If retention and referral behaviour is more important than customer satisfaction measures, how should you reconsider your company's approach to customer experience management?
Peter Simpson, in his article ‘Analytics and customer experience: Are you measuring the right thing?’ argued that it is more important to measure the perceptions of customers against their expectations and, importantly, their retention and likely referral behaviour, than it is against internal performance indicators. In this article, I will continue this theme and discuss some state-of-the-art methods for doing so.
- Stage 1: suspect
Suspects include everyone who might possibly buy your product or service. We "suspect" they might buy; we do not know enough yet to be sure.
- Stage 2: prospect
A prospect is someone who has a need for your product or service and has the ability to buy. Although a prospect has not yet purchased from you, he or she may have heard about you, read about you, or had someone recommend you to him or her.
- Stage 3: disqualified prospect
These are prospects about whom you have learned enough to know that they are not the best fit for your products and services and so you may choose not to target them. Choosing not to serve certain customers is an indicator that you have really thought about your brand and customer experience.
- Stage 4: first time customer
First-time customers are those who have purchased from you one time. They are customers of yours but are almost certainly still customers of your competitor as well.
- Stage 5: repeat customer
They have purchased from you two or more times. They may have bought the same product twice or bought two different products or services on two or more occasions. They will buy from you but will also continue to give their business to competitors. You have share of market; you do not have share of mind of these customers.
- Stage 6: loyal customer or client
A loyal customer or client buys from you rather than anyone else. You have a strong, ongoing relationship that makes him or her resistant to the pull of the competition. For professional services firms this is where you begin to make the transition from being a supplier to trusted advisor. You are 'top of mind' and the first firm that a client calls when they need help.
- Stage 7: advocate
Like a client, an advocate buys everything you have to sell and purchases regularly. In addition, an advocate encourages others to buy from you. An advocate talks about you, does your marketing for you and brings customers to you. Brands like Virgin, Apple and Zappos all have advocates who are happy to be unpaid sales people for these companies.
Shaun has been a leader in expanding management attention from the narrow focus on customer
service to the wider, more strategic drive towards customer experience. He is the founder of Smith+co
the leading UK based customer experience consultancy. He is co-author of five acclaimed business
books, his most recent being, ‘On...