Tag Archives: loyalty

Jan 9 2013

Beat the Worst at Customer Service

badCSThe American Consumer Satisfaction Index was released with its latest findings on customer satisfaction across multiple industries, but if we look at the 15 worst companies in America for customer service, we’re not looking at as many industries as you might think – largely social media, telecommunications, utilities, and the airlines came up short.

In fact, the article The 15 Worst Companies For Customer Service notes that the worst 14 are all from these four industries. Does this mean that customer service is just about the industry, not the company? No, it just suggests that companies in certain industries don’t prioritize customer service.

The Twitter, Facebook, LinkedIns of the world don’t see (or value) how customer service impacts their bottom line. Airlines care about retention, but they haven’t universally seen the financial link between customer service and retention/revenues. Utilities and Telecoms have a legacy of lack of competition, so why provide great customer service if the customer has nowhere to go?

So what’s the common thread? These individual companies don’t see, quantify, value (however you want to describe) the link between customer service and financial success. Either they don’t realize the financial impact of the business they’re losing, or they don’t understand the cost of poor service. Either way, they’re not seeing the link.

So if you care about customer service and you care about your organization, here’s the key point. Before you sing the praises of investing in, focusing on, and striving for great customer service, take the time to identify the true revenue being lost, costs being added, profitability being harmed by poor customer service.

To beat the worst at customer service, start by putting a dollar figure on the benefit of being great at customer service.

Read our New Book – “Ask Yourself…Am I GREAT at Customer Service?” http://www.amigreatat.com/

Listen to our latest podcast episode of “Stepping Up Service” on The MESH Network at http://themesh.tv/stepping-up-service/

Interested in improving your company’s customer service? See more at our new website! http://www.cssamerica.com/

Dec 19 2012

What You Must Know to Keep Your Customers

Bad economies make companies truly focus on good customer service and the importance of customer retention. And when businesses try to retain more customers, they often fall prey to the desire to create a new benefit, institute a new loyalty program, or launch a new customer retention effort which is – in reality – just marketing gone bad.

So instead of suggesting you create some costly initiative, let’s start with creating a common understanding of the knowledge you need to have to best keep your customers:

  • Know why they would leave, and address it. This means, what do they expect from the experience? From the quality of the product or service? From your level of customer service?
  • Know who you want to keep most – and why (typically because of profitability or longer-term impact) – and target more of your efforts on these customers. No company has infinite resources with which to use the most personalized and labor/cost-intensive methods of keeping customers. So you have to know with whom you make the personal visit (high cost touch), and with whom you send the personalized e-mail (low cost touch).
  • Know who’s most at-risk of leaving, and create strategies to keep them. Target, target, target. Don’t spend the same time and energy and money keeping everyone, if you know a certain percentage of customers are almost certainly going to stay with you. And how will you know? Simply ask them, and also look at historical data to identify common characteristics of former customers.
  • Know how to become vital to their day-to-day lives or success. If they can’t efficiently get their job done without your software or research, if they can’t get their need met well without your product, if you are the supplier of something that’s imperative to their daily personal or professional lives, you have significant leverage in retention.
  • Know how to make it easy to become your customer…and more difficult to leave. Is the customer’s signup with your organization a piece of cake? Can a first time customer navigate your organization and your processes/policies as easy as a long-term customer? If so, you’re golden. On the back end of the relationship, you don’t want to make it impossible to leave (then you’re dealing with ethical concerns), but if the customer needs to replace what you provide, and that effort or time (in addition to the effort and time and cost of going to your competitor) are high, they may not make the move.

Know what you need to know to keep your customers.

Read our New Book – “Ask Yourself…Am I GREAT at Customer Service?” http://www.amigreatat.com/

Listen to our latest podcast episode of “Stepping Up Service” on The MESH Network at http://themesh.tv/stepping-up-service/

Interested in improving your company’s customer service? See more at our new website! http://www.cssamerica.com/

Oct 17 2012

Cloud and Customer Retention

Customer retention becomes a hotter topic every time the economy tanks. Most recently we noted in the early 2000s and starting in early 2009 that businesses were talking more about customer service, loyalty, and retention. That focus increased because the backlog of customers and the levels of disposable income greatly decrease in recessions, so the demand for products/services generally decreases.

As demand decreases, so does either volume or pricing, and thus begins the pinch on profitability. So organizations begin to realize something they forgot – that customer retention initiatives generally provide ROI multiple times that of acquisition initiatives, and to maximize profit, they have to redirect marketing dollars to retention.

