Being Customer Focused Means Being Easy To Do Business With

Customers Do Not Want To Be Nomads

Larry Weber, the founder of public relations firm Weber Shandwick , says that “most customers are nomads.”

And rightfully so. Too few companies and organizations deserve customer loyalty.

The reasons why customers are nomads are numerous:

  • Service delivery is inconsistent.
  • Customer service is perfunctory and uncaring, lacking warmth or even pleasantness.
  • There is no recognition of the customer’s previous engagements and interactions with the organization.
  • There is a lack of personalization to meet individual needs, wants, desires, likes, or dislikes.
  • “Value-added” pricing and packaging comes without the value add.
  • Customer rewards programs are thought to be true customer loyalty programs.

Despite all these hurdles, customers do want to be loyal!

After all, loyalty saves the customer time (our most precious commodity in today’s world). Plus consistent service delivery can be anticipated, expected, and planned for. No surprises results in the customer not having to make new plans or contemplate new decisions.

How can you obtain customer loyalty? Does becoming customer focused work? What does it mean to be customer focused anyway?

Call it customer focused, customer centric, customer caring, or any other clever phrase you want. Being customer focused may boil down to one simple question ─ are you easy to do business with?

How do you rate in terms of convenience, easy ordering, customizable products and services, personalized delivery terms, and flexible terms and conditions?

Being easy to do business with is more about pre-sales and post-sales support than about the core features of your products or services.

For example, I buy almost all my books from Internet retailer Amazon. Unlike the big chain bookstores, or even my local neighborhood bookstore, Amazon is easy to do business with because:

  • The titles I want are always in stock.
  • I never have waste time while the checkout person chats idly with the customer in front of me.
  • I never have to search for a knowledgeable staff member to help me find out where the book I’m looking for has been placed.
  • I do not consume fuel driving to Amazon, nor do I have to wait or pay for a parking space.
  • The time and fuel costs I save more than outweigh and offset any shipping charges I pay.
  • My personal shipping addresses and credit card details (yes, both are plural for a reason, another sign of their flexibility and customization) are on file, so I easily check out with the mere click of a few buttons.
  • Amazon notifies me when my order has been shipped, saving me the time to follow up.
  • Amazon gives me an approximate delivery date, thus setting my expectations (which they then always meet).
  • Even when I place an order on Saturday it gets shipped the next day ─ a Sunday!

I cannot think of a single thing Amazon could do to make it easier to do business with them. I have read where Amazon founder and CEO Jeff Bezos is passionate about improving the customer experience. For me, he is certainly hitting all the right buttons.

Amazon is a great example of a company that is practicing Customer Retention Marketing by being easy to do business with. As a result, they are keeping good customers (like me) loyal in terms of both buying behavior and brand preference.

Customers do not need (or want) to be nomads. All it takes to change this is being easy to do business with.

 

KEY POINT:  being customer focused may boil down to one simple question ─ are you easy to do business with?

TAKING ACTION:  ask yourself, is your organization easy to do business with? What rules, procedures and processes do you have that make it hard for your customers to do business with you?

How could you make it easier for customers to do business with you? What changes can you make in the areas of convenience, order placement, product or service customization, delivery, and other terms and conditions that would make it easier for customers to do business with you?

Review with your major customers which of your processes, policies, procedures, terms, conditions, and other elements drive them crazy and make them wish you did things differently.

 

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

Customer Churn Continues Unabated

The Importance of Measuring Customer Retention and Loyalty

Customer attrition rates remain unbelievably high, despite (or maybe because of) continued investments by corporations in CRM technology.

According to a study a couple of years ago of 1,000 consumers by Accenture, 18% of respondents reported they stopped conducting business with at least one retailer within the past year due to poor service. A significant proportion of consumers in this survey also stopped doing business during the previous 12 months with Internet Service Providers (15%), banks (14%), telephone companies (12%), wireless/cell phone companies (11%), and cable/satellite TV service providers (10%).

That’s a whole lot of customer churn going on.

And I have not read or seen any data or evidence that these numbers are significantly different today. In fact, they may well likely be worse.

It is little wonder that Larry Weber, founder of the Weber Shandwick public relations firm, says that “most customers are nomads.”

When viewed in the light of another piece of research, perhaps these findings are not so surprising after all. A destinationCRM.com reader poll conducted in October a couple of years ago reports that:

  1. 39% of customer contact centers do not measure either customer loyalty or customer satisfaction.
  2. 19% measure only customer satisfaction.
  3. 42% measure both customer loyalty and customer satisfaction.

