Customer Retention is a Shared Responsibility

Seasoned customer experience executives well know the importance of high customer retention to brand perception, loyalty, and customer lifetime value. The topic of retention continues to gain momentum as we learn more about the direct link between customer experience and revenue preservation and growth. Gartner says 80% of future business will come from 20% of your current customers—for companies focused primarily on new customer acquisition, this statistic should be a loud wake-up call and a driving motivator to create a retention strategy.

Responsibility for customer retention usually falls to the most senior service executive, chief customer officer, or sometimes the marketing chief. I believe, however, that retention responsibility must instead be shared by leaders across the entire organization.

A c-suite member should be publicly accountable for overall customer-centricity—which includes culture, loyalty, and certainly the retention strategy—but spreading accountability across the organization to protect and grow the customer asset makes good business sense. In our consulting practice, we continually advocate for this broader accountability because the customer experience is impacted positively or negatively at every level within a company.

Expanding responsibility for the customer experience throughout an organization helps to transform 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 awareness, teamwork, effectiveness, and performance. Below, I’ve noted six important areas of focus for shared responsibility: branding, sales, process, policy, technology, and, of course, talent…especially customer-facing talent.

Branding: Understanding the value that’s expected and realized from your product and service is key to meeting customer expectations and delivering the brand promise. In an earlier post, I mentioned how a company’s brand is tied more to what customers tell each other than what the company tells customers. (See our blog Social Media’s Impact on Customers.)

Sales: Price isn’t the only thing customers consider in a purchase decision; the price-value relationship is very important. Feature and functionality, as expressed before the sale, become even more important after purchase as customers attempt to realize product value. Ensuring alignment between what was sold and what was bought is important to the service experience—otherwise, the initial service experience becomes a struggle to manage buyer’s remorse.

Process: Nothing creates a negative customer experience more surely than a poorly designed process. If you haven’t taken time to understand your end-to-end process from the customer’s perspective, I urge you to try it. You’ll likely discover aspects that are frustrating, outdated, broken, or difficult to navigate. Hopefully this will instill a sense of urgency to explore your customers’ journey. (read our post on  Customer Journey Mapping, Desitination: Success to see how process improvement makes it easier for customers to do business with your company.)

Company Policy: Policies that aren’t sensible can be maddening to customers. Think about Best Buy’s requirement that customers pick up their merchandise at a local retail store after they’ve ordered it online: seriously, is that not incredibly inconvenient? Polling your frontline service staff as well as your customers brings outdated policies to light and is an incredibly valuable exercise. Prioritize the feedback and organize a team to change those frustrating policies.

Technology: Although technology is meant to facilitate process, policy, and the simpler and faster completion of work, processes and customer preferences change so frequently that employees and customers can find themselves forced to work around a system or to use technology in a way that actually makes the service experience more difficult. Make sure that your technologies are serving your purposes. For example, customers want multiple support channels (email, chat, self-service), so you need to provide them; studies show that companies with multiple channels have better retention and higher levels of purchase.

Talent: Hiring and training the right employees to provide exceptional service experiences is foundational to customer retention. Beyond that, employees must be engaged, enabled and empowered to serve customers, and encouraged to innovate and help company leaders understand any process that blocks or hinders a great customer experience. Leaders must, in turn, prioritize obtaining employees’ feedback, resource their improvement recommendations, and remove service impediments.

Stay tuned weekly as I delve more deeply into the rest of the best practices for higher customer retention identified in Mend the Holes in Your Leaky Bucket. This 10-article series will give you valuable insights and guidance as you plan, develop, and implement your own customer retention strategy.

Ready to move forward more quickly? Interested in personal assistance? Let’s chat. Please sign up for my complimentary one-hour Customer Insight Strategy Session by calling our office at 617.848.4589 or emailing [email protected].

Lori Carr is a customer experience pioneer and expert. Working with Fortune 500 companies for the past 25 years, she helps recognized brands to dramatically increase retention, loyalty and profitable revenues.

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