What do customers want? Learning the answer could bring success to your business
It is no longer enough to ‘serve’ your customers. With a plethora of options in the market that can easily sway their loyalties, businesses would do well if they gun for ‘customer experience’.
A Latin American bank wanted to know what its customers thought of its products. So it broke away from the tradition of outsourcing customer research to a third party and, instead, began interacting with them directly. Each week, the bank’s staff showed sketches, wireframes, and functional prototypes of new models to customers and collect their feedback.
The result was a redesign of the account-opening process. New customers now had to input just four fields out of 25 – the rest would either auto-populate or were excluded.
The bank went beyond delivering good customer service; it delivered a superior customer experience.
Customer ‘experience’ is the new kid on the block
Most business leaders complain about the finicky nature of customers today whose loyalties shift seemingly easily. This is often because they fail to notice how the landscape has changed. Customers no longer crave just service; they crave an experience.
Customer service is a reactive process that occurs when customers reach out to a brand. Customer experience, on the other hand, is a proactive process that occurs when the brand reaches out to the customer. From being a good-to-have, customer experience has turned into a must-have for businesses and brands that want to thrive in the new economy.
In an insightful column, Anup Rajpurohit, CIO of YES Bank, Rajpurohit wrote, “Digital is disrupting value chains and compelling organizations to redesign their business models... Technology is now the bedrock of everything, from customer sourcing to enhancing customer service at reduced costs.”
Technology is the most important tool when it comes to improving customer experience. Some of the ways it helps brands streamline and improve their functioning are:
Identifying creditworthiness of customers
Brands can analyse purchase amount and frequency, payment cycles, and other relevant data to set credit limits for their vendors, suppliers and customers, especially in the B2B sector. A logistics company that deployed our CRM software analyzed factors like billing amount, the frequency of business, and payment cycles to set credit limits for its clients. Within three months, the company reduced its outstanding payments by a 40-percent drop.
Identifying effective lead generation platforms
Brands can use data to figure out which platforms are effective in generating qualified leads for them. They can increase focus on such platforms and reduce resources on others.
When a travel company using our CRM tool conducted such an analysis, they came across a surprising statistic: their most effective qualified lead generation source was a team of women working from home. They focused more on onboarding such people and training them to generate leads. The result was an 85 percent rise in leads in the year.
Providing accurate recommendations to customers
Brands can use data to provide accurate recommendations that cater to customers’ specific needs. They can also upsell according to these needs.
Target analysed shopper data to assign shoppers with a “pregnancy prediction score” and sent them relevant coupons at specific stages of the pregnancy. If customers purchased baby products from their stores, Target reasoned they would start purchasing everything else too. This upselling was one of the key reasons for Target’s revenue to increase from $44 billion in 2002 to $67 billion in 2010.
Reducing customer churn: By identifying points where customers abandon a purchase and understanding reasons why brands can not only reduce churn but also shorten the purchase cycle.
According to research, around 40-60 percent of users who sign up for a SaaS application trial never use it again. The main reason for this is that users cannot perceive the value it offers to their business. By educating customers during such trial periods, SaaS and IT service companies can reduce churn substantially.
Increasing turnover and profitability
According to research by Google, brands integrating advanced digital technologies and data to personalise customer experience witness up to two to three times faster improvement in their bottom line.
Customising offerings according to demographics makes the experience more personal for the customer. Delivering a positive experience consistently will help retain customers and lower marketing spends, thus driving turnover and profitability up.
The most pressing reason to digitise customer data
Since early days, industries have been disrupted not from within, but by external forces. Automobiles disrupted the horse carriage, the digital cameras were disrupted by mobile phones, television and radio lost their lustre to social media, and so on.
Such industries turned obsolete because they focused on a technology rather than a market. They built technologies and then searched for markets to fit them rather than looking at markets and developing technologies to fulfil those needs.
Digitisation doesn’t just keep customer data safe and consolidated. It also equips brands to analyse buying patterns and identify red flags when changes are en route. Proactive companies like Apple and Amazon go a step further to introduce such changes that revolutionise the market and use data to study how customers respond to it.
A new playing field
Companies that want to thrive can no longer afford to function on yesteryear’s business models. Questions have changed and so have answers. From “what are we selling?” to “what do customers need?” From “how should we maintain relations with them?” to “what value are they looking for?”
Answers to these questions will decide the success of businesses in the future. Effective implementation of digital technologies and analysis of relevant data captured will play a major role in serving businesses with these answers.
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)