The economic environment has become volatile; companies are understandably worried about their customers. Will they stay or will they leave? After all, customers have options, and they certainly know it. Competitive overtures, such as lower prices and intriguing promotional offers, have intensified. The internet beckons, with its impressive array of available alternatives. And so, it appears that today’s customer is indeed king.
Corporate mantras don’t always translate to the “moment of truth” when the customer comes in contact with the employee.
But in focusing on maintaining the continuing patronage of their customers, too many companies appear to be ignoring their potentially most powerful marketing weapon. In their attempts to build stronger customer relationships, many companies emphasize managing the traditional “four Ps” of marketing — Product, Price, Place and Promotion — while appearing to overlook an essential fifth P: People. Admittedly, most organizations that have employees who touch customers will at least give lip service to the critical importance of their human resources.
Their websites proudly proclaim “our people are our most important assets”; “our people make the difference.” But these can be empty promises, representing nothing more than meaningless puffery. Corporate mantras don’t always translate to where it really matters: the “moment of truth” when the customer actually comes in contact with the employee who has been challenged to “live” the company’s brand promise.The reason why companies seem to emphasize the traditional four Ps is simple. The “people” P is the toughest one to manage. In clear contrast, product attributes can be changed relatively easily. New features can be added, and product designs can be altered. New pricing structures can be announced, and discounts can be offered. Promotional campaigns can be launched, involving everything from television commercials to social networks and interactive videos. Additional retail locations can be set up.But the human component defies easy management. Unlike prices or product attributes, people cannot be meaningfully managed from on high. They must be locally managed. And people vary to a frustrating degree in their ability and commitment to add value to the intended brand experience. People aren’t all the same.
But people are powerful. Research has shown that, when it comes to building customer loyalty, the “people” factors are often the most important element, outweighing the combined impact of product features, convenient locations, and even low prices. Of course, customers do show loyalty to the companies they see as offering superior product performance or consistently better prices. But we typically find that customer loyalty levels are even higher for those companies whose employees are judged by customers as standing apart from all others. When customers come in contact with employees, those human encounters make a huge difference. Employees who sell, support, or service what the company offers are not merely serving a transactional function that’s required to get the product into the hands of the customer. These employees are also helping to establish a relationship, the nature of which is heavily dependent on them. Through their actions and attitudes, they may enhance that customer relationship, or they may jeopardize it.
Engaging the customerWhen the customer relationship grows stronger, when the customer becomes more “engaged,” the company benefits impressively. Research shows that engaged customers spend more money, come back more frequently, stay longer, and are less price sensitive. Engaged customers sing the company’s praises, while disengaged customers spread their unhappiness everywhere. Stores that do a better job engaging their customers greatly outperform other stores within the same system when it comes to sales growth and profit versus target. Engagement is good business. It should be noted that customer “engagement” is a lot more than “satisfaction,” and it requires a good deal more to achieve and sustain it. Engagement represents a meaningful and enduring bond between customer and company, one that is grounded in emotional considerations and not just in rational ones. It stems from customers’ feelings about how they’re being treated by the company. The arena of customers’ feelings is where the impact of employees is most clearly evident. Employee-to-customer contact speaks directly to some of the more critical aspects of an emotionally grounded customer relationship. Research has shown that an engaged customer relationship is characterized by four essential ingredients:
- First is Confidence, the customer’s belief that the company can always be trusted to keep its promises.
- Second is Integrity, indicating that the customer is convinced that the company will always stand behind its offerings and will fix anything that might ever go wrong.
- Third is Pride, a feeling of mutuality on the part of the customer, sensing that his or her patronage is both appreciated and respected.
- The final component is Passion, the customer’s feeling that the company is essentially irreplaceable.
See you next week.
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