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Service Excellence at Risk

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Creating and delivering the client experience may well be the next key competitive business differentiator.

Executive Summary.

  1. Perception Vs Reality
  2. Marketing Defined
  3. Eight Steps to Success
  Creating and delivering the client experience may well be the next key competitive business differentiator.

The industrial revolution is long behind us, the technology revolution is well under way. Where are we, in so far as delivering on the client experience? Depending on whom we speak with, we’ll get differing comments.

However, research, undertaken by the Bain Consulting Group in late 2006, shows a very worrying situation. Based on interviews with 200 vendor CEO’s and their respective clients, see graph below, 80% of vendor CEO’s believed that they were delivering on the client experience. Yet only 8% of their clients concurred.

VendorClientCEOs

In too many instances CEO’s and CMO’s don’t know, as they haven’t asked. They are groping in the dark. Ipsos Markinor’s 2007 State of Marketing study indicated that companies do understand that client retention needs to be a core part of their strategy for continued growth, yet only 1 in 20 companies had the necessary insights to understand their clients well enough to plan accordingly.

Marketing Defined

And, only last year the American Marketing Association (AMA) announced its new definition of marketing. Out go the four ‘p’s and in comes this client centric definition. “Marketing is an organisational function and a set of processes for creating, communicating and delivering value to clients and for managing client relationships in ways that benefit the organisation, its clients and stakeholders. Value is not delivered by a business to clients, but rather co-created with clients in an on going interaction with them.”

Commodities Rule

Creating and managing unique client experiences will become a clearly defined competitive differentiator in a world where more and more products and offerings are just viewed as a commodity. Whether we talk of retail banking or airlines, notebooks or fast food, cars or municipalities, few if any, deliver a client experience that would engender client loyalty. They mostly see themselves as supplying a product or service, with nothing underpinning it. Worse still, many display a take it or leave it attitude!

Customer Experience Defined

A customer experience is an interaction between a company and a client. It is a blend of a company’s physical performance, the senses stimulated and emotions evoked, each intuitively measured against client expectations across all moments of contact and communication.

Steps to Delivering on the Client Experience

Much has been written on this. So as to keep an intricate and complex subject reasonably simple, here are eight steps on the ladder to success in delivering on the client experience.

The Emotional Step

Great client experiences offer competitive advantage as they create loyal clients over time. Who are we really loyal too? Most probably, those special friends and family. Why you might ask? We enjoy an emotional attachment to them and most importantly, it is reciprocal. Companies that can create an emotional bond will keep clients. They’ll come back to you again and again.

Deliver More than is Expected

Examine the role of client expectations during a client experience. What are client expectations and how is your company delivering against them. Define the gaps and then develop initiatives required to address them. This relates to all touch points, be it your website, switchboard and of course personnel.

Inspirational Leadership

Is your company’s ‘C’ level walking the talk around delivering on the client experience? Are your people really your greatest asset? Have you got the right people in place to deliver on the leaders objectives? It is these people that are

the company’s greatest asset. Have these “right people” been empowered? Are they happy and fulfilled?

The Right Client

Not all clients are created equal. Does a segmentation analysis indicate that some clients are really not worth the effort and should be shown the door. This approach will allow your company to focus on those clients that are worth investing with in a reciprocal manner.

Outside In Focus

Is there a clearly defined client experience strategy that has been developed in conjunction with your company’s clients, rather than what the marketing and sales department see as being right for the client. Have you a learningRelationshipTM or similar methodology in place, so that your clients are in a position to guide you on this journey?

Saving Costs

Delivering on the client experience can have a dramatic positive impact on your company’s bottom line. Much has been published regarding the cost of gaining new clients as against retaining existing ones. The ratio is now assumed to be as high as 1:10. Delivering on the client experience significantly improves client loyalty. Client loyalty translates into greater revenues. Handled correctly, greater profits will accrue.

Living the Brand

Each time your brand touches a client, an opportunity is created for your company to build a relationship, elicit an emotional attachment, earn trust and

engender loyalty. Employees are often busy with the operational aspects of the

business and forget to think about their clients’ perspective. They need to be

reminded to do so.

Silocitis

An organisational disorder in which the affected system is unable to co-ordinate activities across its component parts. This may result in the development of isolated functional silos who, as a result of their inability to collaborate, destroy value for both clients and shareholders. Typical symptoms of the disorder include product-based organisational structures, increased prevalence of inter-silo competition over and

above collaboration and an inability to track and enhance a clients’ experience across the silos. The disorder can be cured, but only when the entire system

(company) recognises the need to work together to deliver on the client experience as one.

Technology is not the answer.

So as to put customer relationship management (CRM) technology into perspective. Whilst these technologies have an essential role in ensuring that the right employees are empowered to deliver on the client experience, it must be understood, that these technologies are enablers. It’s the people that deliver on and build the client experience, hence it comes back to some of the steps outlined above, specifically Inspirational Leadership and Living the Brand.

Who is serious?

The above steps aren’t revolutionary, yet a study recently released by the New Jersey based Strativity Group, indicates that most companies hold a superficial

CommitedToCustomer

view when it comes to delivering on the client experience. These results represent some serious challenges ahead as companies are seeking growth and innovation. While the past few years were dedicated to forming lasting relationships, the study demonstrates that the foundations of relationships are weak and unsustainable. Companies need to shift their focus and efforts around client strategies from the relationship level to positive client experiences. No relationship can thrive and last when employees remain unconvinced of the value their company provides or when the client roles are ill defined. Without a staff that enjoys the authority and tools to answer real client demands, companies will not be able to differentiate their products or service and command preference or premium prices let alone expand their client

wallet share. While declarations of commitment to clients are plenty and popular, when it comes to the details and the execution, the gap between the intentions and

execution is widening and requires attention. Ever increasingly cynical clients and employees follow actions, not declarations. They judge and act based on what a company does, not says. Issues such as the emphasis of compensation on quality and providing the tools and authorities to the right employees are the first of many steps to be taken.

How to get it right

To conclude, and going back to the Bain Consulting study, what made those 8% of CEO’s concur that their companies were receiving the client experiences they desired from their vendors. Three points, namely;

  1. The vendors design the right offers and experiences for the right clients.
  2. The vendors deliver these propositions by focusing the entire company on them with an emphasis on cross-functional collaboration.
  3. The vendors develop their capabilities to please clients again and again—by such means as revamping the planning process, training people in how to create new client propositions, and establishing direct accountability for the client experience.

In a recent issue of Fortune, I was startled to come across an article entitled “The Disappearance of Shopping Centers”. This piece highlighted that about 30 – 35 shopping centers are being closed each year in the US. The article went on to highlight the main reasons, namely the internet and a return by the American consumer to the Mom and Pop stores and Farmers Market’s. Why? Although totally different contact points for clients, they are both more pleasurable than huge, impersonal stores. Both the internet and Mom and Pop stores deliver a superior client service experience. Food for thought!!

Andrew Clare is Managing Partner of reLiance a business to business relationship marketing practice. We focus on improving client profitability through developing, implementing and measuring sustainable, collaborative business to business relationships.  This e-mail address is being protected from spambots. You need JavaScript enabled to view it , www.rassa.co.za

 

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