How to Create Loyal Customers? A Checklist to Becoming Customer-Centric
By identifying customers’ needs and creating sustainable solutions, your company can enjoy a long period of loyal customers. Moreover, you can focus on useful products, efficient processes, excellent customer service, satisfying quality, all of which benefit your customer, as well as a favorable brand image, which benefits your company. But how can you achieve that? What steps does your company need to take to become customer-centric? If you are looking to develop a customer-centric culture, follow this checklist to create more loyal customers.
Checklist for a customer-centric company
Your company’s culture lies behind the customer-centricity approach. The following 7 steps demonstrate what your company can do to keep your customers at the core of your business.
1. Create awareness for the importance of customer empathy in your company
Empathy is a word a lot of companies claim to understand but actually get it wrong let alone practice it at all. So what is customer empathy? Basically, customer empathy is the skill or ability to pinpoint a customer’s demand, fathom the causes behind their desires and, in the end, fulfill their demands properly and adequately.
According to a study by PwC, about 59% of all customers worldwide feel like companies have lost touch with the human element of the customer experience. Additionally, there is a discrepancy between what customers want and what companies offer. Between 54% and 62% of the customers questioned have the feeling that companies do not understand their needs. This is critical, as it could result in a company developing wrong products, investing in wrong resources and losing its good reputation with its customers due to neglecting their needs. If your company is not able to acquire and retain customers, your company cannot survive.
Therefore, how can your company prevent neglecting their customers needs? First of all, leaders must express the importance of customer empathy for their company both externally and internally. Moreover, to walk the talk, empathy must be conveyed as a universal value that affects everything a company does. If a company is not able to understand their employees’ needs, how can it expect them to truly understand their customers’? In short: Customer empathy needs to be integrated and operationalized into everyday business.
2. Pave a way to interact with customers
Not long ago, before we could all just surf the Internet, direct customer contact with companies happened on a daily basis. In Germany and Switzerland the “Tante Emma-Prinzip” (engl. Auntie Emma Principle, also known as Mom-and-pop store) was a role model when it came to interactions with customers.
The personal approach of the good old Mom-and-pop stores were their success story. Auntie Emma (as they say) knew each and every one of her customers as well as what they needed in their daily lives. That way, Auntie Emma was always able to recommend the products most relevant to her customers. If a customer were to give birth to a child, Auntie Emma would almost immediately learn about this through her close relationship with her customers and, when this customer made their next purchase, would receive offers for diapers or recommended care products for the baby from Auntie Emma.
Even though the “Tante Emma-Prinzip” is often used to demonstrate an offline shop, the approach can be applied to all companies. Especially since the internet has made the communication with customers more impersonal and aloof, no one wants to be treated as one out of many. But this remains the difficulty of the World Wide Web. Therefore, the communication with customers has to become more personal again. How can you do that? Bring your customer to your business! Encourage personal contact by hosting events, having open house days and inviting your customers over. Organizing personal events can be an advantage in striving for Customer Centricity. By hosting an event, you create added value for two parties: your customers and your brand.
3. Develop processes for customer complaints
Unfortunately, it’s not always as easy as Auntie Emma makes it sound. Every company has customers who are not (fully) satisfied. Bill Gates once said “Your most unhappy customers are your greatest source of learning.” However, not all dissatisfied customers directly turn to companies to express their complaints. Therefore, it is important for a company to show that it is willing to improve and meet its customers’ needs. There are obvious signs that a customer is dissatisfied and if a company does not recognize these warnings, it may mean losing the customer to a competitor.
This is precisely why companies should not waste the opportunity to analyze their customer’s satisfaction. How a company deals with these can make all the difference. Channels for customer complaints can be unpleasant and often leave customers feeling misunderstood when, in reality, what they are looking for is to feel someone listened and tackled the problem accordingly.
Managing customer dissatisfaction means having the right channels for customers to voice their complaints. The goal is to develop processes that enable employees to turn negative situations into positive customer experiences. Simply put, customer-centricity means: listening, learning and adapting.
4. Practice Knowledge Management within your company
Knowledge Management is about employees and how they store and pass on knowledge within a company. Every employee must be prepared and give the tools and processes to share his knowledge and experience with team members to constantly learn new things.
It is not only important to listen but also to use and document what has been learned to keep these insights within company.
