What enables a business to find and keep customers are good experiences the business creates in a marketplace… experiences that get shared with others.
In today’s connected world “others” becomes a large audience quickly and even more so when the customers experience is a bad one.
Experience is an intangible asset that represents relationship capital which gets translated into tangible results. Relationship Capital is created through the interactions a business creates with its customers as well as the messages and images it creates and the quality of service provided. Relationship Capital is not created in a silo rather it is intertwined and supported by an organization Strategic, Human and Structural Capital all of which are intangible.
Even with clear evidence as indicated below businesses fail to identify measure, monitor and improve upon the intangibles so they can improve upon the results. Consider the following:
- Price is not the main reason for customer churn, it is actually due to the overall poor quality of customer service – Accenture global customer satisfaction report
- A customer is 4 times more likely to defect to a competitor if the problem is service-related than price- or product-related – Bain & Company.
- The probability of selling to an existing customer is 60 – 70%. The probability of selling to a new prospect is 5-20% – Marketing Metrics.
- For every customer complaint there are 26 other unhappy customers who have remained silent –Lee Resource.
- A 2% increase in customer retention has the same effect as decreasing costs by 10% –Leading on the Edge of Chaos, Emmet Murphy & Mark Murphy.
- 96% of unhappy customers don’t complain, however 91% of those will simply leave and never come back – 1Financial Training services.
- A dis-satisfied customer will tell between 9-15 people about their experience. Around 13% of dissatisfied customers tell more than 20 people. – White House Office of Consumer Affairs.
- Happy customers who get their issue resolved tell about 4-6 people about their experience. – White House Office of Consumer Affair.
- 70% of buying experiences are based on how the customer feels they are being treated – McKinsey.
- 55% of customers would pay extra to guarantee a better service – Defaqto research.
The rules of business in the 21st Century require a change in our thinking if we truly want to improve results. We must start by changing the way we think about intangibles.