Major consumer rights changes became law at the end of 2013 and they are likely to affect most UK consumer-facing businesses. Yet according to a survey by Eversheds, two-thirds of UK business leaders are unaware of the changes and over a third are unsure how the changes will impact on their business.
The EU Consumer Rights Directive was brought into statute on 13th December 2013. It aims to simplify consumer rights so that consumers are clearer about their rights when purchasing goods and services.
The change in rules will obviously impact upon UK businesses — but how? Here’s a simple guide explaining how businesses will have to adapt over the next few months so that by June 2014 (when the rules are enforced) businesses are in line with the law:
Businesses will now be expected to explicitly disclose the total cost of the product or service as well as any extra fees. Consumers shopping online will not be liable for any charges or other costs if they were not properly informed before they placed their order.
Businesses must give customers 14 days to change their minds and withdraw from a sales contract, so customers can return goods for any reason if they change their minds. If the business doesn’t state this clearly, the return period must be extended to a year. The period will begin from the moment the customer receives the goods instead of from the conclusion of the contract, which is how it currently stands.
Businesses must refund consumers for the product, including the cost of delivery, if the customer returns the product within the statutory period.
If businesses want the consumer to cover the cost of returning the goods, they must state this clearly beforehand, otherwise the business must pay.
Businesses will now be banned from charging customers more for paying by credit card than what it actually costs for them to provide this means of payment.
Under the new rules, businesses will no longer be able to use premium rate 09 numbers or higher rate 084 or 087 numbers for their customer services or complaints lines. Switching to national rate numbers will lower the call costs for mobile users.
For those companies that still want to provide a non-geographic number, they can simply switch to an 03 number. This will provide them with the benefits of an 08 number, but it will allow consumers to call from mobiles at low rates, as the minutes are included in monthly bundles.
The same set-up can be used with 03 numbers and any virtual geographic (01 or 02) numbers. What’s more, those using an 084 number will be able to switch to the equivalent 034 number, so they only need to change one digit to comply with the guidelines.
Katherine Evans is PR and marketing executive at 03NumberShop.
Follow these ten commandments on customer service and you won't go far wrong — our thanks to Moneypenny for sharing this brilliant infographic with us.
Customer retention is incredibly important for growing a sustainable business. The relationship you have with your consumers shouldn’t end once the initial deal has been done and an essential component of any customer strategy should be developing repeat custom.
Get it right, and your loyal customers can become key brand ambassadors, helping to bring in new customers from among their friends, family and acquaintances.
Using loyalty or reward schemes is one way to attract and retain customers. Here are some top tips for small businesses on how to make the most of them in order to establish a long-term relationship:
If your customers are entitled to be part of your reward scheme, then make sure they are clear why they are being given the reward and what value it holds for them. Remind them frequently that they have the benefit and relate it to their current requirements.
The reward on offer must be relevant to your consumers’ requirements, interests and aspirations and it must compliment your brand. In recent years, with many consumers having had to tighten their purse strings, those brands that have been successful in building loyalty are those offering rewards and discounts that are relevant in terms of product, brand and timing.
Don’t overcomplicate the rewards programme as your customers may not understand it and will not engage with it. Present consistent offers that offer the greatest level of flexibility and are not limited in number or by timescale, rather than one-off deals that are only available for a fixed period of time. This helps to establish a long-term relationship.
Keep the reward programme interesting by offering new opportunities. This ensures customers stay interested and shows your commitment to great customer service. This can increase repeat purchase and build loyalty and also gives you a reason to communicate more. This in turn enables the collection of valuable data, so you can develop more targeted communication going forward and have a real impact on the bottom line.
To achieve stand out from other loyalty schemes, reward your customers with something that is not readily available elsewhere. If you can deliver better value than those offers and discounts that are freely available on group discount and other websites, then your consumers will take notice.
Remaining in constant two-way communication with your consumers is key. If they feel they have a voice they will be far more engaged. Allowing them to feel they are shaping their reward package through feedback and suggestions will tell you exactly what they like and don’t like about the current offering.
Giveaways and welcome bonuses work very well for customer attraction. However, after the initial reward has been offered, a secondary element is required to aid retention. A programme that can do two jobs in one can save a great deal of time and money and have fantastic results. Impressive acquisition results can be achieved through promoting the benefits of the scheme. Then, through successful engagement and repeated usage, you can add a strong retention element. If your customer’s daily life is enhanced by a rewards package, they will be reluctant to sacrifice this through moving to another brand.
The right reward scheme can turn a customer’s first purchase into a lucrative, long-term relationship.
Daniel Nugent is head of Entice.
