The journey from customer satisfaction to brand loyalty

22nd Nov 2007

The market has moved a long way beyond traditional CRM technology solutions. Keith Pearce examines the complex relationship between satisfied customers, customer loyalty and brand management - and how a different approach to contact centres can create lasting bond between customers and businesses.

By Keith Pearce, Genesys Telecommunications

In the global business climate, customer service is now one of the few areas a company has to differentiate itself. In particular, companies in the mobile phone and financial services industries – both of which have reached saturation point – place enormous focus on good customer service as a key differentiator from the competition.

The link between branding and customer service is an area that many executives have completely overlooked. Companies spend millions on advertising and product promotion efforts, but don’t invest adequately in CRM. They don’t realise that the contact centre is the most sustainable and meaningful brand delivery vehicle they have at their disposal to build lasting customer relationships – which is the breaking point for the brand. It takes an extremely distasteful advertising strategy to lose customers – but only one poor customer service interaction, to see defection.

Take, for example, the recent merger between Virgin Mobile and NTL. One is renowned for its excellent customer service, the other known for its rather lacklustre approach. Looking to leave behind its past customer service issues, NTL has rebranded itself under the Virgin name, giving it instant consumer appeal.

This demonstrates how the value of a brand dictates customer expectations on service they will receive. If an organisation has high value products and a strong brand then customers will rightly expect superior service in the contact centre - and be irritated with anything less. If, on the other hand, a business offers low cost products and services, then customers’ expectations will be different. Adjudicating what customer service is worth to the customer is the first important step in determining a business strategy.

Satisfied customers do not mean loyal customers

But CRM isn’t based on simple maths. Satisfied customers do not equate to loyal customers. All things being equal, a merely satisfied customer will defect to a more economical option if they do not feel they are emotionally connected to the company. Customers need a strong reason, and an emotional pull, that will affect their re-purchase intentions and willingness to promote the company above simple satisfaction. Companies who boast about high levels of customer service may not be advertising a meaningful metric.

It is true, however, that customer service is the largest single influence on consumer loyalty. Genesys research has shown that 46 percent of people in the UK feel that service is their number one driver for loyalty, compared to only 33 percent who felt that product quality was key. So if you can achieve both excellent service and product quality, then your business will have high customer loyalty levels - which in turn will help drive up profits!

"Research has shown that 46 percent of people in the UK feel that service is their number one driver for loyalty, compared to only 33 percent who felt that product quality was key."

Before customer relationship management became an industry buzzword, businesses were traditionally offering the type of personalised service that fosters loyalty. Local corner grocery stores and independent retailers, for instance, embodied this service by delivering a personalised customer service that enabled them to foster relationships with their customers. Managers of such businesses greeted their customers by name, knew their particular buying habits, stocked special items for certain customers, and even knew the time of year when particular customers were more likely to spend more.

In these businesses, managers knew the value of keeping their customers and cultivating these relationships. Some extended this service to ‘store credits’ for their best paying customers, and offered discounts and free items when deliveries were mishandled or transaction were miscalculated, so as not to lose such a valuable clientele.

Companies looking to deliver successful CRM projects nowadays need to revert back to this traditional model of personalised service that has been lost in most modernised societies – and contact centres! – and look to provide a more proactive service than one that simply deals with customer issues and problems. They need to go beyond satisfaction and create an emotional connection between themselves and their customers.

Often, this will require companies to rethink their customer interaction models that are for the most part predominantly centred on inbound customer inquiries. These types of interaction are to a certain extent flawed from the outset, as they are reactive to a customer’s enquiry and/or complaint. By contrast, a proper CRM strategy examines closely how the company can prevent the contact from ever taking place.

Repeat business is not really customer loyalty. The customers that we all want are those that will promote your business to their friends, and to people they meet – an active advocate for your business can become one of your greatest sales tools. People like this do exist, but why are they so enthusiastic? The answer is that they have formed a strong emotional connection.

A dynamic approach to managing customers

Customers feel loyal if they feel valued by that person/business, and feel that they get value from the relationship. Several forward-thinking companies have made great in-roads into addressing these issues successfully through the deployment of a dynamic contact centre approach. This enables them to optimise the blend of people and technology to create a seamless process for managing customer interactions. And managing those interactions well means that whenever a customer chooses to contact your business, they go away feeling satisfied and knowing they will return.

"90 percent of consumers would have a more positive opinion of a company if they were to receive a courtesy call, to follow up after a new contract, upgrade or change in service."

90 percent of consumers would have a more positive opinion of a company if they were to receive a courtesy call, to follow up after a new contract, upgrade or change in service. Customers appreciate a quick phone call to thank them for their business, and to check that they are satisfied with the products and services they have received. Having this kind of service in place is another factor that can distinguish your business from your competitors and create a strong, sustainable relationship with your customers.

Planning, executing and managing this kind of outbound campaign without adding cost can be initially daunting. However, the ability to do this is dependent on the set-up of the contact centre and its processes. Segmented and siloed contact centres will find it difficult to manage this kind of blended approach. However, a dynamic contact centre enables organisations to effectively integrate the separate elements that make up an effective, multi-channel customer service approach.

Businesses should remember that, essentially, any employee within the organisation is capable of making a courtesy call or informing a customer of new products and services – it doesn’t just have to be your most experienced agent. Use employees in the back-office as well as contact centre agents, and you will be able to keep up more regular contact with your customers and optimise the effectiveness of every person within the customer service organisation. This is key to strengthening customer relationships, customer loyalty and enhancing your company’s brand.

Keith Pearce, is EMEA marketing director at Genesys Telecommunications.

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