Why businesses should focus on maintaining consumer confidence
Consumer confidence can be lost for a variety of reasons. Reasons for loss of customer confidence may range from selling faulty products to experiences where poor customer service was received. One of the largest reasons a company will lose customer confidence is when it possesses an inability to handle complaints and solve problems. These days companies also face the challenge of maintaining trust in light of the growing incidences of data breaches.
Any or all of these actions can prove to be problematic for a company, because a loss of consumer confidence can result in many negative consequences. Companies these days should strive to not only meet customer expectations but exceed them. If maintaining consumer confidence isn't a top priority, it should be for a number of reasons.
Customer satisfaction and profitability share an intrinsic relationship; profitability cannot happen without a solid customer base willing to make purchases, preferably again and again.
Take Tylenol as an example. For many years this brand was a trusted over-the-counter medicine that consumers felt confident in giving to their family members of all ages. Back in the early 1980s, the company overcame the cyanide crisis through swift action and quickly restored customer confidence. However, due to many recalls in 2010 which were related to quality control, consumer confidence rapidly began to fall and the company was not as easily able to maintain assurance as they did during the earlier crisis. Some recent examples include Target, Home Depot, Yahoo! and Anthem with their respective massive data breaches (to name a few, there are many more, these are just some of the biggies!)
Businesses who have a proactive plan to address customer relations issues can go a long way in reestablishing and/or keeping consumer confidence. The best way to maintain confidence is to not lose it in the first place due to faulty business practices. However, if issues were not able to be avoided, the next best approach is to move swiftly to resolve issues and/or correct the problem. There should always be a contingency plan.
An important relationship exists between the ability to sustain and customer confidence. Once consumers no longer trust a business, the business will suffer negative effects. Rather than travel down this road, companies are better off maintaining strong levels of quality control and keep a close pulse on how their brand is doing in the eyes of consumers. Including transparency, if a problem (such as a data breach or recall) emerges. This way it decreases the chance of consumer confidence being lost and the negative effects of losing confidence is significantly decreased.
Any or all of these actions can prove to be problematic for a company, because a loss of consumer confidence can result in many negative consequences. Companies these days should strive to not only meet customer expectations but exceed them. If maintaining consumer confidence isn't a top priority, it should be for a number of reasons.
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| Image credit: Geralt via Pixabay |
Decreased consumer loyalty
Customers who do not feel they have gotten what they paid for, or are unsatisfied with the transaction in any way, are likely not to become return customers. There is a lot of competition in most given industries and, rather than be dissatisfied, consumers will simply turn to a competitor to meet their needs. It's easy these days to hop online and do a Google search. A business that cannot successfully grow customer loyalty is going to find itself struggling to maintain any sort of reliable customer base which will eventually lead to long-term problems with profitability.
Lost profits
Customers that do not have confidence in a business are not going to buy from that company. Pure and simple. As a result, the company will not be able to increase its revenues and expand. If enough customers are dissatisfied the company could experience a loss, perhaps severe enough where it is forced to close its doors. Especially these days with social media, word gets around quick.
Customer satisfaction and profitability share an intrinsic relationship; profitability cannot happen without a solid customer base willing to make purchases, preferably again and again.
Brand suffers
Branding is a vital component of longevity for a business. If a company cannot effectively maintain a positive brand image, customer confidence will fall. As a result, the business will have difficulty sustaining.
Take Tylenol as an example. For many years this brand was a trusted over-the-counter medicine that consumers felt confident in giving to their family members of all ages. Back in the early 1980s, the company overcame the cyanide crisis through swift action and quickly restored customer confidence. However, due to many recalls in 2010 which were related to quality control, consumer confidence rapidly began to fall and the company was not as easily able to maintain assurance as they did during the earlier crisis. Some recent examples include Target, Home Depot, Yahoo! and Anthem with their respective massive data breaches (to name a few, there are many more, these are just some of the biggies!)
Businesses who have a proactive plan to address customer relations issues can go a long way in reestablishing and/or keeping consumer confidence. The best way to maintain confidence is to not lose it in the first place due to faulty business practices. However, if issues were not able to be avoided, the next best approach is to move swiftly to resolve issues and/or correct the problem. There should always be a contingency plan.
Inability to grow
Companies that do not profit or have a loyal customer base cannot expand and grow. As a result, the business remains stagnant instead of seeing growth. Over the course of time, there is a high probability the business will fail.
An important relationship exists between the ability to sustain and customer confidence. Once consumers no longer trust a business, the business will suffer negative effects. Rather than travel down this road, companies are better off maintaining strong levels of quality control and keep a close pulse on how their brand is doing in the eyes of consumers. Including transparency, if a problem (such as a data breach or recall) emerges. This way it decreases the chance of consumer confidence being lost and the negative effects of losing confidence is significantly decreased.
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