Tough times mean the customer is king once again

>>published on TheWiseMarketer.com

Now, more than ever, British SMEs are devoting time, money and effort to improving their customer relationships, although it is still evident that specific attention is needed in many areas to ensure that their investments are not wasted, according to the 'Customer Kings 2009' report published by Cisco.

The survey of 1,000 senior decision makers from UK SMEs in a wide range of business sectors found that, with the world economy presenting a tougher business environment, there is a renewed focus on customer relationships and customer service. 

Among the study's main findings:

• 57% of respondents have introduced new measures in the past 12 months to help build relationships and retain customers, although only 39% said that Britain as a whole is getting better at customer service;
   
• 61% believe that their approach to customer service could be improved with more time and resources, by focusing on quality and customer insights;
   
• 52% believe that their customers will see price as more important than quality of service in the economic downturn;
   
• 42% say that the downturn is moving their focus away from acquiring new customers to increasing the loyalty of existing ones. Worryingly, 41% said that they didn't know which area to focus on;
   
• Respondents cited the top three attributes needed to run a successful business as:
  1. Putting the customer first (44%);
  2. Flexibility to adapt to market changes (39%);
  3. Ensuring that employees are professional and motivated (37%).
   
• 88% say that a successful business is based on the 'personal touch' when dealing with and selling to customers. Interestingly, 76% said that a personal touch was best achieved by the attitudes of staff, and 46% said that miserable employees should be removed from the organisation to safeguard customer service and satisfaction;
   
• Technology was a point of debate amongst SMEs, as 36% claimed that retail outlets will always offer better customer service than internet-only businesses, while 33% argued the exact opposite;
   
• British SMEs are tentatively embracing Web 2.0 technologies, with 17% now saying that they 'blog' to connect with existing or potential customers.

According to Cisco, SMEs should begin to learn about their customers and gain a better understanding of buying behaviour and loyalty patterns. At the same time, businesses need to prioritise employee motivation. According to Bernadette Wightman, head of SME business for Cisco in the UK and Ireland, it is easy to overlook the importance of employee morale in a downturn, even though SMEs widely recognise that happy employees are essential for good customer service.

Wightman concluded: "We see a fascinating divide between those small businesses that are embracing technology, and use it as the core of building customer relationships, and those that shun it in favour of an absolute personal touch. It is important that businesses achieve a balance between the two - a mix of traditional values and technology that can help them do better business."