From time to time there will be customers that are dissatisfied with your service or will receive an enticing offer from the competition and will want to leave. Although that is a natural part of doing business, you can always try to do your customer retention management by addressing customers´ needs. So, what are the necessary steps you need to take to retain customers that are contemplating ditching your services?
Well, first, you need to differentiate between two key streams – contracted customers that have a contract signed with your company and customers that aren’t tied to your business through a contract. Another thing to keep in mind is whether the customer has the option to use the services of a competitor.
These are things that influence the customer decision-making process – is it easier for them to leave or is it difficult? It’s one thing for a customer to be dissatisfied and not loyal and another for the churn itself to occur. The less competition you have the lower the chance of churn. The stronger and tougher the contract the lower the chance of churn as well.
The rolling stones
These are the customers that aren’t bound to your company by contracts, such as retail customers that usually buy regular consumer items ranging from food products to gas to medicine from the pharmacy, etc. These customers usually decide on their purchases depending on the brand, location, and how bound they are to a certain product. Here the churn can occur based on one bad experience. Each contact can evoke a certain emotion, that will influence their decision to whether continue doing business with your company. However, sometimes, even if the experience is bad, they will only switch to another branch.
In these cases, it is necessary to have a transactional survey in place, like customer closed-loop feedback surveys. This is needed to investigate the root causes of low customer loyalty and the reasons behind their dissatisfaction during transactions. After you’ve collected the data, it’s necessary to perform a variation analysis of the various touchpoints including stores, call centers, and the staff that interact with your customers. Focus on the negative feedback to get an idea of your customers’ concerns.
Once you’ve done that it is a matter of going through the list of pain points and removing them one by one. If it is a problem with an employee that interacts with customers, you need to deal with them accordingly – retraining, or removing them from a customer interaction role. This isn’t a one-off activity but an ongoing process of you monitoring potential causes for churn and rectifying them.
If you reach a point where you can’t improve any further, you’re providing top-notch services and your staff are highly rated by customers, then that’s a good thing. Remember that every customer visit matters, so all your key attributes have to be set high.
While on the one hand, this may be one of the toughest types of business from the CX point of view. On the other hand, it is easy to measure, and eliminating the root causes is quite easy as well. If the reason for customer dissatisfaction is that the gas station or toilet is dirty, all you have to do, is clean it. All these types of problems can be easily solved, all you need is to have a proper process in place. This however means, that you have the CX governance process set up on a very high level where all frontline workers (customer service team leads, branch managers) need to be informed about the feedback immediately, so they can solve problems ASAP.
If you take a monthly approach, then you may find out that an underperforming employee that has interacted with hundreds and thousands of customers over the course of a month may have alienated them and you could have prevented that.
Since these customers are usually bound to the company, they tend to often feel that their hands are tied and are harsher in their feedback. Another problem is that they don’t interact with the company often, that’s due to being subscribed to some type of long-term service – water, electricity, internet, etc. – which doesn’t require an interaction that often.
The lower the number of contacts with the customer, the lower the resources expensed for the company, and it also implies that the customer is probably satisfied with the services as they are set up. On the other hand, the company loses contact with their customer, who then perceives the company through ads, its presence on social media, if it contributes to philanthropic causes, and so on.
And let’s not forget about the pricing and the word of mouth, where acquaintances recommend competitors who have a lower price or shorter contract. All of this has a direct impact on customer loyalty, which in turn makes the NPS numbers drop. That’s due to the fact, that there is nothing inspiring the customer, who thinks that they only pay and nobody at the company cares about them.
However, when a customer needs to do something or deal with a change in the service, they interact with the staff, who are all professionals and perform their job well. This interaction informs their decisions and since it was positive and on a high level, they can immediately tell you why they are so loyal to the brand.
To retain customers, you have to evaluate how to do it in a cost-effective manner. In companies that work with commodities (energy sector, telecom) the drop in loyalty doesn’t have to be one problem, it can be a long-term process where the problems experienced by the customer just start to pile up over time. These companies need to find a balance between revenues, costs and providing top-notch service.
While retaining customers isn’t that difficult of a process, it is one that involves a lot of planning and has a lot of moving parts. The customer service agents, pricing, and processes are responsible for 95% of the problems customers experience. The best way to tackle this is to find out the root causes of these problems, investigate their impact on customer loyalty, and then create an effort analysis to plan out your next steps. At this point don´t hesitate to collaborate with a customer experience consulting agency. And keep in mind, this isn’t a one-off activity but an ongoing process that needs to be regularly repeated.