Think Small to Win Customer Loyalty
People gravitate toward companies because of their products and leave them because of their service.
Why is it then that so many large companies under invest in this area? Research by Net Promoter Score inventor Fred Reichheld found that a mere five-percent increase in customer retention can boost company profitability by as much as 95 percent.
Most small businesses are keenly aware of the importance of customer retention -- often because one lost customer can often make a huge financial impact on the company -- and because of their size, they're able to provide their customers personalized attention.
But what happens when a company begins to grow? How do you scale your customer service to help more people without losing the personal touch?
The Ritz Carlton opened in Boston in 1940, and revolutionized hospitality in America by creating a luxury hotel setting. Forty years later, they began to expand, keeping customer experience at the heart of their business.
Now, not all of us mortals can deliver wow-factor service like the Ritz. (Then again, for $2,000 the hotel will give you a one-day course on how to deliver it).
But perhaps the goal of thinking smaller and more incrementally is a good place to start.
Focus on the basics
Companies need to solve customer problems in real-time without compromising accuracy.
In today’s world of immediate gratification, customers now expect problems to be solved quickly and correctly. If they’re going to remain loyal, consumers want a personalized experience that makes them feel as though they are a true priority -- not just another account number.
The bottom line is that most consumers would give up the pleasantries and a forced shtick in exchange for immediate access to someone who's empowered to help them when they need it. If companies can’t provide personalized, fast customer service, they're setting themselves up for failure.
Mattersight recently commissioned a study of more than 1,000 consumers and found that that one bad customer experience could stop 70 percent of them from purchasing from that brand again. But businesses need to think beyond that single customer: When customers have single-click access to broadcasting complaints, companies also risk a social pummeling of their images.
Survey satisfaction isn’t loyalty
Today’s consumers are more informed, less patient and more mobile than ever.
The Corporate Executive Board shared some stunning research about customer satisfaction in The Effortless Experience. Simply put, it found zero correlation between customer satisfaction and loyalty. So why do companies still spend hundreds of millions of dollars on feedback surveys that annoy customers and deliver suspect value to the business -- especially when so many of them continue to provide notoriously bad customer service regardless?
Effortless is the new way to retain. Companies that focus on creating hassle-free experiences are on the strongest path to loyalty and retention -- for a much richer customer lifetime value. As a starting point, this means getting a much crisper understanding of buyers, their lifestyles and how they actually want to be served.
Entrepreneurs, small-business owners and techies are leading the pack when it comes to providing an effortless experience. Why? Because instead of mounting surveys, they tend to invest their precious resources into the little things that customers really value -- and as a result, achieve their intended goals: They put a premium on solving customer problems.
Big business could stand to think small in this regard. Behave as if losing a single customer will put you out of business.