The easiest way to grow your customers is not to lose them The average business loses around 20 percent of its customers annually simply by failing to attend to customer relationships.

CUSTOMER   SATISFACTION   is 

SUPERB  RETENTION   STRATEGY

People want to buy from places that make them feel good. Creating an experience that is memorable and enjoyable for the customer will help to keep them coming back for more and not churning away. No longer can marketeers compete on price, customers want more, and they want emotional connections with the companies they deal with. Create that experience that keeps them coming back for more. This will create a point of differentiation that you can use as a competitive advantage

When a customer is overawed by the service experience and has their expectations exceeded, it increases customer retention.. Their argument ... It eases customer acquisition, drives customer loyalty and improves customer retention  . Yet research report of Indian companies found that  just 20% of companies have a well-developed customer experience strategy.

THE EASIEST WAY TO GROW YOUR CUSTOMERS IS NOT TO LOSE THEM

The average business loses around 20 percent of its customers annually simply by failing to attend to customer relationships. In some industries this leakage is as high as 80 percent. The cost, in either case, is staggering, but few businesses truly understand the implications. Imagine two businesses, one that retains 90 percent of its customers, the other retaining 80 percent. If both add new customers at the rate of 20 percent per year, the first will have a 10 percent net growth in customers per year, while the other will have none. Over seven years, the first firm will virtually double, while the second will have no real growth. Everything else being equal, that 10-percent advantage in customer retention will result in a doubling of customers every seven years without doing anything else.The consequences of customer retention also compound over time, and in sometimes unexpected ways. Even a tiny change in customer retention can cascade through a business system and multiply over time. The resulting effect on long-term profit and growth shouldn’t be underestimated.

WHAT DO COMPANIES WITH A SUPERIOR CUSTOMER EXPERIENCE DO?

SOME ACTION POINTS FOR INCREASING CUSTOMER LOYALTY.   

Big opportunity for companies who are willing to invest in the customer experience. In order to help you increase your own retention rates, we've compiled a list of thrust areas for increasing customer loyalty. 

1. CUSTOMERS ENJOY BUSINESSES WHO KNOW THEM.

Telling your employees to spend more time with customers might seem like folly, but smart entrepreneurs know that isn't the case. Numerous studies have shown that everybody views their service experience as more positive when they don't feel rushed or ignored. Don't spend time idly, though; have employees attempt to find out key customer traits. When it comes to customer service that keeps people coming back, the research shows that quality matters more than speed. According to a study by the Gallup Group, customers were nine times more likely to be engaged with a brand when they evaluated the service as "courteous, willing, and helpful," versus the "speedy" evaluation, which only made customers six times more likely to be engaged

2.REALIZE THAT BUDGET IS NEGLIGIBLE.

Giving back to customers can appear incredibly costly, but it doesn't have to be. Instead, reciprocity is built even with small gestures. The premise is simple: Go above and beyond for customers and get rewarded with repeat business. The execution, however, can be trickier, so below is a compilation of interesting research on how to improve reciprocity with your customers. Although reciprocity works incredibly well on it's own, research shows that it is even more powerful when started by surprise. Everyone knows it costs 4 -5 times to acquire a new customer than to retain one. Higher customer referral rates and customer satisfaction were reported by a study of  companies who increased their investment in customer experience; inspite of the relentless war of cost saving marketing chiefs could convince their CEO for a higher budget allocation

3. WIN THE HEART OF THE CUSTOMER TIME AND AGAIN

So many people do an excellent job of making the initial sale, then drop the ball and get complacent, ignoring the customer, while they chase more business. Your selling has actually only just begun when someone makes that initial purchase decision because virtually everyone is susceptible to buyer’s remorse. To lock in that sale, and all of the referrals and repeat business that will flow from it, you need to strike while the iron is hot to allay your customers’ fears and demonstrate by your actions that you really care. You should thank them and remind them again why they’ve made the right decision to deal with you … and put a system in place to sell to them again, and again, constantly proving that they made the right decision.

4. CREATE TOUCH-POINTS AFTER THE FIRST SALE

Avoid losing your customers by building relationships and keeping in touch using a rolling calendar of communications. This is a programmed sequence of letters, events, phone calls, “thank you’s”, special offers, follow-ups, magic moments, and cards or notes with a personal touch etc. that occur constantly and automatically at defined points in the pre-sales, sales and post-sales process. People not only respond to this positively, they really appreciate it because they feel valued and important. It acknowledges them, keeps them informed, offsets post-purchase doubts, reinforces the reason they’re doing business with you and makes them feel part of your business so that they want to come back again and again.

