Things are (finally) cooling off here in Arizona after what seemed like a never ending summer. Unfortunately, many analysts now believe the economy is cooling off as well. While all companies are subject to the fluctuations in business sentiment, there are many ways to dampen the impact a downturn might have on your financial prospects.
Our October newsletter includes two articles that offer a few suggestions tied to an area we know best - customer feedback programs. We firmly believe organizations that have made the decision to put the customer first are better positioned to succeed in the face of a difficult economy. This resilience emanates from strong customer loyalty which is highly correlated with financial performance. When budgets are being cut, it's the companies providing an exceptional experience and offering real value that will retain customers.
Recession? "It's d�j� vu all over again".
Shift your focus to Customers in 2012.
It wasn't that long ago that the U.S. was mired in the worst recession since the 1930's. Here we are only a few years later and many prognosticators are predicting yet another slowdown and possibly a full-fledged recession. The last few months have brought some added uncertainly - from the volatility in the stock market falling to concerns about the debt crisis overseas to frustration with our elected officials. This undoubtedly will pose new challenges for many businesses as we enter 2012.
This past August I had the opportunity to present to the Society of Digital Agencies (SoDA) just as chatter grew louder about our nation's troubling financial situation. What I discussed with their members was that while a turbulent economy poses many challenges for organizations, it also brings much needed clarity to the importance of focusing on existing customer relationships. When the economy is healthy and the pie is growing, generating new business is understandably the primary focus for many businesses. Companies invest significant resources in sales and marketing activities, while existing customers are unfortunately neglected.
The question today is - what steps can be taken to help mitigate the risk associated with another potential downturn? Well-known studies shed some light on a few considerations. The cost to acquire a new client is significantly higher than to retain and grow an existing account. How much more depends on a variety of factors but research indicates it can be up to 5 times as much and even greater in a difficult economy like we are experiencing today.
This is just one of the reasons it is essential for businesses to place a greater emphasis on improving existing customer relationships. This is not at the exclusion of more traditional sales and marketing efforts but even a slight shift in resource allocation to programs that maximize the value of your existing relationships can help improve your bottom line significantly.
Research conducted by Frederick Reicheld, a customer loyalty expert and creator of the Net Promoter Score�, states that a 5% improvement in customer retention can cause an increase in profitability between 25% and 85%.
Think about it. Customers can express their loyalty in several ways. They can continue to purchase your products or services, perhaps even give your company a larger share of their spend by buying more. They can initiate free advertising by recommending your company to others or serve as enthusiastic references for new business opportunities. Studies have also shown that loyal customers are less expensive to service and are less likely to switch to competitors.
This is why I believe customer loyalty and retention should be a key strategic focus for your business in 2012. Some of the most effective growth strategies are the ones that involve your existing customers so using a systematic approach to listen to your customers is not only the right thing to do; it's the profitable thing to do.
|Utilize Customer Feedback to Drive Sales |
Influence prospects by leveraging customer satisfaction programs.
Detailed customer insights are a veritable treasure trove of valuable information for your company. They help inform process improvement decisions, the allocation of company resources, feature / functionality enhancements and employee development. An often overlooked application, however, is the use of insight and data captured from your feedback programs to help your sales team close more deals.
The long-term benefits of formal customer feedback programs are quite clear. Responding to customer feedback goes a long way in building trust and confidence in your business. Customers who feel their voices are being heard and action is being taken are more likely to become loyal advocates. But what if you can use the same information to improve sales close rates? Here are a few suggestions on integrating feedback programs with your business development efforts.
- Validate and expand your reference list: It's a common scenario. The decision comes down to your firm and one or two competitors. Now the prospect wants to speak with references. The salesperson's greatest ally for closing the sale are other customers who will rave about your business. In the absence of formal customer feedback programs, companies often rely on members of the sales, marketing or account service team to identify reference accounts. This can be a risky proposition as their view may not always reflect the full story. I have seen countless situations when using the wrong customers as references resulted in a lost sales opportunity. An impartial assessment of current customer sentiment will remove the inherent bias employees often have when identifying references. This way, only your most passionate customer contacts will be used as references for sales opportunities. Your survey data can also highlight other customer contacts who are enthusiastic about the service your company provides, thereby enabling you to expand your reference list.
