Thursday, 13 April 2017

Customer service and customer engagement - the truth, the lies and everything in-between



In this blog piece we will talk about what customer engagement is (and what it is not) and why you should bother engaging with your customer s at all.  At the end of this piece we will give you some handy hints and tips about engaging effectively with your customers

So what is the difference between customer service and customer engagement?

Customer service is;

o   ‘A series of activities designed to increase customer satisfaction..’
o   ‘..important within any organisation in order to generate income and revenue’
o   ‘An experience that can change the perception that a customer has of an organisation’

Good customer service is what customer should (rightly so) expect during every transaction and interaction with you (their supplier).  It is the minimum that you should be delivering to your customers.  If you disagree with this statement, it is probably a good idea to stop reading this article now!

Customer engagement is;

o   ‘Long term engagement leading to loyalty and advocacy’
o   ‘..Turning a customer or potential customer on to a brand or idea  ...’
o   ‘The different stages a consumer travels through as they interact with a brand’

So, customer engagement is what gets remembered and talked about – get it wrong and it will be talked about for all the wrong reasons.  It is about understanding your customers wants and needs – and ensuring that you deliver them at each and every touch point along the customer journey




















We firmly believe that the Holy Grail of customer engagement is grounded on a trainagle of belief – which we have named (appropriately enough) the Customer Engagement Triangle;




The customer engagement triangle puts – rightly so – happy and engaged customers at the centre of all of your activities.  In order to maintain this, they have to be supported by well-trained and motivated staff, technology that enables and does not hinder, and processes that are well designed with the customer (not the organisation) at the heart.

What does this mean?

Well trained staff;

It always amazes me when businesses put their most junior, least well trained member of staff in their customer services team – this is the first point of contact with your customers and potential customers – surely you would want you most experienced member of staff to handle their enquiries?  As a minimum, staff should know about the products and services offered by the business, should know lead-times and prices and should be able to negotiate with customers (there is nothing more frustrating than being told ‘ I will have to ask my supervisor’  and have access to all information about the business – such as opening times, locations etc.  If your staff can’t currently do this, then they are NOT well trained!

Processes that work;

If your staff are constantly countering customer requests with ‘I am sorry we don’t that’ or worse ‘I am sorry, we CANT do that’ then this is a good indication that something within your processes is wrong or broken.  As a minimum you should have a mechanism that is used throughout your organisation where customer feedback (either directly or through your staff) can be fed into a process improvement stream – this should pick up issues like ‘our customers are always asking for...’ and this is your opportunity to deliver it to them (assuming that their requests are neither immoral nor illegal!)


Technology;

Technology can often be a barrier to delivering great customer service – but this is only true when it is;

a.     Designed, specified and implemented badly (and generally without any thought to the customer), or
b.     It is being used incorrectly

If it is the latter, then please see above (Well trained staff). 
If it is the former, then you potentially have a larger problem to deal with.  All technology should be an enabler – if yours is not, then a strategic review is in order – and do not be scared to declare the technology you are using as ‘unfit for purpose’. 

Technology is great when it works well, at all other times is just taking up space.



It is all about the Strategy (but, then, we would say that, wouldn’t we?)

Every business should have a customer focus strategy.  It doesn’t have to be a huge, wordy document (and potentially is could be part of your business plan or your sales and marketing strategy – we are not precious about this, but we do recommend that you have one – somewhere)

So, assuming that you do have a customer focus strategy, when was the last time you looked at it? (hint:  if you cant remember then chances are that it has been too long)

Who is the customer champion of your business?  Many businesses have Chief Executive Officers or Chief Financial Officers – what about having a Chief Customer Officer – someone at board level who will champion the needs and wants of the customer?

Does your strategy have meaningful KPI’s – and I really do mean KEY performance indicators – not just things that are east to measure.  What is important to your customer – find out and measure how you perform against it

Ensure that everyone in your organisation knows what your customer strategy says and what it means for them

But, why bother;

Here are some interesting and scary statistics about why customers stop doing business with suppliers -
      68% leave because of how they have been treated
      14% leave because they are dissatisfied with your product or service
      9% are tempted by a better offer with your competition
      5% actively move from supplier to supplier
      3% stop using the service altogether
      1% die

If a customer leaves you – you will probably never get them back

So, just to reiterate, of all the customers who are going to stop doing business with you, 68% of them will do so because of the way in which you have treated them – something that is directly in your control (not, as is often perceived by business owners, that they have been tempted away by a better offer from your competition).  Still don’t think that it is worth bothering about?

Recent research has shown that the top 5 reasons for a breakdown in a customer /supplier relationships are;

      1. Having to repeat the same information multiple times
      2. Being trapped in automated self-service
      3. Forced to wait too long to be served
      4. Agents do not know the customer history or appreciate their value
      5.  Inability to use the communication channel of choice

Again, all of the above reasons for a breakdown in a customer relationship are entirely within your gift to correct.

Have you ever been trapped in an automated IVR system (you know, press 1 for service, press 2 for sales....etc)?  Well, if you have, you are not alone. Recent research suggests that an average if 9.5 minutes is spent trying to reach a human whilst trapped in an automated self-service function.  This is cited as being one of the most frustrating places to be (other frustrating things include the sound of an unanswered phone – do you see a pattern developing here?)


