Knowing Your Customers in the Digital Age
Consumers have never been easy to figure out. Recently, they have been displaying even more puzzling behavior as they shop and seek service in the digital age. New Accenture research finds that while consumers today claim to be more satisfied with the companies they buy goods and services from, they show an increasing willingness to switch providers, especially service providers.
One reason is that companies have focused on fixing the things that drove customers away but haven't made improvements in those that motivate consumers to stay. The Accenture study suggests five ways companies can tip the scales in favor of customer loyalty and retention.
1. Nice to meet you. The promise made to customers at the onset of the relationship sets the stage for future satisfaction. Survey respondents rated "having the service experience match the promise a company makes to me up front" as one of the most important areas of customer service, and said a company's failure to deliver on the service experience promised is their greatest frustration.
2. You don't know me anymore. Companies do not always notice subtle changes in customers' need for recognition. Accenture's research shows a significant increase in the extent to which consumers want to be rewarded for being loyal. Companies generally recognize increases in major steps (like adding a new product or service), but are missing the smaller steps (like purchasing movies or other digital content).
3. Cheating heart. Companies overlook signs that customers are itching to switch. One key indicator is partial switching, when a customer has stayed with a particular company but has added another provider in the same category as well.
Companies that rely on their overall retention rate as a key measure of effectiveness may be unaware of customers who have partially switched. Using more finely tuned analytics increases the likelihood of being able to address such issues.
4. Are you listening? Over the past year, more than half of consumers used social media sites to gather information about a company. More consumers reported that comments posted on social media sites influence their purchase decisions—the real outcome companies are seeking to influence.
These new channels build consumers' expectations for personal interaction and engagement. Companies do not always show consumers how their input contributes to new products or services, however, leaving them feeling as if they've wasted their time.
5. Trinkets won't save me. Although 68 percent of consumers say technology has improved their experience, even tech-savvy customers are not necessarily swayed by new applications or technology point solutions.
Technology-savvy consumers want greater engagement with their providers. One area of interest is involvement in companies' innovation agendas. Companies may have to assign greater importance to keeping tech-savvy consumers engaged when they consider how to grow customer relationships.
While these blind spots represent potential lost opportunities to create customer engagement and generate growth, companies can take actions to improve their ability to attract new customers, retain existing ones, and grow rapidly and sustainably. Companies should clarify expectations at the onset of a relationship. They can tap knowledge gained from customers who have switched from the same provider to understand the reasons for the switch and create a more satisfying experience.
Similarly, customers want companies to reward them for being loyal. Recognition programs should reflect the customer's perception of a meaningful increase in engagement or spending, not the company's perception.
Predictive analytics can also help identify the warning signs of partial switching. These might be changes in the customer's market basket size or composition, or negative postings on social media sites. Once such signs are identified, companies can head off a complete switch.
New approaches are needed for building a committed customer base. Companies will need the right tools and a higher degree of collaboration among marketing, sales, customer service, and research and development through a common approach to digital capabilities.
It's ironic that while the digital consumer is asking companies to make their relationships more personal, doing so can bring more customers into the fold and increase their emotional attachment to the company's products and services.
Robert Wollan is global managing director of Accenture Customer Relationship Management and coauthor of The Social Media Management Handbook.
Multichannel Predictive Analytics
29 Jun 2012
Uncover data patterns to unlock revenue.
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