This means that a full 58% of customer contact centers do not measure customer loyalty at all, at least according to this reader poll.

If you are not measuring customer loyalty, then you probably have little idea how to manage and reduce customer attrition.

Building a sustainable and profitable business requires a customer strategy that is centered on creating (and measuring) customer loyalty.

Doing so requires keen customer insight, not million dollar CRM computer systems. In most cases, the thousands and millions of dollars spent on CRM hardware would have been better spent on hiring, training, motivating, and retaining good staff who have your customers’ needs, wants, desires, and best interests in mind at all times.

In another Accenture research study reported in the article Meeting Individual Customer Expectations by Michael Breault, “delivering consistently on the brand promise plays a greater role in creating loyal customers than any other customer-facing capability does.”

In fact, according to the study, “regardless of their industry or business model (B2C, B2B, etc.), developing and delivering a branded customer experience comprises 33% of a company’s ability to achieve strong customer loyalty.”

In his article, Breault also cites a Bain & Company study that found some 80% of companies believed they are delivering a “superior experience” to their customers, while the customers of these firms rated only 8% of them as truly delivering a superior customer experience. Now that is a perception gap!

It is a perception gap that is caused by the corporate focus on using transactional data to define the relationships with customers and a lack of insight on customer attitudes, behaviors, and perceptions. It is also caused by the reliance on demographic segmentation instead of segmentation based on customer needs.

It is also caused by companies not listening to their customers. A study by customer experience research and consulting firm Strativity Group concludes that too many companies do not properly use the information garnered from customer surveys. The two biggest problems cited in this study were:

  1. although a majority of the respondents (59%) claimed to design customer surveys with strategic intentions, only a small minority (23%) managed to obtain internal buy-in for change in response to customer survey results.
  2. only 45% of the 200+ plus firms surveyed around the world could translate their customer survey results into actions.

One of the other problems identified in the Strativity Group survey is that 69% of the survey participants reported that they faced internal struggles with people arguing about the validity of the customer survey results. As the report concludes, “the study results indicate only a superficial and incremental commitment on the part of companies to their customer studies and to acting upon customer insight.”

When these various independent research studies are reviewed in aggregate, one reaches the conclusion that:

  1. Customer attrition rates of 10% to 15% per annum are likely to remain for years to come.
  2. Until companies start to measure customer loyalty, they will remain ignorant and naive about this critical bottom-line impacting issue.
  3. Too many companies are fooling themselves (or their senior management, but not their customers) by conducting customer surveys that do not result in action and customer experience enhancing changes.

One of these days, corporations are going to understand the cost of customer attrition. At least that is my hope.

Until then, of course, any company that makes customer insight and customer loyalty a focal point of their business operations will have a significant advantage in creating long-term, sustainable growth and profitability.

KEY POINT:  if you are not measuring customer loyalty, then you probably have little idea how to manage and reduce customer attrition.

TAKING ACTION:  review the results of your two most recent customer surveys and then identify what actions were taken as a result of the surveys. Was sufficient action taken? Why or why not? What actions were overlooked or not implemented? Why?

What is your customer attrition rate? If you do not know, how can you start monitoring this immediately? Your customer attrition rate should be a critical component of your Marketing Dashboard. Is it?

How can you start to measure customer loyalty? Make measuring customer loyalty one of your top goals for the coming year.

 

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

 

If It Touches The Customer, It’s A Marketing Issue

Base Your Marketing Strategy On Customers, Not Products

Many years ago I developed a personal marketing philosophy that I believe forms the core principle of marketing ─ if it touches the customer, it’s a marketing issue.™

By focusing my thinking on what touches the customer, and how these impact and influence customers’ purchase decisions, I became highly adept at developing marketing and positioning strategies, first for my employers and then for my clients upon creating Howard Marketing Services in 1993.

Of course, everything your organization does touches your customers. This is why I advocate that long-term, sustainable success requires a customer-centric, marketing-led approach.

The key here is being customer focused, not just marketing led. Success will not automatically result from the traditional implementation of marketing techniques such as brand advertising, one-way communications with customers, lack of awareness of customer experiences, and reactive customer service strategies.

