The Customer Experience Is More Important Than Price

Consistently Good Customer Experience Drives Repeat Business

From a customer’s perspective, every interaction with your organization is a customer experience. And each of these interactions has a cost to the customer ─ in terms of money, time, or both.

If these experiences are consistently good, customers are more likely to repeat business with you; giving you the kind of customer loyalty your organization truly desires.

A research study from Amdocs, a leading provider of software and services that enable integrated customer management, supports the importance of the customer experience on customer retention.

Called the Customer Experience Survey, the survey reveals that consumers and businesses around the world say that they are more likely to stick with a telecom provider based on the quality of the customer experience than on the cost of its service. For an industry that seems driven by constant cost pressures and incessant price cutting, this survey may be quite an eye opener.

For those of you who hate being put on hold when calling a customer contact center, you will not be surprised to learn that 57% of the respondents to this survey said they would pay extra not to be put on hold, or have to talk with multiple service representatives, when dealing with a call center.

This survey queried over 1,000 consumers and 400 businesses in the United States and the United Kingdom about their interactions with telecom providers. While the results are industry specific, I believe similar findings would occur in most other industries and markets across the globe.

After all, the frustrations that customers feel about the service they receive, particularly when trying to reach a frontline support person, are universal.

“The Amdocs Customer Experience Survey proves that keeping customers happy is not just about reducing prices,” says Mr. Michael Matthews, Chief Marketing Officer of Amdocs. “By adopting an integrated customer management strategy, providers can get a full picture of their customer interactions. From there, they can identify customer needs and provide a differentiated and intentional customer experience. That is the right strategy regardless of whether the customers are consumers or large corporations.”

Customers buy experiences.

Customers pay for the experiences they receive from your organization ─ either in money, time, or both.

For many customers, perhaps even a majority, time is a more valuable currency than money.

As a result, many customers are willing to pay for convenience. In the Amdocs survey, a majority of respondents claimed they were willing to pay an extra US$5 a month if it meant that they would not be put on hold and not have to talk to multiple service representatives when contacting a telecom call center.

In a world of product parity and commoditization of both products and services, it may seem like price is the most important determining factor in the customer buying decision-making process.

But as the Amdocs survey results show, this may not always be the case. Even in the highly competitive telecoms industry, where product parity and service commoditization are the status quo, there are market segments eagerly willing to make purchase decisions on factors other than price.

In a world of customer experiences, sustainable growth will come to those who monitor and improve the experiences of customers at each and every point of interaction.

After all, good customers place a higher value on their experiences in dealing with organizations over the prices paid for products and services.

And since customer retention is all about the art of keeping good customers,™  focusing your efforts on improving convenience to customers and reducing their time costs when dealing with your organization is one of the best ways to improve the overall experiences of your customers.

 

KEY POINT:  customers pay for the experiences they receive from your organization ─ either in money, time, or both.

TAKING ACTION:  survey the top 20% of your customers and ask them specifically what steps you could take to improve your convenience to them. Also be sure to ask them if they would be willing to pay a fee to receive improved and more convenient service.

Monitor your call abandon rates, as well as the length of time customers spend on hold, at all your telephone service centers. Survey your customers about their experiences with your phone and call centers. Where is improvement needed?

Benchmark your customer experiences with those of your competitors. How can you make the customer experience a point of differentiation so that you do not need to compete as much on price?

A World of Customer Experiences

Every customer interaction is an opportunity to build long-term loyalty.

Customers buy experiences.

That is the premise behind the book Building Great Customer Experiences which I had the pleasure of reading several years ago.

The authors, Colin Shaw and John Ivens, have seven philosophies for building a great customer experience, including:

  • Great customer experiences are a source of long-term competitive advantage.
  • Great customer experiences are both revenue generating and cost reducing.
  • Great customer experiences are an embodiment of the brand.

In a world of product parity and commoditization of both products and services, their arguments make a great deal of sense. And even when customers buy products or services, they repeat buy based on their previous experiences.

It is interesting to observe how many organizations focus only on the customer experience at the beginning of the sales cycle, rather than at all points of interaction.

For instance, how many large retail stores have a greeter who welcomes people as they enter the store, but have no one to say “thank you” as the customers leave with their purchases?

Even worse, there are the stores that have people at the exits checking everyone’s shopping bags to make sure nothing is being stolen. How many thieves are caught or prevented by this? A few a week? That is not necessarily a good trade-off for making hundreds of people a day feel like their privacy is being violated or, worse, that they are being falsely considered as shoplifters.

People often cite the phrase that first impressions matter most. From a marketing perspective, I disagree. I often write that it is the last impression that matters most.

For instance, you may have a wonderful check-in experience and an enjoyable in-flight experience, but if your bags are not on the carousel promptly (or at all) at your final destination that will be the thing you remember most about your flight and the airline you flew.

Or, you may have wonderful help in the aisles of a store, but if you encounter a rude and surly cashier at the check-out counter that will be what you remember most of that particular visit to that store.

