In today’s increasingly competitive marketplace, small businesses must be quicker, more agile, and far more creative to adapt, respond, and effectively meet customers’ ever-changing preferences and demands. Customers and prospects of the Digital Information Age are more knowledgeable than ever before. Unfortunately, customers are also more fickle, too.
Did you know that an unsatisfied customer will tell 9 to 15 people about her bad, frustrating experience?
One can only imagine how that number has increased exponentially as a result of the world’s newfound addiction to the social networking phenomenon…As you’re reading this blog, you better not have any of your social media sites also open!
On a more serious note, be sure to turn off all your social media notifications if you haven’t already – they can be a huge distraction and time-suck! You’re better than that and it’s time to focus (by the way, you only have 158 words left to read here)!
As I was saying, the rampant sharing of a horrendous shopping experience or an unpleasant customer service encounter on social networking sites can instantly tarnish a firm’s reputation. Repeat offenders that constantly receive negative survey results or have angry, colorful diatribes hurled in their direction in chat rooms will certainly lose customers and market share.
By constantly updating and tracking customer interactions in a centralized CRM throughout all of its locations, small businesses should be able to better serve customers and respond more quickly to their questions, concerns, and suggestions. Thus, companies can mitigate the risk and likelihood of a viral smear campaign and maintain and even improve their reputation that they have worked so hard to uphold in the marketplace.
Legendary investor Warren Buffett said it best:
“It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”
This report came to mind because it reveals that the average lifespan of companies in the large-cap S&P 500 Index is significantly shrinking:
As far back as 1964, the average tenure of firms in the S&P was 33 years. Recently in 2016, that number shortened to just 24 years and it is predicted to shrink to just 12 years by 2027. Furthermore, Innosight’s research goes on to assert that 50% of the current companies traded in the S&P will be supplanted by 2027 if this current churn rate and turnover continue to accelerate.
Evidently, large firms (really, firms of all sizes) need to take action and avoid the corporate hubris trap or they face the risk of severely underperforming, falling behind, and having their brand no longer be relevant.
Where to Aim First if Your Market Share is Declining
No one wants to see their brand lose ground quickly or even get completely swept away by younger, hipper, and hungrier upstart competitors.
To prevent their demise and loss of market share, organizations need to become more in tune with their customers’ needs and more agile to improve the customer experience and enhance service levels.
Investing in a leading-edge CRM platform, that is scalable, flexible, and highly intuitive, is a great place to kick start this transformation and strategic initiative.
How CRM Can Help
Armed with a centralized CRM solution will improve the firm’s knowledge of its clients, prospects, and partners, thereby allowing deeper bonds to be forged. Having such a comprehensive 360-degree understanding of all existing and potential customers plus key strategic stakeholders will empower employees across the enterprise to make quicker, more informed decisions. The result will be a more collaborative environment in which marketing, sales, and service associates communicate more effectively and efficiently. Finding it easier to connect with clients and co-workers, employees will become more united, more engaged, more accountable, and more willing to go the extra mile to provide a unique, differentiated level of service that will lead to more satisfied and loyal customers, which in turn will generate more referrals.
With CRM, the company will spend less time struggling to find info to resolve client issues and complaints and more time segmenting, targeting, and closing higher-margin customers with much higher lifetime values to the firm. Moreover, CRM’s robust pipeline forecasting capabilities will help identify top-selling products/services and trending customer demands/requests. These real-time sales analytics tools will provide the insights and actionable intelligence necessary to not only shorten sales cycles and increase revenue but also enable the firm to make the necessary adjustments to overcome apparent product gaps or upcoming sales downturns.
All in all, CRM will serve as the framework and foundation for your client intelligence. With better organizational coordination and more command of customer info, CRM will become the growth driver of the firm. Plus, it will become much easier to thwart off rising stalwarts, maintain brand relevance, sustain one’s leadership and market share positions, and even avoid extinction.
Are you losing ground to competitors and experiencing a surge in client defections?
Are your sales and service teams handcuffed by lack of client intel, operational bottlenecks, and manual, inefficient processes?
Do you have a brand obscurity problem?
Don’t risk becoming further irrelevant or even extinct…CONTACT US to speak with one of our tenured turnaround specialists or seasoned strategic marketing consultants.
The CFI Group, an Ann Arbor, MI think tank focused on customer satisfaction and feedback analytics, occasionally releases research findings showing that the level of a publicly-traded company’s customer satisfaction directly correlates to the firm’s stock price. For one of its studies, the CFI Group managed and tracked a portfolio of stocks based on their performance in the American Customer Satisfaction Index (ACSI) and the National Customer Satisfaction Index UK (NCSI-UK). The portfolio results were then compared to the benchmark S&P 500 in the case of U.S. companies and the FTSE 100 for firms in the United Kingdom.
Overall, their research found that the top companies on the ACSI and NCSI-UK, which represented the ones with the highest customer satisfaction scores, significantly outperformed their competitors and the overall stock market.
Key conclusions from the report are highlighted below:
The ACSI portfolio of U.S. companies returned 390% vs. the S&P 500 return of -7% (from April 2000 to April 2012)
The NSCI portfolio of UK companies returned 59% vs. the FTSE 100 return of -6% (from April 2007 to June 2011)
As Claes Fornell, the CFI Group and ACSI founder and University of Michigan professor, states:
“Companies with highly satisfied customers generate superior returns because customer satisfaction is critical for repeat business, and that type of business is usually very profitable. That is, loyal customers tend to be highly profitable as long as their loyalty comes from their satisfaction and not because prices are low.”
