In the global marketplace, customers expect to get what they want when they want it, where they want it, how they want it, in the quantity they want, at the quality they want, and at a price they are willing to pay. But, satisfying customers through competitive pricing, innovative products, or faster service is no longer a guarantee to attract and retain customers.
According to Rick Tate, co-author of Leadership and the Customer Revolution, this entitled customer attitude is driven by the fact that there is increased global competition across industries, seismic advances in technology that puts information in the hands of customers, and an “over-capacity” marketplace that offers customers more choices than ever before among similar products at similar prices.
The customer has control. And, companies are starting to realize that they must become customer-driven and customer focused to attract and retain business. Companies are allocating more resources to better understand how customers “feel” about their customer experience that either drives them to return or buy somewhere else.
Becoming customer driven is about customer service — understanding customer needs, satisfying those needs, and turning satisfied customers into committed users of your brand. Furthermore, companies must understand the relationship between the many variables that drive the customer-provider relationship.
Two such variables, of course, are brand engagement (loyalty to a brand) and customer service. Are customers willing to tolerate poor customer service to remain loyal to a favored brand product or service?
During a debate about this issue over lunch, my marketing and communications colleague, Joe, maintained that brand engagement cannot exist without high quality, responsive customer service. As if to illustrate his point, our food server brought a glass of Pepsi to the table, spilling it over the table as she set the glass down and hurriedly moved on to the next table. A lifelong Pepsi fan, Joe mopped up the spillage and salvaged the Pepsi that was left in the glass.
“It isn’t Pepsi’s fault that my soft drink is all over the table. I love Pepsi and will continue to order it, but I won’t be coming back here anytime soon,” he quipped. “The customer service is awful.”
Score one for loyalty to the brand and zero for the service provider. Joe remains loyal to Pepsi, but will purchase it somewhere else the next time due to poor customer service. Even under the best of circumstances, a competitor can sneak in and lure your most loyal customers away. This service provider made it easy.
Last fall, the National Business Research Institute (NBRI) asked more than 10,000 customers in 27 countries to address issues related to expectations, purchasing intentions, switching providers, loyalty, and satisfaction in ten industries (i.e., travel and tourism, life insurance, consumer retailers, consumer electronics manufacturers, retail banking, internet service providers, cable/satellite, wireline phone, wireless phone, and gas/electric utilities).
Only one in four customers felt very loyal to their brand across industries, while another 25% felt no loyalty to brand or business. Sixty-six percent of customers switched providers in at least one industry over the previous year due to poor customer service; this was especially prevalent in the retail banking, internet service provider, and cell phone industries.
Forty-four percent of customers stated their expectations today are higher than they were one year ago. But the greatest frustration reported by customers was “having the company deliver something different than what they promised up front” related to sales and marketing practices as well as customer service initiatives.
About 66% of customers appreciate companies that recognize their loyalty through repeat business, although only half of loyalty program members across industries stated that their participation resulted in loyalty to those companies.
About 66% of customers also noted that business use of technology in marketing, sales, and service enhanced their experience but was not enough, independent of other factors, to retain their business over the long term.
Fewer than 30% of customers had previously participated in innovation efforts for a company, but more than 50% expressed interest in doing so, especially those companies in emerging markets. This includes contributing ideas to modify existing products or develop new ones through idea portals, discussion forums or blogs, customer surveys, and product trials.
So, what does it take to initiate and sustain both brand engagement and customer satisfaction? A complex mix that takes into account past and current experiences, perceived value, product or service availability, quality, affordability, ease of communication, customer service, and company reputation.
It should go without saying that a product or service must be consistent, reliable, affordable, and do what it is promoted to do. The ‘brand personality’, the characteristics of the product or service, must be meaningful to the customer. Does the vacuum cleaner pick dirt up on the first sweep? Did the contractor remodel the kitchen at budget and on time with quality products that withstood normal use?
Engaged employees who provide excellence in customer service are key to promoting brand engagement and customer satisfaction. This means that employees must be knowledgeable and well informed about products and services. This expertise allows employees to establish realistic and accurate customer expectations up front, which helps to minimize or avoid customer disappointment later on.
