Tag Archives: Marketing

How Do You Make Your Customers Feel?

50 Facts About Customer Experience is an article by James Digby. As the title suggests, it lists fifty findings Digby collected from reports by many different sources such as consulting firms (McKinsey, Bain), research firms (Gartner, Forrester) and even the White House Office of Consumer Affairs.  We find that even though the article was written nearly three years ago, the facts that it lays out lead to insights that are arguably universal and still valid today.

After reading all fifty facts, it is almost impossible to miss the common trends that emerge.  None of these trends should come as a surprise to anyone, but nonetheless it is powerful to see facts from different sources point to the same outcome.Customer

The most powerful message of the facts is the importance of customer retention.  Companies are always chasing after new customers, but often times neglect existing customers while doing so.  It is critical to establish the correct balance between “hunting” new customers and “farming” existing ones. Here are some facts that underline the importance of “farming”:

  • It costs 6 – 7 times more to acquire a new customer than retain an existing one. (Bain & Company)
  • The probability of selling to an existing customer is 60 – 70%. The probability of selling to a new prospect is 5-20%. (Marketing Metrics)
  • A 2% increase in customer retention has the same effect as decreasing costs by 10%. (Leading on the Edge of Chaos, Emmett Murphy & Mark Murphy)
  • Research shows that a 10% increase in customer retention levels result in a 30% increase in the value of the company. (Bain & Company)
  • Customer profitability tends to increase over the life of a retained customer. (Leading on the Edge of Chaos, Emmett Murphy & Mark Murphy)

It is clear that customer retention is important for profitability, both from a cost and a revenue perspective.  If we can see that by simply looking at a few facts, then surely the managers of companies who deal with customers every day also realize its importance:

  • 85% of business leaders agree that traditional differentiators alone are no longer a sustainable business strategy. (Shaw & Ivens)
  • 73% of marketing managers of various large companies credit “repeat purchase behavior” as integral to the definition of successful customer engagement. (Forbes Magazine)
  • 71% of business leaders believe that customer experience is the next corporate battleground. (Shaw & Ivens)

It seems that most managers hold customer experience and retention in very high regard.  They are talking the talk, but are they walking the walk?

  • A survey asking which is the most important marketing objectives, shows that 29.9% think that it should be customer acquisition, and 26.6% think that it is customer retention. However 62.2% admit that they concentrate on customer acquisition, with only 20.6% focusing on customer acquisition. (eMarketer)
  • 55% of current marketing spend is on new customer acquisition, 33% on brand awareness and only 12% on customer retention. (McKinsey)
  • 92% of all customer interactions happen via the phone. (Gartner)
  • 85% of consumers are dissatisfied with their phone experience. (Gartner)
  • 68% of customers leave because they were upset with the treatment they received whilst speaking to customer services. (US Chamber of Commerce)

It appears that customer retention is not getting the attention it deserves, because not only does marketing consider existing customers to be less important than new ones, but the customers are also getting bad customer service, especially from call centers!

We will not go into the details of why that is the case here.  It is no secret that in most organizations the sales function is considered to be the “superstar”, while customer service function is more like the “ugly child to be kept in the back room.”  Why that is the case and at what point companies decided that selling is more important than serving is not important.  What is important here is that most customers are simply not happy, and most companies do not find out about it until it is too late:

  • 72% of all customers believe it takes too long to reach a live agent. (Harris)
  • 50% of the people survey said that agents failed to answer their questions. (Harris)
  • 44% said the information they received was not accurate. (Harris)
  • For every customer complaint, there are 26 other unhappy customers who have remained silent. (Lee Resource)
  • 96% of unhappy customers don’t complain, however 91% of those will simply leave and never come back. (1st Financial Training Services)

Customer Strategy

To summarize, Digby’s facts give us the following:

  1. Customer retention is extremely important for profitability.
  2. Executives are aware of this fact, but most are not doing what is necessary.
  3. To increase retention, both marketing spend towards existing customers and service quality need to be improved.
  4. A customer retention strategy targeting the right cost/benefit ratio for the company must be adopted by all parts of the organization.

Let us conclude with a quote from poet Maya Angelou, and remember: Customers are people, too!

People will forget what you said.

People will forget what you did.

But people will never forget how you made them feel.

Yorum bırakın

Filed under Posts In ENGLISH

Strategy vs. Tactics

Lois Geller of Lois Geller Marketing Group talks about strategy as an element of business planning in Why Strategy Matters.

“Whether our plans have a thousand pages or five pages, they start with the same four elements: Background,ObjectiveStrategyTactics.

The Background is the answer to “Why are we doing this?” It contains every bit of information relevant to your task.

