REINVENTING CUSTOMER SERVICE IN THE AGE OF THE INFORMED CONSUMER

1.      WHO IS THE CUSTOMER?

The Customer is that person or Institution that makes a demand for your products or service offering.

A Customer is the target for specific products or service and helps add value to an enterprise through the demand he / she makes of specific offerings.

The Customer is the most crucial actor in the marketing process because there can be no marketing without the Customer.

2.      WHAT DOES THE CUSTOMER WANT?

The customer seeks for the satisfaction of his / her needs in the market.

The producers of goods and services seek to satisfy the desire of Customers for value in return for profit.

The customer demands the value inherent in the consumption of products or services and also gives value to the producer in the process.

3.      PERFECT MARKET: THE OLD ORDER

In an imperfect market, where the DEMAND for specific products or services outweighs SUPPLY, producers are usually price-makers, who make little effort to woo the Customer.

This situation occurs in a monopoly or an oligopoly.

Here, producers dictate their terms and Customers strive to meet these terms.

4.      ENTER THE ERA OF IMPERFECT MARKETS

With globalization, increased innovation and its attendant atmosphere of fierce competition, where monopolies like Microsoft and Oligopolies such as Coca-Cola, IBM, Nestle and PepsiCo are now facing stiff competition from emerging enterprises in China and India, the era of price-makers in perfect markets are over.

The death of perfect markets has led to a new era where competitive edge is not only driven by product quality but by distribution, delivery and customer service innovation.

5.      THE DEMANDS OF A CUSTOMER SERVICE CULTURE

Global exposure to technology and skilled Man power, led to the advent of product parity in most industry and the consequent erosion of rigid customer loyalty.

Price now became a big consideration in choosing between competing brands and products.

In this dispensation, consumers became price-grabbers, shopping for price and not out of loyalty.

 

However given the need for differentiation beyond price and product quality, companies now started to innovate in the area of product delivery, turn-around time and Customer service.

This shifted emphasis away from Total Quality Management (TQM) to Total Relationship Commitment (TRC) and redefined the whole concept of Marketing.

6.      ENTER THE ERA OF MAXI-MARKETING...

Noting that traditional marketing with its emphasis on Product, Place, Price and Promotion, does not adequately address Customer needs, Maxi-marketing a blueprint centered around Customer Relationship Management (CRM) emerged.

Customer Relationship Management is a process or methodology used to learn more about customers' needs and behaviours in order to develop stronger relationships with them.

Customer Relationship Management  as a process which brings together pieces of information about how customers, sales, marketing effectiveness, responsiveness and market trends help to shape a Company’s Business  Strategy.

7.      CUSTOMER RELATIONSHIP MANAGEMENT: THE NEW REALITY

Customer Loyalty is crucial in the drive at year on year profit.

For a company to stay solvent and profitable, it must manage its customer churn rate and increase its customer retention capacity.

To drive this strategic intent, Companies must court the Customer by meeting or surpassing his expectations through availing the Customer a robust value proposition well beyond the competition.

8.      WHAT IS CUSTOMER LOYALTY?

Customer loyalty describes the tendency of a Customer to choose a product or service over another.  Note the use of the word "choose”.

Though customer loyalty becomes evident when choices are made and actions taken by the customer, customers may express high satisfaction levels with a company in a survey, but satisfaction does not equal loyalty. 

 Loyalty is demonstrated by the actions of the Customer; Customers can be very satisfied and still not be loyal.

9.      RETAINING THE LOYALTY OF THE CUSTOMER – WHAT IMPERATIVES?

If your Customer could compare you with your competitor in terms of your product and price, would you be better off?

Companies generally need to know two key principles about customer decision making:

a)      Customers never buy solely on price even though we think they do.

b)      Prices may be transparent to Customers, but value is usually opaque. By building a Customer service culture, companies build added value to their offerings.

10.  MOVING THE CONVERSATION AWAY FROM PRICE TO VALUE

In value based selling, relationship is prioritised over transaction. Sale is therefore a continuous process - from building the pipeline, the narrowing on the prospect, making the real sale to after sale service - customer satisfaction is placed very high in the entire process. 

11.  HOW TO SELL ON VALUE

Value delivery is the basis of the existence of businesses.

However, given the gradual decline in the differentiation of offerings based on quality, value delivery in most industry began to wear the toga of monotony and stasis.

Value delivery soon became defined in terms of product delivery, distribution and Customer service innovation.

