Are you kidding? A PERFECT Customer Experience?

By Dale Wolf

Perfection, we all know, is an ideal state -- zero defects. Yes, the pursuit of perfection is a quest. Sort of "the impossible dream" search by Don Quixote. If we do not attempt to deliver perfection, we will never get there. The pursuit of perfection is a mission (in fact it is the stated mission for Cincom Systems, where I work).

But it is not enough today to pursue perfection and that is why I call this blog "The Perfect Customer Experience" instead of "The Pursuit of the Perfect Customer Experience."

Why not just set my sights a bit more realistically? Why push the story to a level many would consider unattainable?

The answer is that perfection is now the standard for customer loyalty.

Let me back up a bit to how I arrived at this point.

For years, all kinds of companies have been collecting customer satisfaction data. This has become pretty routine. And lots of companies have used this data to improve their offering. But there was virtually no relationship between having a high satisfaction score and customer retention. In fact a study by Michael Lowenstein a decade ago indicated that only 2% of companies were able to show increases in revenue from customers who were satisfied. Even satisfied customers still bolt. Satisfaction is a standard that a lot of companies can deliver.

It takes something more than satisfaction to hold onto customers.

A large office products and services company that probably does over 250,000 customer satisfaction surveys a year helps me illustrate a critical difference. Upon analysis, what they discovered is that "completely satisfied" customers were six times more likely to repurchase. When this company did the usual survey of various attributes it noted an unexpected relationship. Customers who were generally satisfied on several attributes did not repurchase as much as those customers who had aggregate scores of 5 out of 5. In my books, 5 out of 5 is perfect, and that is the standard that customers put on us if we want their loyalty.

Now, here's the trick.

It is terribly expensive to move ALL customers to the point where they will give you a 5 out of 5 on all meaningful customer sat attributes. In fact, as we all know, typically 80% of your profits will come from 20% of your customers. That statistic is what has driven the shift to treating different customers differently.

If you can identify your best customers, you can spend more of your limited resources to deliver to them a perfect customer experience while you just meet the basic satisfaction standards for the other customers. You can build a more profitable business by treating these customers like royalty and letting up on the rest of the less profitable customers.

Perfection is The New Rule

You can -- and in fact -- you must deliver your best, most profitable customers a perfect customer experience. The payoff (if your business model is similar to the office products company mentioned above) could be a six-fold increase in retention of those customers who should matter most to you.

Now, when you arrive at the point where you understand your most profitable customers, you can design a perfect customer experience for them. This will make you unique and highly valued and put you in a position to attract more customers who are like the ones who already produce most of your profit. You can surprise these great customers with a dozen roses and thank them for their loyalty.

Comments

[Peter Poster]

The management of the local company we have back in our town must read this blog and apply every inch of it to his supermarket! I do not believe that the customer is ALWAYS right, though they are powerful enough to bring a business down! Thanks for the post.

[Call Centers India]

Very Useful Information for Customer Support Services.
thnks for the latest updates and awareness.

[Marketing]

I read this blog and find many good theme about how a customer can be a good service
holder by kidding in many company the customer can get frosted but if you are able to give better service s to your customer they will get back to you .
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[Dale Wolf]

Thanks, Dave, for expanding upon the original posting. You have shared an important insight about customer retention.

Too often, we look at customers as simply vehicles for upselling, cross-selling or selling more. And, of course, we need to do that to be a successful business and to be of value to the customer.

But your insight that "we continually have an accurate, 360-degree view of the customer's perceptions, predispositions and plans" takes this discussion to a higher plane.

Many companies organize their sales teams into "hunters" and "farmers" -- the farmers presumably being responsible for the long-term relationship with the customer.

When, however, these farmers are compensated exclusively for revenue growth then that's what they focus on.

Instead they should be focused on the three points you cited. I repeat them for emphasis ... we continually must have an accurate, 360-degree view of the customer's perceptions, predispositions and plans.

If the farmers are compensated on building this knowledge base of perceptions, predispositions and plans and uses this knowledge to help and support the customer to achieve their goals, then the relationship will be solid and highly valued.

The revenue will follow.

But if the farmers are just pounding the client's halls looking for short-term revenue, the value is only to the seller and the relationship is one-sided.

And eventually, some other company will come in to that customer and win the day.

[Dave Decker]

I think Dale has it right, in many regards, and that perfection should and must be the standard. One complement I'd offer is this: the company which is driven to deliver and enable perfection at every level on a consistent basis HAS TO continually have answers to the most difficult and potentially damning and damaging questions, from a variety of vantage points. Switching cost used to be in vogue as a measure of how 'sticky' a vendor was to the customer. The world's flat - and getting ever flatter - so we need to know WHY the customer stays with us, WHAT options they are considering and HOW at-risk we actually are, etc. Said differently, we need to understand WHERE the customer is going, WHY this is so, and HOW we can be THE ONE (or at least one of the most important ones) to provide such a solution to their ever-evolving problems. Perfection's the right ideal, a wonderful one. But it's only hope of 'sticking' is to ensure that we continually have an accurate, 360-degree view of the customer's perceptions, predispositions and plans.