Last week, my husband and I officially became what I call “customer prospects.” After having the same home insurance provider for over 16 years, we pulled the trigger and made the decision to make a switch. We are what the industry calls “in market,” as we look at other providers and begin to compare and contrast. For us this is a big decision, given how long we’ve had the policy and our long-term relationship with the company. Originally, we purchased the policy from my uncle, the agent who had been handling all of our extended family’s insurance needs. I’m certain from the perspective of the company and their customer database, we look like a long-term, loyal customer. Little do they know… we’re now customer prospects.
At Some Point We’re All Prospects
It’s a tough to think about, but it’s true. At certain points in time, your current customers become prospects. They are learning about and interacting with your competitors and may actually consider a switch. Although technically, they are your customers at this critical point of consideration, they also are prospects for which you may need to re-win. All businesses, regardless of industry, have trigger points where churn is most likely. Some of these trigger points are defined, such as policy renewals within the insurance industry. Others are less defined, such as a competitor’s new product/feature launch or recommendations from friends and family which lead to your customers opening up their consideration of others. Worse yet, are the triggers that are within your control; poor service events that cause your customers to consider the grass on the other side.
What Causes Customers to become Prospects?
Regardless of the trigger that leads to your customer becoming a prospect, it is important that you understand what is leading to consideration, who is being considered, and what steps are important to retaining your customers. Many companies rely on collecting feedback from attrited customers to understand what retention strategies could have been in place. Why wait until the customer is lost? Your growth strategies most likely focus not only on acquiring new customers, but also deepening relationships with existing customers. Customer prospects may be your best source for defining retention strategies.
So who are these Customer Prospects? They most likely are:
- Customers who are making inquiries about their accounts. For example, the customer who is calling to ask why their cable television rates are so high compared to what is being advertised.
- Customer who are interacting with you less. Within the retail banking industry, one important trigger of an “at risk” customer is diminishing balances and fewer transactions on an account.
- Customers who give you poor ratings or are detractors. Unhappy customers will eventually leave, it’s not if, but when. Case management is important to acting personally to retain the business, but really work to understand if there are larger systemic issues at play.
- Customers who do not always choose you. If you’re in an industry where customers have a lot of choice, understanding why they don’t consistently choose you will be enlightening.
Of course, your goal as an organization should be to reduce the chance of customer prospects. The best way is to learn why customers become prospects and use these results to better your customer experience strategies and execution.
What Can Prospects Tell Us?
When does customer experience actually start? Some can arguably state that being a “customer” begins when a purchase is made or an account is opened. For tally and bookkeeping purposes, this is true. However, customer experience actually begins well before customers become your customers. Brand perceptions, consideration, and future intentions are well established before customers join your organization. So, why don’t we focus on prospects when trying to understand customers’ holistic experiences? Personally, I believe that understanding prospects is key to later providing the best possible customer experience. It’s also critical to understanding growth, which is a desired outcome for all businesses regardless of footprint or industry.
Here is what we can learn from prospects that can help shape customer experience strategies:
- Critical Touch-points/Experiences – What are the experiences that make or break your relationship?
- Drivers of Consideration – What is most important? What experiences make a difference?
- Expectations – What is expected? How have their current experience shaped their expectations?
- Information Sources – What information do they rely on to learn what is available or research a specific company or offering?
Provide a Path to Renewal and Retention
So, what should our home insurance provider be doing? First, the company needs to realize that any point current customer may be prospects. Our home insurance provider should have a process for identifying “at risk” customers and should have a plan to act – either personally or through broader campaigns to reduce or eliminate the chance that customer prospects will leave. A CX program, both through measurement and prediction, can help to identify customer prospects and will guide the path to renewal and retention.
If your organization is focused on driving growth, what steps are you taking to understand prospects? How much do you understand about why a prospect would consider you and what you can do to capitalize on the opportunities?