Product and Service delivery based on the understanding of Customers changing needs and attitude became the order of the day.

12.  SELLING ON VALUE: CASES FROM THE MASTERS

Dell

Dell cut off the middleman in the distribution of Computer Hardware and Customized offerings to suit  individual Consumers, thereby beating competitors like HP, Compaq and IBM.

Pepsico

Pepsico shifted emphasis from the production of carbonated soft drinks to production of energy drinks and other related offerings in order to take advantage of changes in trends and consumption attitude, thereby beating a competitor like Coca-Cola in terms of profit.

Selling on Value: The Nigerian Experience

Zenith Bank

 Zenith Bank redefined the concept of Banking in Nigeria by introducing On-Line-Real-Time Banking and Convenience Banking before it became the minimum standard of entry  thereby beating Competitors like Guaranty Trust and Diamond Bank.

Ekocorp

 Ekocorp redefined health care delivery in Nigeria by being the first publicly quoted Hospital. Through its access to funds from the capital market, it was able to raise enough funds to procure state of the art medical equipment and hire experienced personnel thereby raising the bar in private health care delivery.

13.  HOW TO GET THERE

It is proven that innovation based on technology or efficiency in production not targeted at the customer do not positively affect the bottom-line.

Most profitable innovation therefore are built around the Customer.

This is because the Customer is at the core of Value Delivery and Profit Maximization.

It is therefore essential to build a Customer centric value delivery process in order to engender loyalty.

14.  WHAT DOES IT TAKE?

Understand What Your Customer Really Value

 You may find that product cost is a small component of the customer’s total cost and that price is only one of the many variables that customers consider. To build loyalty you must understand the Customer’s Life Time Value (LTV) and align this with your Product’s Lifecycle.

Develop Flexible Market Offerings

No Company can satisfy all Customer segments with the same offering. Companies need to create flexible market offerings. These are bundles of products, service and information that Customers can configure and customize to suit their priorities. Companies sometimes bundle services with their product, but the truth is that not all Customers value these services. Allow Customers to choose the service they value and pay for only what they use. 

Communicate Your Value Proposition

You need to educate Customers about the elements of your value proposition in order for them to fit these into their equation. Without this, your sales force will only use price as its competitive weapon. There is therefore the need to educate your customers on the economic benefits of the Non-Price-Variables embedded in your offering.

Be Open and Honest

A lot of People believe that transparency is an enemy of profit. They reason that Customers will take advantage of better information to drive down prices and profit, but the truth is that there can be no loyalty where there is no trust and trust is better built in an open and honest relationship.

Develop a Customer Data-Mining Process

Customer data and models based on this data can help inform you of customers most likely to respond and become loyal, no matter what kind of front-end marketing program you are running or how you "wrap it up" and present it to the customer.  The data will tell you who to promote to, and how to save precious marketing naira in the process of creating customers who are loyal to you.

15.  PARTING SHOT!

“It is much less costly to generate Customer Loyalty and retain Customers, than to deploy marketing money in the quest at attracting new Customers”

GETTING ON THE ROAD TO ELDORADO: HOW CAN COMPANIES FIND A DIFFERENTIATOR?

I work in an industry dogged by low perceived used value. My industry is Public Relations and just any guy, who has honed his skills in journalism and citizen publishing, feels he can ply my trade; hence everyone jumps in until we get to a point where no one feels the need to pay for our service. So, how do we survive? And what is the attraction for our continued participation anyway? I reckon this applies to every industry. The need to find a differentiator, one that delivers value and keeps you in business is one question that keeps CEO's awake at night. But, the answers get tougher as one survey the landscape.

1.       At the Beginning – Far from Having a Product , Companies Saw a Need to Build Reputation

Everyone has an image, but building reputation takes careful planning, hence the need to hire someone on the outside, looking in and orchestrating a road-map – from the sessions with critical stakeholders, the interviews on Radio and TV, the Press Release to the Social Report – everything must tell a story aligned to the desired end state. But beyond that, Companies focused on keeping the quality of their products or service high as a basis for continued patronage and good reputation.

The marriage was fluid and pleasant until quality became a buzz word and clutter slipped into the media environment on the back of the worldwide web.

2.       From the Era of the Media is "Us" to the Era of the Media is "Me"

After centuries of brandishing quality as a differentiator and latching on to the traditional media for corporate story-telling, a big bang occurs and the world is thrown open. Now every company must come to the table with quality and people are able to communicate with anyone in the world graphically and visually in real time about their experiences of competing companies offerings. And as this changes kicked-in, things came tumbling out of control.

