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Customer Relationships

From Customer Service to Customer Experience

Posted on February 16, 2018March 23, 2018 by Dr. LeNoue

16
Feb

You know customer service is a great thing, but you wonder how much it can really help your small business.

You already go all out for your customers, and everyone else who survived the crash of 2008 has been pouring it on by the bucketful too, right?

Well, at least on paper they have.

The 24/7 customer service support lines, loyal customer appreciation points, 2fers, rebates, rewards, and freebies all sound great. Too bad they so often hide the reality of understaffed sales floors, endless robot phone trees, fine print, run-arounds, and outright scams.

Real customer service is pretty much missing in action nowadays.

It may not look like it, but if you are scrambling in the increasingly competitive global economy and looking to grab an edge for your local business, now is actually a great time to leverage customer relationships as a way to differentiate your company from all the rest.

Your local business can implement a strategy that was first conceived by large enterprises in the manufacturing and technology sectors. Now, with the digital transformation, it’s trending strong, and many of the principles involved can be easily applied to an operation of any size.

CX – The New Face of Customer Service

That’s customer experience – CX – and it goes beyond traditional conceptions of customer service to encapsulate the entire customer life cycle. It is a strategy that tech companies, software-as-a-service operations, B2B vendors, and forward-thinking retailers are implementing to great advantage.

Wikipedia defines customer experience as the product of the interaction between a customer and an organization over the duration of their relationship. There are a lot of other definitions being thrown around, and a key binary is the difference between CX as viewed from the customer’s perspective and CX as an area of practice in business and marketing. In fact, the latter would be more properly identified as customer experience design or management.

Customer care is certainly an important aspect of customer experience, but so are advertising, packaging, features, ease of use, reliability, and cost among other things. CX is outlined by and describes the entirety of the customer journey through a brand’s physical and digital ecosystems.

Today’s digitally-connected, social media-driven, information-saturated consumers are defined by their increasing expectations.

Companies need to meet those expectations, so the trend going forward is a shift from focus on product to a focus on customer experience and customer satisfaction. The two go hand-in-hand, they are what customers will be looking for, and brands that deliver will be the brands that thrive.

The shift is occurring because search engines and social networks along with online access to a global-scale market of goods and services have diluted the product-based competitive advantages that companies were formerly able to use as sources of differentiation. Customer experience is now drawing the highest levels of marketing investment and will be the primary competition space over the next few years.

Research shows that improving customer experience pays dividends in the form of better business performance. The 2016 Temkin Experience Ratings reveal that companies categorized as “experience leaders” attain 22% higher net promoter scores than companies rated as “experience laggards”. This indicates that customers are more likely to recommend a brand that offers a quality customer experience.

So how does a local business with no marketing department, little less a digital marketing department, no IT shop, and no massive budget transform simple customer service into a rich customer experience?

It might be easier than you think. Here’s what you need to do first.

Develop and Maintain a Customer-Centric Culture

The embrace of customer-oriented approaches to business is one element of the digital marketing transformation and the rising primacy of customer experience.

Taking a customer-first approach in everything your company does is foundational to creating a great customer experience.

Consumers today have endless options and easy access when looking to satisfy their wants and needs. Technology has made comparison shopping more convenient than ever, and many customers will be evaluating your product or service and your business against competitors. It’s easy for current customers to leave, and new customers are hard to capture.

The way to win in a business climate where customers can use multiple devices to compare products and services in real time is to put customers first in all things. Treat them with respect, provide great service at all stages of the purchase cycle, and build ongoing relationships.

These traditional customer service guidelines are also the basic strategy embodied within the creation of a superlative customer experience. Tactics have changed a bit, but the overall objective is the same: reducing churn and maximizing customer lifetime value.

Customer-centric companies offer more than just good customer service. These companies commit to engagement in the creation of value and a high-quality, seamless experience that extends through every stage of the customer journey. They work to understand what customers really want to do, then help them do it in fast, easy, and satisfying ways.

What Does a Customer-Centric Business Look Like?

Customer-centric companies and brands display true commitment to the principle that the customer comes first. They want to empathize with their customers and really understand their wants because without satisfied customers there can be no real success.

