Are You Giving What Customers Want Today?

As a dedicated customer centricity champion, just like you, I spend a lot of my time researching what customers want, just like you do too, I hope. In this period of great global unrest, understanding our customers has become more important than ever before.

Just a few short months ago, I didn’t think that it would be possible for customer-centricity to become any more important. But things change and now everyone is fighting to keep their businesses afloat. So the new and constantly altering needs and desires of our customers should be a top priority for all of us to follow.

To help me keep abreast of the changes, I’m regularly checking online searches for such terms as customer service, customer satisfaction and customer care. Google and Bing have become some of my best friends!

A couple of years ago, I came across some surprising facts, which prompted this post when I first drafted it. But with the incredibly unforeseen events of the past few years, I feel it deserves a update.

Already at the time, my analysis suggested a serious problem in the business of looking after our customers. Today it is clear that any organisation that hasn’t spent time putting things right, will most certainly be suffering in this post-pandemic, global unrest in which companies are trying to do business. I’d be interested to hear your own thoughts once you have read the article.

 

Customer Centricity

Wikipedia, another of my faithful friends, doesn’t have a definition for customer centricity! If you look up the term, you get directed to customer satisfaction! Unbelievable.  Try it for yourself and see!

Gartner defines customer centricity as:

“The ability of people in an organisation to understand customers’ situations, perceptions, and expectations.”

It then goes on to say:

“Customer centricity demands that the customer is the focal point of all decisions related to delivering products, services and experiences to create customer satisfaction, loyalty and advocacy.”

What I particularly like about this definition, is that it refers to customer understanding and the need for customers to be the focus of decision-making. It also highlights the need to create not just customer satisfaction, but loyalty and advocacy too.

Now whereas it seems to be difficult to build longterm loyalty these days, especially in B2C businesses, advocacy is essential in today’s connected world. Of course the latter means that customers are surprised and delighted rather than just satisfied, so that they are excited to share their positive experiences with others.


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Aim for Advocacy Rather than Loyalty

As we all know, it costs between 5 and 25 times more to acquire a new customer as it does to retain existing ones. (Invesp) Therefore strong loyalty is a valuable benefit for a brand. But covid saw us all changing our purchasing behaviours, as we researched, compared and then bought more online. So although loyalty is difficult, it is not impossible to achieve and luckily advocacy demands the same positive experiences that once led to customer loyalty. So we should be aiming for improved customer service and experiences.

A positive customer experience increases both loyalty and advocacy. #CEX #CRM #CustomerCentricity #CustomerFirst #Loyalty #Advocacy Click To Tweet

Of course, what customers are looking for in a company has also changed dramatically. They now expect organisations to provide more than just their products and services. They expect them to care for their employees as well as the communities in which they do business.

 

Customer Experience is the New Differentiator

Retailers will need to review their bricks-and-mortar strategy as customers continue to order more online than the pre-pandemic era. McKinsey’s article on this topic “Adapting customer experience in the time of coronavirus” makes a good complement to this post.

Do you fix your prices to Amazon if a customer shows interest in buying something but hesitates purchasing in store? Many retail chains do this, especially in durables.

Another important consideration is making the customer’s experience as seamless as possible as their journey takes them r=from online to offline and back.

The experience you provide your customers is the main – dare I say the only? – way to differentiate yourself today. In so many industries product performance and services have become almost indistinguishable.

It has been shown that customers are willing to pay more for excellent customer service. Yes MORE for exactly the same product or service, so what are you waiting for? You can read a summary of the American Express research that was recently updated HERE.

In the post-covid reset, differentiation is going to move from products alone to increased service and care. As already mentioned, customers expect brands to support them in such hard times, but also their employees and communities. Companies who cut jobs and/or salaries while their board members take bonuses will be shunned.

What customers wanted until recently was a seamless experience from pre- to post-purchase, both on and offline. But with increased out-of-stock in physical stores and more purchases being made online, customers now want companies to support them and deliver an even better experience and service. This is definitely not the time to cut customer care departments if your organisation is looking to reduce costs!

