Yesterday I was at Relate Live, an event hosted by Zendesk that is focused on the idea of building and maintaining customer relationships in today’s digital landscape.
The theme of this year’s event is ‘relationships are complicated,’ a notion which no doubt brings back awkward personal memories for many of those in attendance – a wave of cringeworthy nostalgia certainly swept over me – but also couldn’t be more accurate in the modern business world.
Zendesk CEO Mikkel Svane set the scene in his opening keynote, explaining how “customers today are more connected, more empowered and more demanding” than ever. “Relationships are really, really complicated,” he continued, so customer service and customer engagement can no longer be thought of as just a back office function, as they are "actually very central for how businesses today think about growth.”
The bulk of Mikkel’s keynote centred on three current trends that are disrupting the industry or, as he put it: “Three critical components for customer relationships.”
- New business models
Thanks to the rapid rise and success of disruptive startups over the last few years, business models have changed dramatically. Subscription-based models have become all the rage, consisting of “little transactions over time” and focusing on “nurturing lifetime relationships.” For these businesses, “it’s all about loyalty” and “retaining the customer relationship over time,” something which the likes of Uber, Netflix and AirBnB have excelled at.
Although more common in digital services such as music and films, this trend is now also finding its way into the world of physical products, thus disrupting “a whole generation of traditional businesses.” Loyalty is the key factor with this business model as “loyalty equals lifetime value.” Customers need to feel engaged and valued by the business across many years, rather than just one or two transactions, thereby decreasing customer churn and – hopefully – increasing revenue.
- The promoter economy
In today’s hyper-connected world, businesses and consumers alike have the ability to talk to more people than ever before through the use of social media. This means more businesses today are driving customer acquisition through word of mouth and the key thing for businesses to think about is: “How you can turn your current customers into evangelists.”
“How we influence each other through social media is becoming incredibly powerful,” said Mikkel, but of course this applies to negative sentiment just as much – if not more – than positive sentiment. If customers aren’t happy with the service they are receiving, you can be sure they are going to talk about it on the likes of Twitter and Instagram, potentially broadcasting a negative image of your company to millions of people.
It’s no longer enough to get the majority of experiences right. Every customer interaction has to be as perfect as possible, which could result in social media and word of mouth being more powerful than any marketing campaign.
- Conscious consumers
This final factor is an interesting one. Modern consumers, led by the millennial generation, actually think “as much about the values of a company as the products and services.” More than ever, customers are paying attention to the social, moral and environmental values of businesses and want to be able to “relate with the companies and brands that they support.”
Companies such as Toms and Lush which give something back via charities or donations are fostering an increased level of customer loyalty and are creating communities around the worthy causes they support. This is known as Corporate Social Responsibility (CSR), which has become as powerful as to influence where millennials choose to work (74 per cent), the brands they recommend (82 per cent) and the companies they invest in (64 per cent).
Building a culture of CRS provides an opportunity to “create trust with your customers,” ultimately helping to foster that long term loyalty that is so important to modern businesses.
Image source: Shutterstock/Jirsak