Customer-Company: A Couple Heading for a Breakup?
News Article -- May 02, 2011
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Premium, CSC's business magazine | Spring 2011 | No. 15
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Client Intimacy Barometer 2011
Companies and their customers are couples with a long history, couples that have been through crises and made up again, couples that have been through both melodrama and romantic comedy together. Today their relationship is undergoing profound change, yet remains the main preoccupation of businesses. How will this “love story” evolve? What are the new codes and new pitfalls? How can this couple make it together while customer scepticism and mistrust continues to grow? CSC’s Customer Intimacy Barometer uncovers the rules of seduction to be followed in order to make this relationship last longer than just a meeting and a purchase. Premium takes a look at marketing in the 2.0 era and examines fragments of this new customer-company dialogue.
For a long time it has been companies that have defined the relationship they want to have with their customers, possibly giving them the opportunity – if their operational model allowed it – to express themselves. It was only a possibility, almost a favour. Globalisation, the rise of 2.0 and the intangible economy has changed all of this completely.
Today customers can inform themselves, compare offerings in real time, ask their peers questions, speak their mind and criticise. Customers have become more powerful, more expert, more demanding, and correspondingly much less loyal in a highly competitive world. The unilateral relationship between companies and their customers that has until recently prevailed is now changing completely. A new balance of power is emerging: with greater autonomy, customers aspire to play a more active role in defining their expectations and the ways in which companies respond to them. There is a shift toward an interactive relationship more closely resembling a partnership. “All the recent changes herald the central role that the customer relationship will play in determining corporate performance,” concludes Claude Czechowski, President and CEO, South and Western Europe, at CSC. “The difference will be made by companies’ ability to integrate customers’ need for mobility, and the ability to respond to their specific needs. We’re moving to a personalised approach based on continuous dialogue.”
So there is a shift from customer relationship to “customer intimacy” – which is the focus of the latest Barometer survey carried out by CSC among roughly one hundred European corporations. What are the codes in this new relationship? What has changed? Premium offers six seduction tips for keeping the customer-company couple together.
Tip 1: Secure the Territory
Customers are becoming nomadic, mobile terminal use is skyrocketing, and the mobile phone is in the process of becoming the primary channel. In an ultracompetitive world in which loyalty cannot be taken for granted, being everywhere your customers are is of strategic importance if you don’t want to be left behind. Being close to them means off ering information and services that are accessible every time customers need them. This means having a real multichannel strategy, in particular for mobile terminals (smartphones, tablets with touch screens, etc.), which are currently not being taken sufficiently into account.
To be as effective as possible, this strategy has to capitalise upon the complementarity of physical and dematerialised networks, and also on their interoperability in order to simplify the customer experience as much as possible. Let customers choose – the key aspect is to always be there where they expect to find you. If you stand the customer up, someone else will be there to take your date.
Viewpoint
Yves De Bohan, CEO of Laurent Perrier Belgium
“For understanding the customer there is one golden rule: field work. This is a constant feature in the luxury sector: the more upmarket the product, the more knowledgeable you must be about all topics – business-related or otherwise. And this can go quite far! In a luxury hotel, for example, you must identify who is responsible for purchases, but also where the “spheres of influence” are. If the sommelier or the bartender has no connection with your brand, they will not serve it. This knowledge takes a long time to develop.”
Tip 2: Make Them Feel They're Unique
In this time of globalisation, brands are tending to become more distant from their target audiences. There is a certain harmonisation in communication and products. A pitfall, according to Michel Phan, marketing specialist and holder of the LVMH chair at ESSEC, a leading business school based in Paris : “Lost in the masses, customers feel like they are only a number, resulting in an increased need for differentiated treatment and personalisation.” Seducing the customer means offering personalised products and services aligned with their needs and aspirations. It also means sharing their values, a real strategic challenge in a society which is looking for meaning and points of reference. Although price is still important, it is no longer the only argument that will sway consumers.
Tip 3: Be Interested in Them From Up Close
Sharing values and offering personalised services to customers assumes that you know them well. The challenge is to gather and use customer data efficiently in order to understand their expectations. The development of tools for gathering information, databases, and segmentation and behavioural techniques offers vast possibilities for businesses to invest in. Significant effort is still needed, however, in terms of listening to messages coming from the field. The vision of marketing departments is often focused on their own activity, and the channels for pulling in information are still poorly managed. This is a real loss: players in the field that are in direct and regular contact with customers are fundamental information relays, vital for building up relevant customer intimacy.
