No other modern-era presidential term has delivered so many executive decisions to radically alter the markets that TPG serves as our current one. With the implementation of Dodd-Frank, the Affordable Health Care Act and the establishment of the Consumer Financial Protection Bureau (CFPB), the landscape across several verticals has changed. Since the change is led by abstract, and at times, contradicting sets of rules, the market’s response to comply is often reactionary and directionless […]
We use the word ‘directionless’ because the original intent was to protect consumers and improve their experiences with the entities they choose to engage. However, since the government decided what is best for consumers, corporations are left to comply with regulatory demands without considering the true impact of the consumer’s experience.
Fast forward a few years after the adoption of these regulatory changes. Is the consumer experiencing a better interaction with the brands they choose to do business with? Are loyalty ratings up? Is customer attrition declining?
We study the leading indicators to customer satisfaction (CSAT), loyalty and customer attrition for consumer-based interactions that occur in these vertical markets. Our research shows a stagnating customer demeanor across the marketplaces we serve, meaning there is no positive spike in voiced satisfaction after all of the hard work and expense to comply with regulatory enforcement motivated to ‘improve and protect consumer experience.’
So, what is missing?
Our data suggest the missing link is the actual voice of the customer along with a corporation’s unique value proposition and natural corporate ability to serve that voice to distinguish itself as a champion of customer.
If a customer questions whether to retain a product, it should be left to the customer and corporate brand to re-evaluate and determine if it is still beneficial for both sides to continue a relationship, which is the purpose of a dialogue designed to re-inspire and re-educate on product value while offering alternative solutions as the customer ‘outgrows’ his current one (the original purpose of a ‘retention channel’). The consumer loses when the only course of action available for such a dialogue is to cancel their current relationship. It implies that the entire relationship was an error in judgment and a waste of resources. Yet, that is the path we are seeing in retention dialogues to avoid regulatory fines and interference.
We report greater than 90% cancellation rates in some Care units because value reinforcement and frank dialogue to serve the customer is not permitted. Conversely, we see that almost 40% of customers convey gratitude and retain a relationship with a brand when such a value reinforcement dialogue is had.
We have leveraged regression analysis for years to study the customer cancellation interaction, seeking to learn whether it best serves the consumer to be treated with a service desk mentality or with a re-inspiration mindset. We were able to identify nine (9) Dialogue Components that generate high rates of voiced customer satisfaction. The collection of these components describes a re-inspiration dialogue that is interactive and does not assume that cancellation is the path for all customers. Our observations include a 300% improvement in the ability to save a customer when we effectively execute a single component from our strategy. By moving away from a service desk mentality and towards a re-inspiration mindset, even a modest attempt to retain a customer generates significant positive results for both the consumer and corporate brand.
These learnings are intriguing and customer-centric. They place the needs of the consumer ahead of the worry to comply with the regulatory statute. This does not imply that these communications are non-compliant, because they are. However, the primary focus and delivery mission is to serve the customer and not the government.
If you are interested in how you can return to serving your customers, and make that the centerpiece of your business focus, contact us. Start by receiving our Customer Retention Marketplace Analysis independently published by TPG’s Behavioral Research team. It will provide you guidance on an optimized dialogue strategy that will be embraced by your customer, while complying with current law.