Although statistics vary with the source, studies show that approximately 60% of customers will stop using a brand if they can receive better customer service elsewhere. Approximately 45% of customers state they are engaged with a brand because they trust the company’s product or services.
Delivering exceptional customer service and engaging customers with their brand requires that companies align everything they do — their people, systems, functions, processes, leadership, middle, and front lines. There is a direct relationship between satisfaction with customer service and brand engagement; the happier the customer, the more likely they are to engage with the brand over the long term.
“Companies must identify and specify the touch points customers have with the brand before specifying what the service requirements are at these touch points,” notes Dr. Thomas Oosthuizen, brand strategist and partner at BrandWealth.
Oosthuizen writes of an individual’s search for a personal computer. The individual walks into a computer store and asks why he should buy a Windows-based personal computer from them instead of an Apple computer from Apple.
“Because they are cheaper,” said the sales associate.
That same individual then visits an Apple store, asking them why he should buy an Apple computer instead of a Windows-based version.
“Because Apple is simply the best quality you can get,” states the sales associate.
Although both stores in this example provide a reliable product, the Apple product appeals to many customers who desire the ‘brand experience’, the feeling they are getting not only superior employee knowledge and customer service, but a superior or unique product. These same customers are often willing to pay a price beyond the industry average for such brand personality and service.
It is important to understand that brand engagement can be emotional. Customers must ‘feel good’ about their entire experience as well as love the product or service.
Brand engagement is dependent on customer service, engaged employees, and differentiating the product or service delivery from that of others. Singapore Airlines delivers exceptional service that is second to none. Virgin Atlantic and Southwest Airlines, too, have a unique feel that contributes to their brand image, taking into account customer expectations, employee engagement, and quality service provisioning.
In our high tech society of cell phone trees and voicemail, customers especially value employees who listen, really listen. Those employees who demonstrate active listening skills tend to respond fully to specific customer concerns in a timely, professional way. And, customers value customer service representatives who are able to deal with an issue without passing them off to someone else.
Customers tend to want long term relationships with their product and service providers; it is time intensive, not to mention stressful, to have to constantly search for new providers. And, companies should know by now that it is less costly to retain customers than to market to and recruit new ones.
Companies also need to improve their processes to acknowledge and recognize customer loyalty in ways that are meaningful to the customer, not simply in ways that are easy or cost efficient for the company. This requires that employees be trained to truly listen to what customers share when they call, email, or write letters to the company, and pass that information along to the appropriate department for timely, decisive action.
Brand engagement is high when employees treat customers based on their expectations of the brand so that the experience is truly unique. This means that employees have both the authority and responsibility to make decisions based on the customer’s individual need.
Each interaction between customer and employee is ‘representative of the brand’ and integral to the brand image and cannot be overestimated. It is important that employees be trained in detecting even the slightest hint of customer dissatisfaction to avoid partial or full switches to another product or service provider.
One recommendation is that companies must regularly seek feedback from customers about all aspects of the brand experience, including customer service. Valid, reliable customer feedback is most easily gained through questionnaires, such as customer service surveys. Simply ask your customers and in most instances they are happy to share their thoughts and feelings.
When facilitating interaction between company and customer, it is always in the company’s best interest to let customers know how their feedback is being used or applied in business decisions, where applicable. There is no surer way of turning someone against a brand than making them feel that their opinion does not matter, that time giving feedback was wasted. If a company is not willing to take action on customer feedback, they should not bother to ask the question!
What are the factors that could drive customers away from returning to your business? Make a list and then examine stakeholder behaviors, attitudes, and values. Challenge assumptions and ways of doing things. And, consider everything you do from the customer’s point of view.
As Thomas Paine once said, “A long habit of not thinking a thing wrong gives it the superficial appearance of being right.”
If you would like to learn more about how NBRI can help you identify what drives customers to engage with your brand, contact us now at 800-756-6168.
Terrie Nolinske, Ph.D.
National Business Research Institute