Retaining Customers in a Digital World

This Valentines Day I sent my wife flowers, bought her a small gift from Tiffany’s and took her away for the weekend.   All things well deserved for a loving soul mate and mother, who tolerates my constant travel, work schedule, and me in general. 

On February 27^th, I received a hand written thank you note from the Tiffany’s sales associates that assisted me with my purchase.  It’s not uncommon to receive a thank you given Tiffany’s reputation for service, but in the same pile of mail was a hand written thank you from my florist; the first I’ve received after years of doing business with them.  

Minutes later, I received a phone call from Pete, the manager of the Lorien Hotel and Spainviting my me and my wife for a return trip - free of charge - as a result of some service issues we experienced during our stay.  Pete realized that those misfires disrupted an important customer experience (see my note above about “constant travel” and “well deserved”) and offered to make it right. 

Significantly impressed with the three simultaneous acts of kindness, I thought to myself that maybe there is a silver lining to the recession.  Maybe companies have been reminded that customers are, in fact, important to their success. 

A customer defined as an individual, not a segment that scores the highest on a propensity model or an occupation with a “desirable socioeconomic profile.” A person with feelings and beliefs that has had an experience with a brand, a company representative or a product or service, and most likely will decide to buy it again, and/or tell a friend…if that experience was a good one.

In a new study published by Accenture titled; The New Realties of “Dating” in the Digital Age, 85% of consumers who posted a comment about a negative online experience switched providers.  And they are getting harder to please, customer service expectations have been increasing consistently over the last four years with 44% of consumers saying their expectations are slightly or much higher than the previous year, compared to only 31% in 2008.  

The study also identifies five potential blind spots over the course of the provider-customer relationship that could predispose customers to switch providers:

1. Nice to Meet You – Missing the chance to set the right expectations at the onset of the relationship.  
2. You Don’t Know Me Anymore – Missing subtler changes that matter in customers’ need for special treatment or reward. 
3. Cheating Heart – Overlooking signs customers are itching to switch.
4. Are you Listening – Failure to offer consumers opportunities to engage with a provider.
5. Trinkets Won’t Save Me – Relying on point solutions to satisfy and keep customers.

The “cheating heart” effect points to companies over emphasis on retention which may cause them to miss important shifts in buying behavior that may signal a future switch in vendors.  Thankfully, my florist carefully monitors my purchase patterns, and reminds me of purchases I make at certain times of the year (birthdays, anniversaries, etc.), creating a win-win for both of us.  

As the researchers note, failure to notice these subtle changes in behavior puts the company at risk for eventually losing the customer. For example, 27% percent of respondents mentioned that they had stayed with their bank/financial services provider but have added another provider (a partial switch).   A foot out the door that eventually leads to customer attrition. 

Mark Johnson, CEO of Loyalty 360 in an interview identifying the Top Loyalty Trends for 2011 stated, “Loyalty will focus more on emotions than on rational, incentive-based initiatives.  Behavioral economists tell us that economic decision-making is 70% emotional and 30% rational.  Which is why incentive-based loyalty programs that tend to be rational do not work well.  It’s the emotional side of the decision making process that creates connected, passionate, engaged customers.“ 

The thank you cards and the phone call I received were specific to me, and my experience.  They weren’t form letters generated by a transactional or CRM system, based on my purchase.  The notes were hand written by the people who served me and mentioned the specific purchases I made with them.  

They were relevant to me, left an impression, and got me talking about the experience.  I didn’t receive bonus points or special discounts. Instead, I got a response from someone who cared about my experience with their service and product – and that’s how you create connected, engaged customers ...and prevent “a cheating heart.”  

Are Existing Customers 8 Times More Valuable than New Customers?

It’s conventional wisdom  that it is “six to seven times more expensive to gain a new customer than to retain an existing customers.”  Given today’s economic uncertainty, could the inverse also be true?  Could existing customers be six, seven or even eight times more valuable in terms of revenue and growth than new ones?

Frederick Reinchheld of Bain & Company coined the phase based his research on customer retention and acquisition in a study published in the Havard Business Review in 2001.  He would later go on to develop the Net Promoter score, measuring the impact and importance of “loyal enthusiasts” on a company’s performance. 

So for many companies, existing customers are a bellwether investment –  such as gold – in times of instability and uncertainty.  But what the research does not address is the potential existing customers represent.  Many are a goldmine of opportunity for incremental revenue growth that is often missed. 

