I had a conversation with a colleague recently about customer trust and it got me to thinking about it.
We are so focused on making the sale, reducing churn and growing the business that it seems customer trust is an after-thought. Yet, we must first develop relationships with customers and earn their trust for them to do business with us.
This notion seems elementary, right? But with all the things we have on our plates, it’s easy to forget the smallest, most basic things.
This reminds me of a quote from the film, The American President.
Michael Douglas, who plays the President of the United States, Andrew Shepherd, in the film, says, in a speech, “I was so busy keeping my job, I forgot to do my job.”
That’s what happens to us. We get so caught up in meeting corporate expectations that we forget to meet customer expectations – we take customers for granted, and we get complacent into thinking we can put our relationships with customers on auto-pilot and customers somehow will always be there for us.
We need to show customers we’ll always be there for them, that we will have their back, no matter what.
Relationship development is ongoing. Each day we must earn the customer’s trust.
How do we do that?
There are some important keys to earn customer trust that we must keep top of mind every day.
1. Show empathy.
Showing empathy to customers is more than understanding them. We must also be able to connect with them on an emotional level. Show customers you care about and appreciate them. Be grateful. Actively listen to them. Be open-minded. Be curious about them. And, always be ready to help.
2. Be authentic.
Be yourself. Be true to yourself. Say what you do and do what you say. Be genuine. Be what customers expect you to be. Don’t create a false impression. Engage on a human-to-human level with integrity.
3. Be consistent.
75% of consumers expect companies to provide a consistent experience wherever they engage with them. A customer should feel confident that they are going to get the same experience every time they do business with you. A good rule of thumb here, as the old adage goes, is always under-promise and over-deliver.
4. Be transparent.
Don’t cover up mistakes. Admit them. Be up front when you’ve made an error. Honesty is the best policy and customers will appreciate and admire you for it.
When something does go wrong, address the issue with the customer and offer solutions on how to resolve it. But don’t stop there. Ensure the issue was resolved to their expectation by following up with the customer. That’s called closing the loop with the customer.
5. Be responsive.
When a customer asks a question or voices a concern, they expect a fast response and quick resolution. The best thing you can do is to respond immediately. Excessive waiting hurts a customer’s trust in you.
Thus, respond as quickly as you can. And, be proactive. Anticipate your customers’ needs and regularly check in with them, not only to ensure you’re meeting their expectations but also to continue to nurture your relationship with them.
What’s at risk if you don’t have a customer’s trust?
Let’s look at the facts.
The main reason customers churn comes down to a bad experience. A recent NICE InContact survey showed that eight out of 10 customers would switch to a competitor due to a poor experience. To replace each lost customer requires you to get a new customer. And, it costs six-seven times more to get a new customer then it does to keep them.
That’s a lot of money down the drain.
In fact, in 2017, $1.6 trillion was the amount U.S. businesses lost thanks to customers switching to their competitors because of poor customer experiences.
But this isn’t only about lost existing business. It’s about potential lost new business as well.
A customer can negatively advocate for you. There is a statistic that says 96% of unhappy customers won’t complain about you but they’ll tell 9-15 people about their bad experience.
93% of consumers read local reviews to decide if a business is good or not. And, 85% of consumers trust online reviews as much as personal recommendations. Because consumers read seven reviews before trusting a business, businesses could risk losing up to 25% of business when negative reviews appear online!
Combine this with recent estimates that state 80% of all customer service tweets are critical or negative. Considering there are about 330 million users, posting more than 500 million tweets every day, that’s a lot of complaints!
When you lose existing customers and aren’t gaining new ones, thanks to your reputation, this will also have damaging effects to the organization, in terms of morale and corporate health.
Thus, it pays to focus on customer trust and nurturing customers.
How do you know if a customer trusts your company?
They’ll respond with the purse.
They will buy from you. Again and again. And they’ll become loyal.
Loyal customers generate more revenues. According to Gartner, 80% of a company’s existing revenues comes from 20% of its existing customers. RJ Metrics found that a company’s top 10% of customers – its repeat customers – spend three times more per transaction than the other 90% of its customers. Bain says returning customers spend, on average, 67% more than first-time customers. Loyal customers also buy more frequently and spend more per transaction.
The probability of getting a sale from a new customer is 5-20% vs. 60-70% of getting an additional sale, be it an expansion, upsale or cross-sale, from an existing customer.
And, because loyal customers are less cost-sensitive, average revenue per customer rises.
As a result, profitability increases.
According to Bain, a 5% increase in retention can boost a company’s profitability by over 75%. And, loyal customers are worth 10 times as much as their first purchase on average.
They’ll also refer customers.
83% of customers are more willing to refer after a positive experience. And those referrals are four times more likely to buy, have a 37% higher retention rate, generate 16% more in profits, and have a customer lifetime value 16% higher than non-referred customers.
How do you measure customer trust?
The best way to measure customer trust is through behavior and feedback.
While there are a variety of metrics in which a company can measure performance, it is important to align perception metrics (such as NPS) with outcome metrics (like increased retention) for a complete picture.
That said, key metrics that should be monitored include customer engagement, NPS, CES, CSAT, first-call resolution, retention rate, churn rate, average revenue per customer, customer acquisition cost, and customer lifetime value. Track them. Watch for and understand trends so you know how and where to make improvements.
While metrics are great to enhance performance, it is vital that if you want to build customer trust, you nurture relationships by engaging with customers empathically, gathering their feedback, and creating better experiences for them.
Congratulations. You’ve earned the customer’s trust and they’ve bought from you. To keep them coming back, you must continue to earn customer trust and nurture the relationship.
How do you build customer trust and nurture relationships? Let us know in the comments.