Modern customers have higher expectations in terms of getting more while paying less. They seek value for their money, demanding the latest product features and benefits. Failing to meet their expectations promptly could lead them to seek alternatives. Providing ongoing value involves consistently delivering benefits and positive experiences to customers throughout their entire journey, rather than focusing solely on the initial point of sale.
By actively engaging customers and effectively identifying pivotal moments of delight, companies can foster long-term trust and engagement. This, in turn, brings forth numerous advantages for the business, including higher retention, increased customer lifetime -value (CLV), and a favorable brand reputation. Often, these benefits are achieved through customer word of mouth and viral marketing, further amplifying the company's reach and impact.
Offering better deals to new customers than existing ones is a common practice in the market. However, this creates a challenge for companies as existing customers might perceive new customers as receiving more value. As a result, they may prioritise price over recognising the ongoing value of the product or service. This situation can lead to organisations leaving paying customer alone to avoid creating issues like this. If this strategy is continued it can create a large ‘sleeping base’ who if ‘woken up’ could cause a large churn risk and impact to the P&L.
Loyalty programs have been instrumental in providing value, but they often lack a direct correlation with the perceived value of the product or service by customers. If customers do not recognise the inherent value in the offering, a loyalty program alone will not prevent them from switching to a competitor's product or service.
Today, companies are finding more sustainable approaches to engage their customers. It is now becoming commonplace to map out the end to end customer lifetime journey to ensure value and moments of delight are delivered with a focus on the value equation, i.e. what is the mix of free vs paid value for customers at the various stages. How this is achieved can be varied, such as product enhancements, paid features for free, loyalty credits, proactive support and insights etc.
According to research conducted by Bain & Company, increasing customer retention rates by just 5% can lead to a significant increase in profits ranging from 25% to 95%. By focusing on customer satisfaction, loyalty, and delivering ongoing value, companies can not only retain customers but also unlock substantial growth and profitability.
Take a look at healthcare company, Bupa…
BUPA's ambition is "to be the world’s most customer-centric healthcare company". Over the past few years, we have witnessed several notable instances that demonstrate their commitment to delivering exceptional value to their customer base. They proactively addressed customers evolving healthcare needs by enhancing their product range of support services from home including telephone and video consultations with nurses, GPs, physiotherapists and mental mental health practitioners. Additionally, in a show of their dedication to customer satisfaction, they created a key moment of delight by crediting existing customers in 2020 with an exceptional financial benefit due to the fact customers were not able to utlise as much of their extras during COVID-19. This combination of new innovation and an unexpected moment of delight is exactly the types of positive experiences that lead to engagement and loyalty.
Test & Learn Culture is one of IE’s 20 success factors. To learn more, read our first article, ‘Winning in a Product-Led World’.