The importance of being straight forward with customers

3/21/2011

During the economic recession, many companies switched their customer approach. Realizing that it is often more costly to win over new consumers than it is to keep existing customers, many entrepreneurs made customer service a priority within their businesses.

They quickly found out, however, that even customer relationship management has changed over the past few years. Social media has made it more difficult for business owners to keep their brand's reputation spotless. One misstep and a crisis could be on hand, given the speed at which social networks can be used to proliferate such news.

In this new environment, where open communication is demanded by consumers, businesses are increasingly finding value in being more candid with their corporate messages. Rather than trying to spin a potential mishap, businesses may be better off admitting to any faults and dealing with them appropriately, rather than trying to pull a spin job.

Candid camera

As Inc. magazine recently observed, companies who take this approach to customer relationship management have been tremendously successful during the economic recession.

For example, Domino's Pizza has done a particularly exemplary job acknowledging and addressing customer complaints in the public space. In fact, this approach was the backbone of the pizza chain's recent television commercials, which were based around a photograph that a customer posted on the brand's Facebook page, which showed a Domino's pizza smashed into the top of box. Rather than deleting the photograph, Domino's publicly apologized to the customer and promised to do better in the future.

"The old days of trying to spin things simply doesn't work anymore. Great brands going forward are going to have a level of honesty and transparency that hasn't been seen before," the source quotes Patrick Doyle, CEO of Domino's Pizza, as telling the Associated Press.

Since the campaign, recent data collected by Inc. magazine show that Domino's reputational score has grown by 21 percent in differentiation, 24 percent in leadership and 28 percent in perceived quality.

Using social media as a customer service tool

As a recent survey conducted by Gartner indicates, more companies plan to leverage social media as a brand management and customer service tool during the next five years. This will help them maintain open communications with customers and address any potential crises before they become widespread.

Only 5 percent of businesses polled by Gartner used social media as customer service tool in 2010. However, during the next 24 months, as many as 30 percent of companies expect to adopt the communication channel as a part of their customer service initiatives. Among the top 1,000 companies, this trend will proliferate even faster, with as many as 40 percent expected to use social customer relationship management.

"As awareness and use of social networks increases, customer service executives and planners are feeling increasing pressure from corporate executives to articulate a strategy for how this new communication channel will be harnessed so that they don't get left behind," notes Gartner's report.

As the number of consumers registered to social networks, such as Facebook or Twitter, continue to grow, engaging customers through these channels will become paramount to success. Entrepreneurs may want to consider developing a social media presence now, rather than later, even if this means they have to take out commercial loans to do so.