Customer data is highly-valued by customer-centric enterprises. It is diligently gathered and used to develop insights into what customers want and need.

Customer centricity involves developing products and services around the identified wants and needs of customers.

Customer-centric strategies are designed to build and support relationships that maximize the customer’s experience with those products and services.

Customer-centric companies orient their planning and strategy toward creating and retaining loyal customers.

The Why and How of Customer-Centric Operations

Customer service has always been about the customer’s needs, and the customer-centric paradigm of increased focus on the customer makes sound business sense. Research by Deloitte and Touche comparing customer-centric companies with enterprises that had not adopted the strategy revealed that the customer-centric operations were 60% more profitable.

The 2018 Digital Trends Report published by Econsultancy and Adobe also highlighted the value of customer-centric approaches. Data from a survey of 12,795 marketing, creative, and technology professionals across EMEA, North America, and Asia Pacific regions revealed that organizations with “a cohesive plan, long-term view and executive support for the future of their customer” are more than twice as likely as their peers to significantly outperform their competitors.

The process of building a customer-centric culture will be different for every organization. Start at the top with senior leadership clearly defining the characteristics that would make your business a customer-first operation.

Some other things to consider at this level:

A customer-first culture is supported by an employee-first culture. Employees that are satisfied and happy transmit their experience during interactions with customers.

Make sure everyone on your team understands and is onboard with the brand promise, the customer experience you are trying to create, and their roles in that experience.

Identify any barriers to adopting the customer-centric approach and operationalize the changes that must be made to remove those barriers.

Plan ways to support transparency about what is and is not working, and develop methods for addressing challenges and reinforcing best practices as you move forward.

The next step is to orient your team:

Ensure that managers can take ownership of the process. They need to understand their roles and the details of customer-focused strategy as it relates to your brand. Make sure they have the skills needed to both carry out their roles and build capability in the people they lead.

Emplace feedback loops that enable managers to provide insight on how well the new initiatives are working and what needs to be done to optimize the customer experience.

Front-line employees need solid understanding of your brand promise because they will have the most responsibility for delivering on it. Make sure they know the big picture in regards to the customer experience you hope to deliver. Give them examples of behaviors that support the objectives.

Outline and set priorities regarding what is most important, then empower individual contributors with skills and knowledge that will enable them to deliver on the customer-first vision.

Establish service standards and provide guidance that will help employees make tradeoffs and decisions.

The goal is to prepare your team to anticipate customer needs and then go beyond expectations when meeting those needs.

From Good Customer Service to a Great Customer Experience

Customer experience is often cited as the most important driver of competitive advantage going forward.

Whereas customer service is often viewed as a discrete function within an organization, customer experience encompasses every aspect of customers’ interaction with a company.

Yet, in most companies, people, departments, or divisions still operate in silos. Little thought is given to the contributions separate decisions make to shaping the customer experience. If CX is considered, everyone has a different idea about what it means, and there is no overarching vision or oversight.

For example, product development might defer to marketing on customer experience matters, and both tend to focus on features and specifications. Operations will deal primarily with quality, timeliness, and cost.

Customer service reps tend to engage only with the unfolding transaction while overlooking connections to what comes before or after. For that matter, much of the service they deliver is rote. Why else would reps so often repeat “Is there anything else I can help you with?” when the original reason for the call or visit has not been successfully dealt with?

Clearly, a quality customer experience must be driven by a shared, unified vision and carried out according to design by team members who have the knowledge and capability to bring excellence to their roles within that design.

Doing CX By Design

An important principle of customer experience is that it consists of the personal, subjective perceptions the customer forms during association with a brand. It is not something created by a company.

That said, just as a skilled architect can design a structure that tends to impart a pleasant experience to those who move through it, a business can takes steps to ensure that customers have satisfying, memorable experiences during the customer journey.

If a customer-centric culture is in place, half the job of providing a good customer experience is done.

To formalize and continue the CX development process, begin with a company-wide assessment of CX maturity. After completing a review of existing processes, including employee awareness and engagement, develop a vision based on CX design principles. Make sure all team members understand and embrace the principles. Identify obstacles and find ways to remove them.

With your vision in place, use these guidelines to frame the design of a great customer experience:

Maintain the creation of smooth, friction-free interactions as an overarching CX design principle. Remember that speed and ease are key expectations that customers have for their interactions with a business.