With the changes brought clutter and confusion, and as things progressed, the question on the mouth of future-oriented companies became - from the email, to the blog, the podcast and now with social media - how do we build the needed differentiator for our offerings? How do we tell the corporate story to the right audience and be sure they are listening and in turn helping to shape the desired perception? Suddenly, the name of the game changes from having a consumer who is content with shopping for the same products under different labels to a consumer who is not only individualistic and informed but one who seeks to be involved in the production or service process.

3.       Under the New Era – How Do We Tell the Corporate Story?

Under this era of individualism with the consumer drawing expression and association with all that he encounters, based on the connection he feels with each product or service, rather than the perceived quality of the product or service, telling the corporate story becomes a complex game. In building communication that connects, the demand on business therefore became to understand not just what the consumer wants but how the consumer wants it.

So away from onground reality, shaping perception also became complex. And in trying to simplify things, the print journalist jumps in, wielding data on the circulation figures as well as the demographics of the readers, claiming “it can never be better than knowing precisely where your crowd has been for decades and knowing it really does not change”. Excuse me? Never changing demographics or never changing consumption patterns? Does that really exist?

Still trying to make things easier, the broadcaster comes knocking, claiming “the crowd is still with me and I know because there is a TV and a radio in most homes”. Hey, whatever happens to the proliferation of electronic media? How does this affect gathering the crowd?

Still seeking Eldorado, the Social Networker and  Citizen journalist breaks in saying, “I am the new deal, try me for size and you’ll see the beauty of your story come through with immediacy of feedback”.  Looks good and Interesting, but how about unintended consequences?

In an attempt at finding an Eldorado, everything changes as everyone stakes a claim to the crowd and what the crowd wants remain elusive. What is even sadder still, is the fact that the Public Relations professional whose duty is to seek out what the crowd wants is considered a middleman and in today’s business logic, everything must be done to get rid of the middleman because he not only reduces turn-around time and increases cost, he also prevents personalization and customization. The take is, why do I need a Public Relations professional? “I know what my desired reputation is and I figured I can hire a guy who speaks the PR language and I can deal directly with the media – whether old or new – on my own!

And as changes continue to happen in both the social and business environment, new challenges erupt raising new questions and demanding specialist knowledge. But guess what? The business buff finds a way around it. “I reckon I can talk to each platform directly and just maybe, my crowd will pick it up and run with it”. But in telling the story, he fails to recognise that each platform places a demand. And in telling the same story, there is a need to vary it based on the nuances of each platform. He then hits a brick-wall. And still in search of the Eldorado, he keeps trying the same things and hoping for a different result.

4.       The New Game is About Building a Community of Followers.

In today’s complex business and media environment, the only way to avoid clutter is to build a community of followers who share your values and are ready to openly associate with you.

The Social Media teaches a good lesson in building communities as communities once built, become a centre for telling a corporate story and having members tell their experience. And as the storytelling becomes a two-way game, the true picture about how a business is perceived emerges and keeps emerging as new things happen in the external environment.

Truth is, in building a community and ensuring continuous participation, Public Relations regains relevance but in regaining relevance, new skills are demanded of the Public Relations practitioner. He remains an arbiter but no longer a middleman. The Public Relations professional must become as immersed in the story as the owner of the story and must participate in the feedback process as ardently as the average member of the community. But even as the new skills are honed and owned, the search for Eldorado continues, because the world is ever changing.

5.       Building a Corporate Stature – Its More About Dynamism than Heritage

And away from the Public Relations professional, businesses must strive to be different with every encounter in the storytelling process. But beyond finding a difference, the intrinsic value of the business must have a dynamic basis as this deepens the experience; because a story is just as good as the experience of the product and service in the moment of truth. And given that today’s consumer is intensely curious, easily bored and always searching for something new, legacy and heritage cannot stay static, it must have a dynamic basis with the value it brings remaining ever new to the consumer.

Once upon a time, Microsoft ruled in personal computing and Nokia reigned in the world of mobile device. The story changed as the divide between both became blurred and in came the almighty Apple which became ubiquitous as it built a closed community of ardent and fanatical followers.

But that soon changed as Android soon busted the bubble and Samsung became the new word for sexy and smart. But the story is indeed a labyrinth  with no end but only layers and pit-stops, so the way to find your place under the sun, is to keep changing to meet the needs of thirsty consumers with fleeting loyalty.