"For those who believe, no explanation is necessary. For those who do not believe, any explanation is superfluous." Few expressions are as capable as this one by Austrian novelist, poet, and playwright Franz Werfel of putting into perspective all the sales, marketing, commercialization, and customer acquisition policies that companies are immersed in. The analogy with economic activity is complete when it comes to customer relations: any effort to rationally explain the advantages of a product or service over those of the competition is likely to be futile and fall on deaf ears. A company must thrive on customers who fervently believe in it. This saves a lot of headaches, both in retaining existing customers and attracting new ones.
Nothing predicts organic growth like customer engagement, according to consulting firm Gallup in a recently published study based on its own survey called Gallup CE3. And that engagement is determined by belief in the company, because otherwise it will only be possible to survive in price wars that never generate prosperity. "Aggressive advertising campaigns, mega sales promotions, promises of low prices, and rewards programs may attract customers, but they do not create the kinds of emotional connections that generate long-term profits and loyalty," it notes in this regard.
Research shows that customers form strong emotions about your company based on their experiences with its teams and professionals. And those emotions have an extraordinary influence on their purchasing decisions. Converting customers into believers involves literal expressions such as "not being able to live without" the company from which they buy their products and services. The result of something as basic as this transformation in perceptions is more purchases, more often, with more recommendations, and less price sensitivity. Once again, price is rarely the deciding factor in a purchase. "Any customer strategy that does not take this phenomenon of human nature into account is flawed," the authors of the study point out.
The three elements of the Gallup survey measure the following statements: first, "the company always delivers on its promises"; second, "I am proud to be a customer of the company"; and third, "it is the perfect company for people like me." These may not be three overly complicated statements to understand, but they are THE statements that allow us to identify to what extent and in what percentage of cases a company's customers are also its believers.
In short, these are THE statements that any company that wants to excel in customer experience must put on the table. Because the results are not long in coming: according to the research, fully engaged customers represent a 23% premium in terms of portfolio share, profitability, revenue, and relationship growth compared to average customers.
If this observation is directed at certain industries, the impact is even more evident. Thus, retail banking customers who are "fully engaged" contribute 37% more annual revenue to their primary bank than "actively disengaged" customers, which is the term the authors use to identify non-believers. A similar finding can be found in consumer electronics, with a 29% higher ticket price for committed customers compared to disconnected ones. In the case of the hotel industry, that percentage rises to no less than 46%. And to debunk some beliefs about the ineffectiveness of customer experience in B2B environments, the authors of the study note that companies that are successful with their customers reduce churn rates by 63%, increase their portfolio by 55%, and increase their productivity by 50%.
"And here's something you should know: simply satisfying customers does not have the same effect as attracting them. Traditional customer satisfaction programs don't work," concludes Gallup's analysis. Or, as British writer and screenwriter Robert Bolt would have said (and in fact did say), "a belief is not simply an idea that the mind possesses, it is an idea that possesses the mind."
This week, we would also like to recommend the revealing results of a study on the acceptance of chatbots, based on data from 71 million interactions. Spoiler alert: consumers are more accepting of them than ever before, because their main objective is increasingly efficiency.
Photo byPatrick ForeonUnsplash