Our experience has shown that the best way to implement Knowledge Management solutions is to implement them progressively. Your employees have a wealth of knowledge about customers and internal processes. Therefore, they can quickly improve customer experience through personal interactions and behind-the-scenes decisions. But many companies have a reward structure that is only tied to revenue, as opposed to customer needs. These reward structures do not entice employees to make the decisions necessary to meet customer needs but instead to do everything possible to maximize profits. That is why a company has to develop a rewarding system that benefits company needs and goals as well as customer satisfaction. This can only be achieved through motivational approaches that reward knowledge and experience sharing and, at the same time, emphasize the role of the individual employee by entrusting them with more responsibility.
Knowledge Management is tough but there is a variety of software solutions (such as HubSpot, Guru, Bitrix 24 and more) in the market which can help in these processes.
5. Put yourself in your customers’ shoes
What does the experience a customer has to get in touch with your company currently look like? Do you have a shop where a potential customer may pass by while walking through town? Do you engage in both offline and online marketing, so that a customer becomes aware of your company on the train via poster as well as via the Internet? Do you interact with customers via various social media channels?
Put yourself in your customers’ shoes to find out what a customer’s journey looks like in order to interact with your company. Have you discovered barriers, e.g. a website structure that is difficult to navigate or missing information altogether? Then solve these issues to improve the customer journey as efficiently as possible.
Focused on the customer’s view, you will begin to see what customer’s needs are, what kind of information they look for in every interaction, how well your company fulfills this and where there is room for improvement.
At Spark Works, we like to simulate this principle with our customers. One of our customers needed help in getting the board of his bank to understand why being customer-centric was important. We had five Friday afternoon workshops to work with them and as a task we sent each board member an SMS with a different challenge to tackle within one week each Monday. The challenges mostly consisted of simple business operations their customers would undertake (e.g. at a bank: opening an account online, asking for help via customer service, closing an account, etc.). Since board members are typically very far away from everyday customers, with assistants or other help that will go through these processes for them, by going through these processes themselves, they realized how bumpy and, in some cases poor, the customer experience really was. This exercise helped bring it to their action and resulted in an improvement of internal processes and a much smoother customer journey.
6. Predict customer needs
With all the information above, your company should be able to estimate your customers’ needs. To give an example, Henry Ford is known as one of the most innovative entrepreneurs. One of his most memorable quotes is “If I had asked people what they wanted, they would have said faster horses.” What did he mean by that? These words are still being used as proof that real innovations are made without customer influence.
At Spark Works, we believe that this is only half the truth. Indeed, Ford’s customers had probably said exactly that but interpreting customer feedback is an art in itself. Simply put, if Ford had only listened to his customers needs, he most likely would not have manufactured cars. He thought years ahead of his competitors and, therefore, developed a product that predicted the future needs of the market. In short, Henry Ford interpreted what customers wanted in the right way.
7. Launch user tests
A research by Capgemini reveals that there is a gap between businesses’ and consumers’ perception regarding the quality of their customer experience. While 75% of companies believe that they are customer-centric, only 30% of consumers will agree. Therefore, from a designer or project manager’s point of view, there is nothing more valuable than users testing a newly developed product and giving their feedback to minimize or even close this gap.
Modern digital marketing tools such as Usertesting.com and Hotjar provide an easy way to get feedback. In an effort to building a customer-centric company, these tests can help confirm your intuition and make product or service customizations that benefit your consumers.
What is your opinion? Now that you’ve read this checklist, do you think you pay enough attention to customer needs? All of the 8 steps mentioned above have one thing in common: The secret is to create a company culture with a deep understanding of your customers’ needs – and focus on actually doing justice to those needs.
How Spark Works bolsters your company in becoming a customer-centered
At Spark Works, we focus on each of your customers. Through various research techniques, we bring your customers’ desires to light, allowing you to establish user-friendly products, services and business models. Furthermore, we identify user behaviour and underlying customer needs with the help of typical customer models and personas.In short: we can help your company live the customer centricity concept.
Coming up in the next blog
With the increasing speed of technical developments, we find ourselves in an ever changing working world. Therefore, the future is full of exciting opportunities but also challenges. Learn more about the future of work in our next blog post.
By Alan Cabello, Senior Partner