Are your customers your new marketing department?

Times are hard, all businesses have pressure on resources and there are a lot of competing priorities. Consumers have fewer spare dollars to spend so you also have to work harder to make the sale ahead of the competition.

Your business needs to take action to survive. Where should you focus?

The top priorities must surely be:

• Serve existing customers and maintain customer loyalty
• Maximise revenue streams

Of course you need to do all of these while minimising costs. So what can you do?

Focus on fixing the customer experience
You can reduce your traditional marketing spend and you can look at getting your customer service so good that your customers do your marketing for you. This is a double whammy. You will have delighted customers and fewer priorities to juggle.

Customers can be your marketing vehicle
If you do all you can for your customer they will return. And when the opportunity arises they will also tell their friends what you have done and how good you are. Positive word of mouth is a powerful marketing tool:

• 67% of all consumer decisions are primarily influenced by word of mouth (McKinsey)
• Word of mouth travels fast. This is both good and bad. International research has repeatedly shown that a customer is likely to tell ten people about a bad customer service experience. Here in New Zealand the latest research (KiwiHost and JRA 2009) shows most people tell 4-6 others.
• Word of mouth has grown significantly in importance: 93% of customers identify word of mouth as the best, most reliable and trustworthy source about ideas and information on products and services (NOP World 2005)
• People trust word of mouth: On product recommendations, 90% trust their spouse, 82% trust their friends, 69% trust their work colleagues however only 27% trust manufacturers/retailers (Henley Management Centre)

In an environment like this, the experience that a customer has of your business, and the way that they describe this to others will become a key factor in your business success.

What do we mean by word of mouth?
It’s not just chatting over a fence with a neighbour, or over a beer with a mate. Today consumers have other tools they use to communicate their views and opinions. Tools such as blogs, posting consumer reviews on websites, or rating your business on sites such as www.tripadvisor.com all form part of the mix. There are even sites and communities that specialise in collecting bad service experiences such as www.nocustomerservice.com.au.

Even if you didn’t think of your customers as doing some of your marketing for you today, maybe now you may feel differently. The question is: do you know for sure if it is positive or negative marketing?

What are the other benefits of getting customer service right?
Now that I have frightened you and you see some of the risks of poor customer service, let’s also think about some of the additional benefits of getting the customer service experience right.

The latest New Zealand Research (KiwiHost/JRA 2009) shows that over 58% of consumers are less than satisfied with customer service. It also shows that 75% would start looking elsewhere to spend their money after only one or two bad customer service experiences. If your business is typical this means that you are losing customers right now. Fixing customer service becomes an urgent imperative if you want to stay in business. If you can delight customers, you will close the sale, the customer is likely to come back again and they may encourage others to do the same.

One frequently overlooked benefit is that good customer service is also a great source of information about changing customer demand. Well trained staff can help you figure out how customer needs are evolving. What you are selling today may be what your customers needed yesterday. Ask yourself this: Do you keep track of the products and services that customers ask for, or just those that you sell?