into.
of course, on the topic on everyone’s mind is what’s happening in the
market right now, so, given the volatility of the market and us making a
renewed focus on customer attention and acquisition. How imperative is it for
our companies?
Well, Dick, you’ve hit on a really good topic today, which his obviously the economy
and the impact that that’s having on companies out there. And what I would tell
you is we are certainly in a time that’s unprecedented, we’re referring to it these
days as chronic volatility. It’s certainly having an impact on both consumers and
companies and the tactics that they are putting in place these days. You know, from
our point of view, the consumer is in a position where, frankly, tighter credit is an
issue for them and that, of course, leads to lower confidence overall and eventually
less consumer spending, and that decrease in spending is having a ripple effect
through the supply chains and the value chains of the companies that serve
consumers on a regular basis. And so the real key question here is how quickly can
companies react to these changes in the marketplace?
In addition to he economic issue that we see, there’s an overarching globalization
process that continues to impact this whole landscape. We talk about the new pools
of talent that exist out in the marketplace around the world, we talk about the
billions of new consumers that are emerging around some of the new economies,
and certainly resource consumption is at an all time high in some of these places,
and so what we see is these globalization trends continue despite the fact that there
are some pockets of economic uncertainty and economic volatility out there in the
marketplace. So when you look at that and you combine the fact that we’ve got
tighter credit and lower confidence and reduced consumer spending in some areas
we have some of these globalization effects. You know, that’s creating a perfect
storm in some circumstances that have a direct impact on both consumers and
companies that we deal with on a regular basis.
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characteristics of high performance businesses. When it comes to customer
acquisition and retention, what are the key factors that determine an
organization’s ability to not only survive but thrive in times such as these?
Well, our high performance business research tells us a few key things about how
companies have to respond to this current environment.
Let me start with, first and foremost, the factor around understanding who their
very best customers are. As you can imagine in this economic environment, people
have limited resources, and they’ve got to make sure that they’re focusing those
resources on their very best customers. And so our high performance research tells
us that those clients that really understand the attitudes and behaviors and
expectations of their customers are those that are going to be able to serve them in
ways that meet their expectations. Secondly, our research tells us that customer
needs right now are changing, especially over the last 6 to 9 months as the economy
has become more volatile. As the economy has changed, customer’s needs and their
behaviors are changing. What our research says is that those clients that are out
there listening and understanding those changing needs and expectations are those
that are going to be able to serve them better and, therefore, drive a greater level of
retention and loyalty. Thirdly, our research tells us that delivering a consistent
customer experience that’s aligned to the overall brand promise of a company is also
crucial in this environment. And we believe those clients who can deliver consistent
experiences, that are in alignment with the changing client expectations, are those
that are going to survive and come out of this in a good position.
how about providing some examples of the kind of new behaviors you
are talking about?
Well, you know, , there are a number of things that I see as I talk to clients
around the world. Let’s just take the simple example for a moment of different
levels of service, and I’m sure that you have providers that have provided you bronze
or silver or gold service in the past, or have given you options, often three options,
they’ll tell you the hamburger, the cheeseburger, and the cheeseburger with fries, for
example. And in the past, you know, during good times, you have wanted to treat
yourself to that gold standard or that cheeseburger with fries, and in this economy
with spending being reduced, you may choose to drop a level of service, or drop
down a level, or even two, and you buy the less premium gasoline, or you buy the
less expensive option, or you choose less expensive set of services to go with the
products that you have bought. And what’s interesting is, and what we found during
the last downturn, is that once people make that switch to those lower levels of
service, they often find that they actually meet their needs and they stay with those
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lower levels of service, and that requires companies to rebuild that premium level
customer base once they come through the downturn.
in the media you hear a lot about the tough times. In your opinion, is
there any upside?
Well, there certainly is an upside for companies to think about. You know, some
companies are in a very defensive posture and are playing defense right now, and
others are on the front foot, they’re playing offense, they’re taking advantage of
these times. And what our research says from the last time people went through this
kind of downturn is that the companies that came out on the front foot and took
market share during the downswing, in fact, continued to do better than their
competitors who came out on the wrong side, and that gap continued to widen for
several years after the downturn. So, I think the moral of the story here is that
companies really have to think about and play both defense and offense during this
time. They’ve got to make sure that they’re protecting their customer base, they’ve
got to make sure that they’re focusing their resources on their very best customers.
