Established businesses around the world invest in customer retention, as well as making themselves attractive to other consumers who are leaving their current providers in search of a better alternative.
Yet, research shows that, instead of acting, many businesses are still “admiring the opportunity” that comes from the customer switching providers. Others may be trying hard to capture some of the opportunity but are focused mostly on “doing things betters” (which often means doing the wrong things better).
According to an Accenture Global Consumer Pulse Research Study, seven trends were identified that vividly illustrate the ongoing struggles businesses face in keeping pace with a customer base that seems to get further removed from them with each passing year.
Trend #1 Customers are buying less from current providers, always keeping one eye open for something new.
Trend #2 Businesses are inviting customers to leave by failing to improve first-contact resolution. Of the customers who switched to another provider due to poor service, more than 80 percent said they could have been retained, mainly if their issue had been resolved on their first contact with the company.
Trend #3 Businesses aren’t capitalizing fully on their own website and other channels they control to make it easier for customers to prospect. Customers rely on multiple channels when prospecting, with the business website being the primary source of information. Only 14 percent of customers overall strongly agreed that companies are effectively providing a positive customer experience through convergence between new digital, mobile, and social channel interactions and more traditional ones.
Trend #4 Customers’ service expectations are rising faster than businesses are willing to adapt. The percentage of customers switching due to poor customer service indicates that businesses are not giving customers the kind of service they want. The customers say their biggest frustrations with providers are failure to deliver on their promises, inefficient and slow customer service, and lack of interaction convenience.
Trend #5 Customer loyalty program adoption is rising, but it’s not preventing customers from switching. Customers say they participate in at least one customer loyalty program; however, program adoption is primary driven by the desire to gain access to the ‘best deals’, indicating a sort of short-term loyalty that fails to keep customers committed for the long haul. While customers stated increased loyalty due to such programs, their actual behaviors indicated they continue to leave providers at a high rate.
Trend #6 Lack of compelling offers prevents businesses from winning customers. About one-third of customers who switched from a provider said they would consider returning within two years for better pricing or a superior product. That’s the good news, and a real mind shift for single speed businesses that miss this opportunity. Only about one in four customers said they are satisfied with the pricing or product quality offered by the business they do business with.
Trend #7 “Non-traditional” competitors are gaining ground with customers. Globally, 44 percent of customers would be open to consider products and services from businesses that are not generally considered part of traditional industry definitions.
Taking action to win and keep customers
The proceeding trends from the study indicate that businesses need to stop admiring the opportunity, or doing (the wrong) things better, and use the source of their challenges – digital - as an enabler and catalyst to help do things differently to tap into new revenue growth potential. In other words, adopt customer-centric practices that can help the business become a multi-speed customer organization, one that acts at the same pace as the customer now. That requires taking three fundamental actions:
Strive for targeted digital experiences not simply scale. Work to improve how the business interacts with customers. Key to that is understanding the right mix of channels both digital and analog – for each customer profile and developing a new operating model based on the customer’s new needs and preferences.
Focus on the ecosystem versus the enterprise. Rather than continuing to emphasize the traditional “customer-to-company” model, businesses need to use digital capabilities to create a seamless customer experience across today’s new relationship model.
Invest to address the customer’s needs, not the organization’s problems. Instead of pursuing programs geared toward improving internal metrics, businesses must strive to increase the value generated by the customer experience. This involves more sharply focusing investments and metrics on only those initiatives that are truly relevant to and desired by customers as indicated by customer analytics.
Rethinking the business in this way will position it to keep more of its own customers while competing more effectively for those who are looking for a better choice.
Brooke Meyer is the managing partner of Caymera International, a Caymanian-owned hospitality and tourism consulting and advisory firm. Visit Caymera at www.caymeragroup.com or email email@example.com for more information.