Winning the hearts of customers

S.Ravichandran

In today’s globalising economy, competition is getting more and fiercer. That means it becomes more difficult for products and services to differentiate themselves from other offerings than ever before.

Not only is the number of competitive offerings rising due to globalisation of production, sourcing, logistics and access to information, many products and services face new competition from substitutes and from completely new offerings or bundles from industry outsiders. Since product differences are closed at an increasing speed and many companies try to win the battle for customers by price reductions, products and services tend to become commodities.

Customer behaviour

Customers are widely aware of their greater power. Picture - www.blazingplr.com/blazing-affiliate.html

On the other hand, customer behaviour becomes more fusion. On one hand, customers are increasingly price sensitive - searching for bargains at marketplaces and buying their groceries at discount markets. On the other hand, they enjoy branded and luxury goods. One and the same person may plan a weekend trip with a no-frills airline and a stay at a five-star-hotel.

As a result, customers have a wider choice of often less distinguishable products and they are much better informed. For many offerings the balance of power shifts towards the customer. Customers are widely aware of their greater power, which raises their expectations on how companies should care for them.

Bringing it all together, it becomes ever more difficult to differentiate a product or service by traditional categories like price, quality, functionality etc.

In this situation the development of a strong relationship between customers and a company could likely prove to be a significant opportunity for competitive advantage. This relationship is not longer based on features like price and quality alone.

Today it is more the perceived experience a customer makes in his various interactions with a company (e.g. how fast, easy, efficient and reliable the process is) that can make or break the relationship. Problems during a single transaction can damage a so far favourable customer attitude.

Customer satisfaction

The consequence for companies is that they have to adapt their ways of competing for customers. Traditionally, companies have focused their efforts of customer relationship management on issues like customer satisfaction and targeted marketing activities like event marketing, direct marketing or advertising. Although doubtless necessary and beneficial, these activities are not longer enough.

They narrow the relationship between company and customer down to a particular set of contacts in which the company invests its efforts. Most likely this will produce not more than a satisfied customer who is well aware of the company’s offerings and has a positive attitude towards them. However, a satisfied customer is not necessarily a loyal one.

If a customer is satisfied that means that a product of service has met his expectations and that he was not dissatisfied by it. Customer satisfaction is doubtlessly very important. It is the precondition for repeat purchases and it prevents the customer from telling others about his disappointing experiences. A loyal customer, however, is more than a customer who frequently purchases from a company.

The difference is the emotional bond which links the customer so closely to the company that he develops a clear preference for these products or brands and is even willing to recommend them to others.

Loyal customers truly prefer a product, brand or company over competitive offerings. Thus loyalty goes beyond a rational decision for known quality or superior price-performance-ratio. It is about the customers’ feelings and perceptions about the brand or product.

Buying decision

When the customer makes his buying decision, he evaluates the benefits he perceives from a particular product and compares them with the costs.

The value a customer perceives when buying and using a product or service go beyond usability. There is a set of emotional values as well, such as social status, exclusivity, friendliness and responsiveness or the degree to which personal expectations and preferences are met. Similarly, the costs perceived by the customer, normally comprise more than the actual price.

They also include costs of usage, the lost opportunity to use an other offering, potential switching costs etc. Hence, the customer establishes an equation between perceived benefits and perceived costs of one product and compares this to similar equations of other products.

Based on this, customer loyalty can be understood as to how customers feel about a product, service or brand and whether their perceived total investments with it live up to their expectations.

The important point here is the involvement of feelings, emotions and perceptions. In today’s competitive marketplace, these perceptions are becoming much more important for gaining sustainable competitive advantage.

Customer perceptions are influenced by a variety of factors. Besides the actual outcome - i.e. did the product or service deliver the expected function and did it fulfil the customers need - the whole process of consumption and all interactions involved are of crucial importance.

In today’s globalize information driven economy this can also comprise issues like-

* How other customers or influencing groups perceive the product or brand;

* The degree to which the customer feels the actual marketing campaign addresses the most important issues;

* Responsiveness and service quality of any affiliates, e.g. distribution partners.

