Competing for Loyalty

It has been said more than once that history repeats itself. While that may or may not be true of world events, it is certainly proving to be true regarding the customer service experience. One only has to look back a few decades to see a time when companies valued each customer, and when customers responded with loyalty to companies that served them well. That loyalty often extended even to a certain mechanic at the garage, or a certain insurance agent within an agency.

Then something happened.

Call it the Technological Revolution 2.0, call it the Information Age, or call it the Internet, but suddenly customers had more information and more choices. The result was a sudden need for companies to become more competitive for every customer dollar. The only problem with companies’ efforts to compete was that they competed for dollars rather than customer loyalty.

By focusing on sales rather than customer satisfaction, companies made a few extra dollars, but the benefit would be short lived. Once the novelty of gimmicky “rewards” such as shoppers clubs and punch cards wore off, customers drifted elsewhere. In time, large companies began losing their competitive edge, and revenue dollars.

Customer Loyalty Reloaded

At the same time, other companies, such as Amazon.com and Apple, seemed to attract loyal customers with a nearly magical appeal. What was the difference? In retrospect, it is obvious that companies that managed to build and maintain customer loyalty were those that learned to provide a superior customer experience.

With the emergence of the new global marketplace, and a world full of companies ready to provide any product or service, good quality and competitive pricing became givens. Once again, it was customer appreciation that built and sustained businesses. And the way those businesses learned to show that appreciation was by focusing on providing the best experience possible for the customer, from development to support after the sale.

Like the Phoenix that rose from the ashes, customer service was back, only this time it was the goal and not a byproduct of how businesses operated.

And so it is, today. Gartner.com reports that 89% of companies expect to compete for customers based mostly on the customer experience, versus 36% four years ago. The fact that most companies realize the importance of the customer service experience is good news. For companies that disregard the importance of the customer service experience, that should come as bad news.

Since customers now expect to be valued, it is worth examining what it takes to make them feel that way. It begins, and ends, with the cycle of the customer service experience.

The Cycle of an Experience

The customer service experience was once viewed as the end of the process for business activities. Market needs were identified, products or services were designed and produced to satisfy them, and marketing attracted customers who then purchased the company’s wares. The customer service experience could be reduced to a single question: “Were you happy with your purchase?” The question, of course, could be asked only after the company had accomplished its primary objective, which was to make a sale.

Thriving companies, today, have learned that success comes only by complete reversal of that thought process. Rather than allowing profit to drive the business, with customer service being a secondary consideration, satisfying customers’ expectations is now the primary objective. Making a profit is regarded as the natural consequence of accomplishing that objective.

In order for this philosophy to have concrete results, satisfying and even exceeding customers’ expectations must be the goal of every aspect of the business operation.

An effective strategy for turning this concept into a reality must include defining exactly what it is that customers want. As we stated earlier, excellent customer service, today, means that the customer had an excellent experience dealing with the company. This happens when a company does the following:

Saves the Customer Time

And old adage says that the way to win someone’s favor is to help them have more time, money, or love. A good customer service experience will accomplish the first two every time and, depending on the product being purchased, may accomplish the third, as well.

A survey indicated that 71% of customers say the most important thing a company can do to provide good service is to value their customers’ time. With customers placing such importance on their time, every interaction the customer can have with the company must come under scrutiny. Whether a customer is calling in to ask for product details or placing an order online, the company must make each transaction as streamlined as possible. If extra time must be spent behind the scenes and at company expense in order to accomplish this, so be it.

Understands the Customer’s Needs

Knowing what your customers need is no longer enough to provide excellent customer service. You must anticipate what their future needs will be and be prepared to meet those, as well. In fact, the most successful companies will develop goods and services that create new customer needs, and which the company is positioned to meet—a strategy known as disruptive innovation.

Of course, you must meet the current needs of your customers, first. But you must not assume that you know what those needs are. Far too often, a disconnect exists in which companies try to provide good, services, features, or support that customers do not want. You must take steps to know your customers, and to learn what they feel their needs are. This is crucial, because if you are not meeting those needs, someone else will.

Takes Ownership

No company is perfect. Customers understand that. What they do not understand is why they must suffer as a result of a company screw-up. Yelp and similar websites are rife with negative customer testimonials. The vast majority of those testimonials do not focus so much on what caused the complaint, as they do on how the company responded to it.