With the advent of cloud computing, a new twist on customer retention can be taken. The cloud enables businesses to house the client’s data – using the cloud to hold and backup information so the client doesn’t have that responsibility. But to truly understand how the cloud really enables customer retention to grow, refer back to the 1990s book “The Discipline of Market Leaders.” In that book, the authors note that industry-leading companies typically master one of three key disciplines, Product Leadership, Operational Excellence, or Customer Intimacy.

Customer Intimacy focuses on generating loyalty by knowing your customers so well, having relationships so strong that your customers will stick with you. But don’t view “customer relationships” as some “soft” relationship, and this is where the cloud comes in. Build loyalty by having your products and services become vital to the day-to-day operations of your clients. Build loyalty by becoming integrated with your customers. Build loyalty by using the cloud, cloud computing in particular, or access to (or storage/backup of) client data to fill a need for your client.

To create more loyal clients and build your customer retention, find ways to use the cloud to get your clients housing their data on your systems. Use the Cloud for Customer Retention.

Listen to our latest podcast episode of “Stepping Up Service” on The MESH Network at http://themesh.tv/stepping-up-service/

Interested in improving your company’s customer service? See more at our new website! http://www.cssamerica.com/

Oct 10 2012

Be Less Sexy to Build More Customer Loyalty

Loyalty – you get it from a dog by loving it, rescuing it from a shelter, or giving it a treat. Loyalty – you get it from employees by valuing them, being loyal to them, and building trust by doing what you said you’d do. Loyalty – you get it from a consumer by…what?

In the article Retail analysts: Do the math on loyalty cash, the discussion is about loyalty cards, or discounts on store credit cards, or credits that can be applied to the store. According to a Charlotte-based analyst, the reason to offer these types of rewards is evident – “The obvious benefit here for the retailer is the additional trip.”

So to answer the question above, loyalty – you get it from a consumer by…giving them a discount? Hmmm.

Not real creative stuff here; but the analysis that companies have to make before they embark on these “cash for the consumer” loyalty programs must be done by looking incrementally. What is the net increase in profitability through these programs? To calculate, you have to look at the revenue from the sale less the item’s cost (standard profit stuff) less the cost of the program. Then compare that to what the company would have generated in profit if it had done…I don’t know…nothing! Or maybe if it had improved between-sale communications with the client, or if it had improved customer service, or if it had improved service recovery processes, or if it had been more particular about what customer service-oriented characteristics it looks for in employees, or if it were better at motivating employees.

In other words, these types of loyalty programs should be a last resort. It’s like a price drop for a salesman to get a sale; it’s weak; it’s like having a sale but not wanting to call it a sale.

It might be harder and less sexy to improve performance, hiring practices, client relationship development, and customer service than to have a new cash-based loyalty program, but in the end customers evaluate businesses based on the Employee Attitudes, Service Processes, and Products/Services, and these loyalty programs often put too much focus on a small piece of the loyalty puzzle.

Sometimes it’s good to be less sexy to be more successful in building customer loyalty.

Read our New Book – “Ask Yourself…Am I GREAT at Customer Service?” http://www.amigreatat.com/

Listen to our latest podcast episode of “Stepping Up Service” on The MESH Network at http://themesh.tv/stepping-up-service/

Interested in improving your company’s customer service? See more at our new website! http://www.cssamerica.com/

Oct 4 2012

Physician Clinics, Processes, and Patient Satisfaction…oh my!

A recent study noted in American Medical News evaluated multiple aspects of a patient’s experience in a physician’s practice and determined that the three most important aspects of the experience all related to the doctor. The doctor’s knowledge, time spent with the patient, and access to the patient’s medical records were of greatest importance to patients.

However, there are a few points that might not be so obvious. Six of the next seven most important attributes all dealt with process – ease of billing, efficient billing process, time spent in the waiting room, etc. We believe that the 3 drivers of customer satisfaction in any industry are Employee Attitudes/Skills/Knowledge, Service Processes, and the Product/Service itself. So this process impact is not surprising, but it’s important. Key Conclusion: Make it easy and efficient for the customer to do business with you.

But another point in the article is typically as important. Other studies have shown that 40% of customer dissatisfaction is because their expectations weren’t met. This article notes how many patients compare their experience at a clinic to their experience in other industries. So it’s time for physician clinics like most other businesses to look outside themselves to learn. If the Ritz-Carlton makes you feel special, what can a physician clinic learn from them? If a NASCAR pit crew can change four tires and fill a gas tank in 12 seconds, what can a physician clinic learn from them? If Amazon.com can enable a 1-click purchase, what can the clinic learn from them?

