To fix your shortcomings you have to know your customer


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Having inferior product or service is not a goal for any company, but even the best organisation sometimes fails to deliver as planned. For these occasions, it is good to understand each customers’ preferences and sensitiveness, so that you know how critical the failure is and how to correct it. This allows you to target the resources where the make the biggest business and customer satisfaction impact.

For instance, a new mobile service provider, was looking to improve retention while they were still building up their service. They were aware that their quality was not yet at the level they aimed it to be and they had started a large investment program that would take about two years to finish. However, they did not want loose too many customers, especially the highest value ones, while their network was improved. They were monitoring the network logs, and if a high value customer had faced bad network quality frequently, a representative would call to apologize. The problem was that this approach was slow, labor intensive and did not take into consideration the customers’ preferences and his sensitivities. All customers classified as high value based on usage history would be contacted the same way regardless how sensitive they were to this particular issue and offered the standard compensation. In many cases this just irritated those that the company tried to retain.

Our approach was to study first the users’ preferences and how much value they attributed to each aspect of the offering and how sensitive they were to any changes in those. This way we could predict who would leave if they suffered from lower network quality and who would mind less. Once we knew who needed attention, we planned individual retention offers to them by analyzing their preferences. This way our client knew exactly who would be unhappy and what to say to each of them so they would not leave. Combined with predictions on the life time value for each and with real time monitoring of the customer experience, our client was able to keep its customers happy, while at the same time saving on its efforts. All because our client now understood what mattered to each customer.

The outcome; 13% reduction in churn with much lower costs and amount of effort needed.

If you understand your customers’ preferences; how much value they attribute each product/service feature and their communication preferences and styles you can gain great benefits. However, in order to really make a difference to the customer satisfaction and to the bottom line, you need to operationalize this preference knowledge at individual level and use it to improve each and every interaction.

Ilkka Huotelin
Ilkka Huotelin is a co-founder and a managing partner at Be Customer Smart a leading Customer Experience consultancy. He advises companies how to find out customer preferences at individual level and use the knowledge in each and every interaction with the customer with the help of advanced analytics to boost the loyalty and the sales.


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