Many businesses have rigidly defined the respective roles and responsibilities of their customer service and marketing departments. This is often the source of frustrations as, on one hand, the marketing guys do not have the opportunity to interact with the customers and, on the other hand, the customer service team has only a limited opportunity to influence product design and communication.
Small businesses have much more room for manoeuvre, as they can chop and change, test and experiment without affecting a large volume of customers. Very frequently, small companies manage their customers through a single channel, handling social interactions, marketing efforts, customer service and many other activities in one place. They use mishaps as a marketing opportunity and dispatch little gifts and samples to “compensate” customers. Customer service is clearly being used as a marketing tool.
Whilst larger operators are busy leveraging their social media reach by pushing multitudes of promotions, special offers, coupons, vouchers and deals, small businesses can build a long-term advantage by establishing close-knit communities of customers. Positioning customer service at the heart of the marketing strategy contributes to the exchange of ideas and the resolution of problems whilst creating a platform for future recommendations.
All this contributes to the development of a very strong sense of loyalty.
The challenge comes when the business grows and someone makes the suggestion that life would be much easier if dedicated marketing and customer service teams were established…it will be hard but just make sure you resist the temptation.
Guest blog by Very Good Service.
Read more in our dedicated section about customer service.
If there is a fairy godmother in charge of shopping I hope she is listening.
I hope she takes online and high street retailers to one side and says, “Look, your brain does something funny when you go to work, don't you realise what the world is like for customers?”.
I hope she sprinkles them with her fairy dust so they listen when we tell them about the hundreds of little opportunities to sell that they miss every single trading day.
Show people where to go as soon as they start to shop. When they get to your products make the descriptions, sizes and prices easy to read. Remember that customers have criteria — if you understand how customers are deciding what to buy, then you have more chance of selling to them.
Test out a customer's “journey” around your store — or ecommerce website — and look at how their needs and criteria change. Clearly signpost changing rooms and cash registers from different directions so that the customer knows where to go. If you use mannequins to highlight outfits, put the products right by them, clearly marked. Make sure packaging clearly and easily communicates what’s inside.
If customers have a need now, why not satisfy it? If your processes are fixed to a strict schedule of seasonal buying, you’re at the mercy of the weather making your customers want to buy something that you don’t have. Don’t apply fashion season rules to non-fashion basics; if this happens in your store, ask your customers if it suits them — if it doesn’t, change it.
Don’t spend any time or money offering things to customers who cannot buy them. Don’t put any barriers in front of customers with money. Arrange sale clothing by size, not price — during a sale we always need to know what size a garment is and never how much it costs (it’s already in the sale).
If customers have given their contact details to you once, it should be possible to buy from you without having to give them again. When customers do make an enquiry, make it easy for them to progress this to a purchase. Follow up enquiries that haven’t led to a sale and find out why. Knowing why someone hasn’t bought from you is just as important as knowing why they have.
Don’t confuse information with knowledge — having broad market research to hand isn’t the same as understanding the people who buy from you. Think like a customer not a manager, you can't afford to ignore any incremental benefits to your bottom line.
Lynn Allison FCIM, Chartered Marketer is the author of Catching the Chameleon, published by Ecademy Press.
Thank you for all your great retail tips and comments on Lynn's blog. And congratulations to Craig Dearden, Tim Shapcott and Bronwyn Durand who all win a copy of Lynn's book, Catching the Chameleon.
I have been thinking about the brands we love and how to improve customer retention. Let me tell you a couple of stories.
Three years ago, I took delivery of a car and on the way home it literally died. I did not see the car again for four months. However, the gentleman who looked after my “case” was exceptional. He updated me regularly, kept me totally informed on progress and made a bad situation OK. The car firm also sent me a range of well thought-out sorry gifts that were actually appropriate and of suitable value. I am now very loyal to this brand and I have a good opinion of them.
The other day, my wife and I were chatting about Clark Plc expenditure. We had decided to tighten the belt in a few areas and Sky TV was first on the list. With three kids of different ages, all of us have different viewing requirements ranging from football, Disney and South Park to Grey’s Anatomy. We currently have the full Sky package. It was going to be challenging to cut back.
