The secret recipe to customer retention

During the last six months our consultants have received an unprecedented number of questions from customers asking, “how do I increase customer loyalty?” It seems that Covid, and lockdown, has lead to many people looking at their finances and evaluating their current suppliers of utilities, insurance and mobile services.

Which makes a lot of sense: when you are working from home or have more time on your hands, you start to feel the impact of any poor service and start to question the value you are getting.

So, we asked our experts, consultants who have decades of experience designing retention schemes for service providers, to tell us the secret to increasing customer loyalty.

Stop selling, start listening

People hate the hard sell. It’s always been true, and it’s more true today when they can shop at their own pace online. They especially hate it when they’re already customers and already have a relationship with your company. In fact, we have a few teams here that could be

described as “sales” teams, but they don’t really spend much time selling. If you were to shadow them for the day, you’d see they spend most of their time listening.

They spend a lot of time talking to our clients about what’s going in their business, what they need, and then giving suggestions on how to help – not necessarily trying to sell them a product. To this end, we hire people with empathy and people skills to listen and advise, not just do the relentless, pushy sell.

TOP TIP: Prioritise personal service, an authentic interest in helping your customers achieve or succeed, and a passion for what your company does well.

Be agile

Processes are important but they can’t be prioritised at the expense of quality customer service. Think about the last time you had to on hold for ten minutes, only to end up talking to someone [or a machine] sticking rigidly to a script. It’s unpleasant, it’s frustrating, and worst of all it makes your customers feel like they’re not important to your company.

This harks back to the listening we talked about earlier. People want a chance to explain their questions, problems, or concerns to someone. Having a chance to just say the problem to you is part of the solution. Once it’s out in the open, customer support teams can acknowledge it and be their advocate in fixing it.

There’s no replacement for that sensation. That you have someone on your side, who is willing to side-step rigid process, investigate your question, then give you answers and solutions. And there’s definitely no automated system that can replicate it.

TOP TIP: empower your front line teams to fix problems, quickly without having to go through lengthy processes.

Celebrate everyone

Everyone that interacts with your customers affects retention, not just your frontline sales staff. After all, your customers aren’t only going to be talking to your sales teams. Even if you manage clients through an account manager model like we do, there’s more contact points than just your rep.

In our case, our clients talk to our finance department, they talk to our business support teams, and their customers or employees talk to our end-user support teams about our products.

These interactions all add up to create a perception of your company in your clients’ eyes. What’s the good in having knowledgeable, empathetic, passionate sales staff if your clients find your finance department unbearable? Or if your customer support teams make your customers feel second best? Or if someone’s staff and customers are endlessly dissatisfied with their rewards?

Just as importantly – if you operate an account manager model like we do, how are your client contacts going to see your business if their interactions with you revolve around problems like the ones we just outlined?

Everyone that interacts with your clients’ needs to understand their role in customer retention, and just as vitally, they need to be equipped with the flexibility and skills to fully take part in that role.

TOP TIP: Recognise all employees for their contributions in keeping your customers coming back.

Embrace the little things

Make the details matter. They matter to your customers. When you look at what makes customers loyal to big brands like Apple, one of the things anyone can replicate is paying attention to the little things. Quality of packaging, the design of their stores, the training and motivation of their staff.

Now we can’t all be as fashionable as Apple, but we can act like Apple, all the same.

You can make sure your hold music isn’t rubbish. You can make sure your receptionists are equipped to make your guests comfortable when they visit. You can make sure your customers don’t have to repeat their information and their query when they pass between departments on the phone. You can make sure you remember orders and follow-up with customers when you’d expect to hear from them.

TOP TIP: Paying attention to small details doesn’t just add up to a better experience for your customers, it shows your investment and interest in how your customers experience your company. It all adds up.

Be consistent

Not to blow our own trumpet, but we found that one of the key things that keeps Appreciate Business Services clients coming back is that our products offer a consistent experience. Our customers come to us, and whether they plump for our digital rewards, gift cards or our vouchers, they get something that lets their customers, or their employees, pick a great gift for themselves.

By doing that, we spare every company that comes to us from the need to warehouse a huge selection of gifts for every conceivable audience they interact with. This key component is the same every time our customers come back to get in touch.

Our products, combined with our approach to customer services, is a huge part of what brings our clients back year-in, year-out.

TOP TIP: Whenever your customers come to your business, they need a consistent, repeatable experience.

Over to you

Like many “secret” recipes, it’s not all that secret. We’re not MI6, we don’t have Q sitting in a lab in central Liverpool cooking up secret gadgets and techniques that no one else can access.

Doing the simple things really well, will keep customers coming back year after.

If you want to talk about it retaining more of your customers, get in touch. We’re always happy to listen and talk.