Provide access to open, multi-channel lines of communication serving all points along the customer journey. Email, phone, social media, online chat, and instant messaging are the basics. A Microsoft survey of more than 1,000 American consumers revealed that consumers prefer interacting with businesses via instant message or chat over other channels like email and phone. Balance digital experiences with personal interactions added at points where personal contact adds the most value. Use automation judiciously.

Be responsive in communication. Most consumers expect businesses to get back to them in a timely manner.

Work to understand customers with the objective of creating a complete view of your customer. Make insights readily available and especially ensure transparency to customer-facing employees.

Treat customers as individuals. Recognize that there is no average customer. Customize products and services to the extent possible. Customers like doing business with companies that know their individual needs and work to tailor the customer experience in response to those needs. Start small by focusing on personalization at one touchpoint in the customer journey.

Recognize that consumers’ beliefs and values play an influential role in their behavior. They feel good about purchase decisions when the customer experience resonates with their personal values and reinforces their self-image.

Work to ensure consistency. Routine facilitates ease, so interactions are viewed as being easier when the customer’s experience is the same every time.

The overall goal is to ensure customer satisfaction by meeting and exceeding needs at every touchpoint along the customer journey.

Once you have constructed the basic framework of a customer experience that is ideal for your brand, gather and leverage customer data, keep abreast of changes in your market, and keep up with advances in technology. Use the knowledge gained to refine, tailor, and evolve the experience you offer your customers.

Customer Experience: A Pathway to Small Business Success

Meeting customer expectations and staying ahead of the competition today takes much more than great customer service. An outstanding customer experience plays the most important role in establishing and maintaining customer loyalty, generating great reviews, and expanding your customer base.

Small businesses actually have a significant advantage over large enterprises when it comes to implementing a CX model. They have far more control, fewer internal barriers, and closer relationships with their customers. Yet a small business can reap all of the benefits a well-designed CX approach can provide. Now is a great time for your business to take customer service to the next level and give customers the total experience they are looking for.

Customer Relationships

Building Great Customer Relationships for Your Local Business

Posted on February 2, 2018March 17, 2018 by Internet Marketing

02
Feb

What’s the best way to maintain a thriving business that generates ever-increasing profits?

It’s tempting to grab for the simple answer:

Increasing sales to existing clients while capturing more and bigger customers is the formula for success.

But there is something else to consider. Something very important that is in fact the foundational ingredient in this formula.

Customer relationships. These are the ongoing connections between a company and its customers.

The strength of these relationships hinges on the degree of satisfaction customers achieve throughout the buying cycle and following the receipt of goods or services. Building solid customer relationships is closely correlated with developing and retaining a loyal customer base.

Building Great Customer Relationships

Every business, whether it is a corner store or a multi-national concern, runs on customer relationships. And these relationships spring from what is known as customer relations – the way a business communicates and interacts with the public in its quest to capture and retain customers.

Tuning up your customer relations tactics so as to optimize relationship building calls for strategic thinking.

If you do not have one in place already, you need to put together a coherent approach to customer relationship management (CRM). The CRM concept includes guidelines, strategies, practices, and technologies used to analyze and manage the interactions that make up the customer experience. The objective of CRM is to improve customer service, enhance customer retention, and drive sales growth.

Nowadays CRM is often associated with software tools that companies can use to help manage their customer relations and the data generated around those processes. But the term also refers to as an overall way of thinking that prioritizes the identification, understanding, and satisfaction of customers’ needs and wants.

Once you master the art of customer relationship management and build excellence into your customer relations practices, beneficial customer relationships emerge as the natural outcome.

Are customer relationships really that important?

From an objective standpoint, there is really only one reason for people to patronize your business: Because there is something in it for them. They are only there to get what they want or need from you.

Customers are simply looking out for themselves, and they are doing so in a world that they see as being full of risk. Caveat emptor is the working principle – buyers have to guard against the chance that they will not satisfy their needs, or pay too much to satisfy them.

These are the two risk points that any customer has to navigate around in every transaction: potential failure to reach their desired level of satisfaction, and potential failure to achieve a balance between satisfaction level and what they see as a fair and proper cost level.