- Demonstrate your firm's customer-centric culture: Customer feedback efforts can be incorporated into select marketing collateral such as your website, brochures, proposals or new business pitch presentations. Showcase your company's commitment to customer loyalty by highlighting customer quotes or testimonials (with permission), describing your customer feedback process (like Net Promoter Score�) and sharing positive trends in satisfaction or retention. The evidence you present to them will have a powerful influence on their decision.
- Refine the sales pitch: Businesses are always tinkering with their brand, positioning and sales pitch. Candid feedback from surveys, Client Advisory Boards and New Business Win / Loss Analysis will identify specific themes and messages that resonate with your company's target market. You will also learn how existing and prospective customers view your value proposition compared with the competition. Sharing this knowledge with your sales team and incorporating key points into your pitches will further galvanize your business development efforts.
- Differentiate from the competition: Voice-of-customer programs help to build credibility and trust. Show your prospects that you use customer feedback to drive changes. Share examples of how your products and services have evolved to adapt to the changing needs of the market. Let them know your organization is dedicated to ongoing customer-driven improvement. This will serve as a key differentiator and help your company stand apart from the competition.
The most successful customer feedback programs are leveraged to influence departments across the organization. Arming the sales team with this valuable source of insight will increase sales close rates and drive revenue growth for your organization.
|Satrix Solutions Update|
|This past August, myself along with Heather Timney, Manager of Marketing and Public Relations, traveled to Las Vegas where I had the opportunity to present to the Society of Digital Agencies (SoDA) during their annual global members meeting. As their exclusive advisor for customer feedback programs -
see the official press release - I discussed the benefits and numerous applications of formal feedback programs. After the presentation we held round table discussions and met some of the industry's brightest talents from the U.S., South America - even Australia and Russia. We are proud to be associated with such a reputable group in a very dynamic industry and look forward to helping them grow.
I would also like to recognize our client, Red Book Solutions, on the recent success of their Net Promoter Score� program. Net Promoter is both a customer loyalty metric and an organizational discipline now used by hundreds of companies worldwide. Red Book Solutions reported impressive scores and all of us at Satrix Solutions congratulate them on their commitment to improving overall customer satisfaction. For full details be sure to check out their press release.
Along those lines, I am thrilled to announce that Satrix Solutions is now a certified Net Promoter Score Loyalty partner. While I have been implementing Net Promoter surveys for over six years, we are now taking our expertise one step further by becoming one of only a handful of Net Promoter loyalty partners in the United States. This will ensure we continue to stay up-to-date and well informed on Net Promoter best practices as well as give us access to additional benchmarking data. This is a great opportunity for Satrix Solutions to help the many companies now employing or evaluating Net Promoter as a means to strengthen relationships with their customers. Please stay tuned, as more details will be announced in the coming months.
Finally, as we transition to the season of giving thanks, I wanted to take this opportunity on behalf of everyone at Satrix Solutions to say "thank you" for your support. We are very thankful to count so many of you as our clients and wish you all a happy and profitable fall season.
Founder & President
�Net Promoter, Net Promoter Score and NPS are registered trademarks of Bain & Company, Inc., Satmetrix Systems, Inc., and Fred Reichheld
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Welcome new client, Digitaria! This full-service digital agency, based in San Diego, recently engaged us to conduct semi-annual client satisfaction surveys and implement Net Promoter Score�. We look forward to working with them and helping them grow.
We are passionate about supporting organizations in our community, which is why we volunteered to help The Children's Museum of Phoenix engage with their visitors and gain a deeper understanding of what they love about the Museum. As a non-profit organization, providing a memorable visitor experience is a top priority and the feedback we obtained will help them continue to do that.