Rather, sustainable growth and success, as well as long-term customer loyalty, results from combining and modifying those traditional marketing approaches with TLC (think like customers), proactive customer engagements that lead to long-term customer satisfaction, two-way communications at all customer points of interaction, and a focus on understanding and learning from customer experiences with your products and services.

Prolonged success also results from adapting your current organizational processes and practices to better align yourself with the changing values of customers.

One of those changing customer values is choices and flexibility. Customers want both choices and flexibility, particularly when deciding what products and services will provide solutions to their needs, wants, and desires. Of course, when it comes to the actual purchase and use of a product or service, it is a bit different. As B. Joseph Pine points out in the book Mass Customization, “Customers don’t want choice. They just want exactly what they want.”

Only an organization that is fully focused on identifying the needs, wants, and desires of its customers will be able to provide exactly what they want. Then, if you give customers a little bit more than they expect, you are well on your way to developing long-term customer loyalty. As Susan Lyne, CEO of Martha Stewart Living Omnimedia said, “If people get what they expect from a brand ─ and more ─ they’re going to stick with it.”

Product Marketing. Brand Managers. Product Managers. Organization structures based on product lines or product groups. This is where the traditional focus of marketing has been, and unfortunately still remains ─ on products.

But, as I have often stated: “A product is or a service is just your point of entry. A loyal customer is the true goal.”

Having loyal customers should be the goal of every organization. The purpose of business, as the legendary Peter Drucker wrote, is “to create a customer.” In my view, the ultimate role of marketing is to create and keep good customers, to the benefit of customers, the organization, and other stakeholders.

Business is not just about sales, contracts, cash flow, internal rates of return, ROI, and profitability. Even Henry Ford recognized this when he said, “a business that makes nothing but money is a poor kind of business.”

Using traditional marketing techniques, being “customer oriented” has meant operating in order to meet the needs of the typical customer, or the average customer. Businesses today cannot afford to focus on the average customer. Your future growth, and future profitability, comes from satisfying the needs of your most valuable customers.

To treat your most valuable customers as your most valued customers requires that they be treated as individuals ─ with individual needs, wants, desires, likes, and dislikes.

To treat valuable customers as individuals requires the understanding that anything that touches these customers is a marketing concern. It also means understanding that everything you do as an organization ─ and sometimes the things that you do not do ─ touches your customers.

The bottom line is simply this:  if it touches the customer, it’s a marketing issue™.

This simple phrase births an entire marketing philosophy that you can use to develop sustainable growth and a loyal customer base for your own products and services.

It means doing things ─ particularly “marketing” ─ differently than you are doing them today. It means putting the needs of your customers first, before those of the organization. It means inculcating the skills of thinking from the customer’s perspective throughout the organization. And it means delivering your brand through customer experiences rather than paid advertising.

It will feel different, doing all these things, of that I can assure you. But I can also assure you so too will be the results.

 

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

TAKING ACTION:  what is the main focus of your internal meetings? Products or customers? Sales results or customer needs? How can you spend more time discussing customers and their needs and less time discussing other matters?

How do you reward those in the organization that exhibit high levels of customer intensity? How do you publicize their efforts internally? What can be done to improve these areas and turn your customer-focused folks into internal heroes?

What is your marketing strategy based on ─ products or customers? Are your marketing plans based on product groupings and goals or customers and customer segments? Now is the time to change from product-driven strategies to customer-driven ones.

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

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?

Customer Points of Interaction

Gaining a Competitive Edge at the Point of Interaction

A critical aspect of customer retention are the key touch points where customers see, hear, feel, taste, touch, and experience your products, services, people, environment, processes, procedures, policies, and attitudes.

This is extremely true in many of today’s markets, where intense competition and commodity functions and features of competing product offers lead to price-driven and promotion-driven marketing tactics.

As I have written numerous times, the experiences customers receive through their interactions with your organization will make or break your ability to develop a long-term relationship with them. The experiences customers receive will also impact your immediate sales and short-term relationships, as well as any hope you have of turning casual customers into loyal ones.

Competitive advantages are eroding faster than ever in today’s world.

Great products, top-notch technologies, and superb customer service are merely the cost of entry into today’s markets. How do you get a sustainable edge when all of these supposedly competitive advantages are easily replicated?

One route to a sustainable competitive edge is how your organization interacts with customers.