What customers are looking for in a company has changed dramatically in just a few months. Do you know how their adapted behaviour is impacting your brand? #CEX #CRM #CustomerFirst Click To Tweet

 

The Importance of Customer Satisfaction & Understanding 

There is no denying that customer-centricity is important, no vital to growth and profitability. However some companies are (too?) hesitant to adopt best practices in this area, which concerns me for a number of reasons:

1. Changes are happening too slowly in most organisations. If it is important for business, then what is stopping companies from adopting a more customer centric approach? The longer they wait, the more they risk being beaten by a more customer-friendly competitor. And this is why so many start-ups are stealing significant share from the major brands. They are super-focused on their customer.

2. Feelings are more important than fact. It’s also no longer (just) about product and service performance. It’s about how the customer feels about your brand. Niche brands and start-ups understand this better than anyone. And the pandemic further accentuated the importance of feelings and emotions. Many of us have become over-sensitive, even depressed, after months of lockdown and trying to follow the ongoing, constantly changing regulations. We want to feel good about our decisions and expect brands to play an active role in making our lives better.

It’s no longer about product and service performance any more. It's about how the customers FEELS about your brand. #Marketing #Brand #CEX #CRM Click To Tweet

Customers have had to become more flexible in their response to constant out-of-stock situations for many categories and brands. However, there is a real danger that once they have accepted to buy a replacement brand, they may then question the need to return to the brand to which that had been previously loyal. I expect to see a lot of brand switching over the remainder of this year as a direct consequence of these forced behavioural changes.

And as if all this is not already difficult enough for businesses to cope with, the increased level of layoffs and furloughs, are forcing customers to reconsider their spending, and think about cheaper alternatives that they may never have previously considered.

3. Customers are complaining – a lot – about the way they are being treated. Why are companies not accepting these criticisms as the gifts they truly are? Acting promptly before an issue becomes yet one more social media overnight viral sensation is essential today. Do it right and your complainers may even turn into advocates if they are delighted with the outcome.

Complaints are also wonderful (free) sources of innovation and renovation ideas. Find out what your customers are unhappy about and then propose a solution. You may even be able to charge more for it, since the new offer will better meet their needs.

Reacting promptly to your customers' complaints may even turn your complainers into advocates if they are delighted with the outcome. #Customer #CustomerService #CustomerComplaints Click To Tweet

4. Customer service is still being confused with customer satisfaction. Companies are happy when their customers say they are satisfied, but that is no longer enough – if it ever was!

All businesses should be looking to surprise and delight their customers! After months of lockdown, customers have a short fuse and react more strongly when dissatisfied with a company or brand. We need to respond faster and more completely to demands, comments and complaints. Find more inspiring ideas on how to respond to customers in this great article entitled “The Revolutionary Marketing Challenge is Not Customer Satisfaction.”

 

The Future of Customer Service

As mentioned above, the research that prompted this post was a Google keyword investigation of terms related to customers. Having seen the strong positive trend for the word customer, I then wanted to understand what it was about customers that was of interest to those searching online.

I found that both customer service and customer care showed almost identical positive trends, although the latter has flattened in the past couple of years. However, when I looked at customer satisfaction and customer understanding the trends were flat and worse, minimal. (You can see the trend graph below)

Source: Google

These trends suggest that companies search for how to improve their customer services and care centres, but not about how to understand their customers better or increase their satisfaction!

How can this be? Surely an interest in customer services should come from an increased understanding of how to deliver customer satisfaction? Well apparently not, at least for most companies! They seem to be more worried about the technical side of the process of responding to their customers efficiently, rather than taking the customer’s perspective on what should be delivered.

This is when I realised that perhaps businesses are more interested in the cost of providing the service than in the real benefit of customer connection. That is a serious flaw in their thinking in my opinion. Do you agree? Whether you do or don’t, please leave me a comment below. This is too important a topic not to continue the discussion.

To confirm my hypothesis, I looked into the trends for customer satisfaction levels around the world. After all, many more companies are interested in customer service these days, aren’t they? So you would think it should have a positive impact on customer satisfaction.

