Customer Retention is a Shared Responsibility

The following article was originally published at www.loricarrassociates.com

Seasoned service executives are well aware of the criticality of high customer retention rates and their impact on revenue, loyalty, and customer lifetime value. The topic of customer retention is getting increased attention as we more clearly understand the direct link between customer experience and revenue preservation and growth. Responsibility for customer retention usually falls to the most senior service executive or sometimes to the marketing chief, but I think responsibility and accountability needs to be shared by leaders across the entire company.

It's important that a C-suite member is publicly accountable for overall customer retention, and certainly the retention strategy, but spreading accountability across the organization makes good business sense. In my consulting practice, I continually advocate for broader customer accountability because the customer experience is impacted positively or negatively throughout the entire organization. Shared areas of responsibility include branding, pricing, processes, policies, technology and, of course, talent... especially customer-facing talent.

Expanding responsibility for the customer experience across the organization is a key component of transforming company culture to one of customer-centricity. It also establishes linkages between departments for shared performance results. Shared responsibility is a powerful prescription that increases teamwork, effectiveness and performance. I've noted a few important areas of focus below.

Branding: Understanding what customers expect and want from your product and service is key to meeting expectations and delivering the brand promise. In an earlier post, I mentioned how a company brand is tied more to what customers say to each other than what the company says to customers.

Pricing: Price isn't the only thing customers consider when making a purchase decision; the price-value relationship is very important. It can be even more important after purchase if the customer experience is not stellar. Service experience can help to avoid buyer’s remorse for those more costly purchases.

Processes: There is nothing like a poorly designed or badly executed process to create a negative customer experience. If you have not taken time to experience your end-to-end customer process from their perspective, I urge you to try it. You will discover aspects of your process that are frustrating, outdated, broken and difficult to navigate. Hopefully this will instill a sense of urgency to launch process improvement initiatives which simplify the customer experience and make it easy to do business with your company.

Company Policy: Service policies that don't make sense can be maddening to customers. Think about Best Buy's policy which requires customers to pick up merchandise at a local retail store after they've ordered a product online. Seriously, is that not incredibly inconvenient for customers? Polling your front line call center agents and customers to help you understand broken processes and outdated policies is a most valuable exercise. Prioritize the feedback, organize a team to create a roadmap and change those frustrating policies.

Technology: Technology is meant to enable a process, policy, or make work actions easier and simpler to get something done. While this is true much of the time, work process and customer preferences change so frequently that employees and customers find themselves doing "workarounds" or are forced to use technology in a way that makes the service experience more difficult. For example, customers want to choose from multiple support channels (email, chat, self service) so you need to provide them. Studies show that companies that offer them have better retention.

Talent: Hiring and training the right employees to provide exceptional service experiences is foundational. Beyond that, employees must be engaged and empowered to aid leaders to understand any part of the service process that blocks, impedes or hinders a great customer experience. Leaders must make employee feedback a priority, resource their improvement recommendations and remove service impediments.