This week we feature an article by Matt Nolan who shares five keys to building more compelling, sustainable customer relationships. – Shep Hyken Customer retention used to be considered just a “service problem.” That’s before the service world went digital, and the old ways of doing business became almost shameful, which happened practically overnight. We all […]
This week we feature an article by Matt Nolan who shares five keys to building more compelling, sustainable customer relationships. – Shep Hyken
Customer retention used to be considered just a “service problem.” That’s before the service world went digital, and the old ways of doing business became almost shameful, which happened practically overnight.
We all know that we get no sympathy from customers, and one bad experience can ruin a relationship, so waiting for problems to happen before we fix them isn’t viable. We have to head issues off before they go nuclear.
Service has become an always-on, everywhere requirement – in the customer’s eyes, great experiences have to be connected and fluid. Our engagements must shift seamlessly between selling, serving, and retaining – adapting based on the customer context. We need intelligence that we can apply wherever the customer is, to keep their experiences from becoming disjointed and awkward.
Here are five keys to building more compelling, sustainable relationships – concepts which help us avoid creating unwanted tension and ensure both parties receive value from each exchange:
Modeling churn risk isn’t optional – it’s become an absolute requirement. When a customer is in pain or trending towards churn, you need to know so you can proactively address it. If you wait, it’s usually too late. Retention-focused companies are constantly monitoring churn risk with propensity models, then triggering service or retention outreach automatically, when it’s needed, with timely solutions, recommendations, offers, and personalized incentives. This not only saves relationships, it reduces call-center FTE costs, churn rates, and retention discounts, while increasing satisfaction and helping earn the right to cross-sell later on.
Marketing has always been about pushing products, and service has been about solving problems, but that’s an outdated outlook. Today, we have to approach things from a customer perspective. We can only create an excellent experience when we understand what’s going on with each specific individual – their context – and align our approach.
Context-savvy companies often use a next-best action approach to engagement – which rapidly shifts between selling, serving, retaining, collecting, negotiating, etc., based on what best serves the relationship. For example, if a customer is angry, next-best action ensures you don’t try to sell them something on any channel – they likely won’t respond, and you’ll just seem tone-deaf. But when they’re in the market for a new product, next-best action guarantees you don’t miss a great chance to upsell just because the customer is interacting in a traditional service channel, like the call-center. It’s a constant balancing act, wherever and whenever the customer touches your brand.
People tend to understand next-best action at a high-level, but not how it works behind the scenes. What happens is an organization builds strategies to control how they interact with customers in certain situations, like retention, sales, service, risk, etc. Each strategy has options you could use in those situations, like when it’s time to sell, there may be 50 offers you could present to a customer. Or when a customer is at risk of churn, there might be 25 types of incentives you might use to keep them from leaving.
When the times comes to interact with that person, each potential option gets scored for propensity (p) and value (v). For propensity, you use predictive models to calculate how likely a customer is to accept what you present. For value, you calculate how much that action is worth for your company, financially. After those are factored together (p*v), the highest “score” wins – that’s what’s best for both parties, and what you present to the customer. That’s your next-best action.
Customers obviously have preferences and are more likely to do things in certain channels, and those channels cost different amounts to support. We need to respect and embrace that if we want to provide a great experience while still optimizing profit margins. Many organizations will use multiple propensity models for each action (one for each combination of offer and channel) to account for individual preferences. They also leverage value models that factor in channel constraints, like cost-to-serve.
If a customer is most likely to accept an offer via direct mail, but not when it’s presented by email, call-center, or a website, that’s figured into the next-best action. They’ll only see that offer or action presented in channels where it’s relevant so it won’t clutter their experience when it isn’t.
Companies often try to bite off more than they can chew and make sweeping changes all at once, which is often a recipe for disaster. Instead, I’d recommend building in proactive, personalized next-best actions one channel or use-case at a time. This allows you to iterate through problems at a smaller scale, build momentum, and earn the right to expand your approach by showcasing results.
For more information on how organizations are re-shaping their approach to customer engagement, I’d recommend reading Retention Re-Invented – which explains why retention and service matter more than ever and breaks down these five keys in detail.
Matthew Nolan is a marketing director at Pegasystems, enabling the vision and go-to-market strategy for Pega’s marketing and advertising technology portfolio.
For more articles from Shep Hyken and his guest contributors go to customerserviceblog.com.
Read Shep’s latest Forbes Articles: Change In Amazon’s Liberal Return Policy Is Good For Customers
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