Traditionally, companies use customer satisfaction surveys to guide business improvement efforts. The challenge is that even a company with high satisfaction ratings will lose business to a competitor who delivers what customers really care about. Why? Because we all choose value over satisfaction. A simple, powerful example of this is Apple’s track record of disrupting markets. At the time that Apple launched the iPhone, Nokia dominated the mobile phone market, through their ability to satisfy customer needs in a mobile phone. Typically, the immediate response to being disrupted is to rely on increased marketing and sales efforts to keep customers, but this simply increases the gap between expectations and delivery. Despite Nokia’s market dominance and significant marketing budget, they soon went out of business.
Apple has built resilience and adaptability through customer loyalty, and at TowerStone, we believe the most effective test of loyalty is a customer’s willingness to refer your brand to colleagues and friends. Ironically, many organisations lose sight of the customer in the midst of overcoming operational challenges. While this may sound counter-intuitive, experience shows that managers default to measuring what is easy to measure – satisfaction – rather what really matters – value.
The core benefit for those who make the investment in time, effort and resources, is that the whole organisation is aligned to building customer loyalty and this makes the organisation resilient and adaptable. Team members, in turn, find fulfilment through meaningful contribution to the success of the organisation.
We believe a sharper focus on what the customer cares about results in more effective strategy and more relevant performance measurement. The pay-off is improved accountability if business performance is made visible to those who are accountable for it. Once employees take accountability for delivering value to the customer, leadership must ensure that this value flows uninterrupted through the organisation.
The key to building customer loyalty is to allow the voice of the customer to speak directly to each level in the organisation. Frontline employees will engage actively when they can hear the customer speak, and customers, in turn, will feel valued when they discover they are being heard by those responsible for delivery. Mid-level managers will shift their priorities when they get to speak directly with customers during follow-up calls. Senior executives develop raised awareness of the realities of customer experience, and this in turn influences strategic thinking.
As with all research, the most important question is “What do we do with the results?” We work with client teams to internalise the results and translate them into effective business improvement initiatives with measurable impact on customer loyalty.
Malcolm Ferguson is a facilitator at TowerStone, a premium Leadership Centre based in the Western Cape. His experience consists of 14 years business leadership experience, four years facilitation and two years coaching experience.