Capricious customers: are they distracted or discerning?

That the digital age has done wonders for customers and merchants alike is self-evident. But its benefits to the latter are often fleeting with customers continually trying out new products and services as well as buying the same from different vendors. The UK's Marketing Week notes that a recent report from consulting firm Accenture shows that "companies are losing loyal customers at an alarming rate because of poor customer service and rewards.

Accenture's survey pointed to many customers noting "that companies could have done more to
keep them as customers" with as many as eighty-five
per cent
of them saying that  "their loyalty could have been
retained if a company had acted. Of those, 69 per cent would have stayed
if their problem had been resolved the first time they contacted a
brand, and 55 per cent if they had been offered preferential treatment
and rewards for doing more business with a company."

An industry-wise breakdown of the UK survey found that the churners affected retail the most with over 20% saying they have switched to competitors with hotels coming out relatively well at 5% just above airlines (4%) and life insurance companies (3%). The last probably reflects paucity of choice and inertia due to high transaction costs and effort rather than materially greater satisfaction. 

Accenture's UK survey found that the principal reason for flitting and fleeting consumers is poor customer service with 79% saying it was due to unfriendly/impolite staff. But another reason elucidated in an earlier Accenture report ( Accenture-Global-Consumer-Pulse-Research-Study-2012-) is that "consumers have changed considerably; are more empowered with higher expectations and are more prone to switching providers". The new dynamics of the "non-stop consumer" includes a dynamic consumer
whose "pathway" to buying is no longer simply linear with far more
content than ever before through exposure via multiple touchpoints
(various digital channels and brick-n-mortar).  

Also roiling the traditional customer loyalty paradigm is marketers' search for the holy grail: the ability to canalize contextual and timely suggestions to customers. That quasi-big brother like effort just may be getting a boost from Apple's acquisition of a start up WifiSLAM, an indoor GPS like capability that triangulates a customer's location similar to a GPS using WiFi.

The expectation is that Apple can shoot suggestions over its device (smartphone or iPad) when a customer is browsing merchandise.  That could have a significant impact on the buy decision for vendors including hotels which are now looking to use their real estate for more than just room nights by luring locals for more than just food and drinks with some even selling high end merchandise as detailed in a recent report in the Boston Globe. Suggestive marketing for the attention-challenged customer could  take on a really new meaning.

Published by

Vijay Dandapani

Co-founder and president of a New York based hotel company for 24 years. Grew the firm to five hotels in Manhattan and also developed a greenfield project at MacArthur airport, New York. Speaker at numerous prestigious forums including Economy Hotels World Asia, Lodging Conference, NYU, Columbia University Real Estate Roundtable, Baruch College's Zicklin School and ALIS. President and ceo of New York City Hotel Association since January 2017.

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