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Oluwafemi Oyefeso
Customers are more price-sensitive and demanding. Regardless of the state of the economy, organisations must deliver on the customer experience, if they want to differentiate and stand out. This is so, as most products are now commodities and can easily be replaced, coupled with serious competition, fickle and impatient customers who have seemingly unrealistic expectations even in economic downturns.
A couple of companies that have released their financial results especially in the real sector and fast-moving consumer goods have seen a drop in profit projections due to the harsh economic climate. This is in addition to the reduction in purchasing power increasing price sensitivities among consumers as organisations also reconsider their spending patterns reducing budgets, reducing headcount, amidst fall in profit projections. A knee-jerk approach will be to also reduce costs of serving customers, which may provide some short-term gains. However, the organisation stands the chance of “winning” the economic war and losing the retention or loyalty battle as people often do not forget organisations who treat them well despite prevailing economic situations. Customers will continue to demonstrate loyalty to organisations that continue to provide exceptional customer experiences.
In difficult times as this, it is exigent to hold on to the customers in the kitty, as “a bird in hand is worth two in the bush”, since it is improbable that the marketing budget to attract new customers is increased. It is wise to retain existing customers, though customers tend to have spontaneous and quick reactions to uncertainties in their income and purchasing power. However, the loyalty they show in response to superior customer experience is undeniable. While it is imperative for an organisation to continue to attract new paying customers to stay afloat, it is important to note that existing customers will also be considering their options and will be looking for cheaper alternatives. In the course of the week, I had the option of using a service provider who I had used for a considerable length of time; unfortunately for them their response time was not fast enough, so I sought out an alternative. From the quote the alternative gave me, I discovered that I was earlier being ripped off. This is why organisations should not give their customers the chance or the opportunity to see if the grass is greener on the other side, because they might not come back. Care of existing customers should be a top priority considering their lifetime value viz a viz the cost of attracting new customers. Hence, investments in customer experience should be seen as an expense to fence the customer in. This is important because any business worth its salt will usually have competition both within and outside the industry, as low cost providers will spring up with less overhead and a shoestring budget ready to eat into existing sectors’ market share. For instance, a hotel may have other hotels as competitors as well as guests who prefer staying with family and friends, a bank will have other banks as competitors as well as those who prefer doing “ajo” or those who keep their money at home. Customers no longer compare organisations offerings only with those of competitors, these increasing expectations, cross from one product or service category to another. Experiences with other service providers are sometimes the standard, as it is not uncommon to see customers comparing the service they get with a bank, with that of their Telco or Internet service provider, or the one at a restaurant with that of a hotel. However, the common denominator about the economy is that everyone is feeling the pinch in one way or the other, but the reaction to the pinch by organisations will be in different forms. Some will lower their prices (begin to bleed and eat into their profit margins), while others might increase their sales target to focus on getting more customers losing track of the existing customers.
It is essential that organisations play the role of a sound engineer listening to all touch points either offline or online and from the feedback, make adjustments and refine their offerings. While some organisations will bring out the cutlass and start cutting costs and cut back on service, this will seldom grow a business and has serious long-term effects on businesses, as it can only make the organisation stay afloat for some time. However, focusing on the customer will help attract new customers through word of mouth referrals, keep existing customers and make the organisation grow organically as customers will reward those who continue to devote resources to providing high-value experiences. Even if organisations have to cut costs, this can be done by segmenting their customers and structuring a bespoke service delivery modeled for each segment.
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