Viewpoint
Kris Vervaet, Vice President Marketing Belgacom
“We invest a great deal in collecting information that enables us to create a dialogue that is as authentic as possible, far removed from mass marketing, slogans and undifferentiated promotions. In fact, it’s been much simpler since BelgacomTV was launched. Our understanding of our customers’ habits and preferences is continuously improving, and our customer intelligence department analyses its data methodically.”
Tip 4: Be Consistent
Flourishing relationships don’t cope well with mood swings and manic-depressive cycles. What is the value to the customer of a store that gives a royal welcome but fails to deliver on time? Building a strong bond with the customer depends on a constant preoccupation with that customer, in every step of the relationship. All the company’s departments, staff and processes must be involved. Operational models need to be overhauled to embed this preoccupation with the customer throughout the business. The staff needs to be imbued with a genuinely customer-centric culture, while still leaving enough autonomy to those in direct physical or virtual contact with consumers.
Viewpoint
Yannick Grécourt, Director, Strategy and Marketing, Deutsche Bank Belgium
“Reinforcing customer intimacy is not just about equipping yourself with efficient analytical tools. Above all, you have to rethink all product, commercial and marketing approaches, as well as the information systems to support the offering. That takes time. It also requires the will to change, because everything evolves much more quickly. Basically, don’t ask customers what they want if you’re not willing to change your offering and way of working.”
Tip 5: Involve Them in Your Projects
With the explosion in information technology, people have a powerful desire for freedom, commitment and participation. The emergence of concepts of participative democracy, the liveliness of the social community and even the explosion of social media all illustrate this. In this context, these media (in particular blogs and forums) are powerful tools for information, dialogue and interaction with consumers. In certain sectors, businesses are increasingly involving their customers in the co-creation of their offerings and services. They thus become contributors to the business, cooperating to define offerings aligned with their expectations, a real partnership that ensures satisfaction and stronger association with the brand.
Viewpoint
Sophie Heller, Vice President, Marketing and Communication, ING Direct
“We launched a blog to think about how to define a mobile application. 70 clients took part in the discussion. Their contribution influenced the choice of terminal (iPhone) – but also the services offered, the usability and the design. They also beta tested the application. When it was released, it became the number one financial application, with one of the best ratings on the market. In parallel, the clients that participated in the definition of the product felt extremely highly valued.”
Tip 6: Don't Rest on Your Laurels
Time is an increasingly scarce resource, and in a complex world, customers continue to seek greater simplicity. The responsiveness and smoothness of interaction are becoming elements that define the customer experience. Today they are priority objectives for businesses. However, perceptions differ significantly between the company and its customers. You think your customers are satisfied, but are they really? Measuring satisfaction in real time is the preferred tool for rapidly taking corrective action. Responsiveness is essential; in the era of social networks, your customer can rapidly become your best ambassador or worst detractor. Recall: 78% of customers trust first and foremost the opinions of their friends and peers.
Viewpoint
Philippe Bernard, Executive Vice President Sales & Care Europe, Orange
“18 months ago, in an English-speaking country, the ratio of promoters to detractors for Orange wasn’t very good. According to the NPS, Net Promoter Score, we were far behind the market leaders. So we decided to measure the performance of our agents on the front line of managing the customer relationship. The questions were very simple: Have I taken good care of you? Have I solved your problem? And so on. Today Orange is back at the same level as its competitors. This measure enabled our staff to become aware of the need to improve the customer relationship and also to understand how to serve them better.”
Customer Intimacy: The Dashboard
How are businesses approaching customer relationship management in the era of continuous 2.0 dialogue and nomadic customers? What are their priorities? Below is an overviewof the main insights from CSC’s customer intimacy barometer.
What is the Company's Primary Strategic Basis for Differentiation?
53% of the companies surveyed consider customer intimacy as a strategic basis for differentiation for their organisation. Three quarters of companies claim they listen to their customers in order to improve their offering; 30% go further and are counting on anticipation in order to exceed customer expectations.
34% of Companies Carry out Regular Satisfaction Surveys
Businesses have set up systems to gather feedback from their customers in order to improve their offerings and the customer experience. However, the pathways for moving this information upwards have remained rather traditional, and do not capitalise upon the channels that enable direct contact with customers. Information originating from physical networks, call centres, and mail is only used to a limited extent, whereas these networks are the first point of contact for customers.
Multichannel Strategy
- Priority given to the internet: 48%
- And Social Networks: 39%
Businesses have understood the need to develop multichannel approaches in order to reach customers that are both nomadic and fickle. Taking the increasingly autonomous and proactive behaviour of consumers into account has resulted in the development of tools for automating tasks on the internet or via extranets, but also in investments in social networks, blogs, forums and other community spaces.