Customer satisfaction is not enough: Personal connections bring greater results

By Peter Mueller

Customers today are spoilt for choice and once they have selected a supplier for their product or service, the onus is on that business to hold on to them.

Over the past couple of decades, a number of methods have been tried and tested to find a successful formula for customer retention and with the ball in the customer's court, the widespread answer has been ‘to improve customer satisfaction' and that is what businesses tend to concentrate on. But can we truly say that a satisfied customer, i.e. one pleased with the product or service, will remain loyal for years to come - will they grow into a life-long customer? Not necessarily.

Customer satisfaction is not enough

Satisfying a customer is no longer enough. Evidence suggests that satisfied customers will only remain loyal until they get a better deal.

The relationship between customer satisfaction and retention is the subject of a great deal of research. One piece cited by the journal of Psychology and Marketing reports that in a study of car buyers, 60% who said they were satisfied with the service did not engage in any repeat purchase behavior. More interesting is that 15% of the unsatisfied customers returned to the same dealers despite their dissatisfaction. Additionally, the 2009 Global Consumer Satisfaction Survey carried out by Accenture revealed that customer satisfaction scores may not be reliable indicators of loyalty.

So is there a better way to build long-term customer loyalty?

Building life long relationships

Consider your hairdresser, doctor, local butcher, greengrocer, or favourite restaurant. These types of business consistently show high levels of customer loyalty and can expect five to twenty years of repeat custom. All of these markets are able to offer one thing in common- a completely personal service with individually relevant advice and guidance.

For example, restaurants may remember your preferred seating area, hairdressers may recall your last haircut and your last conversation. By pulling on past interactions, these businesses are able to create a sense of familiarity, warmth, and trust, creating what is sometimes referred to as "emotional engagement", a personal connection that demonstrates understanding and client value on an individual level. By building on emotional engagement these businesses experience the full benefits of customer retention.

We can all learn from them.

Opportunities to build personal connection

In the examples above, customers have face-to-face contact, usually with the same people. This makes the process of building a personal connection easier. To achieve this in an enterprise with thousands or even millions of customers worldwide is another matter altogether, especially with the trend of doing more business online and over the phone. But it can be done.

For enterprises the largest opportunity to create this connection exists in their customer communications. Whether its marketing, transactional or operational communications - online or offline, organisations collectively release billions of customer communications every year and each customer may receive many different messages everyday. This creates a huge opportunity for enterprises to turn what can be generic one-way contacts into highly personal two-way conversations, which respond to past and current customer preferences. This develops a closer, individual connection with your clients fostering longer lasting, more profitable customer relationships.

Turning theory into reality into results

The good news is that the technology to do this already exists. By adopting robust and reliable Customer Communication Management (CCM) software, businesses globally are developing individual, closer connections with their clients and reaping the rewards.

CCM software enables highly detailed personalisation of communications with relevant content, delivered through the customers' preferred channel - online, in print, by text or phone- at a time to suit. It makes a customer feel they're more than just another number in the database. It tells them their needs are understood and their custom valued. It could demonstrate, for example, an understanding of their recent trading pattern, refer to a problem solved or suggest a service that matches one they already enjoy.

CCM software also enables businesses to take full advantage of the multi channel age, providing new ways of establishing relationships with customers, even out of business hours, through social media, personalised URLS, automated emails, SMS and more and all managed within a single operating environment. Additionally automation capabilities within CCM software facilitate the delivery of messages when most appropriate or convenient for the client. For example, a noted photography company uses "Facebook" to offer professional photography to customers as soon as their "relationship" status is changed to "engaged". This is an effective example of personalisation through relevant content, delivered through the preferred channel, at the most appropriate time therefore bringing the best results. Scale this up and the principal applies to any business.

Personalisation however is not a one hit wonder. You will also need to assess how well it is working, measure response rates and behaviour changes in customers so you can adapt, develop and keep up.

Where Next

As customer expectations grow, and switching costs decrease, businesses need to engage their customers in new ways if they want to win the retention battle. With the right CCM software as the backbone of their CCM strategy, business are already reaping the rewards.

For example, one of the world's largest banks, Bradesco, utilised GMC Software Technology's 20 years of experience and proven technology in a new initiative to help increase customer retention and bring in new business.

Bradesco realised the need to differentiate the way in which they engage with their clients and implemented the first ever "TransPromo" solution. Emotionally engaging clients by personalizing client bank statements with relevant information and different offers for each individual. It was a resounding success.

In another example, a major retailer is using GMC'S CCM solution to develop interactively generated customer correspondence. This allows call centre agents to personalise customer correspondence with relevant messages, additional information and even tailor when and through which channel (email, print, fax etc) the correspondence is delivered.

Confident that the technology exists, business leaders need to direct their communications strategy to interact with their customers on an emotional and personal level. Those who do will win the retention rate battle and see significant results on the bottom line.