On average, a bad customer experience reaches twice as many ears as a good one. The quicker you can turn an unhappy customer into a happy one, the less chance there is that the customer will complain about your company. You may have to work doubly hard and spend more than the value of the purchase in order to “make things right” in the eyes of the customer, but doing so will have handsome rewards. Stats show that a loyal customer is worth ten times the value of their original purchase, so it is to your advantage to turn an unhappy customer into a loyal one, at virtually any cost.

Expects the Unexpected

Ideally, you will be able to anticipate the areas in which your customers are most likely to have a bad experience, and you can be proactive in preventing those occurrences. Realistically, you are in for a few surprises.

The key to minimizing customer service experience issues is to break them down into two categories: those you can anticipate, and those you cannot anticipate. You should be able to list several common issues that are likely to occur, such as a delayed shipment, a customer receiving the wrong order, a customer complaint against an employee, and so on. With a little effort, you can create an exhaustive list of likely issues and formulate policies ahead of time that dictate how you will respond to them. And those policies should be designed with one goal in mind: saving the customer service experience.

But how do you expect the unexpected? Obviously, you can’t. Once you can envision how a customer might have a bad experience, that issue moves into the anticipated category. You should exercise due diligence in trying to identify how you might fail to meet a customer’s expectations, but after a point you are wasting your time.

Rather than wearing a flat spot on your crystal ball (or on your head), you should plan how you will respond to surprises when they arise, whatever they may be.

There are few failures in customer service that cannot be rectified if the company responds in one or more of the following ways:

  1. Issuing a refund, in full or in part.
  2. Issuing a credit.
  3. Replacing the questionable merchandise at the company’s expense.
  4. Letting the customer know that disciplinary action will be taken against a negligent employee who caused the problem (if such action is warranted).
  5. Issuing an apology to the customer. In some cases a verbal apology is appropriate, in others a written apology is in order.
  6. Letting the customer know what action the company has taken to prevent a recurrence of the issue.

By incorporating these responses into your employee training, and into your policies, you can turn unexpected problems into unexpected responses that will save the customer and build loyalty.

Companies that have adopted similar customer-focused policies, such as Chick-fil-A and Amazon.com, are, not surprisingly, at the top of their field in earnings and customer loyalty.

Follows Through

Nothing taints the customer’s experience so much as when the company does nothing about their complaint. Time and time, again, stories propagate across social media regarding companies that failed to follow up or follow through when receiving a complaint.

If yours is a large organization, formulate a plan to ensure that all responsible departments/employees do their part to respond to each customer complaint quickly.

The Role of Technology

It was technology that created a new demand for excellent customer service, and it is technology that enables companies to provide it. Through the power of technology, companies can streamline internal processes so that “front of the store” interactions with the customer go smoothly and efficiently.

Fortunately, a myriad of tools exist to help companies keep their focus on the customer’s experience throughout the sales cycle.

Project Management

By utilizing project management platforms, company decision makers have a snapshot of each project at every stage of development. Bottlenecks can be identified and resolved, and the entire process can be tweaked for maximum efficiency.

Data Management

In order to understand customers needs, data becomes key. Analytics software provides companies with powerful data mining and data analysis tools for monitoring trends, identifying opportunities for deeper engagement, and collecting feedback after the sale.

Communications Tools

In order to market, manage complaints, create policies, and communicate with customers, flexible communications tools are necessary, for both internal and external communication. The phone and fax machine have been replaced with targeted email campaigns, user-friendly websites, and helpful apps. Internal paper memos have given way to broadcast messages sent across the company network. And online meetings and online training platforms keep management and employees connected and informed.
While technology cannot replace humans, not even those who answer the customer service phone, it can make their jobs easier, and their customers happier.

How KDG Can Help

KDG specializes in developing technological solutions for small and medium size businesses of all types—solutions that can empower your organization to serve your customers in ways never before possible. Our team of professional consultants can analyze your needs and propose ways we can help you improve customer satisfaction and increase customer loyalty. We are experienced in helping organizations build positive customer experiences at every step of the sales cycle.

Why not contact us, today, and see how we can help you?