Is your business experiencing a decline in customer loyalty? It’s not alone. In today’s always-on, always-connected cloud world, the speed and ease with which a customer can swap one app for another, apply for a quote on a competing website, crowdsource a new favorite restaurant, or find the same product for a lower cost somewhere else is empowering customers across all industries to continuously search out better solutions. There is simply no incentive for a customer to stay committed to a product or service that isn’t providing 100% satisfaction—wait, make that 110% satisfaction.
In fact, in a 2016 global consumer survey that underscores growing customer empowerment, 47% of respondents said they would take their business to a competitor within a day of experiencing poor customer service, and 79% said they would do the same within a week. At the same time that customer empowerment is rising, and for many of the same reasons, so too is the cost of acquiring new customers. For example, in 2016, the iOS mobile app market saw an increase of 15% in acquisition costs for high-value users.
The math is unforgiving. The total lifetime value of a customer must be greater than the total cost of customer acquisition and retention. Many businesses are finding themselves on the wrong side of this equation as customers flex their muscles in a landscape of extreme choice and instant gratification. Customer retention has never been more critical, and your business can’t afford to make a single mistake that drives customers away.
Of course, there are the obvious mistakes to avoid: bad product quality, poor customer service, over pricing… But these are hardly news flashes so let me delve a little deeper into my many years of marketing experience to bring you three mistakes that, somewhat ironically, are often made out of the well-intended desire to keep customers satisfied.
Mistake #1: Over promise and under deliver
Nobody wants to be the bearer of bad news. After all, it’s no fun informing a customer that the feature they’re asking for won’t make it into the next release. Or that a purchase is nonrefundable, no exceptions.
But telling a customer what they want to hear in an effort to stave off disappointment often backfires. And when it does, the fallout can be impressive. Not only do you have a dissatisfied customer on your hands, you have an angry, dissatisfied customer on your hands who feels they’ve been intentionally misled. Just ask UPS about the hit their customer base, profits, and reputation took after a widely publicized 2013 failure to deliver thousands of presents in time for Christmas, even though its real-time tracking system led customers to believe that packages were on schedule.
Over promising isn’t always intentional though. In fact, more often than not, it’s accidental. For example, a lack of clarity in service terms, stated capabilities, or add-on fees can also leave customers feeling betrayed, even if it wasn’t your intent to conceal or mislead. Hype, if allowed to grow unchecked, is another subtle form of over promising that can lead to unmet expectations and customer dissatisfaction. Google Glass fell victim to over hype and was harshly ridiculed as a result.
Honesty really is the best policy. And a commitment to transparency is the only way to safeguard against unmet expectations and the powerful negative emotions that arise as a result; emotions that quickly turn satisfied customers into evangelizing dissatisfied customers.
Mistake #2: Communication overload
Your business is not nearly as interesting to your customers as it is to you. As such, there’s a fine line between engaging customers and overwhelming them. Engaged customers are seeing information at a cadence that feels manageable, leaving them receptive to your business and all it has to offer. Overwhelmed customers, on the other hand, are feeling bombarded by your emails, social media campaigns, newsletters, and/or direct touch attempts (no matter how relevant and beneficial the information may be), causing them to tune you out completely or, worse, driving them to unfriend you, unfollow you, or unsubscribe. Either way, you’ve both lost the opportunity to enhance the benefits of your relationship.
So how can you ensure that your communication efforts don’t cross the line from engaging to overwhelming? Start by adhering to industry threshold metrics. For example, a standard rule that I follow is no more than two communications pieces/touches a week or eight total per month. From there, continue to test and analyze response rates and engagement sentiment to find just the right cadences for your various customers, as preferences can (and likely will) differ among customer segments. For example, at my company, Redis Labs, we engage with our cloud customers very differently than our enterprise software customers; cloud customers are zero touch and expect almost no communications, while software customers prefer a predictable cadence of interactions.
Equally important, your business should have a robust opt-in program that allows customers to choose the delivery method, topics of interest, and cadence of the communications they receive. After all, nobody knows your customer’s preferences better than… your customer.
It’s a powerful urge to want to ensure your business is providing every piece of information and nugget of wisdom that could possibly enhance customer satisfaction. Resist this urge, or you’ll likely end up with the opposite result.
Mistake #3: Complacency
Remember when I amended the required satisfaction level to 110% in the opening paragraph of this article? A business’ tendency toward complacency is the reason why.
It’s an understandable instinct. Why stick your neck out when it’s easier to stick with what’s working? Any effort to predict future wants and needs comes at the risk of alienating customers that are perfectly satisfied with things the way they are. But not staying innovative and agile comes at even greater risk. And you don’t have to look far to find examples of revolutionizing pioneers who, after reaching market dominance, paid a high price for their subsequent complacency:
- Blockbuster, a pioneer of on-demand video rental, ignored technology trends and quickly found itself unable to compete with Netflix’s innovative delivery models
- MySpace, the first social media networking site to gain prominence, couldn’t evolve its software fast enough to keep up with Facebook’s cutting-edge platform features
- Yahoo, once the titan of the web, failed to recognize that a one-stop shop for the rapidly-growing Internet wasn’t sustainable and, as a result, lost out to Google’s more strategic approach to information searching and organizing
With fast evolving customer needs and wants driving product lifecycles to be counted in months rather than years, no business can afford to rest on its laurels. You must continuously innovate to not only meet expectations, but exceed them and reach that 110% satisfaction level that will keep your customers from getting bored and wondering, “what else is out there?”
All in a Day’s Work
The cloud is changing the rules of the game and it’s more important than ever to avoid the mistakes that drive customers away, no matter how well intentioned. Practice total transparency, respect the boundaries of your customers’ attention spans, and innovate at every turn. In doing so, you’ll find that not only have you succeeded in retaining your company’s most valuable assets, you’ve also brought a whole new generation of customers into the fold along the way.
24/7 Customer, Inc., 2016 Customer Engagement Index, February 2016
Fiksu, Cost per Purchaser Index: January 2017, January 2017,