UNO February 2018

The added value in customer management

The 2008 economic crisis had a devastating effect on the relationships between companies and their customers, as well as the relationships between public administrations and taxpayers: a loss of mutual trust after attempts to take advantage of citizens to obtain increasingly scarce resources. Customer-taxpayers therefore demanded more, this time empowered by digital technology. A special kind of dehumanization made customers out to be commodities. People were overexploited, their needs were abused, the information they needed restricted and in many cases, the relationships automated,  lacking an appropriate personal touch.

For example, when you buy a product in a department store, during checkout you may be asked to press a button on a feedback machine to inform the store just how satisfied you were with the service they provided. If you call your car insurance company to change your policy, a machine will likely answer and mechanically guide you through a maze of numbers and slogans until you finally hear the voice of an actual person. If you wish to travel at a reasonable price, especially by plane, you have to opt for low cost flights, where, of course, you run the risk of delays. If you want to cancel a mobile phone contract, you must first brace yourself for the truly torturous ordeal and inevitable penalty fee. Securing a doctor’s appointment nowadays feels more like setting up a blind date, since it may or may not happen, implying a patient’s time has no value.

The ways customers are mistreated are endless. Fortunately, the economy’s digitization and the search for customer value beyond transactions have begun to trigger drastic changes. In Spain, PwC, one of the world’s leading consulting providers, published a study on customer management, titled Customers Always Have an Opinion… But Are They Always Right? (published in Spanish as El cliente siempre tiene… su percepción, ¿y la razón?). Although it is a 2013 study and companies have evolved significantly since then, the criteria set out by this study’s researchers are still valid.

Its conclusions are eye-opening: customers demand much more than what companies provide. Furthermore, improvement comes from knowing the customer, adjusting offers and multi-channel management, while customer management has a direct impact on profitability. The study also accurately suggests customers currently do not feel “mistreated,” but feel they are not listened to and, of course, are never pleasantly surprised.

It appears the consumer sector is able to better adjust its offers for customers through loyalty plans. The next pending item for companies—at least in Spain—is the exploitation of customer knowledge they own. How companies choose to approach customers is of utmost importance because truly knowing customers allows companies to offer a unique, adapted and personalized service.

A special kind of dehumanization made customers out to be commodities. People were overexploited, their needs were abused, the information they needed restricted and in many cases, the relationships automated, lacking an appropriate personal touch

It is worth including here the conclusions of this PwC study as it is a particularly spot-on summary of the central character customers have to recover in business management:

  • “Customer management is increasingly critical to the business success. To succeed in this area it is necessary to balance satisfaction and profitability. Using customers without satisfying them is not sustainable; in fact, you will lose them. It is also unwise to invest in improving the customer experience if, in the medium term, your business will be unable to fund the effort.”
  • “Companies are attempting to improve their management on this front. However, this study shows how, in general, customers ask for more, but companies are not meeting customers’ expectations.”
  • “Management challenges vary by sector. For example, the utilities sector has a strong latent threat because its customers have high levels of dissatisfaction but have not yet been influenced by it to change suppliers. On the other hand, fashion and tourism companies tend to satisfy their customers, but their slower progress in relationship management practices means they cannot convert said satisfaction into loyalty. Other sectors are somewhere in the middle of these two extremes, but they have experienced how customers will choose another supplier if their needs are unmet. Results and satisfaction go hand-in-hand. Given their poor customer loyalty, the banking and telecommunications sectors seem to be struggling the most.”
  • “The concept of customer management is also relevant to the public sector. The study also shows the path between municipalities and their citizens is even longer than the one of private sector companies. Citizens’ perception is poor in almost all aspects and management practices are not very advanced. Only in the electronic government field is there a high performance level valued by citizens.”
  • “Therefore, managing the customer well consists of managing their satisfaction and profitability. Nowadays, the best way to improve is by making better use of customers’ information in order to establish meaningful relationships beyond individual transactions. Companies do not adequately incorporate customer information into their service points or their offers. Additionally, the multichannel field presents different opportunities. All sectors perform poorly in this aspect, but there is a clear opportunity to surprise customers in ways that are difficult to replicate.”
  • “In short, the customer always has an opinion… and from what we have learned in this study, they are also right. Companies need to understand what customers perceive and believe and then improve their processes.”

So far, we have explained the technical study. Still, certain intangible elements are missing in the company-customer relationship, for example: the respect for the demand; an empathy toward customers’ goals; a personalized service (away from the cold nature of machines); the proper and correct use of databases with sensitive customer information; discretion and, in some cases, confidentiality; and, ultimately, a human component to the company-customer and administration-taxpayer relationship based on respect.

Moreover, one of the key elements to encouraging service companies to establish these strong relationships with customers lies in the proper training of employees developing their customer service craft. Knowing the rules of civility is not enough. It is necessary to enable them, train them psychologically and socially in order to adjust their responses, suggestions and treatment toward customers. This is an ever-evolving world where a person with a face, name, surname, desires and goals should receive answers that contribute not only to profitability and added value for companies, but keep humanity alive in this terrible contemporary environment where societies are adrift in a world of mechanical relationships and anonymity.

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