What Happens When Brands Can No Longer Dump You?
By Christina McKeon on Feb 06, 2013
By JP Saunders
Once being a “customer” of a brand was almost a privilege. And if you were unable to navigate their complex business policies, tolerate their long inconvenient wait times, or continue to pay for over priced lack of service, then you were kicked out into the cold with a “denial of service” and needing to beg at the door to be let back in.
Fortunately for most, the days of being enslaved by the only game in town are long past. Now when the promise of the brand is just lip service to win your business, customers have the option to dump the brand for ones that can actually deliver to that promise, and they are doing so. In fact recent data around this shows 86% of customers are making the switch, even if that means paying more for a better experience.
Today, these shackles of forced loyalty have been permanently broken across many industries through disruptive trends like globalization, commoditization, cloud computing, social media, and media saturation. The few remaining dominating brands that continue their customer enslavement practices and broken promises are being dragged into the social streets for a beating.
So now what? How are brands reacting to this change? And where is it all headed? A recent survey by O’Keeffe & Company – an independent market research firm – on behalf of Oracle interviewed 1,342 global senior executives in late 2012 to explore this further.
Turns out that the customer is rapidly becoming more like “The Bachelorette” in a reality dating game contest for their affection, advocacy and loyalty. From the research, it showed that 91% of the executives surveyed hungered to become the customer experience (CX) leader in their industry. No surprises that the best looking brands who have CX DNA are the ones standing out and getting the roses to compete. But it’s not enough to just look the part. The 59% of executives, who agreed that customer expectations were rising, will tell you that the stakes are much higher now. And what the customer demands is the total package of the promise if you want to get that rose.
As for the out of shape masses that aren’t the young refined bucks of their markets, their “biggest loser” journey has just began. In the survey, they found that only 37% of brands have started on that path to CX pack abs, and only 20% felt in shape to even compete.
The path of a “CX90” fitness program is a tough workout regime, requiring brands to invest in mapping their customers journey and increase their average spend on CX investments by 18% over the next two years in order to get in shape with their social, cross-channel, mobile, online purchases, and online support initiatives.
The rewards for brands that sign up for the fitness program now are proving worth it. Business executives estimate that not providing positive CX results in a 20% annual loss in revenue. Imagine if you could avoid that loss and get 20% more muscle – that’s $400M for a $2B firm!
As for the “bachelorette” customer, they will be left to go on many dates before ever having to commit again. Leaving a wake of brokenhearted brands behind them who didn’t beef up in time.