We all know that existing customers are easier to retain than acquiring new customers. According to Kissmetrics’ data, acquiring new customers can cost you seven times more than retaining your existing ones. With increasing competitiveness within the market; the cost of customer acquisition is gradually increasing. The secret to scaling business and generating higher revenues lies in providing a quality customer experience that creates a loyal fan base for your products and services.
Working on the fault lines: Becoming an apple of customers’ eyes
A study conducted by Bain & Company revealed an interesting insight about customer experience and an organisation’s perception of it. When asked, 80 percent of companies surveyed responded that they were delivering a ‘superior experience’ to their customers. Customers, however, had a slightly different perception. On further questioning the customers, it was revealed that only 8% of the companies were true to their word. But where exactly are the fault lines in delivering the desired customer experience?
There’s a big difference between customer service and customer experience. When you book a ticket from an online travel marketplace and the travel agent is very helpful, then you might call it good customer service. But if the travel agent goes out of the way to resolve your query and connects you with the airline, assist you during the entire interaction, and gets your problem done away with, then it is a good customer experience. You feel valued as a customer and are more likely to return to the same platform for future travel bookings.
Repeat customers have a considerable impact on the bottom-line of a business. For a stable business, about 25 to 40 percent of the overall revenue often comes through repeat customers. Businesses with 40 percent repeat customers are also observed to generate about 50 percent more revenue as compared to similar businesses that get 10 percent of their customers to return. Returning customers, without leaving a scope of doubt, are the key to success.
Before delving deeper, it is essential to understand why a customer leaves a brand. According to a survey, 1% of customer attrition was attributed to the death of a customer, 3% due to relocation, 5% to customers looking for other alternatives, 9% due to customer defection to competitors, and 14% because of dissatisfaction with services of a brand. But the biggest contributing reason to customers leaving brands, 68% to be precise, is because they do not feel valued as a customer.
The issue in extending a superior customer service experience lies in the fact that customers today expect a lightning fast service together with clear transparency on warranty, price and timeline at an economical cost. This is true whether it is an individual customer or an institutional customer.. The solution lies in personalization and transparency in processes through a more customer-focused digital approach. Today’s technology enables organizations to go much beyond a call centre approach by embracing a digital roadmap for the service process. Customers could be provided personalized information digitally at specific events and the complete service process can be managed in an interactive way with customer, technician and service partners interacting seamlessly. This could reduce friction in customer interaction, which otherwise leads to dissatisfaction against the brand.
To begin with, you must etch out your customer experience strategy. A clear customer-focused vision acting as a set of guiding principles needs to be developed and communicated within the service organization. There should be a possibility to not only define right KPIs, but also ensure availability of actionable information in easy digestible format. You further need to establish direct engagement with your customers and ensure consistent service delivery. Today, in the age of technology, it is relatively easier to gain higher visibility into customer interactions and draw valuable insights, whether it is for sales or services. As an organization, you’re left with data and metadata which can significantly increase the degree of personalization for your customers. It can even enable you to acknowledge the customer’s preferences and service each customer individually through the most favourable channel, generating the desired end-result, i.e. a repeat warranty or purchase decision.
Cloud, mobility, and IoT are enabling organizations to support customers proactively, transparently and at the same time increasing efficiency of the technicians and thus reducing cost per service. You can empower customers to reach out to you via multiple channels like service app, service portal or a call centre. You can increase efficiency of technicians by 20% to 30% by providing right information on customer, location or equipment and helping the technician by providing access to spare parts at right time. Organizations can adhere to SLAs consistently and delighting a customer in the process. Collection of correct data will enable to target marketing efficiently. This can support not only in increasing new sales but also support in increasing service revenue and profitability.
The probably of a delightful customer coming back for repeat purchase is no brainer. Building a world class service organization through digital transformation is no more just a visionary topic. It is a necessity for the organizations that they adapt to ensure matching the ever increasing customer expectations for after sales service.
Authored by Rajesh Agarwal, Managing Director & Co-Founder, Maventic