Squeeze the Lemons for Customer Loyalty Growth


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Embrace customer complaints to proactively manage customer experience: resolve issues and prevent recurrence. The key is what you DO with "voice-of-the-customer". See http://ClearActionCX.com Contact us at OptimizeCX@ClearActionCX.com

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Squeeze the Lemons for Customer Loyalty Growth

  1. 1. Squeeze the Lemons for Loyalty Growth | MarketingProfs.com Page 1 of 5 SAVED ARTICLES | LOGOUT PREMIUM LIBRARY Member: Lynn Hunsaker Level: Premium Plus Membership expires in 91 day(s) Home Topics Our Blog Forum Seminars Careers Case Studies Corporate Services Search Change Text Size: A | A Inside MarketingProfs Squeeze the Lemons for Loyalty Growth Recent Blog Posts Marketing Jobs Templates by Lynn Hunsaker How Do You Build January 9, 2007 A Social Media Community? Q&A with BlogHers Lemonade is refreshing, particularly on a hot day. With a little sugar Elisa Camahort and a lot of squeezing, sour lemons are transformed into a nice, healthy source of sustenance. Man Laws No More: Say It Isnt So Similarly, profitable customer loyalty can be a healthy source of The Netroots of a sustenance for brand equity and a powerhouse on hot days of Primary competition. Numerous companies are nurturing customers with an Going Berry, Berry array of sweet programs such as personalized marketing, advisory Strong boards and references, customized offerings, privileges, and rewards. These are important contributions to your value proposition. MarketingProfs Sponsors Squeezing the Lemons › MY ACCOUNT Your Company › Daily Fix Blog NEW! Store But what about the rest of the customer experience? How about › Member Directory › New Member Tips The supply- squeezing the lemons, or acting on the less-attractive feedback from › Career Center chain solution customers, to transform ambivalent and at-risk customers into a › Vendor Selector for your › Testimonials marketing reliable source of profit? materials. › Premium Help Alleviate the › Seminar Help handling of Were not talking here about alienated or costly customers, but rather materials NOW! the portion of your customer base that are fence-sitters due to inconsistent business processes or lack of a compelling experience with your brand. After all, if a large group of ambivalent customers has "sour Get Affordable Advertising, feedback," then your delighted customers may eventually confront Finally situations that spoil their currently sweet experience. Target our 230,000 The average American company loses half its customers within five marketing decision making years.1 How can your company achieve sustained growth with image- members Visit Here To Get building alone? By addressing the group that provides "lemon Our Current Rates feedback," your company can transform negative word of mouth trends to sustainable competitive advantages that benefit your entire customer base. This is an internal branding effort that aligns whats going on inside the company with whats being promised to customers. It adds customer experience substance to your value proposition. Truly Great Marketers Ability to grow a business is what distinguishes a truly great marketer, as stated in a recent article by consulting firm Booz Allen Hamilton: "In an era of unlimited opportunities but constrained resources, the only marketing metric that matters is growth. Driving growth means stretching the traditional boundaries of the marketing function to encompass activities many companies dont even think of as marketing—yet."2
  2. 2. Squeeze the Lemons for Loyalty Growth | MarketingProfs.com Page 2 of 5 Growth goes beyond quarterly revenue targets. Growth is fueled not just by brands but also by customer equity, or customer lifetime value (CLV).3 Research shows that a 1% improvement in retention can increase customer equity 3-7%.4 The ultimate goal is to increase customer lifetime value. Rewards programs, customer databases, and empowered customer call centers have their role in growth. Wisely, customer experience management (CEM) is also a growing practice among leading companies. CEM is the "process used to comprehensively manage a customers cross-channel exposure, interaction and transaction with a company, product, brand or service." An "outside-in" operational excellence focus is one of the key components of CEM, with a "comprehensive evaluation and improvement of people, process, policies, technology, and systems that facilitate, track, and measure customer interaction and transaction".5 Marketers have an important opportunity to assert their authority and value as a conduit for the customers voice into all areas of the company. "Squeezing the lemons," or driving companywide action on the less-attractive feedback from customers, represents a chance to own CEM, improve CLV, and be acknowledged for playing an instrumental role in growing the business. Value-Based Business Case The first essential step in growing your business by acting on the voice of the customer (VOC) is to establish unwavering executive sponsorship. Lets face it: Long-term growth is a sizable stewardship that requires companywide enthusiasm for the means employed to achieve it. A well-respected executive champion accounts for a great TOP 5 PREMIUM Articles deal of the difference between success and failure. 