It’s not just for healthcare organizations like clinics; this “looking outside yourself” benchmarking approach should be undertaken by local governments, the business operations staff for sports teams, community colleges and other education industry organizations, and retailers alike.

Key Conclusion: Customers come in with expectations about your business based on experiences with other businesses. So look at other businesses to identify improvement opportunities in your own.

Make it easy for the customer to do business with you…and to enjoy the experience, too!

Interested in improving your company’s customer service? See more at our new website! http://www.cssamerica.com/

Read our New Book – “Ask Yourself…Am I GREAT at Customer Service?” http://www.amigreatat.com/

Listen to our latest podcast episode of “Stepping Up Service” on The MESH Network at http://themesh.tv/stepping-up-service/

Aug 23 2012

Sample “Direction of the Team” Letter

There are many reasons why fans stay and why they go – it’s not just about wins or the high profile player. It’s not just about the weather or the visiting team. For many fans, whether they remain fans or whether season ticket holders renew is based on the Direction of the Team. Particularly when there’s a change in ownership, worsening performance on the field or in the arena, or some significant change in personnel, many fans want to see some reason for hope. They want to know the Direction of the Team.

Last week, Houston Astros General Manager – Jeff Luhnow – wrote this “Direction of the Team” letter to season ticket holders (STHs). Check it out…

In short, he’s empathetic about the poor season, talks about lofty future goals, and tries to connect those dots with personnel moves being made. But one interesting thing he addresses is corporate culture. Although a large part of the reason for the letter is to convey hope and retain the STHs, one of the main ways to get the Direction he wants for the organization is to get everyone to experience winning, experience success. Even if this culture-building activity is starting in the minor leagues, Luhnow realizes that a change in mindset is required to truly change performance, and he realizes that changing a culture is a longer-term process.

So what’s the Direction of Your Team, or Your Business, or Your Organization? Clearly articulate it. Identify your “today,” and identify the desired tomorrow.

Define those activities that connect the dots between today and tomorrow, and make sure you intentionally change the culture at the same time.

Interested in improving your organization’s performance? Check out our Sports Industry Services! http://cssamerica.com/csssport.htm

Aug 15 2012

Do Some Root Cause Analysis on Customer Retention Issues

Here are comments from a Reuters article on Leap Wireless’ earnings issues:

  • Churn — or customer defection rate — rose to 4.4 percent from 4.2 percent a year earlier
  • Customer retention programs did not work out as well as expected and came at a higher-than-anticipated cost
  • Customer retention in the quarter was also hurt by reduced promotional activity.

Now, let’s do a little root cause analysis. To analyze these points, think “cause and effect.”

The first bullet is an effect – customer churn is up. But what was the cause? The second bullet says that customer retention programs didn’t work. So that was the cause? No, that wasn’t the root cause because the 3rd bullet says that customer retention was hurt by reduced promotional activity.

So reduced promotional activity was the root cause, correct? No, because promotional activity is needed due to something else missing.

So what’s the real root cause? They obviously have more work to do to determine the root cause(s); it’s unclear if they’ve surveyed exited clients. I’m uncertain if they’ve researched demographics and other characteristics of the customers, their usage patterns, their plans to determine key drivers of churn. It’s not clear if they survey clients to identify retention drivers and act on that intelligence.

What is clear is that the company is losing money and losing customers. As with any company in this situation, they need to systematically identify the root cause instead of jumping from symptom (i.e., lower profitability or retention) to solutions (increased promotions).

Do some root cause analysis on customer retention issues.

Interested in improving your company’s customer service? See more at our new website! http://www.cssamerica.com/

Aug 8 2012

Send the Caller to the “Customer Retention Department”

What is a customer retention department? Typically it’s the group that tries to save customers when they’ve called in to complain and threatened to leave. The customer retention department includes staff skilled at conveying empathy and convincing you to stay; they have the authority to offer perks and discounts to convince you to stay.

They drop the price so you’ll drop the complaint. It’s a reactive and desperate strategy.

Such a retention “strategy” is the product of a company that looks at retention just like they look at a sale – as a transaction. So here’s my soapbox – stop doing that!! Retention is relationship-based, it’s trust-based, it’s long-term focused; it is not transaction-based.

