Wednesday, December 22, 2010

Customer loyalty has virtually disappeared: Focus on Customer Preference.

If business leaders and executives are thinking that the global crisis is over and that the future financial performance should be okay, a word of caution is that all businesses are suffering from a more serious and enduring problem that has hidden beneath the recent turbulence.
      Throughout the history of buying and selling, purchase has been a challenging experience for both buyers and sellers because purchase is a lengthy progression with three phases: consideration, negotiation, and transaction. 
Buyers have always been in control of their consideration phase and sellers have always been in control of negotiation and transaction because they 'owned' every bit of valuable information relevant to the purchase.
      Over the past several years, selling and marketing has been changing rapidly because the buyers are changing.  No longer is the salesperson needed to educate the prospect; marketing is having an increasingly difficult time breaking through the noise to capture the prospect’s attention.  With the immense amount of information every prospect has at their fingertips, many times the prospect knows far more about their issues and potential solutions than the salesperson they’re dealing with. This has led to a profound shift in the buyer –seller equation. Robert H. Bloom states that the ‘buyers no longer care who they buy from’.
      Business growth is thus only possible if marketers and sellers can persuade newly informed and assertive customers to buy from them, and Bloom hastens to add that the task is a tough one, though.
      In this new marketplace the question becomes how do you gain the prospect’s attention and then put your product or service in first position?
      Robert H. Bloom in The New Experts: Win Today’s Newly Empowered Customers at Their 4 Decisive Moments (Greenleaf Book Group Press: 2010) offers an answer to this problem.
      Bloom argues that technology has empowered buyers and “ultimately {their} loyalty died” because of the immense number of choices they now have along with an enormous amount of detailed comparison information, along with the ability to purchase anytime, day or night, and from a growing number of vendors, all vying for their business. 
      Consumer loyalty, according to Bloom, is a thing of the past.  In today’s marketplace companies can no longer count on loyalty from their customers, but they can still become the preferred product or service by creating Customer Preference.  Customer Preference does not guarantee a sale as there are other factors at work, but preference opens doors, allowing you to charge a bit higher price and still get the business, to not have the exact desired color and still get the sale, to not have the best product and still get the sale, and to not be the best known brand and still get the sale.
      Creating Customer Preference involves giving the prospect a real or imagined benefit that is different from and more valuable to them than those given by your competitors.
      Embracing Customer Preference does not require a wholesale rethink of your business plan nor does it require investment in infrastructure or advertising. You can create Customer Preference with big ideas and small ideas.

      To achieve first position in the prospects mind, you must align your entire organization behind the mission of creating Customer Preference at what Bloom calls the Four Decisive Moments in every purchasing progression.
      The Now-or-Never Moment—the first brief contact with the prospect. Among the tips to get things right in the ‘first contact’ is the exhortation to ensure that your company’s website is customer-centric in design and content, because the site is the single most potent tool you have for converting prospects into customers. “Your home page must grab the visitor, differentiate you from your competitors, and immediately convey the primary benefits you offer the prospect.”
      Another advice is about training every employee who may be in touch with the prospect at the first point of contact. Consider implementing a weekly stand-up for the most interesting customer moments and a recognition program for the most successful conversion of the week, Bloom suggests. “Prepare a list of potential questions from prospects, and keep adding new questions to the list. How well and how promptly questions are answered will determine the level of customer preference you create.”
      The Make-or-Break Moment—during the transaction process. For the second decisive moment, make-or-break, staff training should concentrate on exhibiting patience and perseverance, because the consideration, negotiation, and transaction process is often lengthy and usually dangerous. Today, the old-style selling techniques of pressure and dominance rarely generate sales, the author reminds. “Your potential buyers value their independence and are looking for sellers who are willing to be their partners in the purchase progression.”
Importantly, he calls for a clear policy of concessions and ways to wow prospects that will turn them into customers. “How many customer requests have you said no to in the last two months? Is there a policy change you could make that might increase your conversion ratio while costing your business very little money?”
      The Keep-or-Lose Moment—the period when the customer is using the product or service. Focus should be on minimizing customer churn. If churn is eating your bottom line, your offering is probably not meeting customer expectations, postulates the author. Your priority must, therefore, be to assure the best possible performance for customers after they have purchased your product or service, he counsels.
“Too many bad things can occur during your valued customer’s usage of your product or service, and you may not discover the performance failure in time to rescue the relationship. Worse, your customer may spread the word about your failure over the back fence or on Face book or Twitter.”
      The Multiplier Moment—the chance to convert a one-time user customer into a repeat customer and gain a customer advocate and referral. Check how you handle clients when they return to buy more from you. For, investments in the customers you have are far more profitable than those made to attract new customers, as the book notes.
      Becoming the preferred product or service need not be expensive and can be accomplished by any size company since consumers, both business and individual, no longer care about who they purchase from—big or small; local, national, or online; old-line established or new start-up—as long as they provide the sought after benefit.
      Firms in every business category must forget about building their brand. “Brand-Building” is yesterday’s mantra. It is costly and seldom works, because in today’s sea of brands, mind-numbing slogans, and time-constrained customers’ brands mean far less and often nothing to the “new experts.” Alternatively, concentrate all your human and financial resources on delivering Customer Preference every time and all of the time.

      Do not confuse this trans formative concept of Customer Preference with a pep talk to your sales associates. Customer Preference requires that every staff member in your firm, from sales to the back office, to the shipping department, be energetically committed to making your company your customers’ First Choice.

      Creating Customer Preference is the fastest, least expensive, and surest way to win today’s newly empowered customers

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