In the current economy, most companies are focused on cutting costs as they anxiously watch revenues retreat. But it’s important not to let cost cutting undermine customer retention and further erode revenue – especially since long-term relationships represent the highest customer lifetime value and the best prospects for cross-sell and up-sell opportunities.During downturns, it’s more important than ever to focus carefully on improving the satisfaction and of course, once customers are lost, it’s both challenging and expensive to win them back.

If you could institute practices that reduce customer attrition, you’d protect revenue today and enhance long-term loyalty. Consider that:

• 62 % of customer defections can be modified if discovered in advance¹
• 68 % of customer defections occur because customers perceive “an attitude of indifference”²

In other words, since most customers defect because of vendor behavior, you have the opportunity to reduce defection if you can detect dissatisfaction while there’s still time to act – and in the process you can gather information that will help address the issues that erode the loyalty of valued customers.

A Complete View of Each Customer

The better you know your customer, the better your ability to meet their expectations and nurture the relationship. What if you could listen to every customer – even when they are talking about you instead of talking to you? And what if every customer-facing employee had immediate access to a 360^o profile of each customer every time anyone interacted with them? This level of insight would not only let you more sensitively serve customers – it would also help you gather information to make strategic decisions about product features, pricing, and distribution, etc.

Obtaining – and maintaining – this 360^o customer view depends on several actions: making a commitment to identifying what to search for and where, discovering and connecting useful information, aggregating the information, and presenting it in a usable format. One key obstacle is the diversity and broad distribution of the information you need – compounded because the sources include servers you don’t control and market influencers who aren’t your customers.

For the information you assemble to be most useful and cost-effective, you also need to be able to analyze what the information means and what actions need to be taken. And while some of this analytical processing can occur at any time, some of it needs to occur on demand – when the customer is in contact with your company. Of course, your analytics are only as good as your access to all the relevant information.

How mature is your customer loyalty initiative?

Where do customer loyalty and retention fit in your corporate strategy, and how are you addressing this? Do you expect to both reduce costs and improve customer management? Can you identify processes that could be automated to lower costs – without alienating customers?

Before you engage in any plan to improve processes for managing customers, you should establish goals and assess your company’s current maturity in terms of the people, processes, and technology you rely on. An effective customer loyalty or Voice of the Customer initiative:

• Is proactive
• Aligns with business strategy
• Offers an up-to-date, 360o view of each customer
• Gathers and analyzes customer information from all available resources – not just databases and surveys, but emails, attachments, call center logs, external blogs and review websites
• Empowers each customer-facing representative to know the customer and how to efficiently and effectively manage a transaction or resolve a situation
• Relies on well-planned processes, allowing automation and analytics to ensure consistent best results and control costs

Conclusion

You can drive retention and loyalty improvement by ensuring a complete view of every customer in a well-planned Voice of the Customer initiative:

• Incorporate data and content from all relevant sources – from databases to call-center transcripts, blogs and emails
• Get immediate and accurate insight
• Use analytics and alerts for quick response
• Identify and focus on highest-priority customers
• Ensure every company representative can treat every customer with the same insight as their primary account representative

Read more on new technologies and strategies that help you gain a deeper understanding of your customers’ needs and their satisfaction with your company, services and products in our whitepaper: Better Customer Insight, Better Bottom Line.

For deeper discussion, you can also view our Voice of the Customer webinar.

Footnotes

1. © June 2002. SearchCRM. “Model modelers in predictive churn,” By Michael Lowenstein
2. © 1000ventures.com. Data source: American Society for Quality

Author Bio

Sarah Meyer has over 20 years of experience in bringing enterprise software and solutions to market at large and small companies. Her focus has been collaboration and process improvement for business and IT. In ten years at Lotus Development Corporation, she held positions in marketing, product management, product design, and development management. Sarah is currently Director of Product Marketing at Attivio.

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