Thursday, August 13, 2009

Customer Focus in a Slow Economy

For the last ten years I have worked in strategic partnership with Ray Miller. Ray wrote a great article which I am happy to endorse. Here goes...


I wanted to call this article “Sharpen Your Customer Focus or You Will Lose Customers!” but a few of my colleagues (including Eric) thought this was a bit too blunt. Absolutely true mind you, but blunt.

Then I thought why not make the headline a question; “How Many Customers Are You Willing To Lose Today Because of a Lack of Customer Focus?” Again, true but too direct. So in the end I went with what you see above.

So here we are again. The economy has been getting tough and for many, life is now stressful and difficult. For business, this is not new. We’ve all been here before. Hopefully we’ve learned from the last time the economy slowed … But then again, have we?

Nobody wants to lose customers but you know as well as I that when the economy gets tough, many organizations go into reactive mode. Their focus shifts to cost control and the acquisition of new customers. History has taught us that every time this happens, relationships with existing customers can be put at risk. Financial responsibility is important, as is getting new business, but not if it is at the expense of your existing customers.

Allow me to explain.

During an economic downturn most customers will be looking to increase value for their money. They will try to make their hard earned cash go further and you can be sure that they will be more critical when making buying decisions.

With less disposable income, customers will be less forgiving of a mediocre or poor service experience. And don’t forget that when it comes to service, the vast majority, 90 to 96%, will not complain and most will simply go elsewhere. You can bet that they will want to deal with organizations that demonstrate that they want and appreciate their business.

You can also be guaranteed that your customers will be strongly influenced by the commentary of their friends, acquaintances, family and colleagues when it comes to recommendations for products or services and providers.

As I mentioned earlier, when economic conditions become more demanding, far too many organizations focus on cost cutting and acquiring new customers which invariably puts the relationships with their existing customers at risk.

Quite often training budgets are the first to get cut. This includes all important training on things like Customer Service and Leadership.

Process improvement plans get put on hold often including process improvements that were intended to enhance the customer experience.

Even though it is five times more expensive to get new customers than it is to keep existing already profitable customers, many organizations bolster their marketing efforts trying to pull more customers in the front door, at the same time virtually ignoring their existing customers who simply walk out the backdoor looking for someone who wants and appreciates their business and proves it through their actions.

The retention of existing customers is all the more important during difficult economic conditions. Research proves that existing customers are more profitable and improvements in your operating expenses and resulting bottom line can be achieved through maintaining a high level of customer focus. Just to remind you, don’t forget a five percent increase in customer loyalty can contribute from 25% to 125% directly to your bottom line.

Remember that your customers always have the choice of buying from you or your competition. When times are tough, that choice becomes even more important.

Implementing a customer focus strategy will create valuable and long-lasting relationships with your customers that will provide a secure and growing revenue stream.

Focusing on getting the customer experience right is critical. Making sure that your customers choose you over your competition is essential. If you get it right when times are tough you will certainly reap the benefits and rewards of unleashing the power of customer focus as conditions improve.

So this time, why not dare to be different. Why not unleash the potential of customer focus, while everyone else has their eye off the ball.




Ray Miller is the Author of That’s Customer Focus! and The Customer Focus Companion and Managing Partner of The Training Bank

The Training Bank is a full service training and development firm which specializes in fully customizable Leadership, Customer Focus, Service Excellence, Management and Supervisory Development training.

Visit his websites at http://www.thatscustomerfocus.com/ and http://www.thetrainingbank.com/ or call him at 416-698-8230. Please tell him Eric Fraterman sent you? He will be pleased to be of service.

Wednesday, August 5, 2009

Consumers Are Willing to Pay For Exceptional Customer Experiences Even In Tough Economic Times

A Strativity Group Customer Experience Study revealed:
"In contrast to the popular perception that consumers focus on price only, our study demonstrates that consumers are paying attention to customer experience they receive and are willing to reward exceptional experiences with larger purchases, longer relationships and premium price."

Key Findings:
  • Share of Wallet
    More than 70% of consumers surveyed indicate that they are willing to spend 10% or more with businesses if those businesses exceed their expectations.
  • Customer Retention
    Loyal customers are almost three times as likely to expect to continue doing business with companies for another ten years or more than dissatisfied customers.
    Dissatisfied customers are ten times more likely to expect to attrite in the next twelve months than their loyal counterparts.
  • Premium Pricing
    40% of loyal customers said that they are willing to pay 10% or more to continue purchasing from companies delivering great experiences, in contrast with 9% of dissatisfied customers.
    52% of dissatisfied customers expect discounts of 5% or more to continue doing business with a company while no loyal customers expect discounts.

Consumers are very clear about what they are seeking from the experiences companies deliver:

  • Quick and effective issue resolution
  • Common Sense and Discretion
  • Employees who Exceed Expectations
  • Ease and simplicity

Study Overview
1994 consumers from North America
The study was done in collaboration with Customer Service Experts Inc.
Study was web-based questionnaire following the customer strategy phases
The survey was conducted from April 13, 2009 through May 4, 2009
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