Recently I have been meeting various brand managers and marketing experts from different industry segment. Invariably all the discussion was aimed at the Customer Behavior towards a brand and their loyalty to the Brand they have. Though the meeting happened with different segment of the industry, I think taking this blog in sections would be a better idea.Let me start with the Telecome Industry, the focus is Telecom industry in India.
Some stunning facts before we actually come to our discussion-
- The mobile sector has grown from around 10 million subscribers in 2002 to reach 150 million by early 2007. An average growth of over 90% Y-o-Y.
- The growth of GSM in last 8 years has been in the range of 57-110%
- The growth of CDMA in last 5 years has been in the range of 70-700%
- The current Telecom market is in the tune of more than $100Bn (INR 45000 crore)
- There are only 5-6 major player in the telecom domain
- At leaset 5 more big players are planning to enter the telecom market
Despite this the fact remains that
- In telecom sector, hardly 13-22% customers complete over one year with a service provider!
- Number portability is still not a reality
- Once number portability will be in place the rate of retention is expected to fall even more
- The major growth is happening in the urban and semi urban area and the most dropouts are also from these ares only.
With these facts in view, it is very tough situation that on account of customer retaining, the companies are not at all in a good condition. In fact the companies are forced to put the benchmark customer retention figure very low!
- It costs 10 times more to get a new customers then to retain an existing one
While talking to the brand managers about this situation, maximum times they don't realize and accept the problem. This is like not getting ready for the diagnoses of the problem. The major excerpts were-
Our Customers are Satisfied with us. See the number of customers are increasing every quarter-
This is one of the notions that the Brand Managers are attached to. They present the growth of customer base Q-o-Q as a proof.
Addition of new customers is a very organic event. This happens because of the obvious reason of demand. But when asked about the customers falling in the loyalty program, the real picture appears. The percentage loyal customer in some zones is in single digit of the total customer at any given time!
What are the reasons- The brand managers won't stop citing reason as Competition or Better Service quality by the competitors. But is it?
A study conducted by Google Advertising professional shows that the biggest reason the customer leaves a brand is not Competition or Product Quality... these count less than 9% and 15% of the whole lot of customer who leave the brand!
Research found that the benchmark quality is a pre-requisite to enter and stay in the market. In the mature market these are not the reasons customer leave a brand for. Than What is the reason?
No Customer Contact Strategy!
But we have a fantastic Customer Care facility...
The customer care facility works in both ways.
More Customer Care Center = More Customers
More Customer Care Center = More Business so More Customer Calls
More Customer Care Center = More Customer Complaints!!!
There might be many such equations, but ask from a customer who calls these customer cares for a problem and see how the solution is provided? Any authentic survey will reveal why customers call the customer care center and what is their take from the call!
Proactive Customer Care or Reactive Customer Care?
Now when we talk about customer care, there are two approach
1. Reactive Customer Care - Maximum of the current customer care practice falls in this approach. As customer are going to call, there should be someone to listen to! or Company needs to promote something new... might be selling some new product to existing customers.
2. Proactive Customer Care - Corporate understands that the customers should be approached proactively also. This kind of practice is however limited to the new customer in maximum cases. A Dish TV or TATA SKY, Airtel direct-to-home or Reliance BigTV may call their customer after the installation to know if the connection is working fine or not. Similarly the Telecom companies call their customer to know if the connection is good, or sometimes just to let them know that the plan is started on their handset.
But both these forms does not come in the periphery of Customer Connect!
Recently I got a call from one telecom service provider I took the connection from. The customer care call was to say me Thanks for paying their bill on time. I got three such calls! Good to get a Thanks You call from my telecom service provider. But only hitch was, I got two calls when I was driving and was not interested in such calls. But certainly the intention of the caller (and the company) was good. Thanks me on paying the bill on time! This was an example of Customer Connect Program.
But, there was a problem. They tried to invade in my personal time. Calling me on my cell to say thanks was again like an unsolicited call. This might be the reason that I did not get such call again for the next month, though I paid all the bills on time. Probably they also realized that this is not the right way of doing this.
Than what is the right way of Effective Customer Connect Program:
To device an Effective Customer Connect program, it is very important to understand the difference between Customer Care and Customer Connect. Customer care is to provide day to day support for customer queries related to their service. Customer Connect is to connect to the customer on a regular basis. Not just by sending bills. Not just by using up selling techniques. Not just by sending pre-recorded offer messages or text SMS.
Sending regular feedback form, sending thanks you messages, and if your can manage sending a Thanks You card to the customer. A Birthday card for the customer from the company can do a magic. No offer, no gimmick. A general Greeting Card to the customer wishing them, makes they feel connected to the brand. No body hates wishes. No body dislikes being felt Special.
So this can be for the Brand Managers trying to find a better way of Customer Connect. A better way to create Customer Loyalty and make your brand more visible.