Stronger focus

Customer perceptions are dynamic. First of all, with the developing relationship between customer and company, his perceptions of the company and its products or services will change.

The more experience the customer accumulates, the more his perceptions will shift from fact-based judgements to a more general meaning the whole relationship gains for him. Over time, he puts a stronger focus on the consequence of the product or service consumption.

Moreover, if the customers’ circumstances change, their needs and preferences often change too.

In the external environment, the offerings of competitors, with which a customer compares a product or service will change, thus altering his perception of the best offer around. Another point is that the public opinion towards certain issues can change. This effect can reach from fashion trends to the public expectation of good corporate citizenship.

Winning relationship

This approach of developing a winning relationship with customers and suppliers ensure vitality and long prosperous exchange. The Chinese has a concept that “a customer relationship is for life.” Building winning relationships for life is not without effort. You can make this happen with trust and constant improvement of delivering quality products and services that exceeds their expectations. Outline below are a few things to keep in mind as you build your relationships with your customers:-

* Determine who your customers are;

* What are the requirements for your customers that you need to determine for the exchange of services and products?

* Don’t assume that you know what they want. The customers may need less or more than you have anticipated. Constantly review with them what they want. Set up review meetings on a frequent basis. Involve them in your product and service planning sessions. The users knows best what they need and want, steer them to reach the best ideas, solutions and innovations.

I am reminder of an interesting Bible verse: it says, “from the mouth of babes and suckling have you ordained strength [founded a bulwark or brought perfect praise].” In other words you can learn from anyone. Your customers and suppliers are often your best source for new ideas. This is one reason for the emergence of end-user beta testing of products.

* Collect customer and market knowledge on a regular basis. This will adjust your product and service delivery. Frequent usage of feedback and surveys to determine you how well you satisfy their expectations. Prepare satisfaction metrics for your customers;

* Acknowledge their needs and ensure that they are aware of your efforts and capabilities to satisfy their needs. Be open to criticism. Appreciate their input;

* Listen to their needs. Don’t ever ignore them. Send representatives to analyze their current and long-term needs, and develop a strategy plan to fulfill them. If an employee fail to see that the value of a customer, educate him/her, and at the worst case, get rid of that person;

* Realize that you are in business to please your customers. They pay you paycheck. Adopt a mindset of looking at each customer as a precious pearl. You have been given something special. How do you showcase this relationship?

* Never forget that a customer is a person like yourself, with emotions, needs, desires, feelings, wants, values and norms.

As you build your knowledge about your customer, learn to understand the biases, cultural norms, corporate culture, industry trends and attitudes. Look at the customer’s own business and industry from his/her point of view. Intercultural awareness is a must in international business.

Selling yourself and your organization’s culture may in some instances be more important than selling your services and products. Business is about relationship. Ask yourself, “Can my customer trust me?”

* Never divorce a customer, unless you are willing to face the consequences. Make a customer yours for life;

* Constantly communicate with them via phone calls, letters, thank you cards, reminders, and birthday cards [having a problem remembering names, I’ll never forget my chiropractor in Atlanta, because he always sent me a birthday card with a gentle reminder that he valued my health];

* A customer relationship is not unlike general relationships you have with people in general. You must work on them. There is always give and take. But realize that it is better to give than to receive. It is natural in most humans to want to give to a giver;

* Make your customers your friends. Ask for their advice. They will be glad to give it to you. Many internet companies use beta test programs to get free evaluation and great tips from users.

The golden rule applies to all human relations, “Do to other as you want them to do to you,” or better stated, “Give them what they want and they’ll give you what you want.” Also realize that the average person is more concerned with his/her immediate needs than your needs or the need of the world at large. Satisfy that need and you will win a customer.

Make a customer yours for life. If you use all of the above tips, in addition to your own and other ones, you are bound to reap the greatest benefits from your win-win customer relationships.