By Lior Arussy
A year-long study of attitudes toward customer loyalty and customer experience management among customer service executives and marketing executives indicates that the weakest area of customer relationships is not relationship building, but rather the core value proposition/customer experience. The majority of employees lack the conviction of their product’s or service’s value and do not agree that their company deserves the customer’s loyalty. In addition, major discrepancies between companies' declarations and execution were found. Although the subject of customer service and customer experience is high on the “declared” agenda, the reality is far from it:
- 60% claimed that their relationships with the customer are not well defined and structured
- 42% claimed that their company takes any customer that is willing to pay. In B2B and services businesses the numbers are 72% and 69% respectively
- 46% claimed that their executives are not meeting with customers frequently
- Only 32% claimed that their compensation is tied to quality of service
- Only 37% agreed that they have the tools to service and resolve customer problems
- Only 36% agreed that their company invests in people more than in technology (38% in the US and 10% in Europe)
- Only 36% of European respondents agreed their company deserves the customer’s loyalty vs. 54% of the American respondents
The above results demonstrate that there are fundamental flaws in company-customer experiences. The issue of a well-defined and structured relationship with a customer when the expectations are clear on both sides is far from being addressed. While 41% of the U.S. respondents agreed that the role of the customer is well defined, only 17% of their European counterparts agreed with that statement. This represents a lack of full understanding of what companies are seeking from their relationships with customers. As such, it is impossible to maximize opportunities or deliver full value to customers. When confronted with questions such as “how long does the company seek to have a relationship” and “with what level of margins,” the percentage of respondents who were able to answer those questions was in the single digit range.
Employee Loyalty
In an era of growth, companies are ever more dependent on employee commitment, for it is the employees who are the engine for innovation and excellence which will drive growth due to the acquisition of new customers as well as retention of existing customers. Those companies who adapt their activities and invest in people as well as provide them with tools and authority are more likely to reduce their turnover. But more importantly, they are more likely to increase productivity and innovation.
While a surprising 74% of respondents agreed that their employer deserved their loyalty, when asked about specific actions, the agreement level dropped:
- Only 37% agreed that their company invests in people more than technology to solve customer problems
- Only 37% agreed that they have the tools and authority to solve customer problems
- Only 33% agreed that the compensation plan emphasizes quality over productivity
It is interesting to note that 100% of those who strongly agreed that their company invests in people more than in technology also agreed that their company deserves their loyalty as employees (vs. 37.5% among those who strongly disagree).
Conclusions and Recommendations
Companies must go back to basics and deal with the core value proposition/experiences of their employees and customers as opposed to dealing with relationship-based activities. Without a clear experience, no loyalty program can succeed.
Among the areas that require attention are:
- Clarity leads to conviction—Companies must set clear definitions of the role of the customers and move beyond abstract slogans.
- Executives as role models—It is time to practice what we preach. Employees are watching actions and executives play an important role.
- True mutual dialogue—Employees take their cues from actions like that. Build a true dialogue system.
- Focus leads to commitment—Taking any customer at any price leads to employees' perception of lack of loyalty.
- Tools and authority—Employees relate to tools and authority as a way to develop customer commitment. Without, they see significantly lesser commitment.
- Be selective—Companies must select carefully which customers fit their value and experience and would appreciate it. Lack of segmentation and selection will lead to dilution of value and low service levels.
- Differentiate—Make clear how your products make the impact, and it will lead to greater employee loyalty.
- Invest in people more than in technology—Employees watch this indicator and it is directly related to employees' loyalty and commitment.
To access the entire study, go to www.strativitygroup.com.
Copyrighted material; used with permission.
AMA’s seminar “Developing and Executing a Customer-centric Strategy,” developed and led by Lior Arussy, will help your organization gain a competitive edge by structuring a corporate plan that enhances the total customer experience. Click here for more information about AMA’s over 170 training seminars in 17 subject areas. Author Bio : Lior Arussy is the founder and president of Strativity Group, a global consulting firm. He is the author of four books, including The Experience! How to Wow Your Customer and Create a Passionate Workplace (CMPBooks 2002), and has published over thirty articles in publications around the world including an article in the Harvard Business Review. He developed and leads AMA’s seminar “Developing and Executing a Customer-centric Strategy”. For more information: info@strativitygroup.com
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