According to the authors of the article Beyond Better Products: Capturing Value in Customer Interactions (MIT Sloan Management Review), “customers often value how they interact with their suppliers as much or more than what they actually buy.” Their conclusions were based on data collected from more than 1,500 senior executives in interviews and discussion groups on the topic “why do your customers choose to buy from you rather than your competitors?”

I believe the authors are correct, especially when it comes to services and non-tangible purchases (creative services from an agency, legal advice from a law firm, recommendations and therapies from a health care provider, etc.).

Taking this further, authors Jeffrey F. Rayport and Bernard J. Jaworski argue in their book Best Face Forward: Why Companies Must Improve Their Service Interfaces With Customers that overwhelmingly intense competition and markets where products and services become commodities overnight have combined to make superior interface capabilities the only lasting competitive advantage.

According to them, companies must create more effective (yield a better quality customer interaction) and more efficient (incent a better interaction at a lower cost per interaction) interfaces with customers to create and sustain true competitive advantages. Other than their overuse of the word interfaces (I much prefer interactions, as it is more consumer friendly and less of a technical lingo), these authors are on the right track.

If you are interested in learning more about their views, there is an excellent CMO Magazine audio interview with former Harvard Business School Professor Rayport. It is well worth listening to this 30-minute interview as Rayport explores why the points of interactions that determine how customers view a company has become the new frontier of competitive advantage.

At the end of the day, the customer experiences at every point of interaction with your organization create the brand experience. To keep customers returning, these unique brand experiences must be customer-focused and virtually imitation proof.

Doing so not only creates a unique corporate brand that cannot be copied, but simultaneously creates strong emotional and rational reasons for your good customers to continuing doing business with you.

Your points of interaction with customers may be the only competitive advantage you have. They may also be your weakest points. The old proverb about a chain being only as strong as its weakest link applies readily to the strength of your customer relationships and the points of interaction upon which these relationships are built.

The bottom line is: if you are not delivering the right kinds of customer experiences at every point of interaction, all your other relationship building efforts will be for naught.

KEY POINT:  one route to a sustainable competitive edge is how your organization interacts with customers.

TAKING ACTION:  have your senior managers brainstorm and develop a list of answers to the question “why are your customers buying from you and not from your competitors?” Analyze these responses in terms of product features/functions and the ways customers interact with your organization.

Which of your customer interfaces are machine driven? Which are people driven? Which are a combination of the two? Survey your key customers to ascertain if these interfaces are delivering the quality of interactions they want and, if not, how would they like to see changes made?

Give us a call or an email to discuss your customer interactions strategy. We can help you analyze your needs and work with you to create better interactions that cannot be copied or replicated. You may also benefit from our two-day workshop on Innovative Strategies for Reaching (and Keeping) Good Customers or from our half-day interactive program Customer Retention: Creating Value for Customers in the Service Sector.

 

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

Message to CEOs: Focus On Your Customers

The Purpose of Business Is To Attract and Keep Good Customers

Here is a scary thought for a Monday morning: many CEOs have lost sight of the importance of customers.

Oh sure, they do know that customers are the folks buying their products and that such sales are important. However, with a focus on quarterly sales and profit figures, head counts, share prices, mergers, cost structures, and other financial ratios, too many corporate leaders have lost the customer insights required to develop and maintain market leadership.

My long-held suspicions on this were confirmed in an article in Inside 1 to 1, the publication started by the Peppers & Rogers Group. Appropriately titled “Dear CEO: Don’t Leave Customers in the Dust,” the authors Don Peppers and Martha Rogers write that they are “amazed at the number of CEOs who give interviews on how to grow their companies, or even more fascinating, the CEOs who tell the media how they are going to save their failing companies, and yet make no reference to customers whatsoever.”

The authors tracked one month of interviews on business news channel CNBC and reported that “23 CEOs discussed their companies’ strategies and only six used the word customer” in their responses.

The authors also cite a Deloitte survey of 50 technology CEOs, which found that only six percent said building customer loyalty is their biggest challenge to sustaining growth. This was well behind other “more important” issues such as bringing new products to market (27%), hiring salespeople (18%), and developing strategic relationships (15%).

I have noticed this trend for several years in my own reading of business publications. Senior executives are more willing to talk about how they are cutting costs than about the steps their organizations are taking to better understand the changing needs, wants, and desires of customers.

Rare is the executive who claims “we are going to be successful and grow our business because we are listening to our customers and aligning our future products and services with their future needs.”

