Time has come to individualize marketing and customer relationship. With the rise of the social web, brands had more and more opportunities to build a personal relationship with their clients. Channels multiply, points of contact and interaction too, communities blossom – even if...- and brands have learned to interact with them without too much damage. Yet…
4 years ago – what is an eternity – an IBM study names “from social media to social CRM” showed how much brands where wrong about what they thought customers expect from them on social media.
Yes, four years is an eternity. Things may have improved over time and it would be interesting to ask the same question today. This study was about the use of some communication channels, but what can we say about what customers expect from a brand in general. It’s about products, services, the relationship, their core business. So it’s much more critical.
That’s the topic of a study lead a couple of months ago by Econsultancy and IBM, named “The Customer Conversation”.
The ROI of customer understanding : keeping customersÂ !!
Before going further we need to know if customer understanding has any value. If customers are ready to take anything they’re given, why trying to know them better. Of course we have the intuition that it has value, but it’s better when backed with numbers.
According to the study, 49% of respondents have changed at least one of the service providers over the last year. I let you decide decide whether it’s a lot or not as we’re being told that customers are less and less loyal. More interesting is the reason why they changed. In 30% of cases it’s because the brand failed them, in 59% because another offered them something better.
Even satisfied customers can leave
First lesson : if you thought that delivering your promise with the expected level of quality your were wrong. It’s the least you an do, vital to exist, not enough to win.A satisfied customer who gets everything he’s been promised can leave for the only reason someone proposes him something better. Customer loyalty is not strengthened or weakened by the delivery but by the promise.
To be more specific, let’s have a look at the triggering factor. Customers disappointed by the delivery left more because of a bad customer experience and a little because of the product. Customers who left because of a better proposition did that because of the product in the first place and only after because of the promised experience.
Customers come for the product, they stay for the experience
The two variables of customer acquisition and retention are the product and the experience. Forge the price : it account for only 20% of cases. If you thought that an aggressive pricing will help build a competitive advantage and will play a major role in your marketing mix you may face serious issues.
Considering those who left for a better product, we can assume that the new offer was closer to they needs than the previous one. Logical. So that it results from a better understanding of their need.
When brands don’t understand them, customers choose the least bad offering
That’s not obvious at all when we look at the rest of the study. Depending on if you prefer haf empty or half full bottles, I’ll say that the situation is worse than expected or that there is a lot of opportunities for improvement.
As for the first study I mentioned, the numbers are scary : 81% of brands say they have an holistic view of their customers but only 37 of customers say their brand prefered retailer understands them and 22% that the average retailer understands them.
What makes me wonder about what do brands mean when they say “holistic view”.
Online interactions are also poorly taken into account what shows that the coherence of online and offline experiences and the continuity of the customer journey as still wishful thinking.
Contrary to what we can expect, they don’t care about geolocation anymore.
In short, except the customer service history and the demographic profile, brands know very little about their customers.
Knowing what it costs to build a 360Â° view of the customer, there’s no surprise that brands are not that advanced. But customers perceive things differently and obviously overestimate what brands know about them or the ability brands have to use the data they have.
The state of the 350Â° view of the customer : a big step for brands, a small step for customers
The study confirms : brands have a lot of data and tools to sharply manage the customer relationship, so the question is more about what they do with that. The study concludes that marketer approaches are obsolete and incomplete.
Still according to the study, the value of customer experience is to make the value of the relationship self-evident. That’s where the gap between brands and customers appears : what the first consider as relevant is rarely considered as relevant and valuable by customers. The study continues with an interesting benchmark of what relevance means for each of them. In general rarely the same things.
Trust is key to customer loyalty
Finally, a closer look at what leads to customer loyalty, the first factor trust in the way customer data and information is used. Then come treating customers as loyal ones, to provide the best service when they face issues and make their journey as simple as possible.
That’s only an overview of the study but it proves that the gap between what customers expect from brands and what brands think they expect is far from being closed. Especially since “customers” is not an even concept : each kind of profile expects something specific and identifying all the profiles is key to not irritate customers with irrelevant initiatives. In the same way, from the customer perspective, the key points of the customer journey are poorly identified and managed in terms of experience…contrary to what brands think. What is logically not a surprise.
In short very little progress was made in the four last years. But as customers become more and more digitally mature, the risk is bigger for brands who don’t take the situation seriously or miss the train. The good new is there is lot of room for improvement.