5. AIM FOR CONTINOUS PURSUIT OF EXCLLENCE IN SERVICE

The never-ending pursuit of excellence to keep customers so satisfied that they tell others how well they were treated when doing business with you. Moving the product or service you deliver into the realm of the extraordinary by delivering higher than expected levels of service to each and every customer. Key facets include: dedication to customer satisfaction by every employee; providing immediate response; no buck passing; going above and beyond the call of duty; consistent on-time delivery; delivering what you promise before AND after the sale; a zero-defects and error-free-delivery process and recruiting outstanding people to deliver your customer service. Extraordinary service builds fortunes in repeat customers, whereas poor service will drive your customers to your competition..

6. A COMPLAINT IS A TREASURE CHEST FOR LEARNING

96 percent of dissatisfied customers don’t complain. They just walk away, and you’ll never know why. That’s because they often don’t know how to complain, or can’t be bothered, or are too frightened, or don’t believe it’ll make any difference. Whilst they may not tell you what’s wrong, they will certainly tell plenty of others. A system for unearthing complaints can therefore be the lifeblood of your business, because customers who complain are giving you a gift, they’re still talking to you, they’re giving you another opportunity to return them to a state of satisfaction and delight them and the manner in which you respond gives you another chance to show what you’re made of and create even greater customer loyalty.

7. GIVE HIGHEST PRIORITY TO THE LOST CUSTOMERS

There’s little point in dedicating massive resources to generating new customers when 25-60% of your dormant customers will be receptive to your attempts to regenerate their business if you approach them the right way, with the right offer. Reactivating customers who already know you and your product is one of the easiest, quickest ways to increase your revenues. Re-contacting and reminding them of your existence, finding out why they’re no longer buying, overcoming their objections and demonstrating that you still value and respect them will usually result in a tremendous bounty of sales and drastically increased revenues in a matter of days … and will lead to some of your best and most loyal customers.

8. MAINTAIN PRODUCT OR SERVICE INTEGRITY AT ALL TIMES

Long-term success and customer retention belongs to those who do not take ethical shortcuts. There must always be total consistency between what you say and do and what your customers experience. The design, build quality, reliability and serviceability of your product or service must be of the standard your customers want, need and expect. Service integrity is also demonstrated by the way you handle the small things, as well as the large. Customers will be attracted to you if you are open and honest with them, care for them, take a genuine interest in them, don’t let them down and practice what you preach … and they will avoid you if you don’t.

I am trying since a decade to build a compendium of authentic Customer Delight Practices... I found some in Kingfisher Airline but the airline closed down! I need some more of such golden practices in small but flourishing companies which can be a lesson for others to emulate.Did your Customer Service Department innovate by design or circumstance a new business practice ...please share it with me.

With best wishes

                                                        Dr Wilfred Monteiro

how many of these companies spend the same time, energy and money to maintain and grow their existing customer base?

MAINTAINING  CUSTOMER SERVICE STANDARDS

 WHEN THE CASH IS LEAN

Many companies spend enormous amounts of time, money and energy to acquire new customers. Yet how many of these companies spend the same time, energy and money to maintain and grow their existing customer base? In today's marketplace, where most companies are feverishly working to grow market share, prospective users get the attention and deals while loyal customers sometimes get left in the dust with little attention and less desirable offerings.

“PENNY- WISE & POUND-FOOLISH”  APPROACH

The  challenging economy  is putting consumer companies such as airlines, banks, and retailers in the difficult position of cutting back the service levels that customers have come to expect in recent years. These companies are closing retail locations, reducing hours of operation, and making do with less staff in stores and call centers. Meanwhile, faced with rising costs, they are also increasing prices, either overtly or through fees. As a result, customer experience research shows that satisfaction scores are reversing the upward trend of the past few years and actually dropping in a number of industries.

So it’s not surprising that most executives think compromising service levels is a mistake.

How can consumer businesses make necessary investments in service while facing the pressure on revenues and costs? Our review of the companies with the best customer service records in ten industries suggests that one key is to minimize wasteful spending while learning to invest in the drivers of satisfaction. Specifically, companies should challenge their beliefs about service and test those beliefs analytically. Many will discover that long-held but

seldom-reviewed assertions about what customers really want are wrong.

