How many customers did you lose last month? How much will it cost you just to replace the members/revenues you already had? Why did those customers churn? If your first thought is “too many”, “too much” and “we’re not sure” then the solution is listening to customers.
Customer retention remains a challenge in many industries, but while the products and language vary, the underlying reasons are remarkably similar. The majority of customers churn because their needs or expectations changed and the organisation didn’t realise. The organisation had data, research and segmentations; but they weren’t actually listening to customers.
This listening problem is only going to get worse. Customers are more willing and more able to share their opinions about the products they use and the experiences they get. Some might tell you face to face, but many more will share their opinions through emails, feedback forms, surveys, online reviews, blog posts or on social media.
Customer centricity starts with listening to customers
In 2017 customers will share more feedback in more places than ever before. This is great news for customer-centric organisations who know that listening to customers is the best way to unleash growth. Talkative customers will freely tell you what they love and hate about your products and those of your competitors. They’ll tell you why they are loyal, why they churn and what you need to do to keep more of them for longer.
Feedback is a gift from your customers, but it doesn’t always feel that way. It seems that every organisation has a story about customers who always complain, or a standard policy that customers still dislike. Faced with this noise, and a growing to do list, it’s easy to tune out. It’s easy to decide that it’s impossible to please everyone and just move on.
But there’s another way. One that neither ignores customers nor panders to their every whim. This approach treats customer feedback as a basic business improvement tool, a core part of your staff training. In the sports arena, this approach is obvious. Imagine trying to coach a sports team without being able to give the players any feedback. Or imagine every player in that team trying to improve their game without hearing the coach’s feedback. It sounds absurd, but many organisations are expecting their staff to improve customer-related outcomes without getting feedback from customers.
Listening to customers with both ears
Customer feedback (compliments, comments and complaints) is being shared in a growing number of places, making it harder for organisations to keep up. So how can organisations benefit from listening to customers, without getting defeaned by the noise? In my experience, listening to customers improves customer retention when organisations start ‘listening in stereo’. With one ear they need to be listening to reply – ensuring that they quickly hear and respond to specific customer issues. With the other ear they need to be listening to improve – aggregating the feedback to identify the root causes of good and bad customer experience.
Individual listening – listen to reply
Most organisations are ok at individual listening. Staff listen to or read customer feedback and respond directly to them. Someone monitors social media during business hours, and there’s usually a named person to forward written and email feedback to. Many customers don’t expect further action, they just want to be heard, so this is a good start.
But while this approach may make the problem go away for that customer, it rarely stops it happening again – to them or others. Unfortunately for customers in general, the feedback then seems to get lost. The moment has passed and the customer has been ‘saved’. Staff move on to the next customer and customer’s move on to experience the same problems again.
But what happens when another customer experiences the same thing? And then another, and another? To successfully improve customer retention sports organisations need the ability to quickly spot new and recurring themes within customer feedback. Issues that just sound like a squeaky wheel on twitter can become far more significant when matched against CRM data and comments made in reviews and surveys. To spot these trends, organisations also need to engage in organisational listening…
Organisational listening – listen to improve
Organisational listening means ensuring all staff hear the collective voices of your customers. Whether it’s praise or a complaint their comments must be captured and shared across the organisation. This feedback loop helps your team to collectively listen to, understand and respond to what your customers are telling you. When the whole organisation is making decisions based on consistent and current customer feedback, customer retention becomes much easier.
What improvement idea might appear if you combined what all your customers were telling you across online reviews, product surveys, social media posts and directly via emails or feedback cards? You might discover that only new customers are having an issue with booking classes. An issue that might get ‘solved’ for an individual but leads to three others not coming back. Or you might discover that a certain demographic group have stopped returning because there’s nowhere for them to socialise afterwards.
Make listening to customers part of your culture
When it comes to improving customer retention, the listen and reply process is table stakes. Customers expect you to listen. Individual listening can prevent short term churn and done really well, can even create advocates. But to improve customer retention you need to fix the root cause of the problem. Only then can you be sure it won’t happen again and the right thing will be done every time.
The most successful customer-centric organisation I’ve worked with was MBNA International (now part of Bank of Amercia). When they started up in the UK in 1993, they massively raised the bar on customer experience. At the heart of their “think of yourself as a customer” mantra, was a culture that made customer retention part of everyone’s job. To ensure that everyone in the organisation was listening to, understanding and engaging with customers they insisted that everyone (yes including the CEO) spent 4 hours of every month engaging with customers in the call centre or credit department.
As a result, the voice of the customer came through loud and clear, and also consistently. Everyone had a similar customer understanding. As a result decisions were never made with outdated assumptions or siloed information. Of course this isn’t easy. But when listening to customers is done well, it can help organisations stand head and shoulders above their competitors.
If you would like to hear more about how your organisation can improve customer retention by aggregating and amplifying the voices of your customers, please get in touch. My Customer Lens is currently rolling out the first pilot projects, helping clients turn unstructured and siloed data into actionable customer insights.