Consumer Confidence Survey

Customer Retention - Interview with Business 24/7 Dubai - UAE

Businesses and retailers need to raise service levels to retain clients 

In the UAE, customers pay premium prices for certain products and in return demand premium service. (EB FILE)

By   Reena Amos Dyes  on Wednesday, September 16, 2009

Businesses and retailers in the UAE and around the world need to do more to improve their customer services in order to retain consumers in these difficult times, say customer service measurement and communications companies.

Samer Renno, CEO, Renno Communications Group, told Emirates Business: "Recent studies indicate that 43 per cent of all customers who defect do so because of service issues, while three quarters of these defectors cite employee attitude as their core frustration. The most serious aspect of these studies is that 83 per cent of those who have a negative service experience tell at least one other person. With so much riding on employee-customer interactions, companies must find new ways to ensure that staff strive to over-serve customers at every opportunity."

According to a consumer satisfaction survey done in the UAE recently, only 35 per cent of customers were extremely satisfied with the quality of service they received, 44 per cent were just satisfied, 13 per cent were neither satisfied nor dissatisfied, seven per cent were dissatisfied and two per cent were extremely dissatisfied.

Renno said: "Retaining customers is especially important during the current economic slowdown. Companies that used to depend on walk-in customers cannot afford to continue with this strategy since those customers are either looking elsewhere for better bargains or are limiting their shopping due to the market conditions.

"Only loyal customers opt to shop at the stores that provide them with the added value in terms of incentives, discounts, and special attention. This fact itself should give companies impetus to move forward with a consorted programme to maintain their existing and regular customers."

According to Renno, comparison of customer service varies from market to market in the Middle East. Companies in the retail and services sectors in the UAE and most parts of the emerging markets in the region have focused over the years on the bottom line growth of their businesses, neglecting the most essential factor that revolves around retaining their customers. New customers mean quick turnover in profits; however, few companies look more seriously into retaining their existing customers in order to win their loyalty, be it in good or bad times.

Customer satisfaction programmes in the developed world have for years paid closer attention on the need to retain their customers in order to ensure that the reputation of their brands is protected. Unfortunately, the services sector in the UAE and most parts of the Middle East has neglected this essential part of customer service, notably because some sectors/ markets are still in the developing stage and their attention is mainly focused on growing the business without necessarily looking at the assets that loyal customers bring in to such growth.

This is confirmed by a survey done in May on consumer satisfaction in the UAE's retail sector by Ethos Consultancy. It revealed that only 35 per cent of the customers were extremely satisfied with the service they received at a store they shopped at. And 28 per cent of the customers said the salesperson did not ask the right questions to establish their needs, nine per cent said the salesperson was not knowledgeable about the product/service, 22 per cent of the salespeople did not suggest/recommend the right product that met the needs of the customer and 43 per cent of the sales agents did not attempt to gain a purchase decision from the customer. A whopping 54 per cent customers said the sales agent did not cross sell/up sell products or services. A massive 61 per cent of customers stated that the sales agent did not suggest any add-on products or services, while 19 per cent said they would not have purchased from the salesperson who served them. And 12 per cent of the customers who made a purchase stated that they would not return for future purchases.

Going into the service aspect, the study revealed that 39 per cent of the customers were not greeted by the sales agent upon entering the retail store, only 55 per cent of the sales agents were wearing a name tag, 27 per cent of the sales agents did not say a farewell greeting and did not invite the customers to visit the store again, 16 per cent of the customers stated that their experience would not encourage them to visit the store again, 18 per cent did not leave the store with a positive impression, and 16 per cent of the customers would not recommend the stores to their friends/families and colleagues.

Renno said: "Retaining customers means providing them with the tools that make them feel specially cared for and gives them a sense of belonging to the brand or company they shop at. Customer retention is a philosophy of appreciating the value that any customer brings to the company or brand. Repeat customers mean satisfied customers, which translates into growth of the company. However, an unsatisfied customer can single-handedly damage a brand's reputation by not only ceasing to shop at a certain place, but in most parts making sure to spread negative news about this brand to friends and colleagues, thus causing more damage than can be anticipated.

"There are many challenges facing this region as compared to other parts of the world. Most important is the way a great part of the public disregards its rights and takes for granted that bad service is a norm and is therefore part of this region's culture. In order to advance with our free market economy, customers need to press for quality services in return for the money that they are paying.

"On the other hand, businesses need to start paying more attention to the way they build a relationship with their customers, noting the importance of providing 110 per cent effort on all levels from customer service to quality products and, importantly, after sales service. It is unfortunate that many businesses think of the short-term sale and neglect the fact that after sales services ensure the continuity of the relationship with the customer."

Renno said customers the world over vary in their behaviour, with those in the UAE responding differently from those in Egypt or Lebanon or Morocco.

In the UAE, the customer most frequently pays premium prices for certain products or services and in return demands the receipt of premium service, while in other parts of the Middle East, customers have become accustomed to poor services, where in most instances they blame it on the market or the culture that does not understand customer services.

As for customers in Europe and the US, they are more aware of their rights when it comes to receiving the best value for the money they spend. Certainly culture plays a key role, especially the motto "Customer is always right" helped in drawing the line between a good and a bad service.

Giving advice on how companies can improve the satisfaction levels of customers, Halima Anderson. Director of Operations, Ethos Consultancy, Dubai, said: "Companies need to consider the recruitment process very seriously. They spend a lot of money on the interiors and on stocking their stores, but there is no or little investment in recruiting staff. They need to recruit better and put the right people in the right places.

"Staff needs to be properly trained. It should be an ongoing process and companies need to monitor and measure staff performance. How can you train staff and then not monitor what they are doing as then there is no way to find out if they understand what they are selling. Also, how will you measure their strengths and weaknesses?

"Staff performance must be measured regularly and there should be a reward and recognition programme. Companies need to find out what the staff feel about the working environment by doing an employee satisfaction survey that guarantees anonymity and where there is no fear of a backlash. If the staff is happy, then the customer will be happy.

"Also it is vital to get customer feedback from the employees who interact with customers so that you know what the customer needs and feels. So all round communication is important.

"Some brands are practicing good customer service in some locations and not in others. There is inconsistency in recruitment, training and measurement of performance. We found this across outlets, across brands. If one store of the same brand is doing better than the other, they are not learning lessons from each other. There is a lack of communication among brand outlets."

Renno said: "Companies need to focus more on how their customers are being served to start with. The management must assess many facets of customer services, most important of which is the first impression and thereafter the relationship that a staff builds with a new or a repeat customer."
 

PR Survey conducted by my Agency (Renno Communications Group)