The 53% Rule
With a background in (professional) services marketing, I have always been intrigued by the disproportionate impact that those representing brands have on consumer brand perception. This was really brought home to me once more by the recently published Conference Board study results, where they found 53% of contribution to customer loyalty to be attributable to the sales experience.
It becomes clear that “branding through people” is a key trend moving forward. Several industry trends accelerate the need to go from a transactional to a relationship-based customer interaction – in which customer service and close client relationships are key elements.
> Increasing Commoditization – products and services are becoming increasingly commoditized, going hand in hand with price-based competition and centralized purchasing processes.
> Decreasing Differentiation – brands are increasingly being perceived as “more of the same”, leading to a herd mentality and very little true innovation. Who can really tell the difference between Dash and Persil ?
> Choice Overload – consumers are becoming rapidly overwhelmed by the amount of choices that is available to them, leading them to opt-out of choosing in the first place – and increasingly making their purchases on auto-pilot.
> Increasing Transparency - the speed and scope of consumer interactions in today’s world increase the pressure that brands are under to meet or exceed expectations – but make it increasingly difficult to continuously do so.
> Decreasing Customer Satisfaction – from airlines to publishing, the average degree of customer satisfaction has been going down for years – meaning consumers become both harder to please, and more prone to voicing their dissatisfaction.
A clear understanding of client needs coupled with a rigorous segmentation is crucial in order to determine who to cater to – and who to leave to the competition. By picking their battlegrounds, firms can ensure they focus on a segment that is right for them, and adopt a differentiated value proposition customized to fit their niche.
As their understanding of client needs grows, firms can increasingly adopt a human touch and cater not just to the rational, but also the emotional needs – slowly but surely moving away from the harsh impact of “dog eat dog” competition. A close link between marketing and sales is the final ingredient that will enable firms to truly stand out. (Image credits: Flickr.com, CCL, Esparta).
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