Archive for category customer retention

The biggest challenges Businesses face today

What are the biggest challenges businesses face today, was the question posed to members of the Business Exposure Group at a recent meeting, and below are the 10 most pressing concerns.

According to the CBI change is the new normal.

Growing revenue is the top challenge for businesses employing 5-30 employees.  Hiring employees is the biggest challenge for businesses with 30-50 employees and government regulations becomes the biggest issue for business with 50 or more employees.

What are the 10 big challenges for SME’s.

  • Uncertainty about customer trends – does this lead to short term focus, and does it make you feel vulnerable?
  • Financial Management – cash flow. Larger customers are imposing long payment terms, so how are you addressing this?
  • Monitoring performance – are KPI’s as good as they sound even though they compare historical information or are there better ways.
  • Recruiting the right talent – employee working flexibility is important to retain good staff, but increasingly stress in the workplace is a real challenge in small businesses when staff have to be able to multi-task.
  • Technology – it should be outsourced to reduce demand on administrators, but is investment in technology an asset or a handicap. Distinguishing which technology will attain the highest return in terms of time and investment is a problem.  The big issue is, is the IT fit for purpose.
  • Information overload. There are now big digital challenges for meeting the expectations of customers, together with finding and keeping people who can digitally transform a company that delivers a bespoke customer experience.
  • Customer Service – what is the right level, are customers’ expectations too high? Managing the relationship is key
  • Maintaining reputation – there is genuine concern about reputation management with easy access to social media and particular concern about cyber security disrupting the day to day functionality of the business.
  • Knowing when to embrace change is a worry and knowing how to balance quality with growth. Businesses are stocking less and relying on a lean supply chains, but is this clever or does it open up crippling disruptions.
  • Regulations and compliance are becoming more and more demanding of staff time

Everyone was in agreement that running a business is getting harder and is forever challenging, but all were motivated about the challenges and were ready to face them head on.

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Is there relevance for having an E-Commerce website for businesses other than those in retail?

E-Commerce is the name for any kind of commercial transaction that takes place through the internet.  It gives customers the ability to buy from you without having any limitations imposed by time or distance. Its not restricted to a B2C business using a “shopping cart” and credit card.

The question is – are B2B customers ready for this?

This was the topic discussed by members of the Business Exposure Group at a recent meeting and some interesting observations were put forward by members, many of whom had implemented E-Commerce functionality into their businesses.

B2B suppliers know far more about their customers than B2C, so there is no excuse not to deliver relevant experiences to your customer.- a website should no longer be general but nowadays it needs to be specific to the customer browsing your site.

41% of manufacturers are now selling directly to your business customers, so your business needs to be prepared to sell against the same companies you consider as valuable supply chain partners.

Entering into the world of E-Commerce is a major decision and setting up your website is challenging.  Consider the following points raised by our members during the meeting:

  1. Website needs to be user friendly with as few clicks as necessary to enable your customer to order as easily as possible. It should load within 5 seconds.
  2. Do you require multiple “shop fronts”, different languages, to only provide relevant products and services to the specific visitor?
  3. Does your website need a reminder email facility to remind your customer to re-order?
  4. Does your website need an email facility to notify your customer about new products or when products are back in stock?
  5. When logged into the website, does it recognise your customer and automatically bring up their previous order history? – It is important to segment customers and give them a different experience based on their industry requirements.
  6. If you have a complex catalogue, direct customers to the relevant products in as few clicks as possible?
  7. Should you put all your goods or services for sale on the website or leave the high end items for your sales team to sell?
  8. FAQ’s section is extremely important as it reduces the need to have an extensive customer relations team.
  9. With one click specific industry users can fill their ‘carts’ with everything they need for their particular requirements.
  10. It engenders customer loyalties. An order can be authenticated with a click of a button, instead of the process taking several days to be confirmed.
  11. It streamlines your ordering system. It reduces the bottle necks of tedious work.

Consider who is your real competition, your competitors or your customer expectations?

The buying experience is now more important than ever.

It was felt by the Group that B2B E-Commerce was certainly another route forward for most businesses and a great way to find a new customer base.

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Delivering Innovative Customer Experiences

To create distinctive customer experiences, businesses need to push the boundaries and adopt next-generation thinking in six key areas.