Fortunately, such executives are only rare, not yet extinct.

It is sad to watch stellar organizations go through cycles of poor leadership, wrongly placed focus, and lack of direction simply because senior management decides to take the corporate eyes off customer needs.

This happened to one industry-leading MNC in Southeast Asia, when several changes in management led to cost cuttings, reduction in staffing, and automation replacing humans at key points of interaction with customers. This company was previously the benchmark for customer service in its industry. Today, customers constantly comment that “they used to be the best, but now they are the same as everyone else.”

Not surprisingly, this company has also seen massive staff turnover within its middle management ranks, something that was unheard of only a few years ago.

As the legendary Peter Drucker wrote, “the purpose of business is to attract and keep customers.”

This phrase should be posted on the walls nearest every CEO desk.

And next to it should be a poster saying “My primary role as CEO is to ensure we build loyalty with our customers and our employees.”

Customers. Employees. Operations. This is what CEOs should focus on, and in the same order as the letters in their titles.

The ones who do this are the ones who will build sustainable and profitable businesses over the long haul.

KEY POINT:  senior management should focus on customers first, employees second, and operations third.

TAKING ACTION:  review your last dozen public or internal pronouncements on your organization’s business strategy. How many of these include comments and directions on customers and customer needs? What priority is given, if any, to customers and customer needs?

Ask yourself, how much time per month do you spend in internal meetings? How much time do you spend attending to operational or financial issues? Then calculate how much time you have remaining for meeting customers and coaching employees. If you are not happy with the results from these calculations, what steps do you need to make immediately to give higher priority to customers and employees?

Go out and meet with customers. Conduct account reviews with your large and high potential customers. Gain insights into their current and future needs. Ask them questions about their business and where their industry is headed. Ask them how they view their relationships with your organization.

Bring together your leadership team for a full-day discussion on customers and customer needs. Enforce this rule: no discussions on sales forecasts, profit projections, cost structures, or internal constraints. Simply discuss your customers’ current and future needs. Then discuss how you can profitably provide solutions to these needs.

 

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

Service Statesmanship

Serving As A Customer Service Role Model

Why do some companies seem to exude stellar customer service at all levels, when others only offer satisfying service on a sporadic basis?

Outstanding customer service appears to be inculcated in numerous organizations, and dismally lacking in others. What is the underlying factor that determines whether excellent service delivery is a cultural characteristic of an organization? I think the root cause is the concept of Service Statesmanship.

One of the best definitions of Service Statesmanship came from a CEO who said, “When a fish stinks, it stinks from the head.” What he meant, of course, is that service excellence is first and foremost the responsibility of managers and senior executives. Staff, by themselves, cannot ensure excellent service.

After all, when service “stinks,” it stinks from the top of the organization right through to the bottom rungs. To stop the rot managers and senior executives need to become Service Statesmen.

When the fish “doesn’t stink,” managers are usually doing two things. They are establishing service quality and service excellence as the overriding goals of their business units, and they are serving as role models who translate these core values into exemplary personal behavior. These are the key duties of anyone who aspires to be a Service Statesman.

As a role model, a Service Statesman:

  • Constantly reinforces the service message to staff, colleagues and peers.
  • Constantly communicates the organization’s service performance to all staff.
  • Holds regular service progress reviews:
    • To review performance against goals.
    • To discuss how to remedy situations where standards are not being met.

 

Serving As A Role Model

A Service Statesman is a role model, constantly reinforcing the organization’s key service messages and service values.

Having established quality as a high-priority objective, Service Statesmen will literally take this company goal and run with it. They will inspire and cajole other managers to sign up for the program. They will reward their own staff for outstanding service performances. And, many Service Statesmen will adamantly insist that every executional detail within his or her business unit contributes to every customer’s perception of quality service.

This last trait sometimes leads employees to think their managers are “a little crazy about service.” This is not bad. Actually, this is good!

The manager who holds up introduction of a new product because the frontline staff have not been fully informed or trained on the product is a Service Statesman. The unit head helping his business unit work out of a processing backlog is a Service Statesman. The branch manager who regularly spot checks account applications for accuracy is a Service Statesman.

A Service Statesman will be seen by staff as constantly engaged and interested in improving service delivery.

At one major utility, employees were shocked to see their CEO bicycle to the site of emergency weekend repairs to “spur the troops on” and to motivate those working on the problem. Here was a smart Service Statesman at work, capitalizing on the value of a dramatic gesture and its rapid incorporation into company folklore.

