Invest in the customer experience to survive and thrive
Growing and maintaining loyal customers is more challenging today than ever before. It’s not an impossible task, but it does require companies to focus more on delivering customer experiences that promote satisfaction. It’s the experience with a product and brand that can differentiate it and win customers for life.
Depending on the industry, it can be anywhere from 5 – 25 times more expensive to acquire new customers than to keep existing ones. Additionally, the probability of selling to an existing customer is 60 – 70%, while the probability of selling to a prospect is only 5 – 20%. According to these stats, the bottom line looks a lot better with a loyal customer base.
How can a company drive loyalty among its customer base? One essential way is delivering on its customer promise. A brand promise can be a collection of “we will” statements…“we will treat you fairly,” “we will deliver a quality product,” etc. It’s what separates a company from its competition and why customers should consider doing business with it. The customer experience is dependent upon how well a company fulfills its promise. Failing to fulfill a customer promise is one of the fastest ways to lose loyal customers.
According to a Gallup poll, the highest-performing companies deliver on their brand promises only 75% of the time. Whether or not a company fulfills its brand promise depends on those who are on the front lines and expected to deliver that promise: employees. If employees aren’t on board with and equipped to deliver the customer promise, then it’s nothing more than a collection of words. There is no meaning or substance behind it.
Developing a customer promise must be a careful and thoughtful process. It requires examining the steps customers take when doing business with a company. That includes identifying every point of interaction and the pain points—areas where the experience is less than stellar—as well as the areas of excellence. That information is used in writing a customer promise.
A brand promise isn’t a “set it and forget it” thing. It takes periodic re-evaluation to ensure it remains relevant to the customer and is something employees are able to consistently fulfill. If a company strays from it or makes a mistake, it’s important to quickly and thoroughly correct it. Dissatisfied customers are actually an opportunity to build loyalty. Studies have shown that dissatisfied customers made satisfied are actually more loyal than customers who were never dissatisfied.
How well a company is delivering on its promise can be measured by its customers’ level of engagement. Frederick Reichheld of Bain & Company developed the Net Promoter score, which is made up of three different kinds of customers: promoters, passives and detractors. Promoters are loyal enthusiasts who keep buying and referring others to a brand. Passives are customers who are satisfied, but unenthusiastic and more likely to jump to a different brand. Detractors are unhappy customers who can damage a brand through negative word-of-mouth. The more promoters a brand has, the more likely it will outperform its competitors and remain a strong brand. They are a company’s most engaged audience and have a strong, emotional attachment to a brand.
The investment in building and maintaining customer loyalty pays off with repeat purchases and referrals, which positively impact the bottom line. Companies that remain true to their brand promises deliver experiences that generate customer confidence and satisfaction, and ultimately loyalty. It’s an essential part of surviving in a highly competitive marketplace.