Monday 28 January 2013

High Value Customers - What Happens In Between Purchases?


In every sector the customer Contact- Recontact Cycle or Purchase- RePurchase Cycle has a different rhythm. For example in fast moving consumer goods or mass transportation the touch point cycle may be a daily occurrence creating, not only the need continuously to maintain high standards of service quality but also an almost immediate opportunity to redress service failures. However other sectors have a much longer Purchase- RePurchase Cycle where the customer may purchase infrequently, sporadically but, as in the case of high value merchandise, create a high revenue opportunity for the supplier.

Think about cars, jewellery, buildings, plant, machine tools or various commodities. What happens before during and after any single purchase can have a profound effect on the customer’s repurchase decision. So how is the relationship maintained during the period when the customer is not involved in a purchase process?  How can value be added to the initial purchase decision in a way that goes beyond product or service guarantee liability and establishes a bond that, at the very least, ensures the supplier is on the shopping list for the next purchase?

Clearly such a process is not without cost and the investment required is thereby a function of the value of the contact to the supplier, but does it extend beyond the simple investment of money?

Should an organisation providing high cost solution invest time and effort in understanding the customer or prospect’s needs to the degree that they are able to contribute to the success of the customer or their organisation and if so does that mean that relationship management has a role in a wider definition of customer service?  Most so called relationship management software programmes are really sales prospecting tools - the old rolodex in a computer. Could there be more to it, a process where the supplier thinks about how the product or service is being used by the customer, the position it is in its lifecycle and what could be useful to the customer at that stage?

If so that requires a different mind-set. Popping up in front of a customer after two years after selling them the last one without any contact and trying to sell them a new car may achieve some success but it may be more successful if a relationship management strategy is designed that contacts them in between to give them something that adds value to their purchase decision and makes them feel that the supplier is their first choice next time.

As I hear the sound of accountants throwing themselves from the roof of head office at the thought of GIVING customers anything it is worth also considering how a little creativity may help. Information can be an item that has a low cost of acquisition and communication but can have high perceived value.

If your organisation has a long Purchase- RePurchase Cycle  what can you give your customers between purchases that extends the service proposition, reinforces the relationship and puts your organisation in pole position for the next purchase?

Most of all how can you avoid the customer saying “I only ever hear from you when you want to sell me something”?
 
Phillip Forrest

Saturday 5 January 2013

How Can the Retail World Best Manage the Smart Customer ?

In the heady world of economics there is the conceptual idea of a “Perfect Market” wherein the buyer and the seller have equal knowledge. In some commodity markets both the buyer and the seller know the status of the supply situation, the specification of the product and the costs of distribution. Therefore the negotiation settles very quickly to price being the only differentiator.

Enter the internet and the tools to access it anywhere at any time. ” Smart” is a word being attached to many things at present, telephones, televisions, tablets and here and now to the customer.

 So what is a Smart Customer? In the past gaining access to knowledge could be tedious and time consuming and subject to potential distortion from the less scrupulous members of the selling fraternity. Today knowledge is freely available, technology gives the smart customer the capability of researching not only an organisation’s product and services, not only the same information about their competitor’s products, not only the various channels available but also and, increasingly influential, the experience of others who have already made a purchase.

Is technology creating a paradigm shift  in customer behaviour? New descriptor terminology is an indicator that customers for the well-established growth in online sales are increasingly using offline as a part of their research process. Terms like “ROBO”– Research Offline Buy Online - some research suggesting that 28% of customers already do this to compare prices once the product selection is made, “Showrooming” where customers use barcode reader apps and  on smart phones to check prices and local availability where some research suggests that up to 47% of customers shopping for clothes scan barcodes in store. Even if that number is greatly exaggerated it still indicates an interesting trend. Free apps like “ShopSavvy” seek out best prices  and “Smoopa” also links customers with fellow shoppers to  bring greater power to the consumer. No wonder the Wall Street Journal states “Bargain hunters have never had it so good”

So what could that mean for customer service ? Clearly it raises a number of issues at various levels.

At a strategic level does it means that shops become showrooms where customers go to satisfy the touch and feel of products and then buy online? That is clearly not a sustainable independent retail model. So will brand and price become the key drivers, and if so will manufacturers where touch and feel are important inly creasing become “showroom” operators? What would that mean for the size, stockholding and layout of such premises and what service skills would the people require?

At a brand level will the communication of product or service benefits shown in comparison to competitive products become a bigger trend and will honesty become the last great gimmick in marketing. How will price point decisions be managed and how can service quality influence brand loyalty?

At the face to face customer service level where the customer may well be expected to have a high degree of knowledge of competitive options how can service quality be used to intervene in the buying process? Do customer service staff need a wider range of skills that embrace not only product knowledge but greater skills at qualifying customers’ needs? After all if the customer is managing their own buying process which does not involve retailers staff then ways of getting staff involved and engaged may need to be re-thought. Is the time approaching where sales and service skills need greater integration?

After all the term “Shop Assistant” has been around for 100 years perhaps it is time to ask “Assisting the customer to do what?”

Philip Forrest