For example, a financial services company found that because it focused on promoting and selling new products, the majority of new customers acquired in the last 2 years had high penetration of new products (75%) and low penetration of older products (40%). 

The inverse was also true: Customers for more than 10 years had high penetration rates of products older than 10 years at 65%, while new customers had penetration of 37% for those same products.

Marketing promotions, and sales compensation incented behaviors that led to new customers only being exposed to new products.  With existing customers, the company focused on retention and spent little time on trying to sell new products.  As a result, the company discovered a host of cross-sell and up-sell opportunities as a result of this segmentation … opportunities that may exist in many other organizations. I would recommend segmenting your customers by date acquired, and the age of the product they own or use to discover your own goldmine.

This incremental revenue potential, combined with the value a customer represents as a brand advocate (Reinchheld’s Net Promoter Score) powered by social media raises the stakes even further.  It is a solid argument for suggesting that existing customers are in fact, even more valuable than Bain originally suggested ten years ago.

Don’t get me wrong; new products, markets and customers are critical for growth.  I’m not advocating that a company abandon these pursuits, however I am suggesting that given the current situation there might be an overlooked, low-cost opportunity for growth right in the backyard.

You just need to mine it.

Need another reason? At this writing, an ounce of gold is trading at about $1,700..  Two years ago, it traded at $1014, appreciating 68% over this period.  

Treat customers like gold and you might see the same kind of return. 

A Communication Company that Lost the Ability to Communicate

When a life-changing event occurs - like the USA’s Olympic hockey team’s Miracle on Ice- many people remember where they were or what they were doing. I was on the couch when I lost my Fios. It was a Sunday morning (10:02 am to be exact) July 3^rd and I was flipping back and forth between watching the Tour de France team time trial (my favorite stage) and the final of Wimbledon between Nadel and Djokovic (also a favorite sporting event).  

While I was enjoying the tour, my neighbor was in his backyard sinking a shovel into my Fios fiber optic cable, cutting the line. His single move was a triple punch; he took out my TV, landline and the Internet (I also happened to be finalizing the details for our vacation the following week). 

Following the disruption, I immediately checked all the known causes and determined it was outside of the house and outside of my expertise.  Verizon said that because of the holiday, the soonest they could send out a Tech person would be Tuesday, July 5^th.  It’s now August 1^st and I’m still dealing with this issue.  I tried hard not to write this post, but the temporary cable that is still in my backyard is a constant reminder of how this “communications company” has lost the ability to communicate with it’s customers. 

Without boring you with the detail of this mess, what I learned is that the company originally built on providing phone service has forgotten how to use the phone.

• Service Tech reps no longer talk with customers - Instead reps send you a text message when they are on the way or when they missed you. And timing of those texts is also not in sync.  Our rep told us that he was at our house at 9:06 am. However, my wife got a text message at 10:20 am saying that our service was scheduled between 8-12 pm. 
• Customer service cannot talk to the Tech reps – The people scheduling your service cannot directly talk with the reps. We waited for the service tech to engage us in their version of an instant messaging. 
• Customers cannot talk to the dispatcher or the Tech rep – After the rep said he came back in the afternoon and no one was home (that is if you don’t count me staring out the window waiting for him), I was desperate to hunt him down, thinking that he was going to the wrong address. 
• One division cannot talk to another – After I called back to reschedule the third time, my call was accidently routed to Verizon Wireless.  The rep told me he could not route my call back to Verizon Fios because “we’re another company.”  
• Contractors cannot talk to the service department – The tech rep placed a temporary cable through my neighbor’s backyard to restore our service, telling us a contractor would come to sink the line.  The contractor did sink the line, however, he left the temporary line in my backyard (partially chewed up by my 9 month old puppy and the lawn mover). 

In my opinion, the reason for the communication loss is directly related to efficiency and scale.  Verizon has now grown so large that it no longer has to care.  Similar to Sprint in the golden days of wireless, it has momentum on the front end (acquisition) and is trying to make the backend (service) as efficient as possible to bring down the cost to service those customers.  

We were one of the first neighborhoods in the country to receive the Fios service.  Direct mail promoted the service and sales reps went door-to-door signing up customers if they didn’t already get you via telesales.  Cost was not an issue and customer service would do anything to make customers happy while it worked out the bugs in its game-changing product.  