The entire shopping experience at Amazon is a delightful experience. This company understands the mentality of people who want to buy books, videos, CDs, and other merchandise from an online outlet. Likewise, Borders understands the mentality of people who want to buy books, videos, CDs, and other merchandise in a “bricks and mortar” retail outlet. Both are sellers of books. But, more important, both are sellers (and deliverers) of unique customer experiences.

The success of Starbucks comes not just from the taste of their coffee, but from the customer experiences they deliver to their sit-down and chat, take-away, and even drive-through customers. Buying and drinking a coffee from Starbucks is an experience, one that an increasing number of customers around the world appear to enjoy and repeat.

One of the secrets to increasing customer loyalty is to fully understand all the experiences customers have with your organization when they investigate, evaluate, purchase, use, and dispose of your products and services. Each point of interaction is an opportunity to build long-term customer loyalty. Each point of interaction is an opportunity for your organization to better understand your customers.

Your competitors can copy your products, replicate your services, and match your pricing strategies.

This means that the customer experience you deliver is one of the few marketing advantages remaining to keep your customers loyal and to convert occasional buyers into long-term and loyal customers.

In a world of customer experiences, sustainable growth will come to those who monitor and improve the experiences of customers at each and every point of interaction.

KEY POINT:  every point of interaction is an opportunity to build long-term customer loyalty.

TAKING ACTION:   walk through every location that your customers visit or see. What needs cleaning, fixing, brightening, toning down? Who are the staff talking with:  themselves or customers?  What do customers see in your environment ─ a company in control or one so cluttered it appears to be in control of nothing?

Touch everything your customers will touch. What feels good? What does not? What is warm?  What is cold? Is it nice to feel?  How do you react to this? How do your customers react to this?

Close your eyes and listen to the environment. What do you hear? Is the music too loud or not appropriate for your target customers? Are the staff talking about themselves or about customers and their needs?

Examine all forms.  Fill them out as if you were a customer. How can these be improved?

Call your call center with a complaint. How is this handled?

Call your call center with a query. How is this handled?

Review your website. How easy is it to contact your organization via the website? What information is lacking or missing (from a customer’s perspective)?

This article is mostly excerpted from our book The Best of the Monday Morning Marketing Memo, available at Amazon in Kindle and paperback formats.

12 Marketing Principles

The Importance of Core Marketing Beliefs

Do you have a set of marketing principles or philosophies that you follow? I do.

I find having a written set of marketing principles gives me a great reference point when making recommendations to clients on their branding or marketing strategies. It also means my recommendations are based on a core set of beliefs, not current marketing trends and fashionable marketing ideas.

In no particular order of importance, these 12 marketing principles are:

  1. Segment customers based on customer needs, not the needs of your organization and not based around the structures of your existing organizational chart.
  2. In order for customers to see you as a unique brand or service provider, you need to treat them as unique individuals ─ with individually unique needs, wants, desires, likes, and dislikes.
  3. Remember that when dealing with customers (even in the B2B world) you are dealing with fellow human beings, not revenue streams. Thus, every customer matters and every customer interaction matters (especially to the customer).
  4. The era of mass production required mass communications. Today’s era of individual customers and smaller customer segments requires a more individualized approach to marketing communications.
  5. Your fellow employees communicate your brand’s true value to customers. Every employee interaction with a customer or prospect, therefore, either enhances or denigrates your brand reputation and the customer’s brand experience.
  6. With the increased importance of Corporate Social Responsibility, your corporate image is more important than ever. How your corporate image is managed is critical. After all, competitors can replicate your products and services, beat you up on price, outspend you in promotions, and outperform you in distribution. However, the one thing competitors cannot copy or duplicate is a well defined, well managed corporate image.
  7. The Four Ps of Customer Retention (People, Policies, Processes / Procedures, and Prevention) are more relevant for retaining customers captured through the time honored marketing mix than the original Four Ps of marketing (product, price, promotion, and place) created over 40 years ago by Professor Philip Kotler.
  8. It is not what you communicate, it is what your customers hear that is most important. Customers have learned how to filter out traditional marketing messages and now, with devices such as TiVo and email filters, have the tools to do so. Getting customers to hear your marketing messages requires greater creativity, increased innovation, and heightened integration.
  9. Profitability is not very useful or informative for understanding customer needs.
  10. Focus on your customers and their needs, wants, desires, likes, and dislikes. Remember, if you don’t take care of your customers, someone else will.
  11. CRM works better when it means Customer Retention Marketing. Customer Retention is the art of keeping good customers™ and should be the cornerstone foundation for all long-term marketing strategies.
  12. If it touches the customer, it’s a marketing issue.™ Marketing is the integrator across all business lines and all internal departments.

I hope you are able to put some, if not all, of the above marketing principles into practice.

 

KEY POINT:  if it touches the customer, it’s a marketing issue.™

TAKING ACTION:  what are your own personal marketing principles? How do these impact the short-term and long-term decisions you make?

Circulate the list above to your staff or fellow colleagues. Discuss which ones instinctively feel right for your organization. Why?

How could these be disseminated widely throughout your department, business unit, or entire organization?

This article is a revised excerpt from our book The Best of the Monday Morning Marketing Memo, available at Amazon in paperback ($13.88) and Kindle ($3.88) formats.