December 20, 2022

Why Is Customer Perception Important, and How to Improve It?

Uthaman Bakthikrishnan

Executive Vice President

It is not what you say that matters; what matters most is what they perceive.

What is Customer Perception?

Customer perception is customers’ opinions, feelings, and beliefs about your brand. A company that cares about its customers is more likely to have customers with a good perception of the company. Perception is also a reflection of how customers feel about the company’s vision and mission.

Why is It Important?

What do you do when you want to watch a movie?

I am assuming that you are not a first-day-first-show kind. You read reviews about the movie – not just the critic’s reviews but also look at the social reviews of people similar to you.

You interpret all this information to make a meaningful choice of whether or not to watch the movie. Based on this interpretation, you develop an impression of the film, and it is challenging to change.

This is precisely what customer perception is.

It is influenced by both direct and indirect interactions with your business. It can be social media posts or reviews, online reviews, pricing, quality, and customer experience (CX) – all of this affects the perception.

You can control pricing, quality, and the CX, but you cannot control reviews and posts. You can only influence them. However, it is essential in building customer loyalty, retention, brand reputation, and awareness.

Hence, it is important.

Examples of Customer Perception

Let us understand customer perception better.

I will talk about some experiences to make this understandable and easier.

Example 1

My son would never touch anything that is pink in color or has floral patterns in it – be it his towels, soap boxes, t-shirts, shoes – anything that he wears or uses. For him, pink is not associated with men.

While it is a stereotype, it is a perception created by brands over the years and is not easy to change.

Example 2

A friend of mine runs a traditional handmade snack shop. Handmade snacks come with their own challenges – maintaining consistency in shape, size, and quality because they are handmade.

However, she has established a process on quality and taste, which works 98% of the time. You still would have 2% of the customers who would be unhappy.

What do you do with them?

A couple of days ago, one of the customers spoke to her and said that the crispiness was not there in one of the snack items that she bought.

Her immediate response was, “we are sorry about this experience. Please let us know your address, and we will ship handpicked crispy ones to you immediately.”

The customer was happy to provide the address and receive the replacement products.

No questions asked philosophy to keep the customer happy. She spoke to me about keeping this as her customer experience pitch.

No questions asked returns, refunds, and replacements – how does this sound?

Example 3

I bought life insurance 15 years ago. I had to pay a monthly premium for this insurance. I had opted for auto debit from my account. I was told I could opt out of the insurance within 15 days after receiving the policy documents.

The policy number was created, and the money started debiting from my account every month.

For ten months, I did not receive the insurance documents. After that, I repeatedly followed up with them and got it on the 12^th month.

I didn’t want to continue with them, so I wrote to them within 15 days of receiving the insurance document, stating that I was opting out of the insurance, and I asked them to return all the premiums I paid.

I was told that I had been covered for the whole year, and I didn’t have the choice of opting out. I appealed to the regulatory and the ombudsman, but to no avail.

In the meanwhile, couple more premiums got debited.

So, I finally canceled my auto debit and stopped paying the premium. The money that I paid is lost.

I am adequately covered, and I have relationships with five insurance companies, but not with this one. I have shared this experience with more than 100 people, and I would never return to them.

These are some examples of customer perceptions, and I am sure you would have experienced many such scenarios.

Given that it can have positive and negative connotations, how do you influence them positively?

How to Improve Customer Perception?

Your customers and prospects need to have a great perception of your brand. Only then would they engage with you.

There are multiple ways you can influence your brand’s perception in your customers’ minds.

Here are a few of them that you must do:

1. Allow Discretionary Spending to Your Customer Experience Function

Look at this example.

Ritz-Carlton allows $2000 of discretionary spending to employees to take initiatives to solve problems of customers

How would customers perceive this brand compared to others?

2. Set Values for Your Customer Experience

Zappos is a customer experience company that happens to be in the business of selling shoes. They allow year-long returns and a 100% refund policy. They have three times higher returns than other providers, but Zappos considers this a small sacrifice to provide confidence to their customers.