But today, Verizon, like Sprint at its peak (which just recorded it’s 16^th consecutive quarter of losing more customers than it has acquired), appears to be driving as much cost out of operations as possible by placing efficiency ahead of effectiveness.  

I can attest to the fact that using text, IM and other non-personal communication vehicles may be efficient, but certainly not effective.  Customers feel the pain and companies have no way to sense it because they have removed the person.

This quest for scalable efficiency also relates to the way technology is configured.  For example, during this ordeal my DVR cable box went out.  I called the service department to report the cable box and to request (again) that they send someone out to remove the cable from my backyard.  The box arrived a few days later, however, the technician did not.

When I called Verizon to find out what happened, they said that they could only enter one trouble ticket per call.  This is another area where efficiency breaks down.  Complex problems with multiple steps do not easily follow a service process designed for speed.  Reps have to work with customers to solve problems and many times it involves multiple steps.  If reps are compensated for how many calls they take, talk time (as little as possible with customers), and one call resolution, reps will pass on anything they view as time consuming. 

The lesson I learned is that bigger is not necessarily better.  I have 3 wireless phones, Internet, TV and a landline with Verizon.  It’s inconvenient and would be somewhat painful for me to switch (and for some services I’m contractually obligated to pay fees if I cancel). All this gives Verizon leverage.  While I enjoy paying one bill, I don’t like being treated as a number.   

Just as Sprint learned the painful lesson of being too big to care, so will Verizon.  And I look forward to that day, but until then, Verizon get your damn cable out of my backyard. 

Apple Killed the Radio Star

When MTV launched on August 1, 1981, the first video played was “Video Killed the Radio Star” by the Buggles.  It was a warning shot across the bow of the “establishment” that the world was about to change.   I still remember where I was that day; at beach week with a bunch of other high school knuckleheads, wasting our day watching MTV instead of being on the beach.   It was our “big thing,” as we were to become the “MTV generation.”       

Last week, Apple basically made the same statement when they announced ICloud.  Steve Jobs proclaimed: “We’re going to demote the PC and Mac to just be a device…is equivalent to saying the “Cloud Killed the PC Star.”  An amazing comment coming from the company that helped create the personal computer segment with the Apple I and Apple II in 70’s & early 80’s. 

How is it that Apple - a company that was almost out of business 15 years ago - produces home run after home run, and now threatens to cannibalizing one of its core products, the MacBook?  What has changed over the last decade and a half?  Besides the obvious, including culture, resources, and talent, there are four key drivers of their success.  

1.     Learning from the past – Apple has learned that it no longer has to be the innovator of the technology; a learned behavior I attribute to observing the success of Microsoft.   Apple’s strategy has shifted to creating innovative products built off existing technology.   For example, the IPod was a better MP3 player (or DAP).  The IPhone is a better Smartphone.  The IPad – is an infinitely better version of a Netbook.  And the Cloud, not exactly born yesterday.

2.     Timing the market – Apple now allows others (similar to Microsoft) to create the market.  They model the adoption curve and introduce products just as consumer adoption is about to take off (typical 2-4 years after the technology is introduced).    This allows them to learn from consumer usage and hit the market at the right time with a better product. 

3.     It’s the App + the cool device – Apple learned this lesson early and probably applied it better than anyone in the industry.   Not only do they design a great looking product but they also get how consumers want to use it. And their open-source platform allows troves of software programmers and developers to create programs to be used and loved by the masses, further increasing the desirability to own their hardware.  Enabling that functionality also happens to create incredibly scalable revenue streams.  

4.     Being held accountable and challenged by customers– this is perhaps the most important success driver for Apple.  Each year Jobs knows he has to go in front of thousands of rabid Apple fans with something new.  There is no time to rest or to be complicit with their current success; Apple fans want to know what‘s next and desire to be wowed by it.  As a result, Apple has to constantly be in “innovation” mode.  This creates, maintains, and nurtures their culture.  We all know that often times, we produce our best work or solution for our most difficult customers and clients.  Apple embraces this and uses it to fuel future product development unlike any of their competitors or any other company for that matter. 

So what’s the next big thing for Apple?  Well, if you follow the formula above just track new technology innovations, give it 2-3 years and voila…a new Apple product.    In the meantime, look for the IPAD to take over the world.   My kids will be probably be known as the “IPAD generation.”  