Service Statesmen typically work hard to ensure all service employees correctly interpret decisions affecting operating conditions. During interviews at institutions renowned for service excellence, a large number of managers volunteered examples when they personally explained service policy changes far down the chain of command, even at stressful times on major internal changes.

Seasonal peaks, a new product introduction, or customers leaving for a major competitor ─ any of these planned or unplanned events can swamp employees with extraordinary service burdens. Certainly managers should give employees all the practical assistance possible during such stressful periods, but at the same time managers must reinforce the organization’s corporate service values and reward peak or superior individual performance, especially those performed in times of duress.

In short, managers who desire to be Service Statesmen must:

  • take a personally active role in building service excellence into the organization,
  • establish service excellence and quality customer service as the over-riding goal in their business units, and
  • serve as a role model through exemplary personal behavior at all times.

Service quality delivery has strategic importance for the long-term success of any business. Excellent service is a critical means by which any organization can differentiate itself from competition. (Which makes me wonder why more organizations do not focus on this issue.)

Everybody in the organization needs to focus on providing good service, not just frontline customer contact personnel. When such efforts are consistently and constantly led from the top, one is most likely to find a culture of service statesmanship inbred and ingrained at all levels of the organization. One is also likely to find satisfied customers repeating their business.

That combination ─ excellent service delivery and satisfied repeat customers ─ is definitely a surefire formula for long-term, sustainable, profitable business growth.

KEY POINT:  Service Statesmen take an active role in building service excellence into their organizations and constantly reinforce the organization’s key service messages and service values to staff, colleagues, and peers.

TAKING ACTION:  which departments or business units in your organization are known for stellar service delivery? Which are not? How can the learning, ideas, techniques, and culture of the outstanding units be transplanted into other units?

Who are the Service Statesmen in your organization? What do they have in common? How can their passion for outstanding service delivery be leveraged and spread throughout the organization? How can they “infect” their colleagues with their spirit and zeal?

At what level of your organization does the enthusiasm and fanaticism for service delivery seem to come to an end? At what level of the organization is only “lip service” paid to the topic of service excellence? How can the need for organization-wide service statesmanship be communicated to the executives at these levels? (Hint: forward them a copy of this week’s Monday Morning Marketing Memo).

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

7 Laws of Customer Retention Marketing

Change Your Definition of CRM to mean Customer Retention Marketing

I have long struggled with the concept of Customer Relationship Management (CRM), mostly for the simple reason that I fully understand that customers do not want their relationships with an organization “managed.”

This is why the whole notion and philosophy of CRM as customer relationship management is wrong.

In my keynote speech a few years ago at the Services Marketing Conference in Kuala Lumpur, one of my key messages was that marketers and senior management really need to think of CRM as Customer Retention Marketing.

This is what true CRM is all about – retaining customers, or as I like to call it the art of keeping good customers.™

To implement this definition of CRM in your organization, you will need to inculcate the following 7 Laws of Customer Retention Marketing into your culture, processes, and thinking:

  1. The conversion of a prospect to a purchaser is the casting of a potential long-term relationship with a possible customer. A purchaser who buys from you the first time is merely a trial user. A customer is not a true customer until the second time they buy from you. Forget the notions that “the relationship starts with a purchase,” or “you are not closing a sale, you are starting a relationship.” As we have pointed out previously, the relationship starts way back in the information seeking stage of the buying cycle, at least from the customer’s perspective.

The art of keeping good customers means that your entire organization should be geared to ensure that every experience received by a customer (including a first-time purchaser) should result in that customer repeating their future purchases from you whenever you have a product or solution that meets their needs or solves a problem for them.