In fact, my wife had a very, very good experience with Sky TV. The man on the phone listened and came up with a superb idea that was appropriate to the situation and our request. It was surprising and well delivered. To be frank I think we were expecting a bit of a challenge. It was the opposite. So now I have a great opinion of Sky, Clark Plc has the viewing requirements sorted and I will tell people about the positive experience.
So this got me thinking about two things: why we become loyal to certain brands and how businesses can improve customer retention.
In order to establish a loyalty scheme of any kind we need to establish who it is we actually want to reward and what it is we want to reward them for. If our most valuable customers are 100 per cent loyal to us then do we give them rewards just for being there, or do we concentrate on making the less valuable customers more valuable? We must ensure that we are adding value to our business and not simply creating a discount scheme.
Defining our objectives needs to be the first step – are we looking to reward behaviours that are good for our business, such as a customer spending more within a certain time frame, for instance?
We then need to understand our audience segments. Customers are all different and treating them as one entity means that we may be missing the main motivational factors for some of them.
After we have segmented the audience we need to look at who is the most valuable to us and why – is it the segment that makes up the highest proportion of our base? Those who spend the most? Those who are the least hassle? Or those who we feel we might be in danger of losing soon? How do these customers stack up against our objectives?
Having understood who our customers are, we need to understand their motivations – this allows us to be relevant. What do they value most?
We are a business, so we also need to understand our own motivations – what would we like our customers to do? Spend more? Stay with us long-term? Again, we need to look at this against our objectives.
Adding all this up we can see who we should be targeting, what we want to encourage them to do and what is going to motivate them. Our aim is to identify positive behaviours we want to reward and habits we can seek to change in order to make our business more profitable.
In an environment where winning new customers will get harder, it is more vital then ever before that we cherish our current customers. Some are happy, some are apathetic and some may be disappointed. As spring approaches it would be wise to look over your customer base and reward them, tackling any issues with empathy and understanding. We do long for loyalty from them; let’s give them some reasons to love us and importantly to tell their friends and associates about the great experience they have had with you.
Losing weight, giving up smoking, getting a better education, getting a better job. Some people only need it. Others really want it.
And so it is with customer service. Some organisations really need to give better service. Their customers are telling them so, their employees are telling them so and their profits are probably telling them so. But for whatever reason, they don’t want to give better service.
And then there are those who really want it. Those organisations that recognise the importance of listening to their customers, creating a culture with high levels of employee engagement and building their bottom line and their goodwill.
If you want to experience great service, go to an organisation that wants to serve you, where the people are empowered and encouraged to delight you. Very often these organisations don’t need big budgets for advertising or recruitment or training. I’ve never seen a single advertisement for Pret A Manger yet their service is outstanding and their business has grown rapidly from humble beginnings in 1986.
It starts with leadership, with a vision, the ability to communicate that vision and the strength to look for long term growth rather than short term profits. You can feel the leadership running through the organisation like the word Blackpool in a stick of rock. I feel Julian Richer’s influence at Richer Sounds, John and James Timpson at Timpson shoe bars, Richard Branson at Virgin Atlantic and Charles Dunstone at Carphone Warehouse.
You don’t have to be big. You don’t have to be small. But remember that a big business is just a small business that did the right things.
Think lifetime value. When a customer comes in for a USB stick, for instance, think what their lifetime value might be — a computer every two years, plus printers, and cables and inks and paper and servicing and broadband, for them, for their family, for their business. Cock up on the £10 sale and you lose that lifetime value for your lifetime.
Ok, so that’s a bit of a leading question, but whilst we all know what our answers should be, it’s tempting to focus all of our time and money on acquiring new customers rather than looking after the ones we have. Acquiring new customers satisfies our need to get onto the next thing, it seems exciting and new. But does it make good business sense?
The short answer is no. It can cost you up to six or seven times more to gain business from a new customer than it does from an existing one according to Flowtown. The same blog highlights that you can increase your profits by up to 95 per cent just by improving your customer retention rates by five per cent. That sounds pretty optimistic to me, but even an increase of 20-30 per cent in profits wouldn’t be a bad thing for most businesses.
Your loyal customers will spend more money with you, they cost you less to gain repeat business from, and they’re probably more loyal and less sensitive to price than new customers. So, if retaining the customers you have makes good business sense, then why don’t many businesses put their existing customers at the heart of their marketing strategy?