1. Case Study: Smart Marcomm Strategy Enables Precision Manufacturer to Calculate CLV by identifying your costs to acquire and service different Nearly Double Sales in One customers. Also calculate the cost of your lost customers. According to Year the Pareto principle, 80% of your profits are typically generated by 2. Ten Steps to Creating a about 20% of your customers. Some of your customers are likely Brand Ambassador Program creating losses due to their inordinate service demands and/or 3. The 10 Biggest Mistakes insistence on deep discounts. Marketers Make—No. 8: Swallowing Fads Unthinkingly Once you assess customer profitability, you can develop appropriate strategies for aligning your companys efforts with the varying CLV 4. How to Produce a levels across your customer base. This analysis also provides an Marketing Toolkit That Eliminates the Need to Sell opportunity to engage your CFO as an advocate for CLV and to minimize the likelihood of budget cuts that could cripple your growth efforts. 5. The 10 Biggest Mistakes Marketers Make—No. 7: Living in the Marketing Silo Assess your current methods of capturing VOC to determine whether these methods provide you with a 360-degree perspective of the TOP 5 Articles customer experience. Customer advisory boards, user groups, blogs, surveys, complaints, call centers, transaction pulses, executive listening 1. Six Ways to Prepare sessions, sales and service call reports, and many other techniques are Better Collateral for Sales Teams VOC options. Consider firsthand VOC exposure for middle managers and executives for additional momentum. Make sure your VOC methodology 2. Five Ways to Develop a provides you with a thorough understanding of customers pain, Dialogue With Key Influencers wherever it may be. As Jim Morgan, chairman of Applied Materials, quips: "Good news is no news, no news is bad news, bad news is good 3. Marketing to Generation X and Y
  3. 3. Squeeze the Lemons for Loyalty Growth | MarketingProfs.com Page 3 of 5 4. The 12 Tenets of Social news." Media Marketing (and Why You Need to Learn Them) Acting on VOC 5. Stop, Thief! How to Protect Your Site from Copyright Infringement To overcome apathy, denial, or finger-pointing when sharing customer feedback within your company, slice the customer feedback by product TOP 5 Downloads line and by sales and service teams. When each group has its own set 1. Direct Marketing Creative of data, you can drive VOC throughout the organization, establishing Savvy - print the .pdf slide handout -Slides clear accountability for action as the data relates to each internal group. 2. The Wide World of Direct Additionally, VOC feedback associated with support functions, such as Marketing on the Web - print the slide handout safety and human resources, can be assigned to these organizations for (1,222 kb .pdf) -Slides action-plan development. Distribute templates that help each group prioritize the low-performing business processes with the highest 3. How to Craft a Compelling Offer - print the correlation to customer loyalty. Each group can examine and summarize written text .pdf file - diagnostic comments from customers to help identify root causes of Transcript underperforming processes. 4. Google, The Secret Weapon - print the written text .pdf file -Transcript Action plans must be specific in naming deadlines and action item owners within the group, and must include metrics to track progress. 5. Hitchhikers Guide to the Ask each groups executives to sign the action plans as a visible Metaverse -Second Life - print the .pdf slide handout endorsement of their support. -Slides Measure and reward the right things to motivate employees and to predict future customer perceptions. VOC data are symptoms of underlying business process health. They are lagging indicators, Can your customers reflecting what customers have already experienced. Other lagging find you? indicators include revenue, profit, and market share. While these Smart companies like symptomatic metrics are important to track, it is essential to identify, HSN, Northern Tool, track, and provide visibility to metrics for the associated business PETsMART, Discovery, Hancock Fabrics, processes. These are leading indicators because they represent future Furniture Online, Home impact on the customer experience. Visions, Wards, TireRack, Toolfetch and Effective incentives reward internal groups for improvements in both Bellacor Lamps turn to Netconcepts for SEO leading and lagging indicators, with a balanced formula that reflects the advice and technology. improvements