Good Customer Care Builds Loyalty

Businesses have a huge opportunity to improve customer relationships, but failing to take a strategic approach to CRM can result in lost revenue and market share.

By Bob Violino

The way customers interact with companies is changing dramatically, largely because of the rapid emergence of social media and mobile devices. At the same time, consumers—thanks in part to the Internet—have become much more discerning and knowledgeable about service quality and market alternatives.

Companies that ignore these trends do so at their own peril. Businesses have a huge opportunity to improve customer relationships—whether it’s through consumer-driven technology, cloud services and data analytics or via new business processes that emphasize enhancing the total customer experience. By failing to take a strategic approach to building stronger customer relationships, companies can risk losing out to competitors that do.

Industry research shows that customers are more discerning about the services they receive and are open to dumping one provider for another when they feel they’re not getting good service. Of the 10,000 consumers in 27 countries surveyed online in 2011 by consulting firm Accenture, 66 percent switched companies as a result of poor customer service.

Accenture’s Global Consumer Survey, released in January 2012, shows that the proportion of consumers who switched companies for any reason between 2010 and 2011 rose in eight of the 10 industries covered in the survey. The report also found that just 23 percent of the consumers surveyed feel “very loyal” to their providers, while 24 percent said they had no loyalty at all.

Social Studies       

In the face of these challenges, companies need to find ways to more effectively engage their customers. Social media can be a prime mechanism for improving customer relationships, and gives customers additional ways of getting in touch with companies.

Customers are much more empowered by today's social Web, says Lorrie Thomas Ross, CEO of Web Marketing Therapy, who develops marketing relationships via the Web. “They read reviews and are influenced by their peers,” she says.

Social media sites are playing an increasing role in consumers’ purchase decisions, adds Robert Wollan, global managing director, customer relationship management at Accenture. “A growing number of consumers—and not only younger ones—are posting comments about products and services, trusting the comments posted by others, and reporting that such comments are influencing their purchase decisions,” he says. “The consumers’ cravings for personal interaction and engagement with providers are growing, and are becoming a significant factor in their choice of and spending with a provider.”

Hotel company Best Western International in Phoenix is rolling out a social media feedback program to its more than 4,000 global locations. The program will enable hotel operators to manage customer relationships via TripAdvisor, Twitter, Yelp and other popular social sites.

Best Western understands that public responses on sites such as these affect bookings and increasingly have a bigger impact on the bottom line, says Michael Morton, vice president of member services at Best Western.

The company has been using an application from Medallia that allows it to get feedback from guest surveys. Over the past year-and-a-half, it has been eyeing the possibility of using data from travel review sites such as TripAdvisor and other social sites to help improve service and draw new business. But since many Best Western properties are smaller hotels that don’t have the resources to analyze online travel and social media sites such as Facebook, the company needed a way to gather such data in a central location that could be accessed by hotel operators.

Best Western looked at several technologies that could aggregate such data, but when Medallia agreed to develop a cloud-based application for this purpose, Best Western decided that staying with a familiar vendor made sense.

Within a year, Medallia had the software  as a service (SaaS) app ready, and in January 2012, Best Western began rolling it out to hotels. Managers can now analyze customers’ reviews and reply to them when appropriate. It will soon have the ability to compare their own hotel’s performance with that of competitors.

“If we’re able to get their response, respond appropriately and show that [we can] react sooner and address their concerns, it helps us from a customer care perspective,” Morton says.

In addition to giving hotels a direct and immediate feedback mechanism, the social media program gives Best Western’s marketing team a tool for tracking customer trends, which can help it shape marketing campaigns. The team can use positive feedback from customers as part of its marketing efforts, Morton explains.

Best Western is looking into making the application available on mobile devices such as smartphones and tablets, so hotel managers can access the program from virtually any location.