Zappos asks its employees to live by the following ten values:

Deliver WOW through service
Embrace and drive change
Create fun and a little weirdness
Be adventurous, creative, and open-minded
Pursue growth and learning
Build open and honest relationships with communication
Build a positive team and family spirit
Do more with less
Be passionate and determined
Be humble

These operating values allow you to go to any extent to err on the customers’ side. This is how your customers will perceive you as well.

3. Do Away with the Standard Operating Procedures

I was moderating a panel discussion a few months ago, and one of the panelists shared this anecdote during the session.

He booked a hotel for a 4-night stay in Gurugram using an Online Travel Agency. It was a non-refundable booking. When he checked in, he somehow did not like the hotel and expressed that to the hotel staff. The hotel staff apologized and suggested upgrading him to the suite room.

He wasn’t convinced and decided to shift to a better hotel.

So, he called the Online Travel Agency and told them that he had booked this hotel and wasn’t comfortable staying there. The agent said he would figure out if something could be done while listening to this.

If he had followed the Standard Operating Procedures, the agent would have said, “We are sorry that you don’t like the hotel, but since it is a non-refundable booking, we are not able to help you.”

However, this agent took this up with the higher-ups within the online travel agency, made sure that he got the refund, booked him in another hotel, and helped him with the process of checking in. The agent even checked whether he was comfortable with the new place.

What happened here?

The agent had enough data to know that ‘So and So’ has booked more than 500 nights through their portal in the last ten years. The agent understood that he was a loyal customer of the portal. He was empowered to decide to push for a refund of a non-refundable booking by going against the SOPs.

The agent ensured that the customer’s perception of the brand and the lifetime value only increased with this phenomenal customer experience.

4. Commit to Consistency in Experience

Ensure that there is a seamless hand-off of customers from inside sales to sales to support to customer success.

Everyone in the organization is responsible for customer experience, irrespective of their functions. Have clearly defined KRAs for every role to be the customer experience champion they are expected to be.

This way, customers will be at the center of everything you do, and the brand’s perception will improve.

5. Seek Feedback and Commit to Training

Your customer service professionals are the face of your industry. Listen to them carefully to understand the gaps that exist in your offerings. This would allow you to provide inputs to your product and service teams, which can help fill those gaps.

Use an analytics engine on your voice and screen recordings to understand the gaps in customer engagement. This would act as an input to train your agents continuously.

Commit every agent to attend a minimum number of hours of training as a part of their KRA.

6. Provide a Single View of Your Customers

Break down the data silos between functions, especially when it comes to customer interactions.

For instance, I called customer support asking for my Internet connection to be restored. The support team addresses the issue and calls me up for feedback. While giving feedback, I also mentioned to them about increasing my connection speed and having an additional line at my residence.

Both of these requests are not acted upon because that doesn’t form a part of their KRA.

Provide access to all customer interactions across all channels to your customer-facing teams.

This will allow them to have a single view of your customer interactions.

Your customers will never have to repeat themselves to various functions within your organization. This would improve the experience as well as the perception of your brand.

7. Act-On Customer Feedback

Do you know the number one reason why people don’t provide feedback?

They are not acted upon, and because of this, people don’t feel incentivized to provide feedback.

As soon as you receive the feedback, acknowledge it and respond. If the feedback is positive, you can thank your customers and ask for areas of improvement. If the feedback is negative, you should reach out to them within a few minutes to understand their challenges and resolve them positively.

Any feedback is an opportunity for you to interact with your customers. Customers who provide negative feedback are helping you improve your offerings. So, act on them immediately and respond to your customers regarding the steps you take to resolve their challenges.

Keep them engaged in the process throughout. This would improve the customer perception of your brand tremendously. These negative feedback-to-resolution stories resonate better with your audience than positive feedback.

The bar of customer expectations is constantly rising. What works today will not work tomorrow. You should make use of the latest technologies to serve them simply and easily. Besides the technologies, there has to be a balance between self-service and one-to-one interactions with your customers.

Customer perception is a key to any brand, which can only be enhanced by providing exceptional customer experiences.