Could screwing up, and making it right, be the best thing you do for customer loyalty?

It sounds like a joke, right? Why would anyone be more loyal to a company that messes up, even if they make it right later on?

Many people out in the world would agree – once trust has been damaged once, you’ve made a permanent and indelible mark on your reputation with a client, shifting the balance of your relationship for a long time.

Well, that might not be so. In fact, many have claimed for years that recovering after a fumble may improve your relationship with clients. It’s a theory called the service recovery paradox.

There’s always been a bit of debate about just how much of the phenomenon is fable and how much is fact, but a recent meta-analysis in the Journal of Service, taking in data on the subject from a wide range of sources, gave us some interesting results.

The paradox explained

Sometimes, your service fails beneath where customers think your service level should be. This could be down to a variety of factors, some of them inside and outside of your control.

First, the company has to fix the problem, restoring service to at least to the level before the failure occurred.

Once the service dissatisfaction is gone, the company can build trust, and build the perceived value of the company according to customers. For some clients, this will make them see your company as more valuable to them than they did before they experienced a dip in service, and be more loyal to your company. In turn, increasing their value to you as repeat customers.

That’s the claim made by the service recovery paradox.

Reality bites

The findings of the study we cited above and others, unfortunately, found that while they could find evidence of the paradox working, it’s not something you should bank on.

Both the meta-analysis, an inductive analysis of all available information to the researchers, along with previous studies, paint a tenuous picture for the customer recovery paradox, with too many contingencies and moving parts to be considered reliable.

A previous study from Mangini found that the customer service paradox relied on:

  • Customers having not experienced previous service failure.
  • That the service failure was not thought of as severe by the customer, and;
  • That the failure was largely out of the company’s control.

Even when these criteria were met, and this effect is produced, the meta-analysis found that the paradox did increase satisfaction somewhat, but didn’t impact buying intentions, word of mouth behaviour, or the brand image.

However – you still have to recover that service. Like many of the things we talk about on this blog, there’s no silver bullet out there, or in this case a convenient paradox to make it easy. But keeping customers in the fold is more important than ever, and paradox or not it’s important to get a grip on it.

Service failure and recovery is a bit of a big subject to get into here, but there’s three big things you can start thinking about this week now to make it easier.

Making amends

Words and demeanour

Too often, companies scramble to offer effusive apologise and prostrate themselves on the good will of their customers. They believe that one mistake, even if they recover from it, should be treated as fatal.

The result is customer service teams that flail from one crisis to the next. Treating every small fire as a towering inferno, and passing that sense of insecure panic on to their customers.

Knowing that your own mistakes aren’t the end of the world, and that for some customers they might even be made happier than when they initially complained, should change the mind-set to helping unhappy customers.

Approach the situation with confidence that you’re a quality provider, that you’re in control of the problem your customer has, and that you can fix it and make amends for the inconvenience. And equip your staff to carry that into their interactions with customers.

Access and actions

Your company needs dissatisfied customers talking to your recovery staff. This is to demonstrate as early as possible that you’re in control, that you can make the problem right, and that you can make repair the problem.

Service recovery hinges on being able to talk to customers, and vice versa. Customers can talk amongst themselves, they can quietly leave, they can even complain on public forums like Trustpilot.

You can try to intercept as much third-party negativity as possible, but your service recovery effort is only effective when you’re in direct contact.

That means having clear, well-signposted and well-maintained channels for complaint, manned by knowledgeable, conscientious employees. Not having these in place makes it impossible to run effective service recovery, and takes the idea that customers will be more loyal to your company, regardless of any paradoxes, off the table.

Amends

Rewards make excellent service recovery tools, particularly when dealing with individuals’ complaints. Over a long period, an occasional cash-value reward as a sign of gratitude or, sometimes, apology is a great investment. It’s a relatively small outlay for you but isn’t easily forgotten by customers.

This is particularly effective when you can personalise how you reward. It’s not practical to try and warehouse a gift fit for everyone, so it’s most likely that you’ll be using a multi-choice product like a gift card or reward code. You can’t “personalise” the gift itself, but you can personalise the message around it.

For instance – if you know a customer uses your insurance company to insure a vintage vehicle, you can deduce they have a passion for cars. While you’re delivering them a reward, it might be prudent to point out the customer can enjoy their gift at a track day.

You’re not just showing that you’re reticent about a service failure, you’re showing that you see and appreciate that there’s a human being behind the account number and complaint.

Summary

If you’re not sold on the science when it comes to the service recovery paradox, you’re not alone. There’s definitely more research to be done into the phenomena, but it’s an idea worth talking about.

However, regardless of your opinion on customer service phenomena, service recovery should be a priority. Especially as the world heads into uncertain economic times – money and time spent keeping customers now is money exceptionally well spent.