6 Key Attributes of Customer Centric Corporate Culture

Building a Customer Centric Corporate Culture

Sadly, there are too many senior executives more willing to talk about how they are cutting costs than about the steps their organisations are taking to better understand the changing wants, needs, and desires of customers.

Rare is the executive who claims “we are going to be successful and grow our business because we are listening to our customers and aligning our future products and services with their future needs.”

Fortunately, such executives are only rare, not yet extinct.

Losing Industry Leadership

Research from Deloitte Consulting shows that the rate at which large companies lose industry leadership has doubled in the past four decades.

This should make marketing a central concern of company Boards of Directors. As I wrote in this week’s Monday Morning Marketing Memo on Sustaining Competitive Advantage, in almost every case of decline the blame lays clearly at the feet of poor marketing execution and organizational cultures that are not customer centric and therefore not capable of sustaining market leadership.

Here’s what William Parrett, Chief Executive at Deloitte Touche Tohmatsu, wrote in the December 11, 2004 issue of The Economist:

“A recent survey by Deloitte and the Economist Intelligence Unit found that management and boards of directors focus far too much on financial results that represent lagging indicators of past performance. We believe they should pay far more attention to non-financial factors such as customer satisfaction, product and service quality, operational performance, and employee commitment – leading indicators of future performance that firms can use to navigate confidently toward a sustainable future. We also encourage corporate management to communicate with stakeholders about these indicators in quarterly and annual reports.”

The long-term winners in any industry are never the cost cutters and the retrenchers. The winners are always the marketing innovators and the ones who create, protect, and enhance the values customers receive and perceive from transacting business with them and from being associated with them.

The long-term winners are those who understand, if it touches the customer, it’s a marketing issue.™

In short, everything you do should be done to create value for customers. That is, of course, if you wish to stay atop your industry’s leader board.

What do you think?

Customers First. Shareholders Third.

Creating Customer Centric Cultures

I read recently that, according to Deloitte Consulting, “the rate at which large companies lose industry leadership has doubled in the past four decades.”

As I wrote in this week’s Monday Morning Marketing Memo on Sustaining Competitive Advantage, in almost every case of decline the blame lays clearly at the feet of poor marketing execution and organizational cultures that are not customer centric and therefore not capable of sustaining market leadership.

A customer centric corporate culture is one that focuses on building value for customers at all times and at all points of interaction. This requires the mindset of our own personal marketing philosophy: if it touches the customer, it’s a marketing issue.™

Everything your organization does “touches the customer” or has the potential to. Hence, as Peter Drucker long ago proclaimed, “the purpose of business is to create a customer.” In fact, Drucker also wisely said, “The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself.”

Successful marketing — and by that I mean highly effective and efficient marketing practices that produce solid, long-term results — is certainly the result of a proper mind set. To me, this proper mind set focuses on customers first, the organization second, and shareholders third.

What do you think?

7 C’s of Customer Retention

Seven Common Customer Expectations for Customer Service

While all customers are unique, and use different values to make purchasing decisions, there are seven common customer expectations for customer service, which I call the 7 C’s of Customer Retention:

Caring Attitude — employees that are caring, friendly, helpful, exhibit empathy, shows each customer they are valued, apologizes for company errors.

Customized Practices — flexibility in applying company policies, simple documentation for account opening, forms that are easy to understand and use, suspension of disputed charges, willingness to extend additional services, ability of employees at all key contact points to know and understand the customer’s relationship with the organization. 

Competent Customer Contact Personnel — staff who communicate well and accurately, take action, meet commitments, keep customers informed of status, are fully aware of all the organization’s products, services, procedures, and policies.

Call/Visit Once — the customer’s initial contact person handles the problem, or gets it resolved. This person makes necessary decisions and the customer only needs to explain their problem once (even if moved to another service provider). All contacts know the customer’s account status, as well as the nature of the problem under resolution.

Convenient Access — your operating hours of stores, branches, outlets, offices, and call centers are structured with the needs of your customers in mind. Your access numbers are easy to get through, are answered promptly, and the length of time on hold and the number of transfers internally before the problem is resolved are kept to a minimum. Your web site is easy to understand, navigate, use, and the ordering process online is simple and caters for international orders (if you are willing to ship goods and products outside your home country).

Compressed Cycle Times — customers receive an immediate response to enquiries, products and services meet customers’ timing requirements, adjustments or changes to account details (such as address changes or billing corrections) are made before the next billing or statementing cycle, and your organization provides consistently quick turnaround (especially for problem resolution).

