Being 'touchy feely' increases customer loyalty

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By: Wise Marketer Staff |

Posted on March 12, 2009

If marketers want to earn the loyalty of their customers during the economic downturn, it may be time to become more 'touchy feely' by paying closer attention to their feelings, according to the second annual KiwiHost/JRA Customer Service Pulse study.

KiwiHost's managing director, Jared Brixton, observed that comments from this year's survey respondents made it clear that price and product are now of secondary importance and that the key to loyalty is how the customer is made to feel during a shopping experience.

Out of the 400+ companies named by respondents, the ASB received the most positive mentions (26), followed by Westpac (22), National Bank (14), and ANZ (14). The telecommunications industry was accused of providing the worst customer service.

The problem of bad service, or making the customer feel unwanted or uncared-for, does not simply affect one customer at a time. The survey noted that, in New Zealand, consumers tell 4 - 6 people about a bad customer service experience, but that they tell only 1 - 3 people about good experiences.

And consumers are not very tolerant of bad service, as 75% said that they would give a company only one or two chances before taking their business elsewhere. Approximately 80% said that they complain 'only occasionally' or even less often, and Generation Y employees were the subject of the most complaints about poor service. Interestingly, however, Generation Y consumers were also the most tolerant when receiving poor service.

The three things that consumers said they hate most about bad customer service are:
1. Inefficient telephone systems;
2. Retail staff who talk among themselves;
3. Nobody following up on enquiries.

For the second year running, the top three factors that define good customer service from the customer's perspective were:
1. Showing a willingness to help me;
2. Listening to me and understanding what my needs are;
3. Taking responsibility to ensure that my needs are met.

According to JRA managing director John Robertson, the survey demonstrates that getting staff more engaged has now become a key marketing strategy because it's critical to achieving good customer service which, in turn, leads to greater loyalty and even word-of-mouth referrals.

"Right now, customers are more reluctant than ever to put their hands in their pockets. Companies are using massive discounts on price as a strategy to retain and attract business, but there's plenty of evidence that the best way to retain, and attract new customers are practices that engender customer loyalty, and price reduction doesn't do that," concluded Robertson.

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