Some companies are moving fast to adapt, applying a range of approaches to improve customer experiences.  A great experience that delights customers and earns their loyalty is needed. Improving a customer experience from merely average to something that wows the customer can lead to a 30/50% increase in measures such as likelihood to renew or to buy another product.

Here are six areas discussed at a recent Business Exposure Group meeting.

  1. Measure customer behaviour and spend time with customers to understand them 

Companies need to empathize with customers when they experience difficulties and obstacles.

This means embracing new techniques for understanding customer journeys.  Such approaches allow companies to uncover new insights that allow them to design and deliver truly great customer experiences.

One of our Business Exposure Group members is an insurance broker specialising in the farming community. He was developing a new product and took time out to observe the daily activities of farmers.

He learnt that farmers are pressed for time but also very tech savvy, relying heavily on PCs and mobile devices in their daily activities. He had originally planned to market his new product through traditional channels, but lessons learned from an observation trip led him to create a digital solution, which allowed farmers to gather information and buy policies online at night and at weekends.

  1. Designing the complete customer experience

Design is not about making devices and screens look pretty. True customer-experience design involves each interaction customers have with your company. Design is not just what it looks like and feels like. Design is how it works.

To design a customer journey, companies must enlist everyone who has an impact on any part of a customer’s journey, not just people with the word “design” in their title—in particular operations and IT. 

A Business Exposure Group member has a marketing agency whose client specialises in visitor attractions. After a 12 month effort to root out pain points in the experience of visitors to theme parks, their clients introduced wrist bands. These brightly coloured wristbands allow visitors to board rides, pay for meals and gifts. More important, the bands and the technology behind them—which is in every part of the attraction—allow visitors to select exactly what they want to see and do in advance. That has helped turn a day out from a series of highlight attractions interrupted by waiting in line to a smooth end-to-end experience.

  1. Completely rethink the customer experience

The focus is addressing customer needs, not improving a process. Many of our members bring in people who are not normally involved in the business to encourage fresh thinking.  Looking at the best experiences employed in other industries can  be extremely enlightening.

  1. Become an agile organisation

Managers responsible for developing new offerings need the authority to make decisions quickly and to hold staff accountable. 

One of the Business Exposure Group members who has an IT software company shifted entirely to cloud technologies, which allowed new software developed by their team to go live on the clients websites in a matter of seconds.  By making the whole organisation agile, the IT company dramatically reduced time to market for their clients products and services. 

  1. From delivering a product to constant tweaking

Many businesses figure out what new product or service offering they want to create for customers and then launch pilots.

It’s impossible to know in advance how an experience will be embraced by customers. It’s better to launch sooner with fewer features and a simpler interface and learn what works, based on real customer input. 

Using this approach, one of the Business Exposure Group members was able to build a new tablet-based app in just 6 weeks.  It then tweaked new versions based on user feedback, improving the process.  After these tweaks, the app was scaled across new markets and more products within the company’s range.

  1. Working together spontaneously 

Companies need to push their people to move beyond traditional roles and work together to reinvent customer journeys.  Improvements  come from having motivated, empowered frontline employees driven by clear purpose.

Many of our members are working hard to reinvent their customers’ journeys. The ones that win will be those that push the boundaries and adopt new practices.

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Resolving complaints well is vital to protect your reputation.

Handling complaints well and resolving conflict situations caused by equipment failure, broken promises, inaccurate information or poor communication or service is vital in business.  Resolve a complaint in the customers favour and they will do business with you again 70% of the time.  Up to 95% of customers will give you a second chance if you handle their complaint successfully and in a timely manner.

Logging complaints is helpful to see if there is a pattern of complaints relating to the same issue.  Research shows that companies that are customer focussed get more complaints because they ask for them, and with this information they can turn a negative situation into a loyal customer.  Interestingly if you have no complaints, it doesn’t mean your customers are happy, they just can’t be bothered to complain and the first you know of it is when they defect.  This can have a significant impact on B2B companies who may have become complacent as a result of long term business relationships.

With the impact of social media and the threat of everyone being well connected it is important to get complaints ‘offline’ as quickly as possible.  The use of a dedicated email address is important so that you can quickly resolve the complaint without the complaint building an online following which leads to significant brand damage.

