I believe our newly connected, digital world has created a burning platform for traditional customer experience strategies.
Businesses are facing a troublesome double whammy. There’s a newly empowered consumer base, with a loud voice and an unwillingness not to put up with the same old crap. Coupled with this, the rise of disruptive start-ups threatens the heart of our existing business models. Together, this means businesses have to reassess and re-evaluate their idea of the customer just to stay alive.
Not convinced? Professor Richard Foster from Yale University estimates that:
By 2020, more than three quarters of the S&P 500 will be companies that we have not heard of yet.
Due, in no small part, to the speed and impact of the changes that the digital world is bringing about.
But you put your customer first, right? Sure you do, because that’s what it says on your website…and on that funky poster on the back of the toilet door.
The thing is, this just doesn’t wash any more. Customers have new expectations from business – they demand transparency, accountability and fairness. They are resistant to being sold to and want an experience that goes beyond the transactional.
Customers used a British Gas Twitter Q&A to vent their frustration at recent price hikes
#AskBG Can you reinstate my paper bills please, or send anything else that will burn?
— Alan Gibbs (@alan_gibbs) October 17, 2013
To be customer first in the digital age requires businesses to elevate their evaluation of the customer – to reassess their operations to balance profit with great customer experience focused on individual needs.
It’s a view that understands that loyalty, rather than acquisition is what creates a sustainable 21st century business.
Real customer centricity requires a new mindset within the business and new practices and behaviours to embed this viewpoint throughout the organisation – from board to till.
It requires an organisation that lives and breathes the customer and is shaped to meet their needs from the inside, out – a networked, motivated and empowered organisation, with a common purpose in mind.
Metrobank have based their entire business around ‘outstanding’ customer service and their aim is to create fans not customers
The benefits that this brings are really a no-brainer. Here are the three biggies:
- Greater loyalty and reduced attrition
- Reduced cost of sale from stronger reputation and increased word-of-mouth recommendation
- And, above all, increased customer lifetime value (CLV)
Yep, not just more loyalty but greater CLV as your client NPS moves from detractors and passive through to promoter.
Forbes reports that promoters are worth more through:
- Retention rate. Promoters generally defect at lower rates than other customers.
- Annual spend and share of wallet. Promoters increase their purchases more rapidly than detractors, because they tend to consolidate their purchases with their favorite supplier.
- Pricing. Promoters are often less price sensitive than other customers, particularly detractors.
- Cost efficiencies. Promoters typically require less in sales, marketing and advertising costs than other customers. They generally have fewer complaints and account for fewer credit losses.
- Word of mouth. Promoters generate 80 to 90 percent of referrals.
So, next time you see your company mission statement, take a moment to think about how your organisation actually puts the customer first.
And, if you are not delivering on the promises you are making, maybe you should start, before it’s too late?