Consider service levels, specifically average time-to-answer, which is one of the most common metrics used in call centers. Service levels—often based on regulation or historical precedent—are set by call-center managers and then used to calculate staffing requirements. But service levels are challenging to maintain and costly to improve: raising them by 10 percent requires much more than a 10 percent increase in staff.

You can see this happening today with cellular and phone service providers. It seems that every week there is a new deal available to people whom are willing to switch phone plans. Customer loyalty crumbles as customers chase the next best deal. To counter a similar trend, one insurance brokerage firm took bold action when they saw term life insurance rates decrease significantly over recent years. They decided to contact every customer who had a term policy with them and let those customers know that they could obtain more dollar coverage or increased term length for the same monthly investment. Customers were ecstatic. As a result, company insurance policy sales went up because the goodwill that was demonstrated by the brokerage firm generated more business for them from their current customer base.

HOW TO ENGINEER A SERVICE TURNAROUND

Why are service turnarounds so tough? One reason may be that the front line at a service company is the product. A manufacturer's customers can't usually tell when workers at its production plant are unhappy. At a service company, on the other hand, any dip in morale is painfully obvious.

Another reason is that frontline staff control communication with customers. One of their jobs is to keep customers informed when things go wrong. In the mid-1980s, when Indian Airlines was experiencing service problems, one of us was told by a gate agent, "If you didn't want your flight canceled, you should have picked another airline" — hardly an inducement to repurchase. By contrast, manufacturing companies can manage customer communication much more directly through their head office and salesforce.

Since most management thinking about turnarounds is based on manufacturing companies, the strategies usually advocated may be counterproductive in a service context. Bring in a new management team? Better make sure you can do so without wounding the confidence of frontline employees. Reduce costs? You could, but you risk undermining morale, which will impair product delivery and disappoint customers. Establish tight control over day-to-day operations? Easier said than done when your key frontline employees are remote from management.

To make matters worse, service company turnarounds are far more likely than manufacturing turnarounds to become caught in a vicious cycle of deteriorating performance. Faced with poor results, managers cut costs, slashing headcount and trimming service. This damages the product and disheartens frontline employees. Poor morale translates into poor service. Customers lose confidence and defect to competitors, and the bottom line suffers.

MAINTAINING CUSTOMER  LOYALTY

Sometimes companies forget that, over time, their existing customers become more knowledgeable about competitors' offerings. Thus, buyers need to be continually resold on the company and the products and services it offers. One lawn care company experienced a loss of customers to its competitors due to what appeared to be lower competitor prices. However, when they compared their pricing structure with the competition, they discovered that their price was actually comparable. Their competitors had unbundled the various components of the lawn care service, pricing some components separately, thereby giving the appearance of a lower price. Consequently, this lawn care company went back not only to its lost customers, but also to all its existing customers with a new pricing structure that gave all customers more choice as to the service package and pricing level that would best fit their needs.

Companies that want to maintain customer loyalty for the long haul need to effectively gather relevant customer information through their sales and service force, or through outside customer data gathering firms. Customer information is vital in figuring out what products and services your current customers value, and how you subsequently need to update or evolve your product or service's positioning and packaging. This information can give you a significant edge over your competitors. For example, that same lawn company surveyed a subset of its customers and discovered various customer profiles. Some customers wanted to interact with and learn from the lawn service person, while others just wanted the work done without seeing the service person at all. Armed with this and other learning from its customer data-gathering, the company trained their sales and service personnel to position and package their company's offerings to any current customer situation. As a result, they improved their customer retention rate.

SUMMARY

Improving your company's customer service is a two-pronged approach. Externally, a company needs to decide which customers it needs to initially and subsequently focus on. The business needs to examine what it is doing to generate new customers and what it needs to do to maintain, or effectively prune, existing customers.

Internally, a company needs to figure out what's working and what needs improvement with respect to its key internal supports. Committed leadership is required to keep efforts going despite inevitable pain and adversity, especially in a highly competitive business. Initial efforts need to be targeted, starting small and building momentum. Employees and suppliers need to be involved in analyses and actions in order to generate uniform commitment and ensure that improvements stick. Employee competence and confidence needs to be built to sustain your company's advantage over the long haul.

Performing all these external and internal efforts proactively and intelligently will generate and ensure long-term success for your business.

with best compliments

Dr Wilfred Monteiro