Businesses Without a Customer Focus will Struggle

Businesses who think that slashing prices will do it in 2009 should think again.

However, organisations who concentrate on making sure their customers consistently receive a great experience will do much better than those that are focused only on price as their competitive advantage.

In a recent global survey carried out by U.S. management consultancy Accenture, 47% of respondents said their service expectations were met only sometimes, rarely or never.

Businesses need to develop a sustainable competitive advantage, one that will ensure greater customer loyalty, lower marketing costs and lower staff turnover.

While chief executives understand the need for a cohesive customer service package, many do not know how to go about making changes.

In my work with businesses, I’ve found that they do not lack intention or initiative but they sometimes expect a quick fix. Throughout the business world customer related activities have been undertaken as initiative programmes. They run for a short period but are never embraced as a full operational strategy.

Organisations readily tout ‘going the extra mile’ to ‘total customer commitment’. They detail their intentions in brochures and advertising but it’s not working. Intentions and initiatives are many, but sustainable success is rare.

Why? Most of us go where we think we can get the best deal and the quickest, easiest service. Loyalty counts for little.

Sadly, there is very little which distinguishes any business these days – they all have similar products or services on offer; and prices are sharper than ever. Few stand out as creating great experiences for their customers – the norm is frustration.

It’s an interesting exercise to try and name some businesses to which you are genuinely loyal. Chances are you may only come up with one or two examples or you may have difficulty naming any!

So how can your business survive in this modern world where customers can disappear at the drop of a hat? How can you buck the trend and build genuine customer – and staff – loyalty?

Research shows that loyalty is inextricably linked to leadership style. A recent quality of working life report published by the Chartered Management Institute in the UK found that 40% of respondents most commonly experienced management style was bureaucratic, 37% reactive 30% authoritarian and only 17% of the 1500 managers polled experienced management as innovative,15% trusting 13% entrepreneurial.

New Zealand businesses wanting to implement a customer centric culture into their organisations will need to look closely at their leadership style and the resulting culture, if they are going to achieve their goal of a better experience for both their people and customers.

The truth is, customer loyalty is mainly about feelings and emotions. It’s not about price.

And don’t confuse customer satisfaction with loyalty. Many companies count on customer satisfaction as a guarantee of future success. But they are becoming increasingly disappointed to find satisfied customers may shop elsewhere without a moment’s hesitation.

Loyalty goes deeper than satisfaction. Loyalty is an emotion. It’s about building a genuine relationship with the customer, which the customer values. And you don’t need gimmicks or so-called loyalty programmes. Unfortunately, many businesses seem to have given up trying to grow genuine loyalty, which is why we have all these gimmicks around.

Loyalty cards don’t create loyalty. They may entice customers back, but this is only to get a cheaper price or collect points for a future discount, not because customers are emotionally attached to the business.

Remember it’s how you perform after the customer buys that determines whether you keep them as a loyal customer. Follow up with customers to find out how they feel about your company. Most unhappy customers won’t complain directly to you but they will complain to just about everyone else they know, and take their business to your competition next time. Make follow-up calls or mail feedback questionnaires after the experience. In fact, research suggests people whose complaints are properly dealt with professionally and promptly may become more loyal customers than those who have never experienced problems!

Chris Bell is managing director of Customer Experiences; a company that specialises in helping businesses improve the way in which they interact with customers and clients. Click here to contact us.