Retention should be a byproduct of great employees, processes, and products. It should be maximized by a company with a comprehensive and proactive strategy that is continually “touching” customers, offering information of value and soliciting feedback on services. The strategy should act on the intelligence gathered, targeting the at-risk clients and approaching them proactively to resolve issues and strengthen loyalty. And the strategy needs to have a growth component, using the proactively-acquired intelligence to smartly make tailored offers of products and services.

But this is where too many companies go wrong. Although – if they have a calculator – they can determine the lifetime value of a customer and see how much larger it is than that one-time transaction, too many companies care more about the transaction.

We’ve worked with clients where the sales representatives get rewarded better financially for low customer retention. For example, their bonus is lower if they retain a customer than if they let a customer’s contract expire and then make them a new sale a week later. Crazy!! Two transactions are rewarded more than a continued relationship. The sales representative benefits in this system, but the company loses.

Make sure you have a true customer retention strategy, not just a “Customer Retention Department.”

Listen to our latest podcast episode of “Stepping Up Service” on The MESH Network at http://themesh.tv/stepping-up-service/

Aug 8 2012

Determine Who is Retainable

I was reading this article on How to Project Customer Retention for a Subscription Business, and it reminded me of a project we worked on about 10-12 years ago for a local Chamber of Commerce.

Essentially, the Chamber was disappointed in their retention rate, and they wanted to improve it, and they had very aggressive goals. So aggressive were the goals that we started questioning whether the goals were based in reality or whether they were the proverbial BHAG (Big Hairy Audacious Goal) that some executive pulled from thin air. The goal was a BHAG, and once that was determined, we proceeded to get the client focused on what percentage of members are truly retainable.

We’ve used this same approach in helping pro sports teams target a renewal rate, and we created a Retainable Rating system for helping Economic Development organizations prioritize their Touch Point Plans through their Business Retention & Expansion programs. In other words, understanding what percentage of customers/members/businesses are NOT retainable as well as who is more retainable than others helps in prioritization of retention efforts. It helps in work allocation. It helps in goal-setting.

There are 3 core ways to determine retainability (which are best used in conjunction with each other):

- Conduct research with existing customers/members/businesses and ask retention-focused questions.

- Review history in your own databases, comparing characteristics of past customers/members/businesses lost v. those retained and applying that data to existing clients.

- Talk to the employees and account representatives who best know those customers/members/businesses.

Add some realism to your retention goals. Add some prioritization and focus to your strategies. Add some reasonableness to what you expect of staff in managing relationships and retaining business.

Determine who is retainable.

Interested in improving your company’s customer service? See more at: http://www.cssamerica.com/

Aug 1 2012

Fan Loyalty is a Sun Devil of an Issue to Address

To build fan loyalty, is it just about wins, or is it also about fan relations?

I talked with the owner of an NFL team years ago about building fan attendance, discussing with him the issues that the organization faced at the time. I asked about what initiatives the organization was taking in the area of fan relations. His response was that “only wins and weather drive fan attendance.”

Well if that were the case, then you could do mathematical calculations each year to determine how many fans would attend games. You wouldn’t need to do fan surveys, have security at games, offer concessions, have game day customer service staff, have account representatives, have sales staff (except to take orders), and generally do anything beyond open the doors to the stadium.

The real truth is that the game day experience matters. Relationships matter. Being valued as a fan matters. So do wins and weather, but there’s so much more to building loyalty than those aspects of the experience.

At Arizona State University, the athletics department is trying to build fan loyalty and relations. According to the article ASU athletics undergoing face-lift, changes in culture, fan relations, the new Vice President of Athletics, Steve Patterson, is trying to change the culture of the organization. He’s building personal accountabilities; he’s working to improve the game day experience; he’s ensuring facilities are conducive to communications and relationship-building with prospective and current student-athletes (and their families). He created a championship vision, and he’s trying to create a championship environment for the students, coaches, and fans. He’s trying to create an environment where success is facilitated.

To facilitate means “to make easy.” But there’s nothing easy about becoming a champion. However, individuals on the business side of athletics can have a significant impact on the ultimate success of a program in the minds of the fans. These individuals can impact relationships, word-of-mouth, reputations, and loyalty. They can impact the business side and help foster enthusiasm on the sports side.

Fan loyalty isn’t just about “Wins and Weather.” Fan loyalty is about the fan.

Check out some of our Sports industry services! http://cssamerica.com/csssport.htm

Listen to our podcast on Customer Service in Professional Sports