According to the most recent report from The Institute of Customer Service on customer satisfaction across Europe, retail, insurance and banking are the three best-performing industries. This was a surprise to me because they used to be the most heavily criticised!

However, this suggests that they have taken action, albeit because they had little choice, and are now leading the pack. But most other industries continue to ignore what their customers want. You can see the full Infographic overview below; click on it to see the full-sized original.

 

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Unfortunately, as would be expected, all the more recent statistics available are from surveys conducted pre-covid, so I decided not to include them until we have a better grip on the impact the pandemic has had on people.

I then went back to Google to search for any ways that were suggested for increasing customer satisfaction. I found over 133 million articles on how to do it, but very few on the results of doing it. While this is certainly a significant increase on the measly two million I found five years ago and the less than one million articles available just a couple of years ago, it is still extremely worrying.

The increased interest in customer satisfaction is certainly coming from a steady decrease in satisfaction levels over the past couple of years – long before covid struck. The latest results of the US ACSI (American Customer Satisfaction Index) report shows customer satisfaction has been declining since mid-2018 and is now at a level last seen almost a decade ago! With behaviours changing radically during the pandemic, I will be watching with interest how the increase in online ordering and the decline in retail outlet shopping will impact these levels.

What customer want and satisfaction trends usaIt has been proven that changes in customer satisfaction are a predictor of future consumer spending. So it looks like we are not out of the woods yet, nor will be this year, if not next year as well.

David VanAmburg, who is Managing Director at ACSI once said:

“Customer satisfaction will need to increase for the economy to grow at a faster pace. It’s tough to pinpoint one cause of the stagnation, but unless it budges, the national ACSI score paints a dire picture for consumer spending growth.”

 

Key Takeaways About What Customers Want

So what does a business need to do to deliver what their customers really want today and increase their satisfaction? There are seven facts that become apparent from this analysis:

  1. Businesses should always provide positive customer experience and do whatever it takes to not only satisfy but ideally delight their customers. With frustration and lockdowns impacting the emotional stability of many, people are likely to react extremely positively to the slightest thing that goes beyond their expectation at the moment. Take advantage of this opportunity to solidify your brand’s reputation and that of your company too.
  2. Companies need to go beyond the mere technical process of customer-centricity, to truly put their customers at the heart of the organisation. This means adopting a customer-first strategy of course, but also responding to the increase in contacts resulting from customers staying and purchasing at home. This is not the time to cut costs in the area of customer services, but to invest extensively to respond more quickly to requests for help from their house-bound customers. Read “What a Customer First Strategy Is (And what it’s not!)” for more on this topic.
  3. Customer centricity adds demonstrated value to a company; it should be a no-brainer for every single business, whatever the industry, to adopt a customer-first strategy. And as previously mentioned, now that layoffs and furloughs have become the norm, it is vital that customer services remain at the heart of the business and are even expanded if customer connections increase – which they no doubt will in almost every consumer-facing industry.
  4. Customer centric improvements are happening too slowly in most companies, especially when customers are becoming ever more demanding and verbose when dissatisfied. Frustrated customers stuck at home these days, are reacting even more quickly and negatively to being ignored or kept waiting at the end of the line when they call an organisation. After all, they have nothing much to do at home, so will concentrate on getting answers to their questions and complaints. This is confirmed by Matt Wujciak in his analysis “Global Contact Center Trends During COVID-19 Pandemonium.”

    ‘..the contact centre is experiencing an unprecedented increase in overall call volume, with a particular surge in aggressive (if not fanatic) customer inquiries.”

  5. Providing customer service doesn’t guarantee customer satisfaction. Responding to customers in a timely manner has become the table stakes for competing in most if not all B2C industries. And yet investment has not been increasing at the same level as the demand from customers. This has to change.
  6. Positive customer experience always increases loyalty and advocacy. It has been shown that a totally satisfied customer contributes 2.6 times as much revenue as a somewhat satisfied customer and 14 times as much revenue as a somewhat dissatisfied customer. Read “5 Reasons why customer experience is the pulse of every business right now” for more on this.
  7. Excellent customer service enables differentiation and even higher prices. Perhaps now is not the moment to increase prices for your over-sensitive customers, but it is definitely the time to excel at providing the best possible service.