Theoretically, as long as these risk factors in the buying experience can be successfully mitigated, it does not matter to the customer who the provider of a good or service is. It could be you, your competitor, Amazon, or a vending machine.

But in reality, nearly every customer experience is framed within and influenced by relational factors.

How do customer relationships work?

There are two primary strains of business/customer relationships. There are constrained relationships, where the customer has to stay in the relationship, and dedicated relationships where the customer wants to stay in the relationship.

Constrained Customer Relationships

Customers in a constrained relationship can only get what they want from single source. Many customer relationships are constrained by an economic moat, a concept popularized by Warren Buffet.

Economic moats are various durable competitive advantages. Like the original moats that protected castles, economic moats make attack difficult. They constitute obstacles that competing businesses would have to overcome.

Moats are also factors that can be used to make it difficult for customers to turn away from your business.

The brand moat gives customers things that they are willing to pay a premium for. These are often intangibles like reputation, prestige, quality, or self-satisfaction. A brand moat does not necessarily have to come with high overhead costs, but building one may require significant time and effort along with some intangibles as input from your side.

The secret moat is most often comprised by intellectual property. Things like copyrights, patents, trademarks, and proprietary secrets make it difficult for competitors to draw your customer base away with an identical product. The recipe for Coca Cola, Google’s search algorithm, and Amazon’s 1-Click are all secret moats.

The toll bridge moat derives from having exclusive control over a market or market niche. Google Analytics, the Mozscape Index, and the McDonald’s Big Mac are examples of this concept. Customers have to come through you and pay your price if they want the product.

The switching moat is constituted by a degree of difficulty required to change from one brand to another. Mobile phones are a good example of this, as are the many free products and services offered by Google. Customers who want to move away will have to transfer all of their data and settings, an undertaking that we all know is unpleasant to consider.

The price moat is created by creating and/or selling products at prices far below what the competition can match. Think Costco, Jet Blue, or Walmart, the master of the price moat.

Case 1: Planet Fitness – Straining and Constraining at the Gym

Planet Fitness is a good example of a business that leverages a combination of moats to beat the competition and constrain customers. Among gym memberships, they offer a lot of perks at prices that are difficult or impossible for any other fitness center to match.

This price moat is strong, but it is a brand moat that Planet Fitness uses to stand apart from and hold off other gyms.

From the customer viewpoint, it may be a stronger constraining factor than price, blurring as it does into a toll bridge moat by leveraging a certain very common human psychological trait in a way that no other gym does. Planet Fitness loudly promotes their gyms as “Judgment Free Zones” that cater to new or casual gym users – in other words, out-of-shape people who are afraid to strut their lack of stuff in a gym full of toned thighs and ripped abs.

Planet Fitness defends their brand moat aggressively, creating some controversy in doing so. They lost a customer because they asked her to cover up her fit body. Another customer was kicked out for grunting while lifting weights.

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Being willing to defend its moats and stated values even at some cost has worked out well for Planet Fitness. They draw hate but get far more numerous positive reviews, and have pulled 5 million members to locations in 47 states. Once settled in, Planet Fitness customers are unlikely to leave. Even if they get in good enough shape to make a showing in another gym, there is still the bargain price to consider.

If you can get them in place, moats work well for defeating competition and retaining customers. But note that several or all of the listed economic moats may appear to be difficult to achieve from the perspective of a small, local business. They tend to be based on brilliant and unique ideas, being first, or the mysterious workings of intangibles.

What is a simple small retailer or online business to do? Just go to work on creating dedicated relationships that can end up functioning in a way similar to constrained relationships.

Dedicated Customer Relationships

Dedicated customer relationships are based on emotional bonds that give the customer satisfaction. Loyalty is a natural side effect of this type of relationship. These customer/business relationships are driven by intangibles like:

Admiration that develops when customers respect who you are, values you stand for, and things you do. You gain admiration by modeling behaviors that reflect the ideals of your customers.

Benevolence as exemplified by your willingness to act in your customers’ best interests by giving them care, guidance and protection.

Expertise reflected in your ability to deliver on promised outcomes or results. Things happen on time, at the stated price, and as part of a customer experience that goes above and beyond expectations.