  1. You do not work for your employer ─ you work for your customers. Sure, someone in the company signs your proverbial paycheck (or authorizes the direct deposit into your account). But those checks and deposits would bounce if it were not for the customers who buy from your organization. When someone asks you “who do you work for?” your reply should be “our customers” or “the customers of (name of organization).”
  2. You do not sell products or services ─you sell solutions that meet the needs, wants, and desires of your customers. As pithy as this sounds, it is something that way too many organizations and workers these days just do not seem to understand.
  3. Customers want relationships with people and organizations they trust, that are committed to them, and with whom they have shared goals. All of us can buy products and services from a vast number of suppliers and outlets. But we choose to have continual relationships, and to repeat our business, with those we trust and with those whom we have shared outcomes.
  4. Employees should be liberated ─ and allowed to be customer champions. Almost all staff want to serve customers well, if only their organizations would let them! Unfortunately many organizations have rules, processes, procedures, and policies that tie the hands of their employees and prevent them from truly serving customers and satisfying their wants, needs, and desires.
  5. Do not have a commitment to customer service ─ have a commitment to customers (and to customer care). We are definitely in the age of the customer. Customers have many choices and options available to them. But they also all share a deficit of sufficient time. Caring about customers means committing to the things customers place high value on ─ flexibility, sufficient knowledge and information, convenience, ability to choose functions relevant to them, customization, and environmental concerns.

And, of course, good service, which in today’s world is now a prerequisite for repeat business as customers will simply not put up with bad service, inconvenience, inflexible policies and procedures, and a lack of options for customization and personalization.

  1. Customer Service staff should be fired ─ and replaced with Customer Satisfaction staff. This is not a matter of semantics. Customer service tends to be either reactive (to a situation) or a follow-up activity (to a complaint).

Customer service, which is problem resolution focused, is usually initiated by the customer, when he or she has a problem. On the other hand, customer satisfaction is proactive and is customer focused.

Customer satisfaction is usually initiated by the organization to improve the quality of the relationship with the customer. The corollary of this rule is that customer service scorecards, measurements, and matrixes should be replaced with indices that measure and monitor customer satisfaction.

In the typical CRM thinking found today, the organization is the center of focus, thinking, and planning. And the measurement tools used are indicators that support managerial bonuses.

In my Customer Retention Marketing model, the customer is the focus and occupies the central platform for all thinking, planning, and strategic focus. The result becomes the optimization of customer-first processes and the continued improvement in the quality of customer interactions.

Your organization will accomplish a great deal more, and be more highly successful, by changing your definition of CRM to Customer Retention Marketing.

 

KEY POINT: change your definition of CRM to mean Customer Retention Marketing.

TAKING ACTION: survey your employees and ask them this open ended question: “what do we sell to customers?” If they give you a long list of products and services it is time to educate them that you are selling solutions, not products and services.

Review the tools and measurements you use to track and monitor customer service. How could these be turned into tools and measurements to track and monitor customer satisfaction?

Prepare an entire issue of your next employee newsletter (or staff memo) on the subject of customer retention marketing, and what the implications are for the organization in terms of customer care, customer satisfaction measurements, liberating of customer contact personnel, changes in policies and procedures, and how you will reward the organization for making the change to customer retention marketing.

 

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

For more thoughts on customer retention marketing, read our Keeping Good Customers Blog on Tuesdays and Thursdays.

Customer Complaints Are Good

Customers Who Complain Are Customers Who Care

As sure as there are customers for your product, you can be guaranteed that there will be complaints about your products or services.

Why?

Is it impossible for any organization to deliver 100% customer satisfaction and 100% fault-free products and services all the time? In a simple word: yes.

I have yet to come across an organization that does not make the occasional mistake, or the employee who does not commit the odd accidental error or who simply is in a grumpy mood that is reflected onto your customers.

So face it ─ complaints will happen.

And this is good. For complaints are good for you.

One of the worst things customers can do when faced with unsatisfactory service or a poor quality product is to not tell you and leave for the competition. After all, if you do not hear of the problems that cause customers to take their business elsewhere, how can you fix them?

Customer complaints are good for these:

  • Highlight areas that need improvement.
  • Identify procedures that cause customer pain.
  • Reveal information that is lacking, or erroneous, in your communications.
  • Identify staff who need more training or closer supervision.
  • Provide a check on consistency levels.
  • Surface policies that may be outdated.
  • Trigger positive change (if you take the initiative to act on the complaints).
  • Raise staff morale (through positive change).
  • Provide a method of competitive intelligence.
  • Provide bench marking from other industries.
  • Identify customers who care.

That last point is a critical one to ponder. Customers who complain are customers who care!

Sure, customers who complain often want some form of restitution for the inconveniences suffered. But most just want the organization to live up to the promises made, which ought to be the key objective of the selling organization anyway.

So while they care about themselves and having their own satisfaction levels fulfilled, they also care enough about future engagements with the organization to want to help the organization live up to future commitments.