In summary, in this post-covid era, people want businesses to listen and understand them. When a customer takes the time to contact a company because they are unhappy, or even just for information, they expect a satisfactory outcome as a minimum. Those organisations who go beyond, to deliver surprise and delight, will see their reputations improve, as well as an increase in their customers’ loyalty and advocacy. 

Customers also want companies to be more open, honest and transparent. They have a right to know the source of ingredients, the ingredients themselves, the country of origin, the charities the company supports, or the organisation’s policies on waste, water and sustainability.

One additional demand has surfaced this year, that for companies to protect their employees, to reduce layoffs, protect salaries and for management to show that they are adapting their own situations to match what their employees are going through. No bonuses or golden parachutes, when those below them are being furloughed or worse.

So how are you doing? Are you living up to your customers’ expectations? Are you delivering what your customers really want? How have you made progress in this area, especially in the last six months? Please share your (success) stories below. 

You know you can no longer wait; you’re getting left behind by those organisations – and competitors – who are taking action today! Take the FREE C3C Evaluator™ quiz and find out exactly where your greatest opportunities for improvement lie. 

And for more ideas on how you can understand what your customers really want today, why not organise one of our 1-Day Catalyst Training Sessions? We have them on many areas of customer understanding and service, so you are sure to find exactly what you need to inspire and energise your team. Check out and download our brochures. And yes they can be run online as well as in person.

If you would rather talk through your specific needs first, so we can personalise our support for you and your team, then feel free to contact me. It would be a pleasure to help you in these daunting times. 

This post is an update of one that was first published on C3Centricity in 2018.

The 23 Keys to Creating Raving Fans Part 1

This week we have another guest post from Alan Hale of CMG (Consight™ Marketing Group) in Chicago. Exceptionally, I am publishing it as two separate posts because its length and value deserve the detail and effort he has put into it.


I have been fortunate to have managed over 250 voice of the customer projects in B2B over the last four decades, with over 50 engagements on customer satisfaction and loyalty. These projects were across a wide variety of industries.

During this time, I have seen some great successes and some tragic failures in trying to make customers Raving Fans. Based on this experience, I wanted to share some best-in-class insights on how to make your existing customers Raving Fans.

According to industry research, acquiring a new customer is 5 to 7 times more costly than keeping your existing customers, which is why you need to concentrate on keeping your customers and making them Raving Fans.  While customer acquisition is indeed important, so is holding on to your customers and making them Raving Fans.

There is a lot of information on the media and LinkedIn about customer acquisition such as website development, SEO, ad words, effective selling and phone calling etc. Very little has been written on keeping and serving existing customers. Other industry research states reasons why accounts churn. Very seldom is the reason for defection price, no matter what the sales reps tell you. It is a breakdown in account service, the account is not being serviced at a level of their expectations.

First, let’s define a Raving Fan. The term was coined by Ken Blanchard in a book called, Raving Fans published in 1993. A Raving Fan is a customer, who is excited about your product, service or solution. Think of Apple and Tesla. These companies have waiting lists for products and sometimes have long waiting lines for a new product. They are your brand advocates and are an extension of your brand. The characteristics of Raving Fans are as follows:

  1. They are less likely to churn to a competitor
  2. They are extremely loyal
  3. They will buy more i.e. you have a higher wallet share
  4. They are more likely to buy new products, services or solutions offered in the future
  5. They are usually (not always) less price-sensitive and therefore more profitable
  6. They may give insight on possible new products, services or solutions to introduce
  7. They may refer you to other friends and colleagues and/or provide testimonials

Most of this discussion is applicable to both B2C and B2B; with the exception of the 80/20 rule which is explained later. The following discusses the issues and hurdles in creating Raving Fans.

