Competition Naturally Cranks up Need for Strong Customer Loyalty and Retention Strategy
When competition between businesses is fierce, goes the thinking, the consumer is king. Market theory automatically kicks into action, ratcheting up the pressure to deliver on key fronts like price and customer satisfaction. And if like most businesses yours doesn’t have much wiggle room on price, customer loyalty and retention becomes the natural target for your competitive instinct.
Few Canadians would be without opinion on Rogers or Bell, the country’s telecommunications and media titans. And although some complain about price gouging or favourable treatment over smaller players in the industry, you wouldn’t have to look far to find someone who has taken advantage of this tug of war.
Threats of abandoning one company for its competitor are the preferred tactic of the savvy consumer. However idle those threats may be, they commonly draw some form of compensation, whether an upgraded cable package or a downsized internet bill. But this isn’t necessarily an example of a business that’s bad at reading poker faces – because they’ve seen that many customers aren’t bluffing at all.
The first step is admitting you have a problem
Perhaps sensing its image starting to sag in all the wrong places, the outgoing CEO of Rogers recently announced a new program to promote customer loyalty and retention. The strategy, whose details chief exec Nadir Mohamed declined to elaborate on, could go a long way toward boosting that image – of no small importance considering that many consumers have multiple ties with the company, getting their cable, internet, land and mobile phones, home security, print media or any combination thereof from Rogers.
While addressing the media a day after Rogers released data from the first quarter of 2013, Mohamed didn’t downplay his company’s struggles with customer service – an admission undoubtedly met with much head nodding. And with Bell never more than a step away, Rogers has little room for error in its customer retention efforts. (To add to that pressure, as David Friend of The Canadian Press points out, smaller competitors in the wireless communications game have been making strides recently).
You can dance around the issue if you want to
No longer content to stand idly by, consumers have come to expect rewards for their loyalty. For the most part, legislation aimed at preventing anti-competitive behaviour (such as the Competition Act in Canada) does an adequate job of holding businesses to account – but also indirectly, at stimulating strategies like customer loyalty or rewards programs. Businesses are free to ignore prevailing consumer attitudes, but they can bet their competitors won’t make the same mistake.
There are many ways to address issues of customer retention or to foster a sense of loyalty to your brand. But before you can even begin to make improvements, you need to see what the customer sees. Mystery shopping, by today’s standards a primitive methodology, has withstood the test of time precisely because of its simplicity and straightforwardness – the secret shopper, who operates inconspicuously and with a seemingly conventional goal, actually passes along vital information on the customer experience to the business.
But unlike an anthropologist who must infiltrate and gain the trust of an alien culture, someone engaged in mystery shopping will be entirely familiar with their surroundings; the ability to fit in is a prerequisite to success. The shopper collects the kind of qualitative data that helps businesses – hotels, retailers, restaurants, travel agencies, banks, airlines – get insight into what’s happening on the ground floor. In other words, precisely what the customer sees, including how their loyalty can be won or lost.
You don’t have to be a Fortune 500 company or an industry leader to benefit from a customer retention strategy. And you don’t have to wait for a competitor to challenge your claim to supremacy either. Like a successful branding effort, the right loyalty or rewards program for your business is the one that will resonate with your customers. Whether that entails a points program, discounts, giveaways or something far more elaborate, it simply has to recognize that the consumer should always be king.
GoalLine Solutions focuses on helping businesses across multiple industries attract and retain customers. Comprehensive tools like boostCX, a multi-faceted software program that streamlines Customer Experience Management efforts, and Voyce, an interactive Live Customer Experience Center that features Mystery Shopping, make it easy and cost-effective for businesses to respond to growing customer expectations.