Integrity as measured by alignment between the values, words, and actions associated with your business. Integrity builds trust and lets customers feel at peace with their patronage of your business.

Case 2: Harley Davidson – Constrained Dedication

The Harley Davidson motorcycle company has been through a lot of ups and downs since William Harley and the Davidson brothers began manufacturing motorcycles out of their garage in 1903. The brand came close to death at the hands of imported Japanese motorcycles in 1969 and its years as a family-owned business ended in a buy-out by bowling and recreation equipment manufacturer AMF.

In 1981, crippled by quality issues and a severely damaged reputation, Harley was recovered from AMF by a group of 13 private investors.

The company faced the immediate problem of resuscitating the brand in the face of a market dominated by Japanese imports. Unable to match the Japanese bikes in terms of quality, performance, or price, the company moved to embrace the iconic, retro, American-made aspect of the brand. A major effort was put into marketing a lifestyle concept built around Harley Davidson motorcycles, and a Harley Owners Group (HOG) was established in 1983.

It was a successful effort. Customers gathered, wanting to enjoy the cachet and camaraderie of riding an American classic and being a member of a “biker club”. Spreading chapter by chapter across the world, HOG has gathered more than 1 million members, a majority of whom have purchased motorcycles or accessories from Harley Davidson.

The company was saved by Harley customers who are dedicated to and passionate about the brand, riding the bikes because they want to even though import motorcycles still far outperform Harleys. HOG members are constrained to the Harley brand if they want to continue enjoying exclusive customer benefits, the camaraderie, and the community.

Anyone familiar with American motorcycle culture can tell you that a strong bond exists between Harley Davidson customers and the brand; so strong in fact that derogatory remarks about the brand in the wrong company have often resulted in spilled blood!

Bonding Customers to Your Business

Dedicated customer relationships create bonds between customers and your business. Customers want to trust in a business and feel comfortable with their buying experiences. Once these factors are in place, customers generally like to preserve the status quo. They don’t necessarily like change, so if you can give your customers what they want in these areas, you are on the way to having both dedication and constraint in operation.

Take steps to promote dedicated customer relationships by following a few basic guidelines.

Communicate. Effective communication is foundational to any good relationship, and customer relationships are no exception. The goal is to have human conversations with your customers. Depart from the robot phone trees and monotone memorized greetings and pitches. Face-to-face is ideal, but if customer service cannot always be delivered that way, train your staff to talk, empathize, and interact as if they were sitting across from the customer.

Use a polite but friendly conversational style moderated between casual and formal as appropriate to the situation. Listen carefully, and ask the questions necessary to draw out details and show the customer that their case is an individual matter of concern that will be handled to the best of your ability. Customers today want to know they are being listened to.

By communicating with customers as people and responding directly to their needs, you create connections. Maintain the connections with follow-up and outreach as appropriate to build relationships that keep people coming back and bringing their friends with them.

Stay connected. Modern technology and social media offer more ways than ever before to build and maintain connections with customers. LinkedIn, Facebook, Yelp, and your own website and blog all offer spaces where you can connect with and learn about your customers in near real time.

Use these tools to stay in touch with customers, follow up on sales, respond to questions and criticisms, and generally stay up-to-date with what your customers are thinking. Avoid creating a one-way conversation that is only about the products or services you hope to sell. Devise strategies to stimulate feedback and interaction. Providing useful information, benefits, and bonuses are other techniques for keeping your customers engaged beyond the initial transaction.

Exceed expectations. If you master the art of communicating well, and creating and maintaining connections, you will have already made significant strides toward exceeding expectations. You want to under promise and over deliver. Provide not only the excellent products or services customers expect from you on time and at fair prices, but also orchestrate a great all-round customer experience that continually surprises and delights.

Build Your Business Around Superior Customer Relationships

Let great customer relationships based on outstanding customer experiences define the way you do business. When this is the case, people will not only know, but actually fear that they will not be able to find the experience you give them any place else. When customers reach and pass this point, they settle into comfortable relationships with your business as dedicated, loyal customers. As they spread the word to their friends and neighbors, your customer base will grow along with your reputation for maintaining the type of customer relationships that are rare today. A bright future for your company will be ensured.