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The gravitational centre for how organisations need to think about customer relationships has moved to customer service, according to Zendesk’s global chief.
Speaking at the customer experience management vendor’s Relate Live event in Sydney, Zendesk CEO, Mikkel Svane, said the Internet and social media have completely changed how brands need to think about tackling increasingly complex customer relationships.
“Today, customer relationships are incredibly public and as businesses, we’re incredibly vulnerable to how our customers perceive us, good and bad,” he told attendees. “Customers are much more connected, empowered and demanding; we are spoilt. We have all this access to information and to other customers. We are either a great community or an angry mob. We have power and we use it.”
At the same time, businesses are transforming thanks to the globalisation and diversification of teams, vendors and stakeholders, raising a whole new set of relationship conditions that have to be navigated, Svane said. As a result, most business models that are successful today are based on convenience and experience-based relationships, not transactional ones, he said.
For Svane, three global trends are impacting the relationship between brands and their customers. The first, the promoter economy, is about customers becoming advocates for your brand in order to attract new customers.
“The best recommendation we get is someone we have a relationship with,” he said. “With social, customers are doing the brand work for you.”
As a way of responding to this phenomenon, Svane pointed to business collaboration app, Slack, which has put the emphasis on customer experience over transaction by appointing three times the number of customer support agents than sales staff. The company also encourages referrals over sales, and has a target customer satisfaction score of 98 per cent across all customer interactions.
The second global trend Svane identified is the rise of ‘conscious consumers’ who want brands to increasingly reflect their values by aligning to social, cultural and ethical themes and causes. He highlighted A/NZ brands such as Lush, Who Gives a Crap, Intrepid, Icebreaker and Thankyou water as examples of those building commercial success and customer loyalty off the back of corporate social responsibility programs and approaches.
“We have to embrace corporate social responsibility in all interactions with customers as it’s how they build trust with us,” Svane said, adding that trust, loyalty and evangelism lie at the heart of successful customer relationships.
The third of Svane’s game changers that illustrates the need for a customer-first mentality are the new business models emerging through digital connectivity and the rise of the subscription economy. He noted companies such as Amazon, Tesla, Netflix and Spotify have completely changed how customers consume products and services and disrupted industries by being experience-led.
“You don’t start a business today with a traditional transactional model, you start with a subscription or convenience-based service approach,” Svane said. “These are all about the lifetime value and long-term relationship with your customer; the individual transaction is not that important. It’s all about repeat behaviour, repeat buying, making the customer happy and ensuring they have a good experience and come back time after time.”
Svane pointed to research that shows customers who have had a good experience with a brand have a relationship that’s 6 times longer than someone who doesn’t have a good experience.
“It’s never been easier to go to someone else,” Svane added. “Providing great customer experience is critical for building long-term relationships that power lifetime value. If you have difficulty justifying why you should invest in customer experience, just look at the direct correlation between great experience and service and lifetime of the relationship with the customer.”