Walk around any Shopping Mall in Australia and you will find it hard to find the stock for all the “on sale” and “40% off sale” signs that are plastered across retailers stores. The same goes for airlines, telecommunications and B2C and B2B organisations. Everyone is having to work much harder for the sale and are quickly resorting to price discounting to get their customers to buy from them. In a recently published research report called “Customer Service Trumps Price,” 4,600 consumers were asked how they choose the companies they do business with across 12 mainstream industries.
In particular, it asked consumers to rate the importance of two criteria: good customer service and low prices. Here’s some of what was found when the data was analysed across five generations of consumers:
* Across all 12 industries (and every generation of consumers), good customer service was selected more frequently than low prices as being important. * When it comes to the gap between good customer service and low prices, seven industries have double-digit spreads, led by banks (31%) and health insurance plans (18%).
Given nearly everyone has pulled or is close to pulling the price lever, this month I thought I would share with you an approach which is proven to reduce reliance on price discounting.
In a great 12 page mini-book written by Bruce Temkin who is the Vice President and Principal Analyst at the respected Forrester Research focusing on customer experience, he has used his extensive research to compile the 6 laws of customer experience.
1) Every interaction creates a personal reaction.
2) People are instinctively self-centred.
3) Customer familiarity breeds alignment.
4) Unengaged employees don't create engaged customers.
5) Employees do what is measured, incented, and celebrated.
6) You can't fake it.
While some isolated situations may not follow these 6 laws, they accurately describe the dynamics of customer experience for large organisations. Anyone looking to improve customer experience must understand and comply with these underlying realities.
With all companies challenged and marketing budgets cut back in this environment, keeping how to keep your customers (and keep them happy) is the key currency.
Whether you lead a service organisation or you are looking to find ways to add services to your product range to generate new opportunities for growth, if you are looking for ideas on how to improve your customer’s experience, I know you will find this article extremely valuable.