By Damian Traynor, Marketing Director | RR Donnelley Global Document Solutions
Type in the words “price comparison” into Google and it will return over 80 million search findings. As a result, before going to the online “checkout” to buy their new 32-inch LCD TV, many consumers are now clicking over to comparison search engines that will trawl hundreds of sites to find them the best deal. So much for consumer loyalty. Today’s buyers are better informed than ever before, and as a result they are becoming much more difficult to predict and manage.
In today’s highly competitive marketplace, price is no longer a differentiator. Consumers can now trust their favourite price comparison web sites to shave the last few pounds off their online purchase, and hey presto, the lowest-priced product is on its way. However, the ease of this choice masks a much more important dimension, and one that will ultimately determine how valuable the customer is to a particular retailer or manufacturer: customer experience.
For companies that want to prevail in today's dynamic and ultra competitive market, it is essential that customers' needs and preferences remain at the very centre of their customer management strategy. Successful businesses need to make sure they make every effort to communicate with their customers effectively, take note of their feedback, and respond accordingly. Companies that ignore the preferences of their customers, even at an individual level, run the risk of alienating them and damaging the company's bottom line.
Industry research has indicated that customer retention can boost revenues by as much as 25%, since loyal customers provide a steady source of income. Additional research in this area has also revealed that 37% of consumers reported that a company's ability to meet their expectations was the biggest driving force behind customer satisfaction. In other words, consumers who feel that they "got what they wanted" typically end up feeling the most satisfied.
Common sense tells us that the companies with the most satisfied customers will also need to handle the fewest complaints, and that companies who regularly field complaints from customers will invariably have the least satisfied customers. To keep consumers happy and to increase revenues, it is clear that companies will therefore need to improve their understanding of each individual customer, or at least of a customer segment that has been intelligently defined.
Merely satisfying customers, however, is not always enough to foster loyalty in today's competitive market. Research suggests that 25%-40% of satisfied customers will often not return to a place of business where they have been satisfied. Exceeding customer expectations, therefore, is the best possible way for companies to retain their existing client base.
Understanding consumers' preferred method of communication can help to achieve this goal; empowering customers to decide which channels are used to communicate with them is an important step towards exceeding customer expectations. At the heart of this understanding is analytics and the ability to turn customer data, both outbound and inbound, into valuable information that can help to drive marketing and communication strategies.
All customers have favoured methods of communication when it comes to how they would like to be contacted, and by segmenting them more intelligently — and then communicating with them accordingly — customer experiences will be improved and revenues will rise as a result.
Companies need to be able to deploy a blend of communication channels dynamically, and then measure customers’ responses across any given channel. Historically, this has been an extremely difficult task, and marketing ROI calculations have been at best channel specific and as a result virtually meaningless. It is only by aggregating responses across every inbound channel and then applying sophisticated analytics can an effective ROI be measured. Importantly, this aggregated analysis helps to build an enriched view of each customer, which means that the model can be easily modified and optimised for future interactions.
In this scenario, consumers will no doubt have a positive reaction to a supplier that truly understands their needs and preferences and that has empowered them to dictate the marketing and communication process. What the supplier gets in return is a highly satisfied customer base that has a greater chance of remaining loyal and delivering more value.
The successful organisations of the future will view the rise of the Über-Consumer as a fantastic opportunity to outperform their competitors rather than a threat to the way they do business. By deploying dynamic, multi-channel customer communication models that empower their customers, and by continually analysing the performance of these channels in a “closed loop”, businesses will be able to use customer experience to differentiate themselves from their rivals and to dominate even the most competitive markets.