1. Senior Management Paradigms and Expectations. Senior management has two dangerous paradigms. The first paradigm is “we know what our customers want. After all we have been doing this for many years and are successful.” Yes, but the past does not equal the future. There may be new expectations from customers and prospects. Markets are not stagnant, there may be new technologies or new competitors. Don’t act like a film manufacturer who ignored the trend to digital photos since their profit was in the development of film and prints.

The second paradigm is that “we treat all our customers equally. We use the Golden Rule.” Although this works well in society, it is bad policy in business. In business, the smarter and more strategic companies use a modified Golden Rule, “He who has the gold rules.” You need to over serve these large customers.

There also needs to be a commitment from senior management to implement the results of this process. This is “walking the talk”. It is not something else to do when there is time; this is a major initiative. Hold people accountable and make sure the results are implemented across silos. As with all initiatives and establishing cultural norms, you need senior management buy in to succeed. Otherwise it will fail like so many initiatives.

The C-Suite must drive the desire for delighting customers and creating Raving Fans deep into the DNA of the organizational culture. The customer orientation pyramid is shown in the infographic below, which illustrates a spectrum of customer treatment with Raving Fans being the ultimate goal and True North compass.

2. Validate your customer segmentation and value proposition. If these are not correct, it will be difficult if not impossible to create Raving Fans. For example, if you are selling a product with bundled service at a higher price point, and the company has its own technical support team internally, you will not be successful. If you have a brand new instrument but it is more difficult to use, you will likely fail. Ted Levitt a marketing professor in Harvard Business Review once said, “People do not buy drills. They buy holes”.

3. Under promise and over deliver. The majority of companies make promises and then fail to keep them; they over promise and under deliver. They should be under promising and over delivering. The job is to manage customer expectations as well as your performance. That means state a deadline you know you can easily meet, and then perform beating that promised time. This will set you apart from the competition. 

There is a Chinese restaurant we order from for home delivery. When we call, they always say one hour. They consistently deliver within 25 to 30 minutes. One day I asked the owner why he does this. He said, “But aren’t you happy”? When you promise to call back or give a response on a price quote, emulate the Chinese owner and manage expectations and beat your deadlines.

4. Concentrate your effort by focusing on the 80/20 principle. In business to business, there is a rule that 20% of your accounts have 80% of your revenue. So if you have 1,000 active accounts, there are 200 accounts that your business depends on. Another way to look at it is if your number one account defects, how much trouble would your business be in? Answer: Strong negative impact. Concentrate on over-servicing these key accounts. ITW has been successful in growing its business by executing this principle.

Start by listing your accounts in descending order of revenue in a spreadsheet. When you hit 80% of your revenue, you have defined your top major accounts. These are your “Gold” accounts. Next add to these accounts, large accounts that have either walked away or have significantly decreased their purchases with you. Then, add to that any accounts which you legitimately feel – not just the salesperson’s opinion – can evolve into a large account. Then finally add key target prospects who might grow into large accounts. This is who you should be trying to understand insights as well as overserve.

Next, identify the stakeholders in each account, those who use the product or service, those who specify, and those who purchase. Usually, every key account has 2 to 3 or more key stakeholders. It could be the user, the specifier, and the person who purchases. For a plastic bottle manufacturer it was the packaging engineer, purchasing, and marketing.

5. Go out and visit. LISTEN. This I believe is the absolute fundamental foundation for creating Raving Fans. You need to obtain insight which is not delivered from web surveys. This is not done by using a 3 to 5 question set on how you performed after each interaction on IVR (Interactive Voice Response). Get off your chair, go talk to them. How are we doing? How do we compare to our competitors and your best-in-class vendors? What else should we be doing? Are we a partner? (Note: if your product is insignificant, they may not want a partnership.) The customer should be talking 80% of the time. Unfortunately, this is seldom done. In our opinion it is negligent to not call on customers to determine how you can improve.