In the small business world, it’s easy to think that it might be a lack of strategy. Many business owners don’t have a strategy or a marketing plan and will often lurch from advertising to leaflet drops to manic social networking without taking a considered or planned approach. Perhaps that’s a very unfair way of looking at things, but I do believe that without a strategy to retain customers you leave yourself open to losing customers unnecessarily.
That said, big businesses aren’t immune to failing to retain their customers effectively. Talk to anyone renewing their insurance and you’ll wonder whether the insurance companies have even heard of the concept of customer retention. I know that it’s always cheaper for my family to apply to our existing insurance company as a new customer, than it is for us to just renew. How unbelievably inefficient for us all!
Large and small businesses could do well to think more carefully about customer retention. In this age of comprehensive spending reviews and increased efficiency, frankly we could all do with whatever help we can get in leveraging more business from our valuable customer bases. What strategies do you use in your business?
I don’t think it takes a huge amount to make us feel valued as consumers. Know my name when you can, talk to me as a human being, I have been loyal to you, please be courteous and considerate and offer me a fair deal. It’s not a big ask and it’s not rocket science either.
Actually it’s just the little things. Perhaps it’s worth making the point that these little things are worth far more than the constant discounts and money-off offers that we are being bombarded with.
I heard a story a while back about a guy who had worked in Las Vegas as a porter for years. He was a master at remembering faces. Importantly he knew if someone had stayed before. So if a guest arrived and indeed they had stayed before he would put the luggage trolley in the hall on the left, meaning they were a previous guest. The receptionist would then greet the guest with a simple “hello Mr Clark, welcome back”. If they had not stayed before then the trolley was left on the right and the welcome here was equally effective — “Good morning Mr Clark, welcome to our resort and thank you for choosing us, can I show you around?” or words to that effect. Nice, very nice.
Here’s a thought. Think of the challenge as a festive lunch. The doorbell goes, you open the door, the house is warm — you greet your guest with a huge smile and a kiss (kissing customers is optional). You chat, feed them, give them gifts — they might not like the gift but they appreciate the gesture – and at the end of the evening you part as friends having had a great time.
So yes, you’ve put a lot of effort into the relationship, but my you are rewarded. Your guest leaves feeling loved, cared for and appreciated, and the Brucey bonus is that they will probably tell their friends that they’ve had a good time as well.
Let’s call this the Festive Lunch strategy. Consider these things:
In analyzing your data have you segmented it accurately? Do you want to invite everyone? Do you invite the ones who you know will never ask you over for lunch? You really should invite the ones who had you over for lunch a year back — they would really appreciate it.
Are you rewarding your loyal valuable customers with appropriate offers or rewards? Are you using the knowledge you have of them in the most appropriate way, showing them you understand them? Defining their traits might lead to some great insights. If you’re a busy working mum you might want to save time rather than money, so offering money off wouldn’t be as effective as offering a means of saving time (priority parking or bag packing).
The key is not to discount current behaviour, but to reward new or valuable behaviours (to us) for a change of habit.
Well good luck. If they have been loyal this will be unwelcome. Offer them a surprise, an amuse bouche, and they’ll be feeling the love. Use your knowledge of them appropriately, and make sure you offer them an appropriate product and pricing strategy. They will stay a little longer.
Are the channels you communicate to them in appropriate? Do you offer choice, and rewards or value back if you have a low cost to serve channel?
We are all hit with a lot of communications these days. Is your message clear and concise? Is it easy to understand and digest (sorry!)? Present the facts and costs clearly, separate the important from the not so.
Finally it is vital to avoid the trap of “well my competitor’s got a reward card/scheme, we better get one”. That simply gets you to a me-too place. Drill down the USP – what would drive the competitive advantage you are seeking? And the point here is that if you are simply paying for loyalty with no increase in acquisition or retention rates then what’s the point, especially if you have not set any measurement or tracking metrics. It will cost you dear.
Yes building loyalty can be hard but most of the time a smile and a handshake go a long way. Remember my name and feed me well. I’ll remember you, I’ll remember the care you took to make me feel welcome and valued, and you know what, I will stay a little longer.
How hard can that be?