Committed Follow Through — the customer’s initial contact person commits to what/when/how, follows up to confirm actions being taken, checks on customer’s satisfaction level with these steps, and your organization takes corrective action to prevent reoccurrence of an error or problem.

These 7 C’s of Customer Retention are the minimum requirements your customers have. If you do not deliver well against these criteria, you cannot expect to have high levels of customer satisfaction, customer loyalty, or customer retention.

We have a handy 7 C’s of Customer Retention Checklist we use with our clients that we can email to you. Just leave a comment below or send an email to steven@howard-marketing.com.

Online Product Resarch Now First Step for Shoppers

58% of consumers conduct pre-purchase online research

The investigative phase of the buying cycle of the typical adult shopper in the USA now frequently starts with online product research.

According to the latest Pew Research Center’s Internet & American Life Project, 58% of American adults have done research online about the products and services they buy, up from 49% in 2004. The study was conducted with over 3000 adults between August 9 and September 13, with the findings released earlier this week.

On a typical day, one in five adults (21%) are searching for product or service information online, a 40% from the 15% level reached in September 2007.

According to Jim Jensen, a senior fellow with the Pew Research Center, the research clearly shows that more people are going online first to compare prices, make product comparisons, and read product reviews, even if they make their purchases in retail stores rather than online. As Jensen says, “even if they end up making their purchases in a store, they start their fact-finding and decision-making on the Internet.”

Interestingly, nearly a quarter (24%) of the respondents said they have posted comments or reviews online about the products and services they buy.

The Pew research also reported that 52% of Americans are now purchasing products online.

It definitely appears that shoppers start with the Internet, and then decide if, what and where to purchase.

Are Satisfied Customers Loyal Customers?

Customer Retention Requires More Than Satisfying Customers

It takes more than mere customer satisfaction to retain loyal customers.

As we have pointed out frequently in the Monday Morning Marketing Memo, there is a huge difference in customer retention rates between Fully Satisfied customers and merely Satisfied customers.

This has been re-confirmed in the latest Market Force Information survey of bank customers in the United States. Released last week, this survey 2800 respondents reports that customers who are Very Satisfied are three times more likely to remain loyal than customers who view their banking experiences as just satisfactory.

I am often asked if there is a direct correlation between fully satisfied customers and customer loyalty. This survey confirms my firm belief that there is such a correlation. An amazing 98.5% of those indicating they were fully satisfied with their banks also proclaimed their continued loyalty to these service providers.

Not surprisingly, the survey also showed that 10% of customers have switched banking providers in the past year. The top three reasons for this customer attrition were:

1. Not being happy with the service (32.4%)
2. The bank implement new fees/rules that had an adverse affect (29.5%)
3. Wanting better return on their money (27.2%)

As you can see, it takes more than just customer satisfaction to create customer loyalty.

Service Recovery Crucial for Customer Retention

Service problems are bound to happen. How do you keep customer service errors turning into lost customers?

The most important factor is trust. According to the American Express Global Customer Service Barometer of 12,000 consumers in 12 countries, 70% of customers state they are willing to give companies a second chance after a bad service experience if there has been a history of previously received good customer service.

Even without a history of prior service excellence, up to 75% of consumers will still put up with two or more customer service experiences before taking their business elsewhere. As we noted previously, this tendency for consumers to give second chances to poor service providers was remarkably strong across all 12 markets surveyed.

What should you do when your employees create a bad service experience for customers? Two key service recover points stand out in this survey:

1) Over half (52%) of customers expect something in return after a poor customer service experience, above and beyond resolution of the problem they have encountered.

2) The vast majority of customers (over 63% in all but one market) want an apology, while roughly half want a credit to their account or some form of reimbursement such as a discount, coupon, or the provision of free products and services.

Providing rewards points was an unattractive compensation option chosen by less than one-third of respondents in each market.

Significantly, 70% indicated a discount would motivate them to return after a poor customer service experience, but this can be a costly way to retain their business. While the average discount that would motivate returning business was low in Japan (7%), it was a hefty 19% to 23% in nine markets.

A more cost effective way to maintain customer loyalty and ensure customer retention would be to simply create a series of positive customer experiences. That beats having to buy repeat business through discounts and free offers any day.

Read our most recent Monday Morning Marketing Memo newsletters for more thoughts on Customer Retention Marketing, or what I call the art of keeping good customers.

