Having a steady stream of customers is fine, but how do you ensure customer loyalty for a lifetime? Customer Lifetime Value (CLTV) measures just this. By examining customer value – not just in the present day, but over a period of around 20 years – businesses can better retain regular, loyal customers, and fine-tune / customize their products and services accordingly. Measuring CLTV can also help businesses identify profitable and high net-worth customer segments, which can further enable them to better organize their marketing investments in the future.
CLTV is all the more important in the field that we work in – the business of support services – where we have to strive harder to retain customers in an ever-growing and highly competitive marketplace.
Customer loyalty plays an important role in helping businesses constantly adjust to the volatilities of financial and economic shifts, as well as in guaranteeing a steady stream of customers. It also plays a key role in ensuring continuous recurring revenues – which is imperative for a sustainable and profitable business. Further, using consumer data – specifically for CLTV – businesses can tweak and sell their products and services in a suitable manner, based on their customers’ specific requirements / spending propensity; thereby ensuring greater customer retention rates.
Measuring CLTV can also help businesses segregate their customers into various categories. High-spenders can be determined, streamlined and targeted accordingly; while regular returners can be provided with added incentives, promotions and loyalty programs to ensure that they are constantly rewarded for their decisions. Furthermore, business models can be fine-tuned to adjust to the various fluctuations that may take place when running any business, enabling them to weather the fierce storms that could occur during times of economic and financial uncertainty.
Of course, retaining long-term customers is a challenge in itself; however, ensuring that customers are made to feel special by giving them professional and personalized attention can go a long way in ensuring a long-term relationship. What’s more, this bodes well not just for an individual but for their connections too as we all know that a good word, either through face-to-face interactions or on social media, can go a long way!
At CSS Corp, we understand the positive effects of calculating CLTV and we can help businesses segregate their end-consumers based on their propensity to spend. By doing this, we customize our support services to serve their needs accordingly. This has ensured that we regularly score highly on the customer experience scale and the satisfaction index. This has also helped us remain true to our core mission statement of 100% referenceability.
Welcome to the new world of discerning customers. Armed with technology and a seemingly infinite volume of information at their fingertips, these customers are impatient, assertive and fickle.
Though it may be daunting at first, it is possible to understand, analyze and evaluate your customers’ behavior patterns. Using tools such as big data, companies can ensure that they retain their most loyal customers – by keeping them regularly satisfied by catering to their individual needs – and bringing in new ones through customized and personalized tools at their disposal.
But it’s not that easy. Sifting through the huge amount of data – from social media platforms, to online forums, to feedback forms – companies must be on the ball 24/7. In fact they need to act, think and react just like their own end consumers.
There’s also the issue of too much information versus just enough information. Customers want to know what suits them. They don’t want to be flooded with mails, texts and alerts, which are irrelevant or invade their privacy. This could obviously have an adverse effect and drive away customers.
The Present is also the Future
Using predictive analytics tools, companies can use a crystal ball to look into the future to determine what their customers want and where they can leverage their products or services most effectively. These next-generation tools are significantly powerful and, when used appropriately, can be used to gain valuable insights into the mind of today’s customers.
Of course, it takes a skilled scientist to decipher this data and extract accurate insights. Further, there also have to be synergies between the various departments of the company. In fact, long gone are the days when CMOs and CIOs worked in silos. Though the two hold positions of immense power, they now need to work seamlessly together to ensure their strategies on customer experience are in sync.
In today’s digital and fast-paced world, generating valuable insights is imperative for companies to remain ahead of the game. To highlight the point, according to Deloitte, by the end of 2012, more than 90% of Fortune 500 will likely have at least some big data initiatives under way. In mid-2015, this has never been more significant.
Fortunately, CSS Corp is in a prime position to understand customer behavior. We regularly interact with end-users and customize our service offerings according to their needs and expectations. We cater to customers as individuals, drawing on historical data and exploring their specific needs. Thus, it’s no wonder why we score so highly on customer satisfaction.
The High Worth of Customer Loyalty
Businesses today have a unique challenge to contend with – a fickle customer spoilt for choice. To add to that, a multitude of channels to choose from, and an even larger number of people trying to make them offers they cannot refuse.
In this world, there is no greater truth or advantage than customer loyalty. It’s true for all organizations, big or small – the first purchase is either the beginning of an enduring relationship or the end of the road with the customer. Although, identifying, targeting and acquiring new customers is undoubtedly the most important part of any business, retaining them is equally important, if not more, given the high cost of acquiring new customers and losing existing ones. Consider this example, which highlights the importance of retaining customers: Imagine two businesses, one that retains 90 percent of its customers, the other retaining 80 percent. If both add new customers at the rate of 20 percent per year, the first will have a 10 percent net growth in customers per year, while the other will have none. Over seven years, the first firm will virtually double, while the second will have no real growth. Everything else being equal, that 10-percent advantage in customer retention will result in a doubling of customers every seven years without doing anything else. Consider these eye opening findings on Customer Retention:
Earn loyalty with quality support
Clearly, low customer loyalty costs dearly and in more than one way. And whether a customer stays or leaves is found to depend mainly on the quality of customer service, especially for product-driven businesses. According to a Research, “Almost 70% of the identifiable reasons why customers left typical companies had nothing to do with the product. The prevailing reason for switching was poor quality of service.” Customer experience, therefore, plays a big part in deciding whether the customer becomes your or your competitor’s loyal, long-term source of revenue.
