Interesting article by Robert Wollan, global managing director of Accenture Customer Relationship Management, in a recent edition of Customer Relationship Management magazine entitled, “Knowing Your Customer in the Digital Age.”
New research from Accenture indicates that while consumers claim to be more satisfied with companies they buy goods and services from, they are increasingly willing to switch providers.
Accenture’s hypothesis is that companies have focused on fixing things that driven customers away but they haven’t made improvements in those things that motivate consumers to stay.
They suggest five ways companies can improve customer loyalty and retention:
- Provide the consistent service from the start. The promise made to customers at the beginning of the relationship sets the stage for future satisfaction. Service respondents rated “having the service experience match the promise a company makes to me up front” is one of the most important areas of customer service. A company’s failure to deliver on the service experience promised is the customers’ greatest frustration.
- Keeping up with your customer. Companies do not always notice subtle changes in customers’ need for recognition. Consumers want to be rewarded for being loyal. Chipotle does not have a frequent buyer card; however, they do have promotions with sufficient frequency that enables loyal customers to get a free burrito for every five they purchase, a 20% discount — a much better deal than most frequent buyer programs that offer a free item for every tenth purchase, a 10% discount.
- Companies overlook signs that customers are considering switching. One key indicator is partial switching when a customer has stayed with a particular company but has added another provider in the same category. This is true with me between Nike and Under Armor with regards to workout clothes, as well as Zappos and Road Runner Sports with regards to running shoes. I doubt I am a sufficiently large customer to matter to either.
- Over the past year, more than half of consumers have used social media sites to gather information about a company. Companies do not always show consumers how their input contributes to new products or customer service initiatives, leaving them feeling they’ve wasted their time. I’ve never heard anything after suggesting the need for improvements to Duke Hospital, my general practitioner or my gym.
- Although 68 percent of consumers say technology has improved their experience, even tech-savvy consumers are not swayed by new applications or technology solutions. Companies need to clarify expectations at the beginning of the relationship and use the knowledge gained from customers who have switched from the same provider to understand the reasons for the switch and create a more satisfying experience.
Customers want companies to reward them for being loyal. Recognition programs should reflect the customer’s perception of meaningful increase in engagement or spending, not the company’s perception.
While the digital customer is asking companies to make their relationships more personal, doing so can bring more customers into the fold and increase their emotional attachment to the company’s products and services.
Which providers do you believe are doing a good job making relationships more personal?