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Are You Ready for Today's Loyal Customer?
"Customers want to be loyal," Scott Creighton told me during a conversation we had during the Gartner CRM Summit earlier this week. Creighton is vice president of business development for RightNow Technologies.
The catch, however, is that customers are also more empowered than ever because they have more choice, they are more informed, and they have higher expectations about getting a deal done. "This is what I want, this is what I'll pay, do you want to do the deal?" is the current business environment, Creighton explained. "It's a different environment than it used to be," he said, citing Progressive Insurance as an example of a company prepared to excel by being transparent to customers and, in fact, helping them to find the best deal whether it's with them or with a competitor.
It's the same situation with service. But companies' internal processes can get in the way of meeting customers' expectations, Crieghton said. A customer may know she needs to speak to a tier-two service rep, for example, but still has to go through the escalation process. "Companies need to know their high-value customers' expectations and meet them, " he explained. "Those that do will have a competitive advantage."
The problem is, you may not want to do that deal, Creighton said. It may be too rough -- the price may be too low or the service or delivery terms too high. But if you do close the deal, you may also be in a better position to keep that customer than ever before.
"People are willing to pay to be loyal," Creighton said. "Even though it's easier than ever to switch providers, there is still a price to switching."
That price is in part the cost of starting from scratch with a new vendor. As Peppers & Rogers Group cofounders Don Peppers and Martha Rogers, Ph.D., often note, smart companies create a learning relationship with customers in which they use the customer data gathered over time to better serve those customers. The result is a "stickier" relationship in which the customer is less likely to switch providers in part because of the effort it will take for the new vendor to reach the same level of customer insight as the current vendor.
Echoing that point, Creighton noted that most families, for example, have a set of, say, seven or eight primary brands as the focus of what they use in their daily lives. "Customers are optimizing their lives to the point where choice can be disruptive," Creighton said. "They dont want to have to switch."
For B2B marketers, this is even more true than B2C marketing. We must remember that most of our customers do not enjoy purchasing our products - it is a necessary chore that they must do before they can get back to doing what they enjoy doing or need to do today. If we can make this buying process easier, quicker, and less risky - then we will generate very loyal customers. For B2B, don't just meet their expectations, exceed them. And how do we know their expectations? Ask them, listen, then ask again. Use the common customer data to change process and systems within the company and use 'unique' needs to offer a very specific customer-centric relationship. This will create loyal customers who will forgive an occasional goof and won't ask for a larger discount with every order.
One of my favorite phrases is; Customers don't have relationships, they have affairs.
Customers will stay in a relationship that suits their needs at that time. Once the relationship is no longer convenient or easy, then they will consider 'shopping around'.
I fully agree that customers don't desire relationships. They are interested in ease and convenience, and if they see a relationship with the company as enabling that, then they will may be interested in the relationship.
Yes, customers are optimizing their lives, but we businesses are not optimizing our customers, are we?
Customers want to streamline their relationships, but businesses are too busy throwing more clutter into their lives.
Truth is, consumers don’t WANT relationships. They want convenience and simplicity. They want to be able to depend on someone. They want help and assistance that is objective, not slanted toward selling something.
These are the benefits that a customer would like to have, and if a relationship with a business will deliver these benefits, then fine. But as businesses, we have to remember that customers are in it for the benefits, not the relationship.