The Financial Express in India has an interesting article by Jacques Creeten, vice-president of FedEx India, on how customer satisfaction is difficulty  to pin down, and that "retaining consumer loyalty sounds easier than it actually is."

"Every business leader knows the importance of their customers, especially in today’s competitive marketplace. But how to retain those customers, and generate genuine long-term customer loyalty, remains a significant business challenge. A recent marketing survey found that 84% of satisfied customers would “jump ship” for a better deal if the opportunity arose. With markets becoming increasingly commoditised, customer retention has become a critical part of business strategy.

"Increasingly, companies need to ask themselves: “What reasons can I give this customer to stay, even if my competitor offers a cheaper price?” The key lies in providing a service that will win the hearts and minds of customers and keep them loyal to brands and products. Companies need to go one step further, and ensure that they are consistently providing an outstanding customer experience."

Empowering people and streamlining processes are the two key tasks cited by the author that can have a significant impact on improving their customer's satisfaction. He goes on to say that maintaining a single point of contact for customers makes for a good, cohesive experience. 

That's good, and I found it in practice today.

Today, whilst calling my mobile phone carrier, AT&T (was Cingular), I was happy that they handed me off only once during the call to get additional, more detailed support, using a 'warm transfer' where the original customer service agent made sure that the second picked up where she left off. There is nothing I enjoy less than being transferred from one agent to the next, told that I will hear a series of click, clucks and tones during the transfer, only to be sent into customer service phone oblivion and hear the dial tone once again. And then dread having to start the entire process over again.

"To deliver quick and simple engagement with customers, companies need to ensure that their first point of contact can answer all their questions, resolve all their problems and see the company from their perspective."

Creeten's suggests that there are four things that businesses need to get right:

1. Education: make sure that the employees are not only trained in the basics, they should also receive dedicated training "to teach the skills and behaviour patterns needed to meet and exceed customers’ expectations."

Like when to do something that will avoid an expensive call back. The Zune customer service team did this for me when I called in noting that I had a bad sync cable: I was off the phone in less than five minutes and a few days later I had my new cable. As I've said before, the customer on the line is a future repeat customer and ultimately your best advertising. It takes a lot less to keep a good customer than acquire a new one.

I call this finesse on education jump through hoops. HP jumped thru hoops for me when I called in with a customer service issue and has earned my repeat business. One of our new home PCs is a new HP Pavilion Slimline with a slick widescreen monitor that I wrote about previously (more on our new PC, a CNET Editor's Choice, in a future post). 

2. Communication: "employees [should] share success stories and client wins as well as customer and employee feedback, strategies and ideas for improving customer experience."

Absolutely, and share then not only with each other in the customer service bay, but do so with the people making the products or providing the actual service. At Microsoft, our CSS teams do this through regular reviews with the product groups at Red Zone meetings, where we discuss the top support issues that come in from customers. For an example, see this webcast, "Resolving Systems Management Server 'Red Zone' Support Issues" on Microsoft Systems Management Server (SMS) 2003.

3. Listening: "feedback from the coalface is the only way that management can gain a complete understanding of how to improve customer service."

I must admit, 'coalface' was a new one on my that had me searching the rarely used dictionary and pushed me online... But he's right: we have to constantly improve and one of the best ways we can do this is to listen and respond to our customer's feedback and suggestions. I agree with the author that "listening also creates a sense of empowerment in employees." It also makes the issue more real. 

4. Recognition: "a strong rewards programme is vital to ensure employees deliver positive, memorable experiences to customers. Organisations should judiciously use financial and non-financial rewards that will enhance customer service."

At Microsoft, every employee outlines their Commitments (you can read more about the concept and process here in this IT-Showcase article). Commitments (capital c) are what I previously referred to as 'managing objectives' or 'annual goals' in my SiValley life. Every employee includes these in their annual review and they can form the basis for a part of how employees are rewarded.

And incentives are provided to our leadership via the SPSA program (see the Microsoft annual proxy report for 2006 for more), "designed to focus our top leaders on shared business goals to guide our long-term growth and address our biggest challenges by rewarding participants based on growth in customer satisfaction, unit volumes of our Windows products, usage of our developer tools, and desktop application deployment over a multi-year performance period."

That's right: growth in customer satisfaction is tied to rewards.

OK, enough on all this.

I'll add another point...

5. Know your customers and anticipate their basic service needs. And in the recent experience above (with AT&T Wireless Services), it doesn't involve a live person, but relies on the everyone's favourite new technology that firms are racing to master: interactive voice response (IVR) technology.

When I first dialed the AT&T's new 800 line, I expected to get the same level of service I had with Cingular. I surprised that they did not have an option to "press or say" numbers. Consider how many people call while driving (I called via my hands-free speaker phone, thank you, initiating the call prior to pulling out of park). I pulled over, spent far too much time navigating the selections once again, and then was met with a five minute hold time. I believe that Cingular offered IVR options when you dialed into their main support or customer query lines, and rolled automatically to an agent if you did not enter the expected information.

Tags: Microsoft, loyalty, Customer Satisfaction, Customer Service.