Turning a deaf ear is hurting brands

Brands who don’t pay attention to feedback and complaints miss out on more opportunities than they realize. Read on to know what Xerago found in a survey.

Powerful brands have been in business for decades and few of them for more than a century. These became what they were because of the quality of products and service they offered, being innovative and grabbing the first mover advantage in several arenas. They were quick in identifying the need, finding a solution and making it into a usable/ consumable product. They hit their audience in a way which was very compelling. They designed people’s consumption patterns and ensured what they made was bought. But of late the need to change has been heavily felt mainly owing to lesser barriers for entry which has increased competition in any business. This has driven the need to change the way the marketing game was being played. The changing scene has been quite steep in transition. The first need was to let businesses allow customers to shape the product according to their need. The next was the overall experience customers had when dealing with products and then the last but unconquered had been the experience customers look for in dealing with brands and not just the products they create. The most critical component of this is how brands set up their feedback mechanism that helps them understand exactly what their customers feel and want.

This is a global scene. To get an understanding of what customers in India feel about the way brands treat them, Xerago recently surveyed consumers – working professionals across 4 major cities, to find out what they really think about customer service. Successful brands create experiences and the others create goods. An absolute majority of the respondents (83)%, feel that brands have a proper complaint cell and a process to document customer complaints. At the same time a majority of respondents (58%) feel that brands don’t care about what customers give as feedback or complaints. This implies that brands are disconnected from their customers when it comes to delivering the customer experience. This disconnect is also attributed to rude complaint cells and disinterest in providing the right information. Brands do not realize the repercussions this neglect leads to. Taking a global average, more than half of the customers rising complaints and being ignored – that leads to a bad customer experience leave the brand to a competitor and the reason is not known to the brand. This leads to a ripple effect of customers having a bad experience spreading the word around. This can be really harmful as indicated by our survey, in which close to 56% of respondents have expressed that their purchase decision is influenced by what their friends and relatives tell them. So a bad experience delivered is not just a lost customer but a lost group of customers. There is yet another malignant threat that comes from the side of the brands arising from customer complaint cells that are predominantly one dimensional and do not behave proactively to find the potential issues. Customer executives according to a study treat “in-action” from the customer side being the same as not having an issue. When looking at it from the customer’s point of view, a majority of the respondents – 52% of them feel that brands invite complaints in their packaging material just to meet regulatory compliance and not with a real intent to resolve issues and improve their products. This has been the factor that has been driving away customers from taking the initiative in filing complaints. To take an illustrative example from the banking space – especially in the credit cards business according to a study, 43% of customers are motivated to shift brands due to bad experience with complaints cells. Brands need to take a note of this, as hanging on to an existing customers is critical, as the stakes are high when their lifetime value, which increases exponentially comes into consideration and acquiring a new customer is expensive. In the credit card industry, a small retention increase of 5% can have a huge profit impact of 125%.

Now coming to the customer who dosen’t file a complaint nor does he have one. This can be called a satisfied customer. But this doesn’t mean he is loyal. Even a satisfied customer who rates a company’s service as exceptional will leave that company for one that provides better experience which is a combination of product and after sales relationship.

If brands need to use the handle they have in retaining customers efficiently, they need to analyze the experience delivered by their customer service. Unless there is a change made in the way this space – in the overall customer management schema is changed, customers in huge numbers would move on to other brands – a silent attrition that is one of the biggest challenges today.

(This article is based on a Survey conducted by Xerago, across four metros in India with the respondents from the age group 25 to 45)

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