Aggressive pricing, confusing offers, hidden elements of offers that the customer will discover only when they have become contractually bound – these are all parts of the inbuilt armour of the marketers and financial analysts, and so far they have very reliably filled up the treasury of companies and met their shareholders’ expectations. At the same time they deepen the negative sentiment of customers who recognize very well this dependency and the whole “game“ and is internally ready to utilize the onset of new competition.
Liberated customer
An example from telecommunications shows that the story of “customer liberation” can make quite dramatic progress. The thinking of big players, in relation to the arrival of new competition, developed from the sense of dauntlessness (“they cannot survive”) through to awakening and massive marketing campaigns aimed at customer retention (adjustment of prices, copying offers of new players, special offers, binding a customer for further periods) to understanding of the situation and the need to change their overall approach to building long-term customer loyalty through emphasis on excellent customer experience. Procrastination with regard to the change of course from strict financial management to a more strategic stance has caused many of them not only lower margins (which was a necessary effect of competition entry), but also a serious loss of market share or even loss of the overall leadership in the market, which could have been at least partially avoided.
Wise approach
This does not mean that there is no turning back, on the contrary, a positive change in the customer’s favour (and ultimately in favour of telecom companies) is inevitable. Only practice however will show at what price. It is said that a wise man learns from the mistakes of others. Banking, and especially the energy sector, can make good use of the remaining time and change without unnecessary miscalculations. Keywords for such wise actions are:
a) Clarity and simplicity of the offer
Packages, conditional offers, gifts or other “non-essentials” are more or less the past. In addition, tailor-made offers have been tried many times and their effect is limited to a relatively small group of “connoisseurs”. Simplicity and transparency win, which most comports with the need to “know what I am paying for” and “I do not have time for lengthy comparison of offers”.
b) Fair Conditions
Small letters below the bombastic bid, disproportionate penalties for early termination of the contract, incomprehensible legal formulations – these are all elements that customers no longer tolerate, because the customer knows that it can also be different. Their financial effect has already been far surpassed by the negative impact on brand reputation. The customer expects a fair contract and new players in the market fully exploit the potential that such differentiation brings.
c) The unity of words and deeds
Attractive marketing is a necessity and helps communicate the offer, as well as the overall philosophy of the brand. At the same time it creates expectations that need to be fulfilled at later stages of the customer interaction with the company. Grumpy or apathetic staff, inability to solve the problem on the spot, unwillingness to “bend the rules” in cases where the customer is not right (but in reality the impact is not material for the company), errors in billing and many other “minor misconducts” – all these are sins that are immediately compared with the media vows. The sooner companies turn attention to building a customer culture, the greater the resilience of its customers to the aggressive supply of new players.
The road to the new reality
It’s a way to survive in the new reality of a highly competitive environment. It calls for a significant change in culture and mindset on all floors of the organization. Success in this environment requires constant self-reflection of the management, employee commitment and ability to see the facts that formal reports and indicators do not capture. The change is a long haul journey, which in some cases will require “an overall transfusion and change of blood group”.