As a customer centricity champion, just like you, I spend a lot of my time researching the topic. I’m always trying to understand exactly what customers want. My regular searches include customer service, customer satisfaction, customer care and similar areas. Google is my best friend!
However, I recently came across some surprising facts, which prompted this post. I believe they show a serious problem in the business of looking after our customers today. Read the article and then let me know whether or not you agree with my analysis.
Wikipedia, another online friend of mine, doesn’t have a definition of customer centricity! If you look the term up, you get directed to customer satisfaction! Try it for yourself and see.
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My other go-to source for definitions is businessdictionary.com which defines customer centric as:
“Creating a positive consumer experience at the point of sale and post-sale.”
It then goes on to say
“A customer-centric approach can add value to a company by enabling it to differentiate itself from competitors who do not offer the same experience.”
Now I like this definition because it mentions three important elements of customer centricity:
- a positive customer experience
- adds value to a company
- enables differentiation
This clearly identifies three huge benefits of becoming (more) customer centric:
- A positive customer experience has been shown to increase both loyalty and advocacy. (>>Tweet this<<) As we all know, it costs ten times if not even more, to acquire a new customer as it does to keep a current one. Therefore loyalty is a valuable benefit for a brand.
- Adding value to a company also increases the ROI of its marketing investments. This is something that marketing is challenged to prove today, or risk seeing their budgets cut. Luckily, what’s good for the customer is good for business. You can see many more facts and statistics in Forrester’s report “The Business Impact of Customer Experience” HERE.
- The third benefit is just as important to the growth of a business. Enabling differentiation in this complex world is invaluable in standing out from the competition. (>>Tweeting this<<) In so many industries today product performance and services are almost identical, so how can you stand out? By your customer care, that’s how. It has been shown that customers are willing to pay more for excellent customer service. You can read a summary of the American Express research that found that HERE.
The importance of customer satisfaction and understanding
There is no denying that customer centricity is important. However some companies are (too?) slow to adopt best practices in this area, which concerns me for a number of reasons:
- Changes are happening too slowly in most organisations. If it is important for the business, then what is stopping companies from adopting a more customer centric approach?
- Customers are complaining – a lot – about the way they are being treated. Why are companies not accepting these criticisms as the gifts they are?
- Customer service is confused with customer satisfaction. Companies are happy when their customers say they are satisfied, but they should be looking to delight them!
As mentioned before, the research that prompted this post was on terms related to customers. Having seen the strong positive trend for the word customer, I then wanted to understand what it was about customers that was of interest. I found that both customer service and customer care showed almost identical positive trends.
However, when I looked at customer satisfaction and customer understanding the trends were flat and worse, minimal. (You can see the trend graph below with service in blue, care in red, satisfaction in yellow and understanding in green)
These trends suggest to me that people search how to improve their customer service and care, but not about how to understand their customers or increase their satisfaction!
How can this be? Surely an interest in customer service should come from an increased understanding of how to deliver customer satisfaction. Apparently not.
And this is when I realised that perhaps businesses are more interested in the process than the real benefit of customer connection. That is a serious flaw in their thinking in my opinion.
To confirm my hypothesis, I looked into customer satisfaction levels and their trends. After all, many more companies are interested in customer service these days. So you would think it should have a positive impact on customer satisfaction.
According to the latest report from The Institute of Customer Service on customer satisfaction across Europe, retail, insurance and banking are the three best performing industries. This was a surprise to me because they used to be heavily criticised. However this suggests that they have taken action, albeit because they had little choice, but most other industries continue to ignore their customers. You can see the full Infographic overview above; click on it to see the original.
I then went back Google to find the ways which were suggested for increasing customer satisfaction. I found more than two million articles on how to do it, but very few on the results. Again, extremely worrying.
According to the US ACSI (American Customer Satisfaction Index) June 2016 report, customer satisfaction has finally increased for the first time in over two years.
However, as Claes Fornell, Chairman and founder of the ACSI says:
“By and large, the overall customer experience for goods and services purchased and consumed in the United States is getting worse.”
In the UK, which leads Europe in terms of customer satisfaction, levels also rose for the first time in four years, reflecting a more positive economy. However, that was before the Brexit vote! I am looking forward to seeing whether the Brits’ optimism continues this year.
The Key Takeaways
So what does a business need to do to increase their customers’ satisfaction? There are seven facts that become apparent from this analysis:
- Businesses should always provide a positive customer experience and do whatever it takes to satisfy, but ideally delight.
- Companies need to go beyond the mere process of customer centricity, to truly put their customers at the heart of the organisation.
- Customer centricity adds demonstrated value to a company; it should be a no-brainer.
- Customer centric improvements are happening too slowly in most industries, especially when customers are becoming increasingly demanding.
- Providing customer service doesn’t guarantee customer satisfaction.
- A positive customer experience increases loyalty and advocacy.
- Excellent customer service enables differentiation and even higher prices.
In summary, people want businesses to listen and understand them. When a customer takes the time to contact a company because they are unhappy, they expect a satisfactory outcome as a minimum. Those organisations who go beyond, to deliver delight will see their reputation improve, as well as an increase in their customers’ loyalty and advocacy.
Customers also want companies to be open and transparent. They want answers to their questions and criticisms. They have a right to know the source of ingredients, the ingredients themselves, their country of origin, the charities the company supports, or the organisation’s policies on waste, water and sustainability. They expect their questions to be answered almost immediately, especially on social media. They expect things that go wrong to be put right, with an apology.
So how are you doing? Are you living up to your customers’ expectations? How have you made progress in this area in the past year or so? Please share your success stories below.
You know you can no longer wait; you’re getting left behind by those organisations – and competitors – who are taking action today! If you need help in catalysing your organisation in customer centricity, C³Centricity provides 1-Day training on many relevant topics. See more HERE.