Consumers Give Second Chances to Poor Service Providers

Most consumers are forgiving and tolerant of a single poor customer service experience, according to findings of the American Express Global Customer Service Barometer.

According to the results of this 12-country study of more than 12,000 consumers, between 50% and 75% of consumers will put up with two or more poor customer service experiences before discontinuing business with a company. This ranges from a low of 49% in France to a remarkably high 77% in India.

Of course, those of us who have visited India are well aware of the infrastructure problems that often lead to bad customer service situations, so perhaps it is not so surprising that Indian consumers are more understanding and forgiving.

There is no doubt that consumers stop purchasing from companies that give them poor customer service. As we noted in yesterday’s blog post, up to 87% of consumers have vowed never to do business again with specific companies due to poor customer service experiences.

Over one-third of consumers in France (38%), Germany (33%), and the UK (33%) are unwilling to forgive even a single episode of poor customer service and are more prone to quit doing business with an organization after just one bad experience.

On the other hand, consumers in India (38%), Mexico (28%), Spain (24%) and Italy (22%) are more inclined to give companies three or more tries.

Significantly, 70% of consumers in this study claimed they will allow an organization a second chance after a poor customer service experience if they have generally had a history of good customer service from that company.

Consumers in Mexico (89%), Canada (88%), the U.S., Australia, and India (86% each) are significantly more likely to include prior service experiences in deciding whether to keep or drop their relationships with selling organizations.

This study confirms what we often tell our clients and workshop participants — creating a series of positive customer experiences is one of the best ways to ensure customer retention.

Read our most recent Monday Morning Marketing Memos for more thoughts on Customer Retention Marketing, or what I call the art of keeping good customers.

Up to 87% of consumers will leave due to poor service

Over eight of every ten consumers in six major markets have vowed never to do business with specific companies due to a poor customer service experience.

Consumers in Mexico, Australia, and Canada are the most likely to walk away and find other service providers when receiving poor or bad service, followed closely by consumers in Spain, the United States and the United Kingdom.

These findings come from the American Express Global Customer Service Barometer, a 12 country study of attitudes and preferences toward customer service released earlier this month.

At a minimum, across all 12 markets, six in ten consumers report they have decided never to do business with a company as a result of a poor customer service experience. The specific findings were:

Mexico — 87%

Australia — 86%

Canada — 85%

Spain — 82%

United States — 81%

United Kingdom — 80%

Germany — 77%

India — 77%

France — 76%

Italy — 73%

Netherlands — 62%

Japan — 61%

This research study was conducted with over 1000 adults 18+ in each of the 12 countries between mid April and early May this year.

Telstra Backflips on Fee for Paying Bills

Telstra, Australia’s largest telecommunications provider, has withdrawn a controversial A$2.20 fee imposed in September for customer payments made over-the-counter or by mail for monthly phone bills.

“This decision has been taken because it is the right thing to do by our customers,” a Telstra spokesman said. Telstra CEO David Thodey announced the decision to cancel the deeply unpopular fee at the company’s annual general meeting last week.

In our Monday Morning Marketing Memo dated 7 September, we wrote “If Mr. Thodey and his colleagues at Telstra are truly serious about improving customer satisfaction across the company, they need to have a serious look at the fees and surcharges that are not only driving customers crazy, but are also driving customers like me away.”

It appears that the senior management of Telstra has listened to customers like me, who spoke out vociferously against the imposition of this new fee, particularly at a time when Telstra’s corporate reputation and customer service levels are both being hammered.

One leading journalist in Australia referred to “the friendless Telstra” in an article last month, while the headline in an article last week read “Telstra arrogance towards customers exposed as Thodey moves on admin fee.”

As Mr. Thodey told the Telstra annual meeting audience, “We tried to impose this charge without first listening to the people it would affect.” He also admitted that the payment fee has caused customers to defect. [Nothing surprising in that!]

Removing this fee is a major first step in renewing customer preference for the Telstra brand. Hopefully Telstra has learned a great lesson about the need to listen to customers and engage its customer base in a proactive, two-way dialogue.

The other critical lesson here is the need for Marketing to have a presence in the Corporate Boardroom. Telstra’s Board is stocked with lawyers, accountants, financial managers and technical experts. Someone with a marketing focus could have easily advised the Telstra Board that this payment fee was not going to be readily accepted by the company’s customer base.