Some of the messages used by members of the Business Exposure Group in their complaint departments were expressed at the last meeting of our members.  They included:

‘Just say sorry, and ask how you might resolve the issue’

‘Transfer the customer quickly and explain why the transfer is to their benefit, say you will be transferred to XX our specialist who can better answer your questions’

‘Drop formalities and refer to ‘our chat’ not ‘our correspondence’ and all communication should be in the first person ‘I am sorry not we’.

Businesses that resolve matters when things go wrong can charge 5-10% more than businesses that don’t appear to care.  If your business operates in a market with small margins, an effective complaints handling process can be the all-important differentiator when attracting new customers.

Customer service is so important.  It takes 12 positive incidents to make up for one negative incident, which is why businesses nowadays need to positively delight customers to earn their loyalty.

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Why should SME’s be using Customer Relationship Management

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During a recent Business Exposure Group meeting we collected the following comments.

It’s a way of managing your business interaction with current and future customers.  But most companies fail to use it on the premise that too much time is spent entering the information so that it is comprehensive, at the expense of engaging with customers.

However, any CRM system only needs 1) the prospect information 2) when and what was talked about 3) the follow up date 4) who is assigned to it 5) the value of the opportunity.

With this information you can establish whether your existing client relationships have the potential to grow.  Because retained customers are more profitable.  Firstly, customer acquisition costs are high, so they do not become profitable unless they are retained.  Secondly, customers buy more over time, thirdly, satisfied customers make referrals and fourthly, retained customers tend to be less price sensitive.  So just on the current client relationships an engaging touch point campaign which is hands on will increase sales by up to 30%.

CRM is a combination of people, process and technology which seeks to understand your company’s customers.  Because the more you know your customers and build a strong relationship, the greater your odds of winning the minds and wallets of your customers in this competitive market.

Some of our members were content to use Outlook and Excel to record their contacts and activities.  But it is not very efficient and cannot be seen by everyone at a glance.  More worrying it can be downloaded and pinched by a member of staff moving on, leaving your business vulnerable.

Using an integrated CRM system will have one database with all customers in a single place.  Which, if used properly will be the perfect vehicle for identifying groups of like-minded customers to target, allowing you to sell more to existing customers and prospects, creating the process to manage leads from receipt to getting an order, arranging numerous touch points with potential customers and monitoring that your staff are on top of the job.

The majority of the group confirmed that their sales people spent too much time on admin and not enough time selling.  With CRM, the sales team can easily see the relationship history.  So they are well armed to overcome objections and have no excuse to not following up sales opportunities which are tracked and reminders raised via the CRM system.

So, it all seems straight forward, however, because we have amassed so much data over recent years we don’t know how to effectively manage information.  Don’t try and back date, first start from now and implement a simple robust system, otherwise CRM will have lost its focus and worth and will become taken over by the IT function within your business.  The customer experience is core to client relationship management.  It is now becoming mainstream and I suggest that in a couple of years’ time we won’t even be having this conversation.

A contemporary well run business must have a CRM system to be able to sort out opportunities and be competitive.  Consider the following when deciding on the type of system.  It could be a cheap off the shelf cloud based system or a bespoke built arrangement, nevertheless it does need to address. 1) Are we B2B or B2C 2) How do we access, from home, on the road or in the office? 3) What are the main objectives eg is it for sales lead management, or marketing campaigns? 4) Which teams need to use the system – sales, marketing, customer service, operations? 5) Does it need to link to other systems? 6) How will emails link? 7)  Do you need the phones to link and do you need to record telephone calls straight to your CRM system?

All are well worth considering to get it right, but we all agreed around the table that no amount of technology can help manage your customers if you don’t have it in you in the first place to implement and record the information.

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Customer Satisfaction – What state of mind do customers have of your business?

In modern business there’s increased competition, crowded markets, lesser product differentiation and flatter sales.

So measuring customer satisfaction is key. It reportedly costs five to eight times as much to get a new customer than to hold onto new ones.

So why not operate a measurement system for customer satisfaction and find out what your customers expect from you?

Firstly, don’t just watch sales volumes or rely on a sales rep determining your customer’s state of mind. Also, don’t just track the frequency of complaints or look at ageing debt.

Implement a survey via mail, e-mail, or over the phone and rate experiences on a weighted scale (1 out of 5 etc.). Ensure to repeat this process to see how your customers experience changes over time.

Consider these factors:

  • Who is responsible for implementing a system – sales and marketing.
  • Management must champion the initiative.
  • Compare your own customer satisfaction with your competitors.
  • Engage all employees.
  • Inform your customers about the changes made due to the survey. Its  important to communicate.