Implement the 10, 30, 90 day rule. The most important thing you can do is visit and listen to your customers. Every 10 days, once every two weeks, the CMO, VP Marketing, VP Sales and Marketing or Marketing Director needs to visit key customers. This customer listening should be 10% of their time. Other functions like engineering, new product design, customer service and billing etc. needs to visit a customer every 30 days and talk and listen to their counterpart. Ask them what improvements can be made? What can we do to make you a Raving Fan?

Senior management has a responsibility as well. Customers love senior management calling on them. They feel appreciated, heard and valued. They want to know if the visions of the two companies are aligned? Will senior management direct resources to make it happen? We believe the highest value accounts, should each be assigned to a senior manager for quarterly dialogues. Then, go visit them and listen to them. Each member of the senior management team may have 2 to 3 accounts assigned to her or him.

6. Supplement these personal interviews with other Qualitative We call these diagnostic questions in order to diagnose the current health of the client relationship, diagnose root causes for unhappiness and prescribe the key things to work on. We are a strong believer in using qualitative VOC (Voice of the Customer) discovery research to obtain insights, to understand the why’s. This can be a combination of focus groups, in-depth phone interviews, personal interviews, ethnography, and other qualitative research methodology. I honestly do not understand the reluctance to use qualitative research.

Let’s talk about the pros and cons of web surveys. Pros include inexpensive to administer, quick to get feedback, and helps make the qualitative data more robust or even statistically significant. I have had numerous discussions about statistical significance. If you are surveying 80% of your sales in a B2B setting like 200 accounts out of 1000, you are not statistically significant on a pure number of accounts basis, but you are sampling 80% of your revenue. Which is more important? Of course, it is the 80% of sales. B2C service providers have a difficult time understanding this concept.

Web surveys are easy to fill out but do not provide the insight, and the why’s, with or without artificial intelligence. When you add qualitative questions to web surveys, a few things occur. First, very few respondents take the time to fill the information out. Second, they use two or three words with little elaboration. Sure web sites can count how many times responsive is mentioned, but if a respondent says they get back to me quickly, the association with the word responsiveness is not always picked up and categorized. And please stop telling me a word cloud is an insight. It is not. It is a picturesque way of showing the frequency of words cited.

When you do qualitative research, it is like peeling the onion to get to the issues that matter most. An example. What is your rating for our delivery? It is a 5 on a 10 scale. Why? The truck is late. Can you further explain? Yes, the truck misses the two-hour window. Why is that an issue? We have a small loading dock and lots of trucks. How can the client deal with this better? It would be great if they called when they are running late. This is called proactive communication.

There is a place for web surveys, but only after the qualitative is done, at least for B2B research. We actually like to use them as a way of collecting information from the non-key accounts. From a B2B perspective, spend the research dollars where it has the most impact – your largest accounts. In B2C with millions of customers, like bleach or toothpaste, it might make sense to start with quantitative to tease out opportunities where you then utilize qualitative research to dig deeper.

7. Use a mix of NPS (Net Promoter Score) and CSat (Customer Satisfaction). There has been a lot of bashing of NPS lately in magazines and posts in business social media, mainly claiming it is not actionable. Well if you use it wrongly, it won’t be actionable. I hear comments like we have a 27% NPS, now what do we do? Who knows? If you did not get the reasons behind it and how to improve, all you have is a number. If you try to use a hammer on wood screws, it won’t work. Don’t blame the tool. In our opinion, NPS is a great tool to have in the marketing toolbox.

NPS is very valuable because it measures the relationship using the personal risk of recommending. It measures the overall relationship and not a specific transaction. The NPS number is a benchmark as well as a check on your progress on improving the relationship over time. The real value is in determining the insights, and crafting actionable tactics and strategies FOR EACH KEY ACCOUNT that will drive the number up. We are a strong believer in NPS and have used it to predict accounts that will churn in the future as well as those who will buy a lot more in the near future.

These are the first seven keys to creating raving fans; the remaining 16 will be shared in Part 2 of this post, which will be published next week. Make a note to come back here to read it.

I hope you enjoy reading this blog post.

If you want me to catalyse your growth and profitability, just book a call.

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