At the same time, they’ve got to continue to think about growth and make sure that
they are keeping an eye towards the future and towards their improving market
share.
as you speak with your clients, what are you recommending that they
do at this time?
Well, Dick, we recommend a number of things. First and foremost, they’ve got to do
a good job of listening to their clients. Now, as we talked about earlier, client needs
are changing, and those companies that are doing a really good job of listening to
their customers are the ones that we think are going to prevail. So, from a consumer
point of view, you know, listening to your customer means having the right sets of
analytics to understand what’s happening, what their changing needs are, and, more
importantly, what their changing behaviors are so that they, in fact, can react to
that. An example might be a wireless company who has a prepaid card. For example,
one that I talked to recently said that they were getting less calls from consumers to
top up their prepaid cards. So, there’s a changing behavior that they’ve got to make
sure that they understand, they’ve got to understand the implications to their web
traffic, to their call center traffic, and they’ve got to be able to respond to that. So
companies who are really listening are the ones that are going to move forward.
The second thing, Dick, I would tell people is to really – to know how to reach your
customer in this environment, what’s the most effective, and what is the best return
on investment in terms of reaching customers? I’ve talked to a lot of companies who
are looking at their longer term marketing spend around awareness and big
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marketing events, spending less money at this time on those types of issues,
spending more time on focused near term customer acquisition and customer
retention when it comes to marketing spend. And so reaching the right sets of
customers is certainly something they need to consider, and looking at that from the
other perspective, from the customer perspective, making sure that you’re serving
that customer in the ways that they want to be served, so through the channels that
they want to be dealt with and on their terms is really fundamental at this time.
We just completed a customer satisfaction survey that shows that for the fifth year
in a row customer churn numbers are up. Sixty-seven percent of the consumers that
we surveyed, in fact, said that they had switched a major service provider in the last
12 months, and over 50% of them said that they had switched, in fact, two
providers. And so the numbers are up and that means retaining those customers is
critical and they want to be served the way they want to be served through the
channels that they want to be served, and those numbers just help the companies to
realize that that’s critical in terms of their priorities.
The third thing I would tell you, Dick, is that delivering a consistent customer
experience is absolutely fundamental for companies right now. It is one of the most
important factors that we see in terms of driving customer loyalty, that is, delivering
a consistent customer experience that’s aligned to whatever your brand promise
happens to be. If your brand promise is delivering a fast meal consistently hot, then
you’ve got to make sure that that experience is being delivered every time in a way
that meets customer needs and their expectations.
So, those are the things that I would tell you, Dick, are most important for
companies to be dealing with right now.
One term that we hear a lot of these days is customer centric, and I’d like to
hear from you, Woody, what does it mean to be customer centric?
Well, Dick, that’s really what we’ve been talking about here that for me at
Accenture and what I tell our clients is it means being truly focused on your
customer, it means getting close to your customer and knowing them better,
reaching them in ways they want to be reached and delivering them experiences
that make a difference and are truly differentiated.
I believe that customer centricity is a topic that is no longer optional for companies,
it’s something that they’ve go to think about and they’ve got to do. I believe they
have to put the customer at the center and make this shift from being product
centric or service centric to customer centric as they go forward, especially given the
volatility of the current environment that we’re in.
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In the end, companies really have to think about all four dimensions and need to
solve for all four dimensions that are out there, meaning, they’ve got to solve for
their shareholders, that’s clear. At the same time, they’ve got to solve for their
employees. Without happy employees, it’s very difficult to deliver and meet the
expectations of your customers. Third dimension they have to solve for is for the
company itself. The company has to be a long term viable organization, and
decisions made in the short term also have to be given that long term view and
perspective to make sure that they’re good for the company in the long run. And
fourth, they’ve got to solve for the customer, and the customer has got to be a
balance in that equation. We saw in the last downturn too many companies that
focused on cost cutting at the expense of the customer experience, and that’s a big
lesson learned out of the last go around, and companies have got to make sure
they’re solving for all four parts of that equation.
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talking about customer retention and acquisition. This wraps up this podcast, and
we thank you for listening.
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