In the not too distant past, how effectively an organization dealt with its customers, managed and resolved complaints and problems was crucial in gaining and maintaining its competitive advantage and underpinning the business’s goodwill and value.
But times have changed, and with them, customer priorities, expectations, and behaviors. As a result, in our increasingly digital world, a seemingly unresolvable conundrum has emerged. With fierce competition, controlling costs is vital; thus, the drive to lowest cost solutions has inevitably led to resource-hungry human interaction being increasingly replaced with automated, ‘smart solutions.’
Unfortunately, far from improving frustrated customers’ experiences, these solutions seem to have lowered the service bar such an extent that in some cases, a technology solves all approach appears to have increasingly turned customer service into a euphemism for the most efficient, lowest-cost way of getting rid of avoiding contact.
“It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”
Warren Buffet
At best risky now that a supplier relationship can be terminated at the click of a button; not understanding and effectively handling customers’ issues can result in the slow drip loss of business, and if customers flee, there is no business, no matter how low the costs.
As noted, the impact on the bottom line of customers leaving is real and immediate. Increasing customer retention rates by just 5% can increase profits by between 25% and 95%.
Whether it is being prodded towards a poorly configured FAQ, battling through or over-complicated IVR options, or hearing the dreaded phone queue words “We’re swamped right now.” Customer acquisition is an expensive business. Losing customers is a double whammy, loss of revenue plus replacement cost.
Who among us has not at some time experienced extreme frustration when trying to resolve what should be an everyday issue but struggled to find an easy, intuitive, and effective way to contact a supplier like picking up the phone but instead spent hours trying to find the correct information to resolve an issue.
In some cases, it seems far from understanding the importance of being customer-centric; some organizations are actively pursuing a policy of providing no service at all, preferring to hand customers off to self-serve solutions regardless of whether they work or not and irrespective of the consequences. Inevitably, people lose patience and, where possible, click and switch suppliers or, in cases of faulty products or poor service, leave damning reviews on Trustpilot or Google.
Anyone seeking proof of the importance of customers believing in service promises could do worse than looking at the pre-history case of US Car Rental Company Avis. Since its inception just after World War 2, Avis had trailed behind Hertz, the market leader, and been loss-making every year for the previous decade. So in 1962, searching for a competitive advantage, Avis appointed US Ad Agency Doyle Dane Bernbach. As a result, DDB conceived a brave and cheeky campaign based on Avis making a customer promise; “We Try Harder.”
Within a year, Avis went from losing $3.2 million to earning $1.2 million — the first time it had been profitable in more than a decade. Aside from proving the power of a good line, the success of the Avis campaign illustrated the potential of a customer service promise to impact the bottom line positively
The changes wrought by the pandemic, increasing digitalization are changing perceptions and behavior. As a result, companies will need to be much more proactive and nimble, better able to anticipate customer expectations and needs in the next normal.
Glance — Counting the customer
The impact of COVID-19 on customer behavior was sweeping and immediate. Spending across most industries is down, purchases have shifted from in-person to digital channels.
Now is the time for executives to invest in the data, technology, and systems required to deliver exceptional experiences. Conversely, companies that invest in the wrong capabilities could find themselves outside as competitors that offer exemplary customer experiences cement their advantage.
Three priorities that will define customer experience in the post-pandemic era: digital excellence, safe and contactless engagement, and dynamic customer insights: Organizations able to understand customers better — and do it faster are likely to be the next customer-experience leaders.
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Originally published at Upstack.co on Nov 29, 2021, by Symon Blomfield.
