How Sticky are your Customers?

As NDIS rolls out and the disability industry is transformed into a consumer-driven marketplace the term “customer stickiness” is going to become increasingly popular. Before you disregard it as just another marketing cliché, let me clarify. Customer stickiness is simply another name for customer loyalty and retention. It refers to the percentage of customers that an organisation is able to hold onto on a long-term basis and benefits include many key measures of business excellence such as cost containment, business growth and service innovation. As consumers of disability supports become increasingly sophisticated and exercise their newfound choice and control, organisations with well-honed customer retention strategies and practices will find it easier to develop long-term customer relationships that are more profitable.

There are many benefits to having sticky customers; the following three are particularly relevant at this critical time in Australian disability reform.

  • Cost containment: Acquiring customers is estimated to be 5 to 20 times more costly than retaining existing customers. The economic benefits of loyal customers are realised as customer profitability tends to increase over time. Costs associated with acquiring customers are spread over a longer relationship and loyal customers cost less to serve.
  • Business growth: Business growth requires an emphasis on retention and loyal customers are more likely to try new products and services and ultimately purchase more of your services (this is called increasing wallet-share) plus loyal customers become advocates of your organisation and make referrals. This is especially relevant in the disability support market where customers look to family and friends as trusted sources of information.
  • Service innovation: Customer co-design and co-creation of services is widely recognised in disability support, aged care and healthcare as valuable in guiding service innovation. It is largely about using analytics and communicating with customers to understand their current and future needs. Analysing the behaviour of long-term customers provides insight into preferences and these customers are more likely to engage in the kind of probing dialogue that leads to the innovations that set providers apart from their competitors.

So how do you go about creating sticky customers?

There are many ways to build customer loyalty but the first place to start is by providing an exceptional customer experience. Customer experience is the aggregate of all interactions a customer has with an organisation and its products and services, from the moment they first become aware of the organisation through enquiry stage to induction, service delivery and billing, and every interaction in between. Creating an exceptional customer experience is a key factor in driving customer loyalty and retention. Three tactics to consider in creating an exceptional customer experience are set out below.

  • Make customers feel unique: Regardless of how much experience you have in supporting people with a disability it is essential that each individual customer knows you are interested in their unique goals, dreams, strengths, challenges and frustrations. Recording this information in detail and making it accessible to the individuals throughout the organisation who come into contact with the customer will reinforce your commitment to them and make them feel valued and unique. Note: requirements for privacy must be protected.
  • Deliver a consistent experience: Regardless of who, or how, the customer is engaging with the organisation (face to face, over the phone, through an online portal or app) the experience must look and feel the same and be of the same high quality. Consistency in customer experience has been found to be particularly important in developing trust in relationships with customers.
  • Provide proactive customer support: Proactive customer support is about identifying and resolving customer issues before they become problems. It gives you the opportunity to meet and exceed customer expectations and can range from eliciting feedback for service improvement to self-service access to the information a customer needs, when they need it and how they prefer to receive it.

With the transformation of the disability industry into a consumer-driven market there is much to learn from parallel markets about how to manage relationships with customers. As seen in consumer markets as diverse as financial services, telecommunications and beauty services, organisations with well-honed customer retention strategies and practices find it easier to develop long-term customer relationships that are more profitable. Disability support organisations that take these lessons on board will benefit from cost containment, business growth and service innovation. These key measures of business excellence are essential for organisations to thrive as consumers of disability supports become increasingly sophisticated and exercise their newfound choice and control.