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By: Steve
Hilton, Director, Small and Medium
Business Strategies, Yankee Group.
It's About Customer Satisfaction
According to the Yankee Group 2004
SMB Bundled Communications Survey, 66%
of disloyal SMBs are willing to switch
service providers for a comparably priced
service, whereas only 25% of loyal SMBs
are willing to make the same switch.
Loyalty matters in a world of bundled
SMB products and services: Service providers
that minimize the consequences of poor
customer satisfaction and loyalty face
a startling wake-up call. It takes a
31% discount to entice loyal SMBs to
switch service providers, but only a
21% price discount to entice disloyal
SMBs to switch service providers.
Issue
Bundling increases financial risks
Poor interactions between SMBs and
their service providers or vendors increase
customer dissatisfaction and their potential
to churn. Churn becomes especially costly
when an SMB has bundled a variety of
products and services from the same
vendor. Each interaction between vendor
and SMB—from experiences with
the sales process to calls with customer
care to interactions with customer retention
procedures—impacts loyalty. Improving
customer satisfaction requires redesigning
customer interaction processes within
the vendor or service provider.
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"Poor
interactions between SMBs and their
service providers or vendors increase
customer dissatisfaction and their
potential to churn."
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A vendor must measure its levels
of customer satisfaction and loyalty
relative to the competition. As
the competition raises the customer
satisfaction bar, service providers
or vendors must reassess strategies
and processes to attain greater
customer differentiation in the
market.
Solution
Evaluate and measure touchpoints
and brand image: implement customer
satisfaction process improvement
Vendors must assess and evaluate
the potential to improve each
customer touchpoint, including:
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Brand awareness
and image |
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Web site for information
gathering |
• |
Sales channels
(both direct, indirect and
web-based) |
• |
Installation process |
• |
Billing interaction |
• |
Problem resolution (of all
sorts) |
• |
Sales support and customer
care |
• |
Up-sell opportunities |
• |
Retention opportunities |
• |
Discontinuance of service |
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Problem
Identification and prioritization of
loyalty drivers varies by segment and
competitive circumstances
Although certain customer touchpoints
are more important than others, identification
and prioritization of each customer
touchpoint is not trivial. The drivers
of customer satisfaction and loyalty
vary by products purchased, mobility
characteristics, geographic scope, industry
segment, size and competitive environment.
In addition, the drivers change over
time as market and competitive conditions
fluctuate.
Customer satisfaction is a moving target.
Vendors and service providers must constantly
strive to meet or exceed the SMB's expectations
in every customer interaction. Every
interaction with an SMB is an opportunity
to either build or erode positive feelings.
In addition, the competition—using
advertising, promotions and sales channels—is
trying to erode the loyalty created
between an SMB and its current service
or product provider.
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Vendors and service providers
must:
• Identify relevant customer
loyalty satisfaction drivers by measuring
the quality of each customer touchpoint
by SMB segment
• Prioritize the relative importance
for each driver, since these drivers
feed into process improvement plans
• Measure relevant customer satisfaction
metrics against competition, because
the competitive environment directly
influences customer satisfaction and
loyalty
• Understand best-in-breed customer
satisfaction organizations and the business
improvement processes used to constantly
drive error out of customer interactions
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