results from the perspectives of all affected stakeholders. Reaching out to Customers Be sure to "close the loop" with VOC participants as often as possible. Thank customers for their feedback and let them know youre working on solutions. Validate your thinking with them as you establish priority action areas. Share your action plan progress with them. By making your internal metrics visible to customers once youve achieved significant improvements, youre helping customers reset their perceptions for fresh experiences and fresh feedback in the near future. Customer-focused service at all customer touch points is only as good as the weakest link in the entire value chain. Analyze handoffs throughout the companys business processes to identify streamlining opportunities and to track in-process warning signals. By monitoring internal customer satisfaction for each groups business processes, you can greatly reduce the "garbage-in, garbage-out" syndrome of business processes that plagues the reliability of the customer experience. A wide variety of programs can be developed that engage and reward customers who are delighted with their customer experiences and to
  4. 4. Squeeze the Lemons for Loyalty Growth | MarketingProfs.com Page 4 of 5 address those who are at risk of defecting. These include customer appreciation events, reference programs, gifts and rewards, privileges, and customized offerings among many other strategies. The Key Is What You Do With VOC Clearly, in the quest for sustainable growth, there is much essential work to be done to transform VOC into high ROI. In your recipe for healthy sustenance, dont forget to "squeeze the lemons in addition to adding sugar." In the new book Chief Customer Officer: Getting Past Lip Service to Passionate Action, author Jeanne Bliss sums it up excellently:6 "As with any customer feedback system, its what you do with the information thats key," explains Bliss. "Companies have spent more time chasing the elusive score than doing anything different for customers," she says. "In their quest to drive customer focus, corporations have attempted to improve customer experiences by attaching things people want to the attainment of a good score.... She enumerates: What will you do when a customer wont recommend you? Will you find out why not? Are you collecting all of that information from dissenters and identifying the big things that are broken in your business and fixing them? Are you identifying and holding those who have declared that they would recommend you close and building stronger relationships with them? Have you spent the time to find out what they really love about your business and then pinpointed which part of your operation those actions are coming from? Have you created systems and processes to reliably replicate those loved experiences across your enterprise? Bliss concludes: "Becoming a hero to your customers is more about reliability than it is about heroics. If they could just count on you to always deliver, to always be there, to fix what ails them, to really care... well, things would be different. Youd have customers who desired the experience you deliver so much that they keep coming back again and again for more. And recommend you? No prodding necessary. Theyd be singing your praises from the rooftops."6 Notes: 1 The Loyalty Effect, by Frederick F. Reichheld, 1996. 2 "Growth Champions" by Edward Landry, Andrew Tipping, and Jay Kumar, strategy+business, Booz Allen Hamilton, 6/20/06. 3 Driving Customer Equity, by Roland Rust, Valarie Zeithaml, and
  5. 5. Squeeze the Lemons for Loyalty Growth | MarketingProfs.com Page 5 of 5 Katherine Lemon, 2002. 4 Return on Customer, by Don Peppers and Martha Rogers, 2005. 5 "Just What is CEM Anyway?" by Leigh Duncan, MarketingProfs.com, 1/10/06. 6 "Is Your Company a Customer Survey Score Whore?" by Jeanne Bliss, MarketingProfs.com, 7/25/06. Read next article on this subject » MarketingProfs.com Want access to all Premium Articles? Become a Premium Member Lynn Hunsaker, MBA, is a veteran high-tech marketer, university instructor, and founder of the consulting firm ClearAction (www.clearaction.biz). She is also associate partner with Marketing Operations Partners (www.mopartners.com). Related Articles › Interaction Bridges: The Best Strategic Tool for Keeping Customer Promises PREMIUM Quick Read › Ten Steps to Starting a Company Blog PREMIUM Quick Read › Delivering Frontline Wow: Three Must-Haves for Every Employee PREMIUM Quick Read › The New World of Customer Advisory Programs PREMIUM Quick Read › Improving Your Customers Experience Through Journey Mapping Quick Read Home | Marketing FAQs | Article Archives | Newsletter Archives | Know-How Exchange | My Account| Corporate Services About Us | Advertise | Contact Us | Write For Us | RSS/Syndication | Privacy | Index Copyright © 2000-2007 MarketingProfs, LLC All Rights Reserved. Terms under which this service is provided to you. [Permission to Reprint]