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Leadership Team commitment to Customer Retention- the key to sustained business growth

There are only two types of people in any organisation – those who serve the customers and those who serve the people serving customers. Others do not exist!

A number of organisations mention customer centricity as a value in their mission statement. However, ensuring this is imbibed by every employee and translated into consistent customer experience and customer retention, takes a lot of effort and toil by everyone in the organisation. The gap is visible to us as consumers – when the best of brands deliver a below par experience at one or the other touch point with the consumer. The brand pays a heavy price in terms of the gradual loss of consumer loyalty, as each below par experience creates more and more dissonance in the mind of the consumer.

So what does it take for an organisation to walk the talk? How can an organisation align it’s people and processes to deliver the promise and may be, even more than the promise – the customer delight?

The answer lies in the Leadership Team’s commitment to the target of customer retention; that customers remain satisfied with the brand through all the experiences they get with it.

Leadership team commitment to Customer Retention

First and foremost, the organisation’s leadership team need to be customer centric in their own thinking and practice. Which means, customer centricity has to be much more than lip service at annual meets.There are times in an organisation’s journey when, despite best intentions, some decisions may not be in favour of the customer. Those are the moments when it is important for the leadership to think and review carefully, the customer consequences and define an empathetic plan for the frontline to deal with consumers.

Let’s have a look at some typical situations

  • A tariff plan of a telecom company with which new customers are being acquired is perceived to be highly successful. However, the management feels that it’s becoming a drain on the profits and hence decides to withdraw it. The frontline is informed, but customers feel cheated and hence barge into the shops or call up the contact centre expressing their dissatisfaction.If not handled well, they are most prone to churn out at the next opportunity.
  • An airline has been providing passengers a choice of selecting their seats during the web check in. Suddenly they withdraw this feature and even frequent flyers realise that in order to get a suitable seat, they would need to pay an additional amount. They are irritated, but may continue with the booking for now. But sooner than later, the perception gap between this airline and others starts reducing, since the frequent flyer has no special advantage left.
  • A well known 3 star hotel chain, has a flexible pricing model where the room rates go up by as much as 3 times the base rate during peak periods. However, imagine the disappointment of a customer who has to pay at the rate of Rs.10,000 per night for a 3 star hotel, simply due to lack of availability of rooms at other 4 or 5 star hotels in the same location. It gets worse, when the quality of services at the hotel are poor.
  • A company in the manpower space is expected to supply people to client organisations within a certain time frame as prescribed in the job description. It involves a comprehensive selection process.The company has poor planning and invariably gets delayed or compromises, resulting in delays in the manpower being provided or not having the right individual for the job. There’s a good chance, the client will go to another service provider after a couple of recruitment rounds.
  • After careful technical evaluation and financial assessment, a company purchases a software to measure the productivity of its sales force. At the time of price negotiation, the supplier offers a discount but does not inform the customer that he is removing some key features because of that. Once the product is installed at various locations there is feedback that certain features are not enabled. At that time the customer is informed that these are paid services. This results in the company having to overshoot its budget or not use the product effectively.

In all the above instances the organisations may have intended to do the changes to improve their revenues and profits. But imagine the plight of customers, forced to suddenly accept the change; they may do so simply because there was no alternative at that moment, but will they come back to the brand again?

Taking a decision purely based on ROI and ignoring the impact on the customer, is not a tenable model both from the perspective of customer acquisition or customer retention.

Questions for the Leadership Team

When such situations happen, some obvious questions that the leadership teams need to ask themselves are

  • Did the leadership team plan and approve the moves after adequate thought to ensure the customers don’t get put off?
  • Could they have tweaked the plan to ensure they haven’t gone overboard?
  • Is the sales team adequately trained and cautioned to communicate upfront to avoid post-purchase dissonance?
  • Did they ensure that the service delivery teams and the customer service frontline are well equipped to deal with the reactions?
  • Did they visualise the medium to long-term effects of these decisions on the brand?

This really is the test of the management team’s commitment to customer centricity and ingenuity to ensure short-term advantages do not become medium-term losses.

Customer Retention Focus – A bird in hand

Businesses work at sub-optimal levels more often than not because, in the quest for growth and acquiring new customers, they dim the focus on satisfying the existing customers and retaining them. Even from the perspective of the cost of acquiring growth, it makes eminent sense to do the best for the existing customers and use their satisfaction levels as the certificate to acquire new customers and business growth.This is where the leadership team of the business needs to have the conviction and commitment to put the right practices in place to focus on customer experience and customer retention.

If businesses believe in the philosophy that a customer retained is business gained, the leadership team must walk the talk on customer experience.

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