Moving from simple satisfaction to brand loyalty

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By: Wise Marketer Staff |

Posted on October 25, 2007

Moving from simple satisfaction to brand loyalty

Customer service is one of the few competitive advantages companies have to differentiate themselves from competitors, and the linkage between branding, customer loyalty, and good service is something that many executives have traditionally overlooked, according to Genesys Telecommunications.

According to Keith Pearce, EMEA marketing director for Genesys, there is a complex relationship between satisfied customers, customer loyalty, and brand management that companies can leverage to develop lasting customer relationships, by means of a dynamic contact centre approach.

A step beyond CRM Pearce told The Wise Marketer: "Previously, where companies have turned to traditional CRM technology solutions to address this tie-up between loyalty, service and branding, they have come to realise that the market has moved beyond this. A dynamic contact centre approach helps businesses develop these crucial and lasting relationships between themselves and their customers."

For example, companies in the mobile phone and financial services industries in particular (both markets that have reached saturation point) already place enormous focus on good customer service as a way of providing a critical differentiator from their competitors.

But while companies happily spend millions of dollars on advertising and product promotion efforts, many do not invest adequately in customer relationships. Many such companies fail to realise that their contact centre is perhaps the most sustainable and meaningful brand delivery vehicle they have at their disposal. As Pearce says, it takes an extremely distasteful advertising strategy to lose customers, but only one poor customer service interaction to cause a defection.

Fulfil the brand's promise The perceived value of a brand dictates customers' expectations of the level of service they will receive from the company. If an organisation has high value products and a strong, top-end brand then customers will (quite rightly) expect superior service in the contact centre - and be very irritated with anything less than their expectations. But if a business offers low cost products and services, customers' expectations tend to be different. Evaluating what customer service is really worth to the customer is the first important step in determining a relationship strategy.

But CRM isn't based on such a simple equation alone, and satisfied customers do not necessarily equal loyal customers. All things being equal, a merely satisfied customer will defect to a competitor's cheaper option if they do not feel they are emotionally connected with your company. Customers need a strong reason - an emotional pull - that will affect their re-purchase intentions and willingness to promote your company, and that reason can't simply be satisfaction. Pearce warns that companies boasting about high levels of customer service may not be advertising a meaningful metric.

The service-loyalty equation It is true, however, that customer service has been cited as the largest single influence on consumer loyalty. Genesys' own research has shown that 46% of people in the UK feel that service is their number one driver of loyalty, compared to only 33% who felt that product quality is their main driver of loyalty.

Before CRM became an industry buzzword, many businesses were already offering the kind of personalised service that fosters loyalty. Local corner grocery stores (such as the old-fashioned 'Mom & Pop' store) and independent retailers truly embodied that ideal, delivering a personalised customer service that enabled them to foster strong and long-lasting relationships with their customers.

Managers of such businesses greeted and referred to their customers by name, knew their particular buying habits, stocked special items for certain customers, and even knew the time of year when particular customers were more likely to spend more (e.g. around the holidays, birthdays, and other special events). Those managers knew the value of keeping their customers and cultivating relationships. Some extended the principle to 'store credits' for their best paying customers, and most offered discounts or free goods when deliveries were mishandled or errors were made, to avoid losing valuable customers.

Back in time Companies that are now hoping to have successful CRM projects will need to revert back to that traditional model of personalised service that has been lost in most modernised societies (and contact centres), and seek to provide a more proactive service than one that simply deals with customer issues and problems when they arise.

Companies must aim to go far beyond mere satisfaction and to create an emotional connection between themselves and their customers. Often, this will require companies to completely rethink their customer interaction models that are, for the most part, predominantly centred on inbound customer enquiries. These types of interaction are to a certain extent flawed from the outset, as they are purely reactive rather than proactive. In contrast, a successful customer relationship management strategy examines how the company can prevent the problem from ever taking place.

Seek loyalty, not repeat business According to Pearce, repeat business is not the same thing as customer loyalty. Loyal customers are those who will promote your business to their friends and to other people they meet or work with, effectively becoming an active advocate for your business. People like this do exist, and the main reason for their enthusiasm is that they have - for one reason or another - formed a strong emotional connection with the brand they're recommending.

A dynamic approach to managing customers helps to foster loyalty. Customers feel more loyal when they feel valued by a business, and when they feel that they get real value from the relationship. Several forward-thinking companies have made significant progress addressing these issues through the deployment of a dynamic contact centre approach which allows them to optimise the blend of people and technology needed to create a seamless process for managing customer interactions. And managing those interactions well means that, whenever a customer chooses to contact the business, they end up feeling satisfied - and willing to return.

Building emotional ties Among other techniques, strong emotional ties can be built with customers through proactive contact - for example, to offer them new products or services, or to offer cross-sales and up-sales. However, this is still clearly a 'sell' on behalf of the business, so the potential for scepticism on the part of the customer remains high. Some 90% of consumers surveyed said they would have a more positive opinion of a company if they were to receive a courtesy call to follow up after a new contract, upgrade, or change in service. And consumers also reported appreciating a quick telephone call to thank them for their business, and to check that they are satisfied with the products and services they have received.

This kind of service is another factor that can help differentiate a business from its competitors and create a strong, sustainable customer-supplier relationship. Of course, planning, executing and managing this kind of outbound campaign without adding cost can be problematic. The ability to do this is wholly dependent on the set-up of the contact centre and its various processes. Segmented and siloed contact centres will find it difficult to manage this kind of blended approach, but a truly dynamic contact centre can more easily integrate the elements that are needed for such a multi-channel customer service campaign.

In conclusion, Pearce offered some simple advice: "Any employee within the organisation is capable of making a courtesy call or informing a customer of new products and services, and it doesn't have to be your most experienced agent. Use employees in the back-office as well as contact centre agents, and you will be able to keep up more regular contact with your customers and optimise the effectiveness of every person within the customer service organisation."

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