Strong Customer Relationships: More Powerful than Satisfaction for Retention

The Challenge: As companies grow, relationships with customers usually suffer. Larger customer files, heavier account loads, and less available time, often contribute to a decrease in engagement with customers. This begins the cycle of increasing losses of customers.

Findings from research conducted by our company ERDM indicate that engaging and forming strong relationships with customers has 12 times more influence on retention and repeat purchases than customer satisfaction. Satisfaction is now a minimum expectation.

As DMG Consulting says in their Microsoft-sponsored white paper, “In an era of intense competition, the customer experience is often the main differentiator between commoditized products and services.” In today’s consumer-centric business world, customers dictate the rise and fall of companies, and your business is completely dependent on keeping your customer relationships strong.

The key starting point for retention is understanding the state of customer relationships. Luca Paderni, VP and principal analyst at Forrester Research, says, “CMO’s and their peers...must understand what customers represent for the whole organization to help shape the strategy for the overall business.”

Once understanding is achieved, the next step, according to Walker, is closing the loop. This begins with setting alerts that indicate low customer loyalty or negative behavior, usually in the form of survey questions. After alerts are designed, a feedback system is created to ensure the information gets to someone who can act on it. There should also be follow-up protocols in place that allow staff to act on customer concerns, complaints, and opportunities accordingly. Finally, results should be documented, so the company can understand what works best and fine-tune accordingly.

This correlates with our findings, as well as the strategy used by Microsoft in the aforementioned white paper, that changing from relationships based on customer satisfaction to relationships with deeper levels of engagement - based on more in-depth understanding of their needs - increases customer retention drastically over the course of the customer lifecycle.

Key Takeaways for Marketers

1. Assess the state of current customer relationships.
Learn if you’re doing enough to meet customer expectations, and form deeper relationships with customers across multiple channels. Customers don’t just want to be satisfied, they want to be engaged.

2. Develop strategies for following up.
Create a system that will seek out red flags, notify appropriate staff members at the right time, acquire customer feedback, and use that feedback to enrich and improve customer experience.

Honoring Brand Promises Is Critical To Your Survival

The Challenge: Companies have always made promises to customers and prospects. But with today's socially empowered consumers, companies are made or broken based on how well they keep their promises. Is your company trustworthy enough?

Historically, companies have always over promised and under delivered.

But will that behavior fly with today’s savvy consumer? “The dirty laundry is out there because of social media,” says Loni Kao Stark, director of product marketing at Adobe’s Digital Marketing Solutions.

As a result, companies now have a greater responsibility to deliver on promises and live up to expectations.

This doesn't just affect existing customers, but corporate reputations, thus, their continued viability. As Stark says, "In the world of social media and digitally connected customers, only authentic brands will survive."

One company that consistently delivers on brand promises is the high-end men’s retailer Harry Rosen. The company consistently maintains brand promises by utilizing a three-point strategy involving observation, feedback, and training. Associates contact customers, use feedback to establish customer needs, and then respond to those needs throughout the customer lifecycle.

The retailer then strengthens its customer relationships by informing them of events relevant to their interests – such as shipments from their favorite designer – and trains associates to provide great service at every touchpoint. To ensure promises are maintained, Rosen also contacts customers within 30 days of purchase to ensure their satisfaction.

Key Takeaways

1. Understand customer expectations.
Organizations should realize customers no longer compare them only to their competition. Customer experience is also measured against online customer service dynamos like Zappos. In order to compete, brands must maintain ongoing dialogues with customers to gather feedback, and use that feedback to keep improving the customer experience. This dialogue should take place via surveys, CSR conversations, social media, and follow-up e-mails after purchases.

2. Keep promises throughout the customer life cycle.
Every experience that customers have with a company is a reflection of that company’s brand promise. Ensure that staff at every touchpoint in your customer lifecycle are trained to respond to customer feedback appropriately. Customer service reps should be knowledgeable and helpful. Sales associates should be attentive and aware of customer needs. And management should ensure that high levels of performance are being maintained. This applies to people and processes!

3. Ensure your brand promise is consistent across all channels.
Today’s consumer sends and receives information across multiple channels on a daily basis. If you promise one thing in TV ads and another on your social media feed, customers will notice. And that inconsistency can quickly paint you as an organization not to be trusted. Establish what specifically you want your brand promise to be, build your campaigns around that promise, and ensure that messages and experiences are consistent across your multi-channel mix.

Shopping Cart Abandonment And How You Can Stop It

The Challenge: According to recent research done by Fireclick/DigitalRiver, online retailers are experiencing shopping cart abandonment at a rate of about 74%. What can you do to prevent this from happening to you?

In 2009, Forrester asked nearly 3000 web buyers why they abandon online purchases. In a recent study, Bronto analyzed the top reasons and classified them into 4 categories:

1. User Experience
The biggest problem customers had here was retailers asking for too much personal information upfront. People want to shop without unnecessary complications on the purchase path. These complications include required registration, too many pages, and poor site functionality.

2. Indecision
Abandoners who are on the fence about purchasing are usually the most responsive to post-abandonment messaging. However, understanding the behaviors that surround purchase indecision is required to shape post-abandonment marketing strategies.

3. Technical Issues
Technical issues that turned shoppers off included lack of online security, difficulty in redeeming promotional codes, lack of customer support, and constant redirection away from the cart, all of which ultimately lead to dissatisfaction. In order to keep customer interest, good customer service must be maintained along the entire purchase path. Zappos.com is a great example of this, constantly placing high on various “best of” lists for ease of use and customer service.

4. Product Cost & Additional Fees
Customers often drift away from their cart to compare prices with another product or site. Even if they¹re not lured away, this can still cause distraction at a crucial moment in the buying process. Many customers also leave their carts when they see shipping costs, having been spoiled by free shipping elsewhere, as in the case of Amazon.

Bronto also studied 100 companies, including Overstock.com, and how they reduced cart abandonment. Most companies who got customers back post-abandonment did so via follow-up e-mail. And here are some of their best practices.

Key Takeaways for Marketers

1. Test to determine the optimal timing for email follow-up.
Other than the obvious, which is that sooner is better, there¹s no magic time interval for email follow-up(s) after a customer abandons their cart. Conduct tests to measure response across different intervals; same day, 1 day, up to three days. Measure and evaluate.

2. Test incentives and promotions.
Everyone loves a discount. Test a percentage discount or free shipping when they complete their cart purchase. This provides incentive to complete the transaction. Also test a warm "thank you" and confirmation of next steps.

3. Avoid repeat abandoners.
Set controls on your program to keep shoppers from receiving abandoned cart reminders every time they abandon. This can result in customers being trained to abandon carts so they can receive free shipping or discount.