If you think that the only losers here are the poor, disenfranchised customers, then think again.  There is a real financial implication too.  The cost of poor customer service to the overall British economy each year is £15.3 Billion[1]and the average value of each lost customer relationship is £248/year

The biggest losers are;

-       Financial Services £2.2 Billion
-       Utilities £1.98 Billion
-       Telecoms £1.91 Billion

These figures are made up of the cost to acquire new business, the cost of putting right poor customer services, and the cost of repeat work (or meeting failure demand)


Customers as fans;

You may think that you want all of your customers to be fans – but do you want all your fans to be customers and vice versa?

The reasons that this may not be as appealing as it sounds include;

      Turning customers into fans requires time and effort (a lot of time and effort)
      Some customers will always be customers and never be fans (but at least they will always be a customer)
      Fans by their nature are ‘fanatical’ if you upset them they will be very vocal – please them and they will be equally vocal...

However, that having been said, if you do decide that you want to convert your customers into fans, then one of the biggest mistakes that a business can make is trying to convert them too soon.

Customer relationships are like friendships and they need to be nurtured and developed.  You wouldn’t move from being first introduced as a casual acquaintance to getting engaged – would you?

The engagement journey could look a little bit like this;


Only by moving through these steps can you start to build a loyal fan base










A good example of when customers become fans is illustrated below.  It follows the stages of joining a gym – from being a casual user through to being a convert who will wax lyrical about the benefits of gym membership [2]




Psychographic studies have shown that;

       Customers are like friends

As mentioned before, each customer relationship is like a friendship and therefore needs to be nurtured and treasured – but the relationship goes deeper than that.  You do not choose your friends because of one of their characteristics (eg because they are tall or have brown hair), you choose them generally because you share something in common (your love of a particular activity, or some other shared interest).  This is the same with a customer relationship – if you do not share a common value with your customers, then it is unlikely that the relationship will be long-lasting and beneficial on either side

       Share secrets with them

Friends like to think that they are special, that they have your confidence, and as such you would tell then things that you perhaps would not tell people who are not inside your inner circle – customer relationships are exactly the same – tell your best customers things – about new product launches, about special offers – before anyone else.  This will not only help to strengthen the relationship, but it will also build loyalty

       Give them a lagniappe

Everyone loves an unexpected free gift – particularly when it comes with ‘no strings attached’ Surprise and delight your customers by giving them a free gift (not as part of any compensation for something that you have done wrong, just because you can) for example put an extra item in an order that you are sending to your best customers – along with a little note to explain that you have sent them a free gift.

       Give them an opportunity to tell others how great you are

If you believe that you offer a great service, and your customers tell you that you offer a great service, would it not seem a little bit churlish NOT to allow them to tell others how great your service is?  There are loads of opportunities for customers to be able to wax lyrical about the service that you offer via social media
       Give them an opportunity to tell you how you become even greater


Magic moments or moments of misery;

Every time you or someone in your organisation interacts with a customer (regardless of the channel that was used) you have an opportunity.  It is entirely in your gift as to what you will do with this opportunity, you could

      Turn a customer into and advocate
      Lose a customer
      Make someone's day
      Ruin someone’s day

These are what are known as moments of truth – where your customer service is interrogated until it confesses its true beliefs.  These moments can wither be magic moments or moments of complete and utter misery (for your customer).  You have the power to decide which it will be.

The formula for ensuring that each moment of truth is a ‘magic’ moment is easy:

      Unexpectedness + Delight = Magic


Customer satisfaction or customer delight;

It is an often held business fallacy that customers want to be delighted all of the time.  In the round, customers want to be satisfied – and that is all.  They want to be able to transact their business with you in an efficient and painless way

If the truth be known, you could not afford to delight all of your customers all of the time.  That having been said, you cannot afford NOT to satisfy all of your customers all of the time.  If you do not satisfy your customers, then one of your competitors will surely do just that.
It costs 6 times more to acquire a new customer than it does to retain an existing customer[3]



The customer loyalty and retention paradigm;

In every customer relationship there are reasons why customers stay with you – just as there are reasons why customers will look for other suppliers.  Do you know why your customers stay with you?  Is it because;

      You are easy to deal with?
      Fear of change?
      The like your brand?
      They are lazy?
      You are the best in the market?
      They believe that everyone is as bad as each other?

Which customers would you rather have?

Walk your customer journey;

When was the last time, if ever,  you rang your customer service number and experienced what it is like to be a customer of yours? On the whole, I believe that most people would be surprised by what the customer journey is actually like.  The people responsible for the delivery of customer service will tell you what their KPI’s are and all of the great things that customers say about them, but do you really know how variable your service is?  Walk in the shoes of you customers and then you will truly know

      How easy it is to transact business with you
      What the start and finish points of every journey feel like
      How intuitive your systems and processes are
      How knowledgeable and helpful your staff are


Determine your core values;

Business relationships are a lot like friendships.  Customers choose you and your business because of what you stand for.  You do not choose your friends because of what they look like, or how tall they are, you are friends with them because of a shared value or belief – and it is the same with business relationships.



As with your personal values and beliefs, business values should be those things that you really stand for and that;

       Your business would NEVER compromise
       You have a real PASSION about
       You BELIEVE in absolutely
       You want people to FEEL about your business

Customer service should be one of these values – but if it isn’t, don’t try and fake it – it will show and everyone will know that you are trying to be something that you aren’t

Customers will be attracted to you because of your values


Summary

       Customers are hard to win, easy to lose and are savvy about customer service
       You need to understand them and their needs and deliver a service that meets their needs
Ignore your customer at your peril



[1] Figures quoted by the European Business Review (www.europeanbusinessreview.com) 
[2] Diagram reproduced with the kind permission of RightReal Ltd
[3]  Figures quoted by the European Business Review (www.europeanbusinessreview.com) 

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