Friday, October 17, 2014

Connected customers may not be connected

In today's business climate the connected customers are seen as people who are highly educated and technologically social and mobile. A study was commissioned by Kitewheel and was conducted by the independent research firm Strategic Marketing Research, Inc. in 2014 to study ongoing efforts by companies to reach their connected customers individually.  The respondents to the study included 382 US-based connected consumers and 209 US-based senior level marketing executives. 72% of the marketing executives focused on B2C and B2B while 28% of the marketing executives focused exclusively on B2C.  63% of the marketing decision-makers were from companies with more than 1000 employees.

There were four key findings of disconnect between the companies and their connected customers.

The first disconnect was in the area of real-time commerce. The study found that 91% of consumers feel an “in the moment" offer might influence their purchase whereas only 32% of the marketers indicated they have the ability to deliver on this “real-time” promise in practice.

The second disconnect related to mobile devices that are used by connected customers. The study showed that 76% of consumers use their mobile devices to compare prices and read reviews while shopping. However, 51% of marketers do not manage their mobile apps as a consumer touch point. As a secondary issue 55% of the consumers are frustrated by finding that the company app offered no functional difference from the business’ website.

The third disconnect with related to tweets between the connected customer and the company. Approximately one in three connected customers expect a response to their tweets within 24 hours. Unfortunately, 45% of marketers indicate that it's unlikely that their company can respond to every one of the social media opportunities.

The last major disconnect has to do with the customer loyalty programs themselves. 73% of the connected customers believe that companies should show the connected customer how loyal they are to the customer but 66% of the companies see it the other way around.

The bottom line is companies do not yet appear ready to deal effectively with the connected customer who uses today's technology as a primary tool for connecting with the company.  This data should provide a wake-up call to companies who are in the world of technology and think that they are using their technology effectively. The magnitude of the differences between the perceptions of the company and the perceptions of the connected customer dramatically make the case that these companies have a long way to go before they are truly able to support connected customers.

Friday, October 10, 2014

Neuroscience Can Be Used to Improve Customer Loyalty

There has been some interesting work done by Dr. Daniel Kahneman, a professor at Princeton University in the area, behavioral economics. Dr. Kahneman received the Nobel Prize in 2002 for his work in economic sciences. One of the phenomenons that he has written about, and which has been given much attention is the peak – end rule. This rule provides some excellent guidance for building customer loyalty.

In essence, the rule explains how experiences are judged with the primary focus being on intensity of emotions at their peak moments coupled with the endpoint or resolution of customer experience.  What is research has pointed out is the most positive or negative emotional intensity. In the end resolution of the service experiences have a disproportionate influence on the overall experience of the customer.

What makes this insight of Dr. Kahneman particularly attractive is that when we identify the customer’s peak moments during the customer experience and then focus on how the service experience ends we will create the most impact on how the customer feels about overall experience. When these moments from managed the company can plan on increasing the lifetime value of its customers.

Thus, there are two areas that must be managed well; namely, (i) the careful identification of the customer’s peak moments (those moments with maximum intensity of emotions) and (ii) the last touch point of the service experience (the last actions that occur before the experience ends). Many companies forget the importance of the closing experience. Even though there have been many very positive aspects with the customer during the customer contact, the manner in which the call ends can negate much of the goodwill and loyalty that was created through the service experience.

The bottom line of this neuroscience approach to customer loyalty is that we now have a way to focus on those aspects of the customer’s experience which will have the greatest impact on the overall memory of the customer experience and hence should increase our ability to create and sustain loyalty.

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