Customer engagement is the new buzzword; using technology to make it happen is the new mantra. This is also among the top 2 or 3 concerns and challenges as seen by CEOs worldwide. ‘Customer voice’ and ‘Moments of Truth’ are as old as the Himalayas. However, in most instances, the initiatives have either resulted in ritualistic routines and/or automating processes that by themselves don’t mean much: for instance, loyalty programmes/CRM etc. According to a Forrester Research study, hardly 10 per cent of such IT investments have resulted in positive outcomes. The problem is that many such initiatives, though well intended, lack the emotional connect with customers.
We are moving into a digital world where, unlike the world we left behind, news and opinions gets shared at a pace that was unimaginable a decade back. The social and mobile world is simultaneously an opportunity and a challenge to organisations. Employees, customers and other stakeholders have found a medium to express their feelings opinions and judgments/verdicts using social media. Their voice has got an opportunity to be heard. This has put tremendous power in their hands.
Accepting the reality
Now, as an organisational leader you can ignore this at your own peril or accept the reality and see how to leverage it to your advantage. Smart leaders are recognising this.
Bad news spreads fast. With the advent of the internet and social media, it has gained a multiplier boost. A bad experience with a brand, whether a spa, restaurant, hospital, retail outlet or for that matter any consumer-facing business, once it gets written about in the social media causes huge damage to the reputation of the brand and so fast that the brand often suffers irreparable damage.
Customer engagement and listening to customers is the key to avoiding such sticky situations; and a smart and proactive leveraging of the same technology can bring in immense benefits.
Repeat customer
A repeat customer is a profitable customer as the cost of serving an existing customer is far less compared to the cost of creating a new customer. Besides, a repeat customer is also potentially a growing customer with possibilities of cross selling and gaining a higher share of the wallet of the customers.
More importantly, a customer is potentially a good source of information in terms of gaps in our product/service offering and opportunities to improve the features etc. Innovations based on user feedback have a better chance of success and acceptance as they are one of the most valuable and reliable sources. The late management guru CK Prahalad’s concept of ‘Co-Creating Value’ is based on customers becoming partners in an organisation’s new product/service endeavours.
Sustaining success
Sustainable business success (the ultimate state of nirvana for corporates) very much depends on not just creating, but really being able to keep and grow the customer.
Now, do you necessarily have to make huge investments in technology to achieve this? Well, technology does certainly help, but it is neither a must nor a sufficient condition. Some time back, I happened to do a half-day workshop on Strategy for a well known nationalised bank’s top management (AGM and above including the CMD). The discussion drifted to private banks and investment in technology including CRM by private banks. Some one quipped that the average age of the customer is 49 years while for X private bank it is 27. The implications were obvious.
The CMD intervened to add that the average age of employees at his bank is 51 while the private bank has an average of 28. The point being made was that even if one were to invest in fancy CRM, is the organisation geared to use it?
Personalised touch
My take was a little different. Most managers at nationalised banks have a more personalised touch with customers (unlike many private/MNC banks, where they charge you a fee if you turn up at the branch). They know most customers by face and name. They know their occupations, family and history. If one was to empower/motivate them and the branch-level managers were to leverage this knowledge to grow business with their customers, the job is done. So I recommended establishing a process to enable this.
At the end of the day, customer engagement has to be organisation-wide and part of the overall culture. It is too important to be left to one department or function.