Competitive Strategy:

Customer Retention

Customer Satisfaction

The Prime Concern of Your Business and the Critical Component of Its Profitability

 

Vadim Kotelnikov personal logo Vadim Kotelnikov

Founder, Ten3 Business e-Coach – Inspiration and Innovation Unlimited!

 

"Satisfying the customer is a race without finish." ~ Vernon Zelmer

 

Customer Satisfation Retaining Customers 80/20 Principle Customer Satisfaction CUSTOMER SATISFACTION: Delivering Superior Value to Win and Retain Customers, Win Customers' Loyalty

8 Best Practices of Successful Companies

  1. Measure performance by customer satisfaction... More

Main Benefits of Customer Satisfaction1

  1. Customers stay with the company longer

  2. Customers deepen their relationship with company

  3. Customers demonstrate less price sensitivity

  4. Customers recommend company's products or services to others

 

Importance of Customer Satisfaction

Statistics1

  1. It costs between five and six times more to attract a new customer than to keep an existing one.

  2. Companies can boost profits anywhere from 25 to 125% by retaining merely 5% more existing customers.

  3. Only one out of 25 dissatisfied customers will express dissatisfaction.

  4. Happy customers tell 4 to 5 others of their positive experience. Dissatisfied customers tell 9 to 12 how bad it was.

  5. Two-thirds of customers do not feel valued by those serving them.

How To Achieve Customer Satisfaction?

The Five Rules

  1. Reduce the risk for your customers, especially first-time buyers

  2. Give your customers more than they expect

  3. Personalize your offer and tailor it to your customer's needs

  4. Care about your customers, provide great after-sales support

  5. Listen to your customers

Customer Satisfaction Service-Profit Chain Ten3 Business e-Coach: why, what, and how Creating Customer Value 1000ventures.com Employee Satisfaction Econimic Value Added Customer Retention Leveraging Service-Profit Chain To Achieve Customer Satisfaction and Loyalty

Traditional Strategy versus Strategic Innovation

Traditional approaches

Strategic Innovation approach

Are technology-driven (seek consumer satisfaction)

Is consumer-inspired (seeks consumer delight)

>>> More

10 Reasons to Create a Strategic Alliance

  • You'll be able to solve your customer's problems faster with a larger base of customer service people. You'll also learn new ways to improve your customer service from your alliance partners... More

Create Greater Value for People Around You

To be able to help people achieve more and solve their problems in a caring value-added way, ask yourself these searching questions constantly:

The GE Leadership Effectiveness Survey (LES)

 

Customer Retention

Surprise Your Existing Customers To Retain Them

Measuring Customer Satisfaction

Customer Satisfaction Illusion and Trap

Creating Customer Value

Customer Service

Customer Partnership

Service-Profit Chain

Customer's Perspective of Quality

Results-based Leadership

Enterprise-wide Business Process Management (EBPM)

Process-managed Enterprise

Six Sigma

Total Quality Management (TQM)

Customer Expectations

Customer is defined as anyone who receives that which is produced by the individual or organization that has value.

Customer Success 360

Customer expectations are continuously increasing. Brand loyalty is a thing of the past. Customers seek out products and producers that are best able to satisfy their requirements. A product does not need to be rated highest by customers on all dimensions, only on those they think are important.

Create Customer Value: 10 Matsushita Lessons

Customer Satisfaction – a Critical Component of Profitability

Exceptional customer service results in greater customer retention, which in turn results in higher profitability. Customer loyalty is a major contributor to sustainable profit growth.

Customer Care

To achieve success, you must make superior service second nature of your organization. A seamless integration of all components in the service-profit chain – employee satisfaction, value creation, customer satisfaction, customer loyalty, and profit and growth – links all the critical dynamics of top customer service.

Creating Customer Value: 9 Questions To Answer

Sadly, mature companies often forget or forsake the thing that made them successful in the first place: a customer-centric business model. They lose focus on the customer and start focusing on the bottom line and quarterly results. They look for ways to cut costs or increase revenues, often at the expense of the customer. They forget that satisfying customer needs and continuous value innovation is the only path to sustainable growth. This creates opportunities for new, smaller companies to emulate and improve upon what made their bigger competitors successful in the first place and steal their customers.

Giving More for Less

"What do your customers really want? “More for less,” of course!  They want more value, more service, more consistent delivery, more accuracy, and ever more responsiveness – and, they want to pay “less” for this “more,” along with less hassle, less bureaucracy, and less sales pressure," says Andrew Spanyi.6 "Unless you can provide your customers with “more for less,” you can be assured they will find someone else who can, and sooner rather than later."

Innovation Is Love

Getting Right Customer Feedback

Don't get customer feedback only from surveys and answers to casually posed questions: "How would you rate your satisfaction with our product or service?" The same results of such surveys can be interpreted in completely different ways. Surveys and focus groups don't analyze customer feedback with precision, and their results are notoriously susceptible to distortion.