On a related and more recent note, Watermark Consulting, a customer experience consultancy, analyzed the stock market performance of the Top 10 Leaders and Top 10 Laggards in Forrester Research’s Customer Experience Index compared to the broader S&P 500 Index from 2007 to 2017.
Their significant findings include:
The total cumulative return of the Customer Experience Leaders portfolio was nearly three times higher than the Laggards (183.8% vs. 63.1%).
The total cumulative return of the Customer Experience Leaders portfolio was 45 points higher than the S&P 500 (183.8% vs. 138.7%).
The total cumulative return of the Customer Experience Laggards portfolio was almost 76 points lower than the S&P 500 (63.1% vs. 138.7%).
It’s indisputable that companies investing in improving their overall customer experience are being rewarded by not just their customers, but also their shareholders.
Not to be outdone, another study over an even longer time frame came to the same conclusion. In this case, Fortunewith the help of FTSE Russell, a global money manager and institutional consultant, discovered that companies named to the Fortune annual “Best Companies to Work For” list, typically “demonstrate stronger financial performance, reduced turnover, and better customer and patient satisfaction than their peers.”
In fact, the outperformance is quite substantial when comparing the annual returns from 1998 to 2016:
An equal weighted index of the top 100 companies to work for on the Fortune list returned 11.66% annually which was almost 5% higher than two other key benchmarks over the same stretch:
The Russell 3000 Index, a U.S. all cap benchmark, returned just 6.72%.
The Russell 1000 Index, a U.S. large cap benchmark, returned only 6.68%.
It’s clear that companies with more satisfied customers tend to outperform the stock market, while companies with disloyal and frustrated customers typically underperform the broader stock market.
The first step to enhancing customer experience quality in order to boost customer satisfaction is to better understand the needs of one’s customers.
It is safe to assume that the companies with high customer experience scores currently leverage a leading flexible and scalable CRM platform to track customer preferences, patterns, and purchasing history in order to:
Deliver more targeted messaging
Respond quicker to customer requests
Streamline customer interaction touchpoints
Improve client satisfaction levels
Consistently provide a better and unique customer experience
Customer experience leaders and pioneers have happier, trusting clients that are less sensitive to price and far easier to service. Their greater loyalty leads to more referrals, higher retention rates, and expansion of client wallet share. All of these benefits result in higher revenues, lower acquisition costs, increased earnings, and ultimately a boost in company stock prices.
To sum up, having a clear, effective customer experience strategy driven by highly engaged employees and a robust, centralized CRM system can transform your firm from a product-centric to a client-centric culture in route to elevating your customer service and outperforming not only your competition, but also the stock market overall.
Ready to innovate your employee and customer experience and improve your financial performance?
CONTACT US today to speak with one of our customer experience strategists and profit acceleration advisors about how we can take your business or practice to the next level.
As small to mid-sized businesses look to grow market share or enter new markets, they often hire new staff. Many times, though, the addition of more personnel does not always lead to more work getting done overall, less workload for others, enhanced client service, or better territory coverage. The reason for these unanticipated, unintended, and unfortunate consequences is that firms’ technology infrastructure, or lack thereof, impedes employee productivity and progress as the organization grows.
In particular, companies without a leading-edge CRM system in place experience significant challenges when onboarding new employees. After all, learning a new role and a new organizational hierarchy and culture can be hard enough in itself. Complicating matters, a new hire without CRM is going to struggle to get up to speed quickly, regardless if she was brought on due to a new role or division being created, a firm experiencing enormous growth, or a department undergoing high turnover.
Below, I have summarized some of the negatives a new hire will face without CRM and contrasted them with some of the pluses she will have if a robust, intuitive CRM platform is available.
As the new employee comes onboard without CRM, he probably will not be the only one struggling to locate data on clients, prospects, sales opportunities, and service cases due to the abundance of legacy, disparate systems and delayed or non-existent information flow between various departments and channels. Lack of visibility into all client and stakeholder relationships results in too much administrative work done in a vacuum and excessive duplication. Client trust diminishes, especially if ongoing staff turnover compounds these operational bottlenecks and inefficiencies.
On the other hand, CRM streamlines and automates common sales, marketing, and service processes and gives employees, particularly new hires, the information that they need to succeed. New employees can find key background info on customers and partners and come across as if they have been with the firm managing their sales territory for over a decade. The resulting productivity and performance gains from CRM thereby quickly justify the hiring of the new staff.
Are your sales units and new hires still struggling to get by without a solid CRM system and strategy?
Are you still not sure if you need a CRM or how it can help your firm operate more efficiently, serve your clients more effectively, and scale faster?
Are you overwhelmed by the plethora of options in the CRM software marketplace?
Have you recently experienced a choppy software implementation with your IT consulting partner or feel you overpaid for the junior, overhyped resources who worked on your project?
Do you wish you could deliver results faster to your customers and employees/CRM users?
Do you desire to transform your digital customer experience, but lack the in-house expertise and just not sure where to start?
As a leading boutique CRM and Customer Experience Strategy Consulting firm, RevSherpas can help point you in the right direction and grow your business!
CONTACT US to explore a potential partnership and to schedule a complimentary discovery and strategy consultation session.