Repeat business from your existing customer base is the best kind of business you can have. And the best way to ensure repeat business is to treat your customers right. In this white paper we introduce the notion of Customer Centered Service, a new and exciting way to increase customer loyalty and, with it, profitability.
Keeping Customers Loyal
In most industries and market segments, there is no question any more that customer loyalty is a significant contributor to a company’s long-term success. The reason for this is obvious: the cost of sales to repeat customers is usually lower than the cost of initial sales. As an existing customer is already familiar with your products, many steps in the sales cycle are eliminated or considerably reduced. Even when you introduce new products, it is easier to sell into your existing customer base than it is to sell to new customers. Existing customers, if they like doing business with you, are more likely to at least look at your new offerings. Studies reveal that a loyal customer base can be a great advantage.
A shift in [customer] retention of as little as 5 percentage points seems to account for more that a 20 percent improvement in productivity, which in certain industries can increase profit by 50 to 100 percent.
It is important to seize every opportunity to engender loyalty among our customers so that they keep coming back to us. Repeat customers also tend to provide good references, and can be an invaluable resource when selling to new accounts. Prospects are assured that another company in similar circumstances has good experiences with not only your products and services, but also your customer support and service. So, having existing customers that say your company is easy to do business with can be a competitive differentiator.
Loyal and "referenceable" customers are invaluable. They are also hard to acquire. Some challenges you may face are:
It is easy for customers to switch to competitive products and services.
Much as we would like to believe that we have the best offerings, the fact remains that new competitors spring up daily and lurk one click away from us. We have to find ways to be in tune with our customers, and proactively discover and address their changing needs.
Customers expectations are constantly rising.
Customers want everything better, faster, and more. We see this in ourselves—as our lives become busier, we demand instant gratification, we expect things to work exactly the way we want them to work, and it takes a lot more to keep us loyal than it did a few years ago. Customers, whether individual consumers or business organizations, are no different. The bar of "acceptable" customer service is constantly being raised. In fact, meeting customer expectations just gets you onto the playing field; to be competitive, you have to exceed customer expectations and have your customer raise the bar to the point where your competitors cannot compete with you.
Our customer data is fragmented.
Most companies support the execution of their business plans with a number of ongoing ebusiness initiatives. As a result of this, customer data resides in many different systems—a customer’s financial history may reside in the ERP system, the customer’s support history may be in one or more CRM systems and so on. This makes it difficult to have meaningful sales or service interactions with a customer, let alone offer self-service. It is very frustrating for a customer to be asked to contact one part of your company to handle accounting queries, and another to track the status of previous service incidents. And it is frustrating for customer service representatives to not have access to all the customer information they need to do their jobs well. While there are many ways to meet these challenges and realize the opportunities, the optimal solution involves combining competitive products and services with superior and appropriate customer service. The basic principles still apply: If you offer your customers products at a fair price and treat them as you want to be treated when you are a customer you will build trust and, over time, loyalty. In the rest of this paper we will show how you can foster customer loyalty and increase your profits, using a best practice we call Customer Centered Service.