The Objective is a simple statement. You can’t have more than one Objective. It answers the question “What are we trying to achieve?” It can’t be vague. It has to be as specific as you can make it. This frightens some people.

Then comes the hard part: Strategy

A lot of people have a hard time distinguishing between Strategy and Tactics. That’s partly because Tactics are fun and easy while Strategy is no fun and hard.

The short version of the difference is that Strategy is what Generals do; Tactics are what Captains and Lieutenants do.”

Yorum bırakın

Filed under Posts In ENGLISH

Social Media Teams

In a previous post titled The “Odd New Thing”: Social Media, we talked about “what not to do”, when managing social media for your organization or brand. In Data: The Composition of a Corporate Social Media Team, Jeremiah Owyang, industry analyst and partner at Altimeter, tells us “how to do” as he analyzes results from Altimeter’s recent survey to 144 global national corporations with over 1000 employees to see how today’s corporate social media teams break down. It turns out, the average size of a corporate social media team is ELEVEN people, excluding agencies, consultants and researchers.

Altimeter’s study discovered a trend of four key groups at corporations:

  1. Leadership Team: Focused on the overall program ROI, drive business results
  2. Business Unit Facing: Work inside the company to get executives and teams of other business units on board
  3. Market Facing: Serve as a go-between to balance the needs of customers and the corporation
  4. Program Management: Run programs at the corporate level, reporting and brand monitoring, manage developer teams to get systems to work

Owyang also makes predictions for the future of social media teams:

“In the future, these teams will likely shrink, or evolve into customer experience teams. Know that the corporate social strategist will work themselves out of a job.  Why?  Business units will be able to operate their own programs without excessive oversight, following program guidelines, and using pre-set best practices and sanctioned software systems.  With that said, a core team will always be required, to coordinate the enterprise, but we predict this will evolve into a customer experience team.”

1 Yorum

Filed under Posts In ENGLISH

The “Odd New Thing”: Social Media

I see many Turkish executives (although I have a hunch that they are not alone) treat social media as the “odd new thing” they do not really understand but feel the need to be part of.  We have been through this at least once before, when the Internet Revolution came to be.  Most executives were excited but they were also afraid, because they did not know how to go about incorporating the Internet into their business.  So most of them went out, grabbed a recent, tech-savvy college graduate, and if anyone asked they said they were taking care of the “internet minternet*” business of their organization.  Nowadays, history sort of repeats itself and we see a bunch of young people who have cool titles such as “Social Media Specialist” or “Social Media Strategist” showing up at local firms to take care of the “social media” business of the organization.

Same as the Internet, social media is part of a whole, not the “odd new thing” that can be spun off and managed independently.  Just as we cannot separate Internet from the various aspects of our business today, we cannot really think of social media independent of a coherent Marketing or Brand Strategy.  Sure, one cannot successfully manage a marketing function if one does not understand the tools, but without a high level vision and understanding of the overall communication strategy, a tool such as social media is not a tool, but a toy.

Hollis Thomases, in her controversial article 11 Reasons a 23-Year-Old Shouldn’t Run Your Social Media, lists reasons why the easy way to handle social media may not be the best way.

“Just because you don’t understand social media doesn’t mean you should forfeit all common sense and hire your niece, nephew, or any other recent college grad (say, your best friend’s sister-in-law’s kid) because “they’re really good on Facebook.”

* “Internet minternet” is a Turkish phrase which means “Internet, et cetera.”

2 Yorum

Filed under Posts In ENGLISH

How To Make The Best Of Opt-In

I have always thought that customer relationship management (CRM) of Turkish companies in general was a bit lackluster. Contrary to what most corporations think, customer relationship management is more than just keeping customer records in a database. After collecting good customer data, it must be successfully mined, analyzed and used in creative ways to increase customer profitability without pissing people off.

Unfortunately, most Turkish companies merely treat CRM as a tool that allows them to carpet bomb messages to customers in various media, mobile SMS being the most popular, rather than deliver surgical strikes. And thanks to slow progress in the legal field, most of them got away with it without significant penalties so far. To prevent the erosion of goodwill, as well as to spend marketing budgets more efficiently, Turkish companies need to get more serious about opt-in to realize the benefits.

My colleague from our Mitchell Madison Group years, Derek Martin, currently Sales Director at Velti, talks about how to use opt-in to get the right message in front of the right customer while increasing customer value in Getting Past Opt-In.

“By actively cultivating and managing opt-in lists, companies can continue to develop and enrich relationships with customers and foster trust and openness. In a customer-empowered relationship, these traits can make the difference between success and failure.”

Yorum bırakın

Filed under Posts In ENGLISH