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Customer Retention Requires Open Communication
Research finds a link between customer loyalty and continued engagement.
For the rest of the September 2013 issue of CRM magazine please click here
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When it comes to customer loyalty, the way to keep customers coming back is to keep the lines of communication open, according to a report from Impact Learning Systems, a provider of customer service, telephone sales, and field service training. It also doesn’t hurt to deliver on the promises made.

Loyalty requires not only building customer satisfaction but also building customer engagement, the report said.

"There are so many touch points that a company can have with its customers, from marketing to sales, customer service, accounting, and technical support," says Malcolm Carlaw, executive vice president at Impact Learning Systems. "These are all opportunities to leave an impression with the customer, to set the tone for what the relationship will be."

Mark Johnson, CEO of Loyalty 360, singles out brands such as Nike, Apple, and Nordstrom for their customer engagement strategies. These companies, he says, "realize that loyalty is often determined by the strength of the relationships and the interactions throughout a customer's life cycle that affect it. These brands create experiences that allow them to build deeper, more emotional, more meaningful and sustainable bonds between customers and their brands."

For many companies, keeping the lines of communication open means offering 24/7 service. More than half of companies in the survey run around-the-clock contact centers. While this is a great way to serve customers anywhere in the world, it can also be costly, depending on the size of the company, the number of agents needed, and other factors, says Jodi Beuder, marketing manager at Impact Learning Systems.

There are options for companies to maintain that level of coverage without incurring many extra costs. One, Beuder says, is to allow agents to work from home, thereby decreasing overhead.

Another is to employ a follow-the-sun model, contracting with contact center providers around the world to hand off operations at different hours.

And then, in some cases, costs can be mitigated by using contact centers for more than just customer support. The contact center can generate sales, adding revenue that offsets the cost, Carlaw says.

Building loyalty also means more than just driving home a single corporate message, according to Carlaw. "Are you really listening to what [customers] say, and what do you do with that information?" he asks.

Getting that kind of feedback often means surveying customers, a practice done at 52.8 percent of firms. Most firms, the research suggests, let the customer carry out his transaction and then offer rewards to participate in a "How are we doing?" survey.

Loyalty is rewarded with discounts at 36 percent of firms. Other companies build loyalty with points that can be converted to discounts, special customer events, working with other companies to offer reciprocal benefits for customers, or providing preferential services.

When customers do slip away, companies are 62.5 percent more likely to attempt to get them back by phone. This could backfire if not executed properly. For one, not all customers want to be contacted by phone.

However, for the companies, dialing a dissatisfied customer can provide valuable insight. "Having a one-on-one conversation about a specific situation is much more beneficial for the company," Beuder says. "They can get to the bottom of any problem that might be holding them back from scoring better in customer satisfaction or maintaining customer retention rates."


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To contact the editors, please email editor@destinationCRM.com
Every month, CRM magazine covers the customer relationship management industry and beyond. To subscribe, please visit http://www.destinationCRM.com/subscribe/.
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