How call centres can drive customer loyalty in a changing world

Posted in Consumer Promotions and Loyalty, Consumer Promotions, Consumer Engagement, Promotions

by Chris Baldwin on Sep 20, 2017 9:00:00 AM

Investing in customer retention is a no-brainer for any company, and fostering loyalty holds the key….

When it's widely acknowledged that repeat customers are more valuable than new, and repeat business costs less than a new acquisition, it isn't hard to see why.

Right off the mark, consider this food for thought:

12%-15% of customers who are loyal fans of a brand will make up 55%-70% of that company’s actual sales 
Centre for Retail Management, Northwestern University
 

Call centres remain a key part of the customer journey…

Call centres have long played a key role in customer retention. Call centre staff represent the whole company, and the service they provide will determine whether many people stay or leave. 

Yet the customer journey has changed.

Technology has empowered people, enabling them to compare services and prices at the touch of a button, to share experiences - both good and bad - on a myriad of social media channels, and to call up a virtual chat assistant in seconds.

…but they have to evolve

In short, call centres are no longer the only hot line to a company’s customer service desk. They are just one of a host of ways in which customers can get in touch with a company.

And the sales funnel is no longer clear cut.

With customers often carrying out their own thorough research before deciding whether to run into the arms of a competitor, call centres have to work twice as hard to engage with customers on their terms in order to retain valuable existing business.

Putting in the effort certainly pays off. And there's no better place to start than getting to know your customers inside out. Our free guide is your chance to do that right. Click below for a free copy:

Free ebook: How to inspire customer loyalty using audience segmentation  Start smashing your segmentation and see your ROI soar...

Telecoms companies have been forced to transform their approach…

The telecoms industry is one sector that has seen lots of change, bringing with it new challenges.

In 2011, industry regulator, Ofcom banned rollover contracts - those that are automatically renewed by the provider, rolling forward to a new minimum contract period.

The move made it easier for consumers to switch providers without the risk of penalties, while making it harder for companies to hold on to existing customers

…and utilities have had to up their game

In 2013, Ofgem followed suit, taking similar action in the utilities market.

This included banning energy suppliers from automatically rolling householders on to another fixed term offer when their previous contract ended, making it easier for consumers to shop around.

Such moves have been positive for the consumer but have meant that utilities companies have to think more creatively about how to retain current customers.

Indeed, the changes have had a clear impact.

Ofgem data shows that in 2016, 7.7 million energy customers felt so dissatisfied with their supplier that they switched to a different company - a 28% increase on the number of people who switched in 2015, marking a six year high.

An increase in customer retention by 5% can lead to an increase in profit by anywhere between 25% and 95% 
Bain & Company

Companies have had to think outside the box to foster loyalty

Such changes have prompted companies to think again about how they can engender customer loyalty, and the changing role that call centres play in achieving this.

In the utilities space this has involved thinking beyond energy, and finding ways to collaborate with partners to further incentivise consumers.

Some recent examples in the utilities sector include:

  • In April 2017, British Gas launched a £100m customer reward programme which included a range of new tariffs offering discounted energy and services, such as boiler servicing and insurance. But it also looked beyond its core offering, adding value to customers by partnering with Sky to offer discounted Sky TV packages.
  • In December 2016, SSE partnered with Dixons Carphone to offer its customers deals and technical support on connected home products and services, making it easier for homeowners to keep up with the latest technology.
  • In October 2016, Octopus Energy partnered with Arsenal FC to offer a specific-branded tariff, incentivising customers on the Arsenal Green Tariff with monthly prize draws to win merchandise and Emirates Stadium tours.

Call centre staff need to know loyalty programmes and incentives inside out

To work, loyalty programmes and rewards must be well thought through.

But to be meaningful, and therefore effective, incentives need to be highly relevant to the customer. They must also be timed appropriately.

This means that call centre staff need to be well trained in the nuances of the loyalty programme or rewards on offer, understanding exactly why certain incentives have been put in place and how they work.

It also means having a complete picture of the customer and their history with the company, and listening carefully to their needs and problems in order to know which rewards or incentives will prove most effective with which individuals.

Data is key

Data is essential in giving call centre staff this insight, and is also playing a growing role in shaping and informing rewards and loyalty schemes.  

As Dr Katie Russell, Head of Data Science at data analytics company, Onzo told customer and employee engagement magazine, Engage Customer, there is a “huge opportunity” for utility providers in particular to differentiate themselves…  

“It is inevitable that utility businesses will evolve to become highly dependent on consumer data, therefore companies need to ensure that they are capable of using customer insights to benefit their business operations and enhance relationships with the customer. The utilities that do this the best will ultimately be the most favoured by the consumer and the market.”

O2 uses data to offer a host of incentives

The utilities industry can learn from the telecoms sector. One example is O2, which is tapping into predictive analytics to better understand consumer behaviour and tailor customer rewards accordingly.

02 priority leads the way with their customer rewards

As Nina Bibby, Marketing and Consumer Director at O2 told Marketing Week last year:

“With Priority [O2’s loyalty scheme], for example, we use our internal analytics to understand which customers will be interested in music-related offers. At the end of last year, we saw a tenfold uplift in conversion through better use of customer data. This is an area where we are evolving our capabilities.”

Cinema ticks numerous boxes

O2 offers a diverse range of rewards as a result.

“For some, the £1 lunch on Mondays is most popular, for others it’s access to gigs,” said Bibby. O2 also partnered with Disney around the release of Star Wars: The Force Awakens, which proved popular.

Cinema, and cinema tickets in particular, is an attractive area for rewards because it can be tailored to every individual regardless of age, gender and interests.

Aviva is one brand which has incentivised customers to buy more than one product by offering cinema tickets in the past, an approach which Rachael Laurie, Aviva’s Head of Marketing told Marketing Week worked “to great effect.”

Indeed, with car insurance premiums having jumped by 5.8% in the last quarter of 2016 (AA), and the AA predicting premium increases in house insurance too, companies in this sector also have to explore different ways to engage and retain existing customers.

Call centres are central to customer loyalty

The world is changing, and companies must evolve to survive.

But as the customer journey grows ever more complex, with numerous customer contact channels available, call centres will continue to play a key part in customer retention and incentivising renewal.

The figures support this: research in 2016 by contact centre outsourcer, Echo found that 53% of people prefer to deal with service providers over the phone or face to face compared with digital channels, especially when situations are complex.

The customers of today are better informed and more empowered than ever before.

Their expectations are high. Companies that can get their loyalty programmes and incentives right, ensuring call centre staff have all the necessary data at their fingertips to communicate the right offering at the right time, have a sizeable opportunity to steal a march over competitors.

Eager to read more on using your data to drive loyalty and minimise churn? Click below to grab a copy of our guide on smashing segmentation:

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