Satisfaction can be based on:-

  • Quality
  • Business relationship
  • Price
  • The Service and Product meeting or exceeding customer expectations

Did you know? A 5% increase in loyalty can increase profit by more than 25%.

A very satisfied customer is six times more likely to be loyal than a satisfied customer.

Only 4% of dissatisfied customers actually bother to complain, and on average that same dissatisfied customer is likely to tell nine other people about it.

In comparison, satisfied customers will tell five other people on average about the good treatment they received.

You also need to consider the following:

  • Are your products less than advertised?
  • Are employees making promises they can’t keep?
  • Do you know why customers prefer another brand over yours?
  • Do you get customers to compare and contrast?
  • What is the technology expectation? – E.G. Mobile phones are constantly evolving.
  • Conduct a Customer Satisfaction Survey on a regular basis and look for:
  •    Overall satisfaction: How satisfied are you with ……
  •     Loyalty Measure: Would you recommend us to…
  •     Intention to repurchase: Do you intend to repurchase…

Here are 6 thoughts for putting together a customer satisfaction programme:

  1. Who should be interviewed? The end user, the manager or the directors or all?
  2. What should be measured? Put yourself in the customers mind-set – what do they consider important?
  3. How should the interview be carried out?
  4. How should satisfaction be measured?
  5. What should the measurement mean?
  6. How to use the survey to the greatest effect?

It’s debatable whether these should be anonymous or not.

Another strategy is to identify the best company in your sector and set your benchmark against them.

There are links between customer satisfaction and employee satisfaction as happy employee’s work harder, providing greater customer satisfaction.

If a survey is right for your business, then your customer will in-turn expect positive changes to come from it. Most surveys just sit gathering dust. Be sure to communicate quick wins. The newsletter can be a good starting point and turn your customers into very satisfied customers.

This article was taken from a discussion of the Business Exposure Group.

If you are a Director or business owner and would like to attend one of their informative round-table discussions, please contact philipdrazen@bxgroup.co.uk

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Commoditisation – Should we avoid or embrace it?

Most businesses are now in industries that are close to being commoditised, even if they don’t want to admit it. While this is great news for the customer, it represents a significant problem for businesses.

To explain;
A commodity is a good or service for which there is demand, but which is supplied without differentiation.

Commoditisation happens when a product or service becomes so common that customers no longer differentiate between brands – and they usually buy the cheapest product on offer.

The insurance industry is commoditised. Even social media is close to being commoditised. But if everything is commoditised, then how can a company bring value to a potential client?

What is the value you bring to your potential clients? Have you considered this?

In order to survive commoditisation, businesses must have a workable strategy in place. Once you have worked out the value you bring, the next step is delivery. Without this step, you will lose your client and your reputation and your business will fade.

Creating value for clients is what every business must do to survive. By targeting customers that value the unique offering, you move from a broad commoditised market to a narrow one that values your services.

Businesses should:

  • Be authentic
  • Build relationships
  • Create energy – your customers expect you to add an opportunity, not be a source of frustration

How easily can you quantify the differences between your products and those of your competitor? How can you continuously differentiate? Simply providing a better service is not enough to differentiate your business to your competitors.

New forces have propelled the evolution of sales. Buyers are now able to get more information on their own. Consequently, the value provided has decreased and buyers have begun controlling the sales process.

One of the most meaningful ways a salesperson can add value is in helping the customer to identify and understand problems they either didn’t know they had or didn’t fully understand.

Businesses must stop being solution specialists and become problem specialists.

Selling specialist products requires a sales force that has a deep understanding of its customers needs and knows how the company’s products can provide superior solutions.

Commoditisation is the biggest challenge facing businesses for long-term profitability. Despite the fact that your customers are highly satisfied with your services, they are constantly putting pressure on you to reduce prices which d puts you into the commoditisation trap. The key to staying out of the commoditisation trap is to create significant value for your customers so that they don’t consider looking elsewhere.

People don’t buy features, they buy benefits. Companies can develop a package of complementary products and services around commoditised products to provide long-term value.

What’s your inside advantage that people don’t know about? Generate a list of customer benefits and then look for the benefit that is different from your competitors and use it at every opportunity.

This article was taken from a discussion at a Business Exposure Group meeting.

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