Customer connection comes from customer intimacy, involving customers, partnering with them. Partnering with customers represents your firm's "capacity to anticipate what customers need even before they know they need it"4 or to create customer needs... More

Customer Satisfaction Illusion and Trap

Some examples of customer satisfaction illusion include... More

Process-managed Enterprise

A process-managed enterprise supports, empowers and energizes employees, encourages their initiative, enables and allows its people to perform process work. "Process work is work that is focused on the customer, work that is directed toward achieving results rather than being an end in itself, work that follows a disciplined and repeatable design. Process work is work that delivers the high-level of performance that customers now demand."6... More

 Case in Point  Benefits of Business Process Management

The payoffs of process mastery can be breathtaking. Costs melt away, quality goes through the roof, and time spans shrink to a fraction of what they were. In 1999 Hammer and Company8 surveyed dozens of companies that had adopted the process approach to work and business.

  • In order fulfilment, cycle times had typically decreased by 60% to 90%

  • "Perfect orders" (those delivered on time, with no mistakes) had increased by 25%

These improvements in process performance paid off in the critical enterprise currencies of customer satisfaction, customer retention, and corporate profits... More

 Case in Point  Dell Computer Corporation

"We learned to identify our core strengths," writes Michael Dell7, Founder of Dell Computer Corporation. "Pretty early on in the company's life, we concluded that we wanted to earn a reputation for providing great customer service, as well as great products. The idea was that building a business solely on cost or price was not a sustainable advantage. There would always be someone with something that was lower in price or cheaper to produce. What was really important was sustaining loyalty among customers and employees, and that could only be derived from having the highest level of service and very high-performing products."

"We put a great deal of emphasis on understanding what drove customer satisfaction, whether it was response times on the telephone, quality of products, valuable features, or the ease of experience in using the product. Engaging the entire company – from manufacturing to engineering to sales to support staff – in the process of understanding customer requirements became a constant focus of management, energy, training, and employee education."

 Case in Point  Apple

"I get asked a lot why Apple's customers are so loyal. It's not because they belong to the Church of Mac! That's ridiculous," once said Steve Jobs, Founder of Apple.10

"It's because when you buy our products, and three months later you get stuck on something, you quickly figure out how to get past it. And you think, "Wow, someone over there at Apple actually thought of this!" And then three months later you try to do something you hadn't tried before, and it works, and you think "Hey, they thought of that, too." And then six months later it happens again. There's almost no product in the world that you have that experience with, but you have it with Apple products."... More

 

 

 

 Case in Point  Wall-Mart

In his 10 Rules for Building a Business Success, Sam Walton, the Founder of Wall-Mart writes: "Exceed your customer's expectations. If you do, they'll come back over and over. Give them what they want – and a little more. Let them know you appreciate them. Make good on all your mistakes, and don't make excuses – apologize. Stand behind everything you do. The two most important words I ever wrote were on that first Wal-Mart sign: "Satisfaction Guaranteed." They're still up there, and they have made all the difference."... More

 Case in Point  Amazon.com

Amazon.com works hard to achieve value-added differentiation through customer-focused information services. Amazon.com's site retains customer preferences and provides automated customization for users.

Amazon.com's market success depends on its ability to maintain and grow its customer base by knowing and serving its customers better than its competitors and providing a higher level of value-added differentiation in customer service. Due to high level of customer satisfaction, repeat customers account for approximately 60% of Amazon.com's orders... More

 Case in Point  Toyota

The fundamental reason for Toyota's success in the global marketplace lies in its corporate philosophy – the set of rules and attitudes that govern the use of its resources.

The Toyota Way: 14 Principles

Toyota have successfully penetrated global markets and established a world-wide presence by virtue of its productivity. The intent implicit in the Toyota Production System is to stimulate people to think constantly – a "self-running, selfimproving" system. Everyone, not just managers, can see what's happening. Every problem prompts why questions. Empowered workers can solve problems at a very detailed level. A lean learning culture permeates the entire company. Customer value creation and customer satisfaction results from enterprise-wide performance... More

 Case in Point  Fidelity Investments

At Fidelity Investments process redesign model provides the following guidelines:

 

 

 

References:

  1. "Extreme Management", Mark Stevens

  2. "Exceptional Customer Service", Lisa Ford, David McNair, and Bill Perry

  3. Customer Intimacy, Fred Wiersema

  4. "Results-Based Leadership", Dave Ulrich, Jack Zenger, and Norm Smallwood

  5. "Customer Retention in a Week", Jane Smith0

  6. Agenda, Michael Hammer

  7. "Direct from Dell", Michael Dell with Catherine Fredman

  8. "Measuring Client Satisfaction", Go To Market Strategies,

  9. "More for Less," Andrew Spanyi

  10. "The Seed of Apple's Innovation," Interview with Steve Jobs, Business Week, October 24, 2004