80% OF CEO’S BELIEVE THEY DELIVER SUPERIOR CUSTOMER EXPERIENCE….
Only 8% of their customers agreed!
So why is that perception gap so big?
What would your customers think? Would they side with the 8% of customers or the 80% of CEO’s?
Now there are lots of stats & figures banded around by consultants and media articles. If you believed everything that was said you’d never get anything done, right?
But what if we told you that those stats were by a survey done by Bain & Company interviewing 362 business and their customers? And the research was done by Frederick F. Reichheld, inventor of the NPS concept!
Does that make it more real? Could this really be the reason your customers are leaving?
THIS IS THE KIND OF STUFF THAT KEEPS CEO’S AWAKE AT NIGHT!
We understand that the role of a CEO is a tough one. Especially nowadays when the average tenure of a CEO has dropped to around 20 months! A little like a sports manager, you are expected to get results. So you’d better be able to find the answers as to why your customers are churning, or grow the amount significantly going into the top of the hopper!
What we’ll explore today are the reasons the perception gap is so great between C-Suite and Customer. What you can do about closing it and some tips around where to focus your time. There isn’t a silver bullet. But we can give you a framework you can use to perform a health check to see where your business currently sits.
Big businesses have big targets. They have large teams & shareholders to keep happy. Its all part of the success outcomes. However, somewhere in this success model comes a trait that is ever so evident in large businesses today. In the drive to get better results than last year, achieve those bonus figures or grow the business to sell, they lose touch with what made their customers choose them in the first place. They become obsessed with figures like revenue per customer, margin %, cost of sale and operating margin. Now I’m not saying these things are not important. But as a business gets bigger it becomes all too easy to focus on these elements & miss the opportunities that sit elsewhere. Far too often I see a sales funnel that is like a leaking bucket. Customers falling out of love with a brand for one reason or another. Big sales initiatives are rolled out with more new business sales the strong focus. “Look to lower cost per sale, improve margin & sell more products to the customer base”. If they only stopped to look what was leaking out of the business they could have stronger advocacy & loyalty, reduced operating costs & sustainable growth!
Its sometime easy to overlook these areas. But by pressing the pause button and developing a deeper understanding of your current customers, you can improve your key success factors. Customers with a long term tenure cost less to serve, less to attract and deliver more recommendations than any other customer type. Providing they are a profitable customer you’d be mad not to focus on their retention.
If you need convincing any further that building sustainable relationships with your customer is profitable consider this statistic. A 2% increase in customer retention has the same effect as a 10% reduction in operating costs. (Leading on the Edge of Chaos, Emmet Murphy & Mark Murphy.)
Imagine easily achieving those stretch targets but in a sustainable way. By focusing on improving the experience of your existing customers, rather than obsessing with extracting maximum revenue from them. Brand loyalty only comes into play when customers feel you are valuing their loyalty. Otherwise as soon as someone comes along who can do it faster, cheaper or easier for them they will leave. The only way to show them how important they are to you is to build effective relationships.
The hardest part of being a big business is behaving like a small one! That might sound like a strange statement given the goal for growth. But as a business grows it becomes harder to offer that personal touch. In a big business the responsibility is passed on to the employees to deliver the experience. Hopefully they treat every customer in the way intended by the owner or the CEO. But it isn’t an easy task.
Relationships need to be built with customers & employees alike if there is to be a culture of valuing what is important. There needs to be channels which allow feedback to be given AND heard! However just listening isn’t enough. Action needs to be taken if their opinions count. That insight is more valuable than you can imagine. But I’m surprised by those businesses that still don’t know who their most valuable customer types are and what they class as important to them. Industry now is easier than ever to copy and therefore you need to have a strong USP that is backed up by a personalised offer. Otherwise you are just the same as the next company offering your product/service.
The real leaders in their sector know what their customers value. They are obsessive about knowing them really well. They collect data and instigate conversations so they can LISTEN & LEARN. The value of collecting and measuring data only shines through when it is turned into valuable insights. Ones that are then actioned in continuous improvement programmes. These types of companies build relationships. They communicate with customers and employees as a priority & personalise their service where possible. It is baked into the culture of the business, but that is a post for another day!
So, in summary. The businesses who ‘get’ this concept have reduced operating costs, increased customer & staff retention, more referrals and recommendations, less complaints and happier people.
Sounds like something you might want to explore further…….