How customer behavior is a direct response to levels of autonomy and choice in business transactions
Customer retention can feel like a puzzle at times. Even when you think you’re doing everything in your power to achieve brand loyalty, they move along.
100% of the time, it’s for one of two reasons:
1) Something you did
2) Something you didn’t do
Sometimes it’s something you had to do, or couldn’t do. Sometimes you just don’t have the resources to meet their needs. Would you let that stop you from accomplishing your customer engagement goals? Is it even possible to ensure you are maximizing the effectiveness of your response to change with the right customer service?
Our last post highlighted the idea that customer engagement is no longer just segmenting your customer base into particular groups of interest, but really honing in on individual wants and needs. Part of this means accounting for how people are known to change their minds throughout a customer relationship. Keeping up with those changes throughout the customer life cycle is one of the greatest challenges faced by decision makers today.
Revenue Maximization = Customer Loyalty
Customer loyalty determines inflow and outflow of cash: an old study from Bain & Company says a 5% increase in customer retention makes for upwards of a 25% increase in profit. Industry leaders succeed in this department. Most businesses do not.
Revenue maximization is often misinterpreted as a cold motive for business leaders, viewed somewhat at odds with more “human-oriented” factors of commerce. Counter to this perception, however, top-performing businesses have always known revenue and customer relationship to function hand-in-hand, especially when we consider long-term customer retention.
Top companies have been aware of “customer-centric” business philosophy since long before there was even such a term; because they’ve always known themselves to be at the will of the customer.
But customer-centricity is now mainstream, and it’s not going away. Technology only promotes it further, allowing for increased transparency and connectedness with customers. It’s created an expansive shift in corporate behavior. Whether a company cares about customers or revenue first is hardly a question anymore, because they are clearly one and the same.
Two Maximizers of Customer Loyalty
We also mentioned, in our previous post, how customers love two things in particular – two words that can serve as the essential buckets for everything a customer wants.
These ideas function hand-in-hand also, as two basic factors of customer experience that truly maximize each other. The more choices there are, the more useful autonomy is. The more autonomy there is, the more choices are appreciated.
This might initially sound like an excessive philosophy/semantics discussion, but it’s the root of a positive customer relationship. When explored, there is true impact.
Bucket #1: Customer autonomy, Customer Self-Service (CSS)
Customer self-service was a big step in the way of customer centricity. It was once new and “cool”, but is now becoming a regular commodity. ATMs and the rise of mobile banking are among the most common examples. Many even pay their insurance through an app.
Now, almost everything happens by phone. Even when it’s not through an app – when a customer calls, they are essentially “serving themselves” in a dialogue with an automated natural-language guide.
Transactions are becoming increasingly app-oriented across all industries. Though many still prefer print-delivery of bills, statements, and official letters, the message is the same: customers want some – even if it’s not complete – control over what they get from you.
That’s something you are in control of. You could have arguably more control over customer communications than the product or service your company delivers; and it’s exactly here that you introduce the level of personal freedom you’re granting the customer in your relationship with them.
Unified platforms for customer communications do this by giving customers a simple interface for correspondence, with a certain level of interactivity. Every interaction can give them a desired feeling of control.
When you think on how documents are probably your most frequent customer touchpoint, it changes how you consider the impact: is it print or digital? What sort of content (static text, animated graphics, etc.) does the customer prefer? What’s the level of interactivity? How you respond to these variables; how does your response measure up to a particular customer’s interests?
Interactivity means you're controlling what they control. How you decide to control it determines how free they feel, whether they leave you or thank you for it. See the transitive property at work here: Customer Communications Management (CCM) means you are in control of customer advocacy, whether you cross-sell or up-sell. With the technology at your disposal today, customer interaction management – managing customer preferences, managing revenue – was never easier.
Words like customer-centricity and Customer Communications Management are often accompanied by this one: Omni-channel. How flexible are you in engaging customers? What capabilities do you offer them to engage you? The level of connectedness you provide is essential to their autonomy. Customers, on their whims, should be able to reach you by phone, SMS, print, fax, email, and others.
Which brings us to choice.
Bucket #2: Customer Choice, Variety in Communications
Alluding to this earlier, we mentioned customer choice in the context of delivery method, document type (statement, invoice, letter), content specifics (pictures, words), and level of interactivity. We also mentioned Omni-channel communications, which is where you initially establish the grounds for a unique, diverse cross-platform customer relationship.
With Omni-channel, you’re saying “Look at how many different options you have!”
Not only do customers like to choose between phone, fax, email, and SMS for their documents; they also like to specify what kinds of documents they would like to receive by each medium. There are practical reasons for this. Take bills, for instance: customers generally prefer to receive them in physical form. Snail mail is simple, everyone is familiar with it, and there is a heightened feeling of security, because it’s more regulated.
On the other hand, other types of correspondence are more widely preferred in digital format. A paper document takes up space, so customers enjoy receiving documents of lesser importance than invoices or contracts – newsletters, fact sheets, even statements (sometimes) – to their phones or emails.
Within digital document types, customers can choose the style of content they would like to consume. Are they more or less visually-oriented people? Or do they like to do more reading? This varies customer by customer, but there are ways to gauge it. Modern Customer Communications Management (CCM) technology provides a two-way street for communications: digital documents with elements that collect data on how frequently the customer interacts with them.
This is customer preference tracking at a new level. They don’t even have to say anything – only digest the content in the documents as usual, and the data is sent to you in real time. Interactivity is the cutting edge of customer-facing documents, and it’s the perfect synergy between the autonomy and choice earlier mentioned. It’s acting and choosing in a way that is fast and comfortable, and it empowers you to stay on top of customer preference for every step of the journey.
To recap, customer loyalty is now your most powerful revenue maximizer. Knowing this, it’s wisest to pay into methods that promote customer autonomy and customer choice. Ways to do this involve providing customer self-service, options to communicate by different channels, and tracking of preferences during the whole of a customer journey. Technology is what takes us here, but it ends in a more personal, human experience; this only increases with time, and with added longevity in the relationship.