In my last article How Do You Reward Your Customers I spoke about two key elements of customer loyalty which underpin the foundation of your customer experience.
Rewarding not punishing your customers – Comes back to being in the world of your customer and doing nice things for them. When we do this, our customers are going to want to repeatedly demonstrate their loyalty and keep coming back.
Making business decisions is never about the lowest common denominator – When businesses become reactive when they have occasional occurrences that can represent the lowest common denominator; like customer complaints for example that represent a noisy few.
Doing your research, talking to your customers, and capturing a valid data sample is critical.
When it comes to delivering a 10/10 customer experience and developing 10/10 service standards, the foundation always comes back to the customers experience, who your talking to and what data you’re collecting.
For example, prior to working with us at The Loyalty Zone, one of our clients was focusing only on the complaints they had received. What we were able to show them was, the problem with this approach is you don’t know how many people are complaining or sharing negative word-of-mouth and,
that their business decisions were skewed and, their service standards were reactive rather than pro-active.
In fact, when we did this clients customer research – talked to their customers and captured a valid data sample, we found that only 5% of their customer base voiced this complaint and clearly this 5% represented their lowest common denominator.
Now, I am not saying you shouldn’t listen to your customer’s complaints, absolutely you should and you should have a process in place or within your service standards that addresses these rare occurrences, provides flexibility, and delivers a 10/10 customer experience.
But don’t go and change the way your whole business operates for 5% unless you are certain this won’t negatively impact the other 95%.
Another example to consider, one of our clients who is a private school, notified us that their board was receiving a lot of noise from one group of parents, so when we talked to their customers (the parents) and captured a valid data sample, we found that overall, the complaint they were receiving from a minority group, was basically a non- issue. Again, this one group of parents clearly represented the lowest common denominator.
Which reminds me, of the time I was working with New Zealand lotteries, we did a huge amount of customer research and we found that overall, there were different levels of customers, and each level of customer had a different expectation.
One level of customers that stood out and prompted research into a new business idea, were the customers who didn’t want to have any human interaction. They didn’t want counter service, they just wanted to be able to buy the ticket, go to a machine, push the button and get the ticket.
After researching the viability of this new idea and capturing a statically valid data sample, we never did it. Why, because these customers represented only a small section of the total client base and for such a small percentage of the overall, it wasn’t worth hundreds of thousands of dollars, to put in the processes and systems and machines within each store.
My point here is – the only way we were able to make a good business decision based on good profit and customer loyalty was because we got interested and did the research, we talked to a statistically valid sample of customers, and we found that most customers were really happy going in the store.
And in fact, when we drilled down on the store experience itself, another level of customers really wanted to spend time instore and have a cup of tea and chit chat.
We didn’t cater for them either, WHY? Because they represented a small group of customers.
So, you know, is it the loudest voice? Or is it?
The Flip Side
We’ve seen clients who had previously received a massive amount of customer complaints after they changed their way of doing business based on a few, because the other 95% hated the idea. Do you want to react to the loudest voice?
These clients were making decisions and changing the way they operated to accommodate a noisy few, rather than talking to a valid sample of their customers to find out what they’re saying.
When it comes to delivering a 10 out of 10 customer experience and developing 10 out of 10 service standards, the foundation comes back to – who your talking to and what data you’re collecting.
I have inserted step one from a previous article 10 Actions To Implement A Customer Loyalty Research Program which outlines the benefits of just that.
Talk To Your Customers, Do Your Research
The problem for a lot of companies is they think they know the voice of their customer. But it comes from unreliable sources, is not statistically valid and can’t be validated.
Businesses live or die based on what their customers say about them. Research from Forrester about what influences consumer buying decisions has proven that ‘word of mouth’ and a customer’s previous buying process. Are the two biggest drivers for any business selling a product or service.
Customer research provides you with the opportunity to improve the delivery of products and services to your customers.
The single best way to improve revenue is having your customers definitely come back and recommend others to you.
Ideally your customer research should be conducted by a third party. A third party calling on your behalf holds a neutral position; there is no attachment to the feedback that is provided during the conversation.
The level of detail collected and the analysis of your customer feedback is critical. It’s not always what your customers say that can be improved, it is also what they are not saying.
It’s the quality of the conversations with your customers that make the real difference.
Let’s go deeper next week. In the meantime, If you would like to have a chat with me about ‘Statistically Valid Data’ contact me I look forward to hearing from you.