Why Customer Focus Differentiates
>> by Ray Miller
Discover the benefits of customer focus and the link with
customer loyalty and profitability..
Has
this ever happened to you? You're in a hurry. You want to complete your
business and the person serving you is preoccupied with something other than
serving you. Then when you are served, you might get an insincere apology for
the delay followed by the completion of your transaction. If asked to describe
this experience you would likely respond "That's typical" or
"It's nothing more and probably a little less than I expected."
Welcome to the world of the average consumer.
Most people will probably tell you that good service is just common sense. They
would also invariably say "For something so common, it sure is hard to
find!" Edward R. Murrow said it very well: "What is obscure, we
eventually see. What is obvious usually takes a little longer."
Research from a litany of reliable sources tells us that the primary reason
that customers switch their loyalty from one company to another, in the range
of 40% to 68%, is because of a perceived attitude of indifference on the part
of the service provider. Sure, some leave because of price, or product quality,
or other personal reasons; but the vast majority leave because of Poor Service.
These days, customers are really in the driver's seat. The options and choices
of similar products at similar prices at similar quality levels are greater
than ever.
Advances in technology, reductions in production time and access to global
distribution mean that products and services can be duplicated and customized
faster than ever before. And your customers know this!
Consumers have more choices than ever before. This creates an interesting
challenge. How do you create value when customers today are not seeing much
difference in the choices they are offered?
Customers tend to look at value from four perspectives:
-
the Price of the product or service,
-
the Quality of the product or service,
-
the degree of Innovation offered by the product and
-
the Service provided to customers.
The quality of products continues to improve universally and competitors have
developed the ability to duplicate even the most complex of those products.
Innovation attracts younger consumers but no sooner do we see one innovation,
than someone else comes along and clones it plus adds a few more bells and
whistles.
Consider the evolution of the flat screen LCD TV. A couple of years ago, few
could afford such a luxury item. Now there are LCD TVs to fit a wide range of
budgets. And in addition to the traditional manufacturers of televisions, it
seems that any one who manufactures computers also has their own LCD TV.
Developing a competitive advantage based solely on product quality and/or
innovation is very difficult. And sustaining it is very expensive. You will
also find that there is more price parity today than ever before. Very few
companies can compete for long using price as a differentiating factor. By
shifting your emphasis to service quality, you will find the greatest room for
differentiation.
For most companies, customer loyalty is the key to future profitability and
growth. Corporate newsletters, national periodicals, and most executive
speeches are peppered with a litany of examples demonstrating the relationship
between customer loyalty and profitability. In almost every market we've
learned that retained customers:
-
Are less expensive to serve because they know their role in the process.
-
Tend to lower marketing costs.
-
Often purchase more over time.
-
Are open to purchasing new and different products as they are offered.
Clearly, customers value service and whether they get good service or not, they
expect it. If they don't receive service at a level that meets their
expectations, they will go elsewhere until they find it. Whether the economy is
on the down swing or the upswing, no one can afford to lose customers.
|
Ray Miller |
| About the author: |
|
Ray Miller is Managing Partner of The
Training Bank, a Training and Consulting
firm specializing in Customer Focus, Service Improvement, Leadership and fully
customized training solutions. He is author of the book That's Customer
Focus and The Customer Focus Companion. Ray is also known for his
highly effective training programs; Customers Forever, Customer
Focused Leadership and The Wow Factor.
This e-mail address is being protected from spam bots, you need JavaScript enabled to view it
www.thetrainingbank.com
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