As business owners, we like to think we know our customers pretty well. After all, we spend much of our day either speaking to them directly or communicating with them by email and on social media networks.
But just how well do you really know your customers? Try answering these questions honestly. Do you know:
You may be able to answer some of these, but few of us can say we know all of the answers for sure — and of course some of the answers may be dependent on our different products and services and are likely to change over time.
Or you might think you know the answers but then be surprised by the results when you gather customer feedback — proving that your assumptions aren’t always accurate.
But you don’t always have to ask your customers for feedback to get the answers you need. Often your existing data can tell you a lot.
Start by segmenting customers according to the specific products they have purchased. From here you can identify the audience most likely to respond to future direct marketing campaigns, helping you to increase ROI.
You can also identify which criteria means a prospect is most likely to be interested in your product or service, based on your existing customer knowledge. For instance, for B2B customers you can analyse: best sectors, company size, regions, contact types and so on. For B2C customers, you can look at: best income bands, regions, hobbies, ages, social class and more.
This knowledge can also show you where your best cross-selling opportunities are with existing customers.
Ultimately, the more customer knowledge you derive from your data, the better you can identify prospects and target those with the highest propensity to become a customer. This, in turn, will reduce your communication costs, improve response rates and maximise the efficiency of your marketing campaigns.
Antoni Chrysostomou is sales and business development director at Data HQ.
If you’re in the business-to-business sector, then customer churn is a major issue. B2B companies are often obsessed with calculating “churn rate” which helps them remain sensitive to customer feedback.
There are three major reasons for churn:
So how can you achieve churn rates that are near zero?
It’s important to get your customers on board by under-promising. This is about being realistic and setting expectations for worst case scenarios. This doesn’t mean that you conceal some of your product features. The better you under-promise, the higher scope you create for delivering more than what’s been asked for. In addition, if your client needs are recurring, good service reinforces your values and creates an affinity within your customer base for your product.
Considering the three main reasons for churn is important during the pre-sales phase. Planning for the “could have”, letting clients know about the “can’t” and explicitly avoiding “surprises” is key to meeting expectations once a customer is on board.
Knowing the line between a bloat and a feature-rich offering
An offering should be such that it solves an end-to-end requirement without being an overkill. Getting this right is an art not a science and it develops with experience.
Your offering should not come across as directly hitting at competitor’s prices. Instead, the pricing should be justified by your product’s value as perceived by your customers.
Technologies change faster than anything else. It’s important for your product to adapt with the market dynamism, not just because the underlying technologies might be obsolete, but also because newer problems arise in the market.
If your customer isn’t doing well in the market, the chances are higher that they will go elsewhere. It’s important to get closely involved with your customers’ businesses, and keep asking for regular feedback on how well your offering is serving their portfolio. It’s worth identifying trigger points that indicate if your customers are using your product enough.
Often, long-term contracts are seen as a way to achieve lower churn rates. While this might work great for cash flows, the issue of churn isn’t eliminated this way. On the contrary, from our experience, this creates reluctance and curbs freedom at the customer’s end. It’s a better idea to introduce notice periods instead so that there’s enough buffer time to take action before your customer leaves.
Arpan Jha heads the products and market strategy at PromptCloud.
The pompously named “customer/client relationship teams” just don’t get it. In fact, the majority of the marketing team don’t get it. That certainly applies to many corporates but it could equally apply to small firms like yours — so read on.
Some marketers just don’t understand the whole “customer” thing. This isn’t a new fad or a naïve but sales-hungry business school professor’s idea of a good wheeze. This is here to stay and until your business gets it then you will lose sales to those businesses that do get it. This is the “it” they don’t get:
Meanwhile, like rabbits in the headlights, the large company marketing and customer care departments are frozen stiff, not knowing what to do next.
Your customer relationship is not something that you can outsource and control with service level agreements. Customers want to talk to and relate to you. Otherwise they will feel out of control and believe they have no real relationship with you (and vice versa) and they will tell the rest of the world. And they will vote with their feet.
So, rather than waiting for the consultant’s report, how about doing the simple stuff?
Get out there and talk to your customers and clients. Ask them what they think and feel about your product and your service. Stop following the conversations and join in.
They talk about you because they care. You can show them that you care. You can explain what’s gone wrong and what you are going to do. But you can’t do that by hiding behind the next report. Try it. You’ll be surprised.
Robert Craven is an expert contributor to Marketing Donut. Robert shows directors and owners how to grow their profits. As well as running the Directors’ Centre, he is a keynote speaker and the author of business bestseller Kick-Start Your Business. His latest book – Grow Your Service Firm – is out now.