Customer loyalty is important to business success. Profitability of customer retention is pretty much common knowledge. So companies do a lot to encourage customer behavior that favors their brand, to increase:
Purchase frequency and volume
Involvement and structural ties
Recommendations of the brand.
Yet, like most things in life, loyalty is a two-way street. Who are you loyal to? "Loyalty by its very nature demands that we commit ourselves to a person, group, or cause," explain Timothy Keiningham and Lerzan Aksoy in their book Why Loyalty Matters. "We suppress our Continue reading →
Customer satisfaction as a business concept has been around for more than 20 years — but customer experience management (CEM) has only been discussed over the past several years. So it’s no wonder that CEM is often equated with earlier concepts. The articles listed below can be instrumental in clarifying customer experience as a unique set of truths, essential for business success with 21st century customers.
1. Perspective: customer experience is defined entirely by the customer, not the solution provider.
Social media introduces excellent tools and customer feedback data streams for companies to monitor perceptions and trends. Best practices in customer experience management:
– Use social media listening first to determine how best to interact with customers.
– Recognize the importance of making emotional connections with customers via social media.
– Blend social media with other voice of the customer sources to create a holistic view of customer priorities.
– Leverage customer stories from social media to energize employees enterprise-wide in continual improvement of customer experience.
Emotional Connection with Customers In my online interview with Kimarie Matthews, vice president of customer advocacy and loyalty at Wells Fargo Bank, she explained: “We look at customer loyalty as a pyramid. At the bottom of the pyramid, you need to meet customer expectations consistently — mastering the basics. If you do that right, your customers will be satisfied. The next step up is: how to delight customers by meeting un-met needs, innovating new products, services, features and functions. The result is that they recommend you to their friends and family. The tip of the pyramid is: customers will step up and defend you when they hear a negative comment about your brand. How do you get there? By connecting with the customer on an emotional level, showing you care and appreciate them. When we Continue reading →
Why is it hard to retain customers? Of course there’s the ongoing battle with competitors. They may make highly attractive offers to your customers that are hard for them to refuse, and their brand affinity may have strong appeal to your customers – brand affinity here is positive association built through cause marketing, perceived social status and so forth.
Over-focus on customer acquisition teaches customers to switch brands. For example, the brand switching rate, called customer churn, is 40% for the mobile phone industry, compared to a 7% customer churn rate for the insurance and financial services industries. As growth slows in acquiring new customers – either due to the economy or to shrinking technological gaps with competitors, more companies are pursuing customer retention as a vital corporate strategy.
Not Planning or Funding Retention
Most executives and marketers can quote the well-known universal statistics on customer retention – that a small improvement in the number of customers retained can Continue reading →