As we enter the new millenium technology has made the world a much smaller place. In every corner of the economy, in every industry, companies are finding their market place to be significantly more competitive and their customers to be significantly more demanding. Customers are more demanding simply because they can be! Because of increasing choice, customers are more powerful today than ever before. Welcome to the “value era”, an age where customer loyalty is rapidly becoming more difficult to achieve. We are all in a hyper-competitive reality where the old rules don’t apply, and old solutions don’t work.
Here are seven simple truths of achieving success in the value era that I believe to be worthy of consideration. These fundamental truths apply to every organization, department, team and individual.
- Regardless of what business you are in – customer loyalty is the key to success! Organizations are successful to the degree that they develop repeat and referral customers. Research suggests that it cost somewhere between five to eight times as much to acquire a new customer than to keep an existing customer.
- You develop loyal customers to the degree that you add distinctive value to them. The same principle applies to individuals – an individual today is secure and successful to the degree that the customers they serve (external or internal) value the product and process the individual is providing.
- Customer satisfaction is no longer good enough to maintain loyalty! One recent study indicated that over 70% of satisfied customers will leave if someone else offers them what they perceive to be a better value proposition. Consistently exceeding expectations is the key to loyalty.
- The customer defines value! To really complicate things – different customers place different value on different things. This means that organizations and individuals must really focus on LISTENING to their customers and be flexible enough to design a customer value package for each customer that optimizes value added and minimizes costs.
- To the degree that you, your department or your organization fails to add value – you are relegated to sell on price! The fundamental truth remains – to the degree you add value you get to add profit! This means that everyone in the organization must be driven by one overarching purpose; that is to add value to the customer! As the old saying goes …if you are not adding value directly to the external customer then you better be adding value to someone who is adding value to the external customer.
- Every customer interaction has two parts; the functional product or service and the personal component. The research is crystal clear time and again… in that the most potent value factor in determining whether we secure a customer or lose a customer is the personal component! Studies consistently show that approximately 70% of the customers that stop doing business with a given company do so because of a personal or attitudinal issue. The most common reason was someone from the organization treated them with indifference.
- Everyone in the organization must realize that the primary purpose for the existence of the organization is to add value to the customer. Further, everyone must understand that every customer interaction that they have is a “moment of truth”, during which customer loyalty is either grown or eroded, ultimately determining the fate of the organization.
Greg Campeau is founder and President of Campeau Learning & Development Inc. A training and consulting company dedicated to enhancing both organizational and individual performance.
Greg can be contacted by email at – firstname.lastname@example.org or by phone at – (604) 944 – 0642