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Is Customer Loyalty a Thing of the Past?
Erica Falkner
June 30, 2008
Why old business tactics don’t work on today’s savvy customers
When it comes to choosing where to do business, today’s customers have more options and higher expectations. Customers increasingly demand customized service when it comes to how businesses communicate and conduct business with them. As a result, businesses that once relied on the occasional form letter or promotional mailer are being forced to change their whole approach to customer communications.
Gone are the days when businesses could count on loyal life-long customers. Today, customers use multiple channels to research companies and engage with each other to find the best service providers for their needs. While customers feel more empowered, navigating the new communications terrain has left many traditional businesses scratching their heads as more and more customers leave.
Today’s customers don’t hesitate to switch where they do business if they feel their expectations aren’t being met. In fact a recent survey conducted by Thunderhead, found that 61% of insurance, and 63% of banking customers polled planned to switch providers during the next year. The reasons? 76% want more personalized options when it comes to how providers communicate with them. Standard communication tactics are no longer effective or appropriate in light of today’s technological advances. Customers feel that traditional businesses, like insurance providers and banks, don’t value them as individual customers or take the time to learn what they want or need. As a result most customers aren’t loyal. In fact only 17% of insurance and 16% of bank customers said they feel any sense of loyalty to their providers.
So how can businesses build customer loyalty and retain more customers? Give customers what they want. And the only way to know what they want is to ask. Businesses need to proactively seek out the opinions of customers and work to continuously improve processes for how they communicate and interact with customers.
Seem overwhelming? Here are some recommendations for getting started:
- Review your communications materials and methods. Do you put customers first? Do you give customers options for how they want to receive communication from and communicate with you?
- Provide customer feedback mechanisms and develop processes for reviewing and implementing them.
- Segment your customers. Learn more about them individually and look for ways to connect with them on an individual and emotional level.
Erica Falkner is Marketing Manager at Vox, Inc., a customer experience research and consulting firm. Contact her through the feedback form on our Contact Us page. Copyright 2008 Vox, Inc. All rights reserved.
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