative.

Assuming that your products are well designed and represent competitive value for customers, the challenge is to get front-line employees to emotionally connect with the company and customers.

Highly engaged employees are those that “stay, say and strive”. The company retains them (they “stay”), they “say” good things to everyone about the company and its brands, and they “strive” to improve the business.

As company leaders, your ultimate role is to emotionally engage your teams and people. When you can truly help employees feel valued and involved, they will make customers feel valued and involved … the mirror neurons will make it so.

A customer’s lifelong love affair with your company requires a deliberate approach I call “engagineering” – applying the art and science of personal and group engagement.

– Source: Straits Times/Asia News Network

Article by Bill Lang, chief executive officer of Bill Lang International and group president of Training Edge International.