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."