Remember Vox Pop? The classic man, sorry, person-on-the-street interview that was part and parcel of all market research in the early days? The term comes from latin for voice of the people, short for vox populi, and is a method still used to get views and opinions of people.
From the days of kings and queens who used to disguise themselves as commoners to mingle with the crowds and get a sense of their lives and problems to the days of context aware computing and real-time big data analytics, the need for authentic feedback so that those responsible can calibrate their responses is a constant.
And the need is more urgent in the days of multi-channel and customer centricity. Social media is a customer grievance platform before it’s a marketing platform. And customers are not in a forgiving mood when it comes to brand experience.
For example, a survey showed that 47% of consumers between age 18-65 expects companies to respond to their enquiries and complaints as fast as possible to create a seamless customer experience. And customers, especially those in the younger age group, expect you to respond on social within fifteen minutes or something!
The bottom-line is, the customer is talking more than ever. And marketers need to figure a way to listen, profile and respond better to the voices out there.
Given the plethora of channels out there, and mobile, VoC programs can become a task unto themselves, so it’s important to see it in your larger context of Customer Experience – CX. And the approach to analytics and insight mining on customer’s comments and opinions should be aligned to your objectives and processes. Mapped to the customer journey and customer lifecycle.
And it needs to be continuous and not periodic. Real time, truly multi-channel customer feedback capture and analysis that can provide clear, actionable inputs to various parts of the business is a must-have for today’s enterprise. But “selective listening” to the voices that matter in all the data cacophony is not for the hard-of-hearing or the faint-hearted.
As with every idea, sustainability of initiatives will make the difference between success and failure. So, keep listening.
“People don’t want to buy a quarter-inch drill. They want a quarter-inch hole!” – Theodore Levitt
It’s a perspective change that is not very easy to make. But one that is necessary to make in today’s times. All the customer centric buzzwords, technologies and applications that the C-suite is planning to unleash on the unsuspecting customer, may still fail to move the needle on customer satisfaction or CX, customer experience, to go with the new jargon, if we overlook some basics.
The fact is, it’s not about Big Data telling you your customers’ favorite color or movie star; it’s not about marketing ready with upselling or cross selling content; it’s also not about your products or service being available on mobile 24×7.
Yes, technology support is critical to providing satisfactory customer experience across multiple channels in real-time in the connected age but it’s still only an aid and not a silver bullet.
So what is it about? What does the customer want?
Of course, the answer changes from category to category, and the expectations from the customers also change but still there are universals at play here.
To begin with, customers want ‘consistent service’. That should give you cues on fine-tuning the policies and processes. Listen to them carefully, they are not asking for delightful or superlative service or experience. Their demands are much more mundane and realistic. Get and set the expectations better so that it can be met.
The other often expressed frustration is lack of information provided and the lack of knowledge on the people side. Customers expect “Knowledgeable staff”, so it’s essential to make sure training is a key area of focus in the CX era. And spruce up the self-help section on your web and other channels.
Thirdly, and by no means the last or least is, a vast majority (83% to be precise) of customers need support through the journey, especially on digital, and a growing number of people (56%) prefer ‘livechat’ as very helpful.
Having said all that, putting a smile on the face of the customer, long after the sale is done, will continue to be biggest challenge, and positive word of mouth will still be the biggest payback.
It’s official. It’s no longer just about customer experience but it is about Customer Experience – CX, in capital letters. All the revolutions in globalization of technology, economics and demographics have been leading up to this moment. The moment where the ubiquitously connected individual aka the customer, is at the center of it all, with a device in her, or his hand.
Screen on, game on!
As we begin the race for socialization, personalization, customization and localization of all that matters to the individual, every business and business process is getting upended. And a common theme seems to pervade them all, and that is Customer Experience – a catch-all phrase that could cover just about anyone and anything but one not without its insight.
It’s not so much about the outcome (say, a wrong shipment or a failed resolution) but about the manner in which it is handled and resolved. The experience of the whole business rather than the result, and that comes as quite a shocker to many hard-nosed, result-driven business executives. By the way, “89% of consumers have stopped doing business with a company after experiencing poor customer service.” *
And why is a tech support company talking Customer Experience?
- Shouldn’t we be talking network routers and system protocols?
- Shouldn’t we be talking automation technology and cloud security?
- Isn’t Customer Experience marketing’s problem?
All valid questions, and we hope to find a few answers here. The way we see it, a seamless technology infrastructure, coupled with a global, skilled, non-stop support force is what makes for a good customer experience, irrespective of the business vertical. And here’s where CSS Corp can provide the much needed differentiator to building great brands and businesses. Through delightful Customer Experience. Know more about our support services.
* Source: Salesforce Survey