• February 12, 2004
  • By David Myron, Editorial Director, CRM and Speech Technology magazines and SmartCustomerService.com

Vendors Don't Deserve Customer Loyalty

A report released yesterday by Strativity Group states that nearly half of executives polled at medium and large enterprises don't deserve their customers' loyalty. The report, "Customer Experience Management Study," details the findings of a yearlong polling effort of 165 executives, from the vice president and director level on up the corporate ladder. The results paint a grim picture of customer understanding on behalf of executives at large, global companies. "The majority of employees lack the conviction of their product's or service's value and do not agree that their company deserves the customer's loyalty. In addition, major discrepancies between companies' declarations and execution were found," the report states. The study concludes that 45 percent of executives surveyed in the U.S., Europe, Asia, and Africa agreed their companies do not deserve customers' loyalty. "That is a very bold statement," says Lior Arussy, CEO of Strativity Group. As a company, he adds, it brings about the "fundamental question of 'what are we doing here?'" Nearly 60 percent of respondents claimed that their relationships with customers are not well defined and structured. And 53.8 percent of executives agreed they do not meet frequently with customers. "The level of honesty was quite phenomenal!" Arussy says. Even after spending millions on customer initiatives, many executives acknowledge their customers are strangers, according to Arussy. More than two-thirds of executives don't have the tools or the authority to deliver promises made to customers, the report reveals. "These are the leaders! They set the tone for whatever these companies do," Arussy says. Even after years of one-to-one marketing messages, "we're still making the same old mistakes," Arussy says. One common mistake he says is looking at a customer merely as a dollar amount. Many companies, he argues, cannot justify the price they are charging for their own products. "The problem is not cross-selling, upselling, increasing first-call resolution numbers, or cutting customer support time on the phone. The problem is the value of the product or service is diluted. Relationships are built on a vague foundation and customers are not defined well," Arussy says. To remedy this Arussy suggests defining the role of the customer by asking the following: What do you want from them? How much do you want? What are you willing to give back? "Create a clear blueprint of who and how much and what you are able to give to customers."
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