Tech Bytes & Insights

Irish Lessons on Converting New Customers into Advocates

Posted by Raj Sivasubramanian on Thu, Mar 14, 2013

raj st patricks dayEvery year around Saint Patrick’s Day, I find myself reminiscing about my first trip to Ireland when I was in college. It was a memorable experience as I was captivated by the Irish people, culture, natural beauty, music and ... whiskey.

My interest in Irish whiskey formed during a visit to the Old Jameson Distillery in Dublin. The Jameson I had was better than any other whiskey I’d had before, but the overall experience of  visiting the distillery had the lasting impact. The guides were exceptionally friendly, the tour was educational and I tasted Jameson against several other whiskeys and received a certificate proclaiming me a “Certified Irish Whiskey Taste Tester.” Jameson quickly became my drink of choice after this trip. Over time, I have started to appreciate other quality whiskeys, but I still remain a very loyal Jameson consumer. My loyalty is entirely due to the exceptional customer experience Jameson provided during my first interaction with the brand.

My story illustrates the power that a first impression can have on long-term customer loyalty. In my last blog, I discussed some tactics to improve Net Promoter Scores that were geared toward existing customers. But a new customer represents an opportunity to introduce your product, service or brand through a formative initial experience and, in turn, establish a new promoter and drive long-term loyalty and advocacy.

A study ZS recently conducted for an online retailer revealed that new customers who experienced a problem with a purchase in their first three months had a 60-point lower NPS than new customers with a problem-free initial three months. For customers with at least three months of tenure, the NPS impact of a bad experience was 18 points, far less pronounced than the new customer impact. Additionally, longer-tenured customers who reported multiple problems still had a higher NPS than new customers who reported just a single bad experience in their first three months. These longer-term customers were likely to be more forgiving of issues that occurred later in their relationship with the retailer because of a great initial experience.

Due to the pronounced impact initial experiences can have on customer perception, new customers should be a priority segment of your Voice of Customer program. When measuring new customer perception, key factors to understand are:

1. Drivers of new customer satisfaction

2. Time required to build a bank of goodwill

For me with Jameson, an exceptional tour during my first experience was enough to make me a loyal customer. For the retailer I referenced, having problem-free transactions was the key driver and three months was a sufficient time frame.

For most companies in the tech industry, new customer loyalty won’t be as simple as a gimmicky certificate or delivering a perfect first three months. Determining what is required to turn your new customers into loyal advocates can be achieved by engaging with your new customers through a variety of methods, notably these three:

1. Asking: Put mechanisms in place to gather feedback from your new customers immediately after their first interaction with your company and if possible before their first purchase.

2. Observing: Use tools such as social-media monitoring and Web usage analysis to gather unsolicited feedback from new customers.

3. Participating: Create low-risk trial or demo programs for new customers that allow them to try your products or services before making a commitment.

Integrated feedback methods should be used to drive improvements in your new customer’s experience. This requires investment of time and effort, but the long-term payoff can be substantial.

On that note, I am off to commemorate Saint Patrick’s Day … with a glass, of course, of Jameson.


About the Author

Raj Sivasubramanian is a Consultant in ZS Associates' San Mateo office. Raj, a core member of ZS's High Tech Practice, focuses primarily on working with clients to develop their customer insights capabilities. Raj holds a B.S. in Electrical Engineering from Georgia Tech and an M.B.A. from the Haas School of Business at the University of California at Berkeley.

 

Topics: Raj Sivasubramanian, Net Promoter Score, customer loyalty, Voice of Customer (VoC) programs

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