This is the last in a series of four posts that present marketing tactics a business can consider, especially a SOHO business, in a challenging economy. The premise is that customers and success with customer relationship management are the key.
Marketing in a Challenging Economy – #1 Best Customers recommends finding best customers and focusing on delivering the best customer experience. The post also points out that your best customers are likely to be heavy category users. Heavy users are explored in #2 – Heavy Users. #3 – Relationship Marketing Principles provides direction on how to build mutually valuable relationships with customers.
This guest post, Delivering the Best Customer Experience, was written by David Hicks, CEO Mulberry Consulting and Alvin Jackson, Director Mulberry Consulting and explores customer experience.
In recent months it has become clear that, at the very least, GDP growth is going to slow down in most western economies and some economies might even face a recession. Several studies (not all sponsored by advertising agencies!) have proven that advertising during a recession generates a high return on investment and usually delivers growth in market share when economic conditions begin to improve.
What of Customer Experience during a challenging economy?
Customer experience is fundamentally different to advertising or marketing the organization. It is an intrinsic part of the proposition that customers consume as they purchase products or services. Customer experience is also different to advertising in that it is not a discretionary spend, although it is certainly possible to optimize spending to deliver the desired customer experience. However, the same principle that we have seen for advertising holds true for customer experience, in fact probably with more confidence — if you create a superior customer experience in a challenging economy you will create immediate competitive advantage and you will see the upside when conditions start to improve.
The Customer’s Point of View
During an economic downturn most consumers will be looking to increase value for money – they are likely to be more discerning and considered in their purchasing decisions as they try to make hard earned cash go further.
When times are hard customers are also likely to be less forgiving of a poor service experience and are more likely to “vote with their feet” if an organization fails to meet their expectations in terms of the customer experience.
With less disposable cash available, customers are also more likely to take notice of advocacy and other customers’ recommendations of products or services.
The Organization’s Point of View
When economic conditions become more demanding organizations tend to come under considerable pressure to maintain profit growth even though revenues might be flat or declining. Traditionally organizations focus on cost cutting and on acquiring new customers.
This time round, things are likely to be different. Retention of existing customers (in particular the profitable ones) is all the more important during difficult economic conditions; improvements in the bottom line (costs) can be achieved from “getting things right the first time” and dealing with issues “on the first touch.” There are considerable cost savings to be had from doing more of the right things for existing customers and fixing those things that are not working for them.
Understanding and reviewing each stage of the end-to-end customer experience, to optimize those touch points that matter most, is likely to reduce churn and help focus scarce resources where they will make the greatest difference.
Additionally, organizations should identify those customers who are potential advocates of their products and services. Encouraging potential advocates to recommend you will both increase revenues and tend to create even more loyal customers, who are then more likely to stay with you and keep spending even when times get tough.
Where to Start?
Starting to focus early in the customer experience is likely to be a sound strategy. Putting the changes in place early in the cycle will better “insulate” the organization from the effect of any economic downturn and enable the organization to realize the benefits over a longer period.
In addition, deploying a measure of customer advocacy (for example Net Promoter), to both identify the advocates in the customer base and to provide a baseline to check whether overall customer equity is stable, improving or deteriorating will enable more focused action to be taken.
Hip Shots
- Your customers always have a choice — whether to buy something at all or whether to buy it from someone else. During a challenging economy that choice becomes even more important, for buyers and sellers alike.
- Concentrating on getting the customer experience right is important. During a downturn, making sure that your customers choose you over the competition becomes essential. If you get it right when times are tough, you will certainly reap the rewards as conditions improve.
- A practical first step is to develop a clear picture of the current end-to-end customer journey and to identify those high leverage touch points and areas of waste in the current service experience.
© Mulberry Consulting 2008
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