It is widely accepted that satisfying customers profitably lies at the core of every successful business. But do we always fully appreciate all the different ways our customers come into contact with us, and do whatever we can to understand how they can best be served? Nick Hague isn’t so sure…
In these uncertain times, holding on to your most valued customers is more crucial than ever. From just a quick Google search you can get many different statistics thrown in your face:
The average company loses 10% of its customers each year
A 5% reduction in the customer defection rate can increase profits by 25% to 85%, depending on the industry
The top 20% of customers in a business may generate as much as 80% of the company’s profits, half of which are lost serving the bottom 30% of unprofitable customers
I recently read an article on www.btobonline.com about some research carried out by the CMO Council (an online survey of more than 450 global marketers). It stated that only a half of global marketers have strategies in place to further penetrate or monetize key customer account relationships, and only one-third have strategies in place to win back dormant or lost customers. It brought it back home to me that while b-to-b marketers are increasingly focused on improving relationships with customers, they still have a long way to go in implementing effective, consistent customer retention practices.
The survey found that everybody was spending money on demand-generation programs, but was missing a trick in not looking closer to home at their existing customer data and leveraging it further. We all know that it is easier to sell more of a product or service to a current customer than it is to try and get a potential customer on board, so it begs the question, ‘why aren’t more companies doing this?’
The problem is that, historically, companies’ customer satisfaction data hasn’t been disseminated widely enough throughout the company to heighten the importance of little things, like the fact that a delivery driver can speak the native language and is friendly and polite when on site, or that the appearance of the delivery fleet is up to scratch. These little things can impact on customer satisfaction and loyalty in a big way, especially because this might be the only real contact that a customer has with the company. Therefore, the lack of ownership of the customer relationship across a company is the first step to reducing churn.
Marketers should determine their most profitable customers, and look at how to improve the customer experience and how to increase business with those customers. The study showed that only 6.8% of marketers stated they have excellent knowledge of the customer when it comes to demographic, behavioral and psychographic data; there is no excuse!
At B2B International we are passionate about customer satisfaction and customer loyalty research. We have spent our lifetime speaking to other people’s customers. However, the question is often asked; ‘who is the customer?’ This is the biggest challenge business-to-business companies face in the battle for customer loyalty. Keeping on top of all the interactions and touch points a customer has with a company is difficult, but it is important to return again and again to this subject because we all know that the customer is made up of many touch points and different people in different positions. A company not only needs to know who the key decision maker is, who ratifies the decision and who are the key influencers, but also the wider myriad of connections between companies and their customers.
Think about the bank that you deal with. It is not just the cashier that you come into contact with; what influence does the ATM machine, the call centre, or the adverts you see on the television have on your perceptions and satisfaction?
A customer might call in to a call centre for a query on their bank account and get turned off because the call wasn’t handled properly. Small things like this might go unnoticed but when added up these could result in large churn.
It is crucial that all marketers understand that customer touch points are linked and thus work towards heading off the ‘domino effect’ if something goes wrong at one of them.