The longer the customers stay with a company the more valuable they become to the company. However getting them to stay can be troublesome as customer defection is at its peak after the first purchase. So how can companies turn first-time buyers into repeat business?
1.Why are companies particularly vulnerable to customer defection after winning new accounts?
First-time buyers are often best thought of as triers, they are normally looking for validation about their buying decision. Unfortunately if they experience any mishap in the postpurchase service, they will regret and most likely won’t do business with the company again. Defection becomes even simpler if the customers are still in a relationship with their former supplier, well in that case they are just going to hop back to their ex.
2.How can customer loyalty be cultivated after that initial sale?
One needs to monitor every step at which the company contacts the customer and it’s not just receipt and fulfilment of order but also billing, returns and postsale service. Now these points need to be imagined from the customer’s perspective and about the question: “How can we coordinate each point to perform a seamless experience?” Once this is achieved and the customer also notices that all their points of contact with the company has been seamless, they feel appreciated and reassured. As customers have grown savvier about their value to the company, they begin expecting more of these psychic rewards.
3.Does the array of purchasing channels available today offer new opportunities to build customer loyalty?
It most certainly does. Research proves that the more channels – for example, toll free numbers, social media, websites, stores – that customers use to buy from, the more loyal they will be. Companies can create cross-functional teams whose members think about the usage of the different channels from the customers point of view. These insights provide the ‘big picture’ of the customer’s total experience. Channel coordination also helps to provide opportunities to continually monitor and evaluate customer’s experience. This cross-functional team can conduct focus groups or surveys of web site customers’ ratings of the company’s service levels.
4.Do frequent follow-up contacts with customers risk annoying them?
Yes, although follow-ups are essential one needs to make sure that with every follow-up there is an addition of some value. The customers need to feel that the few moments they spare to chat are essential to the company. Suppose you’re an automobile salesperson and you’re sending a thankyou note to your new customer, you could enclose the note with an article on road safety or a coupon for a free car wash. Basically the customer should feel glad that they took time to speak with the company after the purchase.
5.What do buyers value most about their relationship with companies?
They value reliability and responsiveness. However new technologies have shifted consumer’ perceptions about what responsiveness looks like, companies have to continuously asses these perceptions and then exceed them too. For instance, if you’re a roadside assistance company, your customers are going to care most about how quickly you sent a tow truck out to them after they call your helpline. They are less likely to care that the paper work is expedited within 24 hours. You need to decide where responsiveness is most critical in your business, then improve in those areas.
"Traditional smoke-and-mirrors marketing campaigns do not work anymore: today's firms must truly understand the customer's needs."
Amazing!