Do You Really Know What Your Customers Think of You?

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By Mike Gorun

How is your company’s cus­tomer ser­vice? Accord­ing to sta­tis­tics pro­vided by Bain and Com­pany, 80% of com­pa­nies sur­veyed said that they offer a supe­rior cus­tomer ser­vice  expe­ri­ence, but only 8% of their cus­tomers agreed with them. Ouch.

Okay, you think it’s pretty good because your online rep­u­ta­tion is good and you have five thou­sand fol­low­ers on Face­book. Well, think again. In another cus­tomer rela­tion­ship study con­ducted by IBM in 2011, com­pa­nies were sur­veyed as to the rea­sons why their cus­tomers fol­lowed them on social media sites. The com­pa­nies listed dis­counts among the least impor­tant rea­sons, but when the cus­tomers them­selves were sur­veyed, they listed dis­counts as a major rea­son for fol­low­ing a com­pany on a social site.

For a major­ity of busi­nesses, there is clearly a dis­con­nect as to how they believe they are viewed by their cus­tomers and how their cus­tomers actu­ally view them. One rea­son for this is because so many deal­er­ships are focused on push­ing out mar­ket­ing messages—whether it’s via e-mails, snail mail or other adver­tis­ing chan­nels. Even with social media, which offers an oppor­tu­nity to engage with cus­tomers, many busi­nesses fall short because they are focused more on respond­ing to crit­i­cisms or com­ing up with witty or engag­ing content—than what the cus­tomers are say­ing. In short, most busi­nesses aren’t really lis­ten­ing to their customers.

In today’s com­pet­i­tive envi­ron­ment, sim­ply hav­ing a great prod­uct or ser­vice and pro­vid­ing a good cus­tomer expe­ri­ence isn’t enough. Cus­tomers now want a fan­tas­tic experience—they want to feel appre­ci­ated for their busi­ness. You may roll your eyes at that, but if you do, you will be over­look­ing prof­its. In return for a fan­tas­tic expe­ri­ence, cus­tomers reward you with their loy­alty. We’ve all heard the statistics:

  •  A 5% increase in cus­tomer reten­tion can increase a company’s prof­itabil­ity by 75% (Bain & Co.)
  • 80% of your company’s future rev­enue will come from just 20% of your exist­ing cus­tomers (Gart­ner Group)
  • Attract­ing new cus­tomers costs your com­pany five times more than keep­ing an exist­ing cus­tomer (Lee Resource Inter­na­tional, Inc.)

 A CRM may give you a response rate and ROI on dol­lars spent on this month’s cam­paign, but it gives you no indi­ca­tor of what tomorrow’s cam­paign may do, or how cus­tomer per­cep­tion will affect your rev­enue next year.

A loy­alty pro­gram, on the other hand, gives you the abil­ity to answer the questions,’‘what do your best cus­tomers care about most?’ and ‘why are they doing busi­ness with me?’ With a loy­alty pro­gram, you can eas­ily iden­tify, track and pro­mote to indi­vid­u­als who are most likely to become loyal, long-term sources of revenue.

Mike Gorun is Man­ag­ing Part­ner and CEO of Per­for­mance Loy­alty Group, a divi­sion of Media Trac. Read the full arti­cle here.

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