I’m a great believer that a business’ greatest source of growth is its existing customer base and anyone that knows me knows that I can ‘harp’ on about it all day and what it takes to harness that growth potential.
Today, rather than me telling more stories of how and why that could work, I thought I’d share with you the content and insights of a presentation that I came across recently from Jo Causon, the CEO of the Institute of Customer Service, that she gave at a conference in November of this year.
It’s a really interesting presentation and in it she highlighted a number of things, they have found out that, including:
- Customer service is becoming an increasingly important element of business performance
- It is a key driver of profit
- That there is a changing relationship between businesses and their customers and that customers now hold the power
- There is a shift away from transactions to relationships with the focus on maximising the value of long-term relationships and not just on sales; and
- One-way mass marketing is losing its effectiveness and that more customer personalisation is paramount.
She goes on to explain that there are a number of bottom line benefits of making your business more customer centric and customer service driven. Customer service focused companies:
- Have customers that are twice as likely to renew or stay as customers
- Have customers that are three times more likely to recommend
- On average, deliver 24% higher profit margins; and
- On average, deliver 71% higher profits per employee
That’s all good stuff, I hear you say, but it’s a competitive market out there, we’ve just come out of a recession and price is a really important in our business.
However, many businesses make the mistake that they think that price is the main driver of whether a customer does business with them or not. Whilst, being price competitive is important it might not be as important as we might think.
According to recent research done by the Institute of Customer Service, the key priorities for customers are:
- overall quality of product/service provided
- friendliness of staff
- handling problems and complaints
- speed of service
- helpfulness of staff
- handling enquiries
- being treated as a valued customer
- competence of staff
- ease of doing business with
- being kept informed
What stands out here for me is that price isn’t in that mix!
So, now we know that customer service is important and that price isn’t as important as we might have thought, what stops businesses becoming more customer focused?
Well, there are many examples of businesses out there that say that they are customer focused or offer great customer service but fail to deliver on their promises.
Why is that?
Well, the primary reason comes down to one thing…….your people.
Many companies talk a good game but fail to get their people on board and engage their employees to deliver their promises.
Research shows that:
- 70% of engaged employees have a good understanding of how to meet customer needs as opposed to only 17% of disengaged employees (CIPD)
- Engaged employees generate 43% more revenue (Hay Group)
- Engaged employees are, on average, sick 2.7 sick days per year, whereas disengaged employees are sick for an average of 6.2 days per year (Gallup)
- Engaged employees are 87% less likely to leave a business providing important continuity in customer relationships (Corporate Leadership Council)
- 67% of engaged employees advocate their organisations whereas only 3% of disengaged employees advocate their companies (Gallup)
What does this tell us?
I think this tells us that we should all be thinking about how we can make our businesses more customer focused and provide better customer service but that we can’t do it without the people in our business being involved and on-board.
So, when you are setting your new customer service strategy for the coming year, if you want to give it a good chance of working then get your employees involved and get them round a table to see how they can help you be successful.
Thanks to mnadi for the image.
Adrian Swinscoe is an author, blogger and consultant who writes about cost-effective, customer-focused business growth at Ideas for Business Growth. He has a strong belief that any established business could dispense with its traditional marketing activities and still grow itself by focusing on developing and nurturing its existing customer base and retaining its current clients. Why not connect with him on Twitter @adrianswinscoe, LinkedIn or if you liked this article then why not subscribe to his RSS Feed?