Otherwise, they would simply just walk away and take their business elsewhere (after demanding a refund of whatever money has already been spent on the unsatisfactory product or service).

Whether they are loyal customers, upset customers, wronged customers, disappointed customers, angry customers, right customers, or even wrong customers ─ customers who complain do care. (Okay, maybe not all, but certainly most.)

If your staff attitudes can be shifted so that they collectively and individually view complainers as customers who care, then your organization is in a much better position to learn from such complaints and to implement restorative steps that result in retrieval of departing and departed customers.

Unfortunately, too many organizations treat customer complaints as “sore points” that need to be counted, rectified, and forgotten as soon as the service staff moves on to the next complaining customer. This is why too much of “customer service” these days is reactionary and process driven, with managers and service staff monitored and measured in terms of efficiencies, quickness of response, and the number of complaints “handled” per shift, day, week, or month.

When complaints are handled and tracked this way, true organizational learning and the opportunity to turn complaints into new levels of customer satisfaction through positive change are usually lost. Forever. Or at least until an enlightened new manager takes over the so-called customer service unit.

Lastly, it is important to remember that all complainers have one of two things in common ─ they are all customers or prospects.

Service recovery starts with the way you handle complaints and complainers, a topic that we will discuss in the next Monday Morning Marketing Memo.

Until then, remember that complaints are good. And that, for the most part, people who complain are customers who truly care about your future. Or at least your future with them as your customers.

 

KEY POINT: customers who complain are customers who care.

TAKING ACTION: how are customer complaints handled in your organization? Are they processed and handled as quickly and efficiently as possible, and then forgotten? What steps are needed to turn the efficient handling of customer complaints into learning opportunities for your organization?

How is customer service monitored and measured in your organization? What does your customer service “scorecard” look like? Does it include measurements for how lessons from the frontline are circulated to other staff, used in training courses, and incorporated into new employee orientation programs?

How can lessons from the frontline be turned into learning stories to the benefit of the entire organization and its customers?

 

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

 

Customer Service Creed

When the customer wins, you also win

The importance of focusing on customer needs, wants, and desires is a key theme in every seminar and keynote speech I give.

I have long advocated that too many businesses are being run in the pursuit of short-term shareholder value (i.e. share price) and not in the pursuit of long-term shareholder value through solving customer problems profitably and from developing long-term customer loyalty.

Now that a significant portion of the global economy is undergoing a slow (or negative) growth phase, the solitary pursuit by senior executives in trying to constantly push the share price higher and higher is coming home to scorch them.

The best way to create long-term shareholder value is to create and keep good customers.

In order to develop strong customer retention strategies, you need to have an organization-wide customer service creed in place.

Here’s a generic Customer Service Creed that you might be able to adapt for your own purposes:

Every employee has customers, either internal or external (or both). Everyone in the organization must walk the talk during every customer point of interaction.

Treat all employees as special, just as you would treat all customers as special. How you treat your staff is mirrored in the way they treat your customers.

Empower employees who are engaged in regular contact with external customers to make decisions. Establish relaxed levels of authority and alternate chain of commands. Not all decisions should, or need to, come to managers. Trust your staff, having given them appropriate guidelines to work within.

Customer service does not end when the customer has paid for the product and taken it home. Customer service must continue after the sale, just as it must come before the sale.

Allow the customer to talk. Look at them. Be interested in them. Summarize what they are saying. Treat each customer as a unique individual with individual needs, wants, and desires and never as someone who is making the same request you have heard before.

To the customer, each individual they interact with is the organization. Eliminate the “we/they” thinking. Success comes when you think of the word “us” when dealing with customers.

It is much easier to create a positive impression than to erase or correct a negative one.

Let the customer win. Then you both win.

Your competition is anyone the customer compares you with.

Reward, recognize, and celebrate your customer service successes. This creates momentum for future success stories.

To win today’s marketing battles, you might want to consider creating and publicizing, both internally and externally, your own Customer Service Creed.

And remember, when the customer wins, you also win!

 

KEY POINT #1:  in order to develop strong customer retention strategies, you need to have an organization-wide customer service creed in place.

KEY POINT #2: when the customer wins, you also win!

TAKING ACTION:  do you treat employees as special? Is how your organization treats its own staff reflected in the ways your staff treat customers?

What impressions of your organization do your customers take away with them after each and EVERY interaction with your organization?

How can you eliminate the “we/they” thinking between your staff and your customers?

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

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