Customer Engagement and the Mini-Cooper

Owners of the Mini-Cooper have long been known to be one of the most fanatical and loyal of all owners.  They are likely to custom design their cars online, actively participate in local motoring clubs, and are in general, a passionate and faithful community.  

A new project took me to the mid-west where I finally got a taste of the Mini-Cooper, courtesy of Budget rental cars.   Initially, I was excited by the opportunity to find out what the buzz was about, but after getting in the little red car with white racing stripes, I quickly found myself totally discombobulated.  It was like the car was designed by aliens, nothing was where it is should of been.

I couldn’t operate the windows the first half of the day, drove around with my blinker on for the other half.  The radio settings were in the speedometer, and the tachometer was where the speedometer should have been.  Even the gas gauge wasn’t a gauge at all, but rather a circle of lights.

The “Coop” had all the same instruments any other car has, but they were in different locations and/or in different forms.  I’m still not convinced if the lay out of the dashboard is better, but one thing is true -- I was fully engaged, I had to be.  Even though I’ve been driving for almost 30 years I was a stranger in a strange land.  Suddenly, driving was fun again.

It got me thinking about how we engage customers.  There is a bunch of noise being made about customer engagement; the question for most of us is how to make it happen.  Intuitively it makes sense, but from an execution standpoint, it’s still a bit of a mystery. 

We have seen traditional response rates drop, and have begun experimenting with Social Media with little, to no, payoff.  Although the true upside of customer engagement may still yet to be defined, a Gallup research report points to it as a leading indicator for customer attrition.  In some ways we’re searching for the Holy Grail, but maybe new isn’t the answer, maybe we have what we need.

As I sat at a stoplight and stared at the dashboard trying to make sense out of it, it hit me: It was if the Mini-Cooper engineers intentional redesigned and/or rethought everything, most likely with the intent of keeping the Coop customer base happy and engaged with it’s quirkiness.

It showed me that you could create an engaging experience by leveraging what you already have.  Granted, had I been on a tight schedule, I may not of enjoyed having to “get up to speed."  I was in a city that I had never visited and driving to see a client I’ve never met.  I had my hands full directing the GPS, a stick shift, and a conference call.

I am not suggesting rearranging mission critical assets for key customers but what I am offering is this…maybe we need to rethink how customers engage and interact with our sales people, customer service reps, and the web.  Like the engineers at Mini-Cooper, we need apply our creative thinking skills to reordering our assets to provide customers with what they want, but delivered in new and intriguing ways.

At the end of the day the Mini-Cooper still provides basic transportation - I got from point A to point B, but getting there was uncomfortable, scary, exciting and fun.   Much of what we provide customers is basic "transportation," and "mixing it up" can be scary, but it also may be the key to getting customers’ attention again.   

The Customer or the Company Line

I was walking out of a meeting in New York yesterday and noticed that I had a missed call -- It was American Express who had called to alert me that someone in London was trying to charge $500 in telecommunications equipment (most likely, mobile phones) on my card.

Later that night, I was online paying my Capital One MasterCard and found that someone used my card on December 14th to purchase something with a vendor based in Riyadh, Saudi Arabia...and that person wasn't me.  Christmas is the high season for credit card fraud and I was living it. The only two credit cards I have were both under attack.

The way the two companies dealt with the fraud situation was so different that it became a real time case study on the "best" and "worst" practices for dealing with customers.  The key difference came down to the rep's ability to deal with me as a customer, versus sticking to the company policy.

The Best and the Worst

Detecting Fraud

American Express
I had been in London a couple of weeks ago, and most likely, one of the night clerks at the hotel where I stayed sold my Amex card number.  American Express, knowing that I had recently purchased train tickets to New York the day before, figured out that I couldn't be in two places at once, and stopped the transaction from going through.

Capital One
Clueless I had to report the fraud.  Granted the two transactions were only $10.50 each, but the location of the transactions should have flagged them for further investigation.  I caught them more than a week after the charges were made, Capital One had plenty of time to detect and investigate.  Living in McLean, VA, which happens to be the headquarters of Capital One, I know folks who work there, and having had MasterCard as a client for the past six years, I know a good bit about the credit card business, and CapOne.

I know that CapOne has very sophisticated models for segmenting and targeting customers, analyzing purchasing behavior, etc.  They have no lack of intelligence or technology that would prevent them from detecting fraud, it just may be a matter of focus.

Dealing with Fraud
American Express
Closed my account, alerted the merchant, and sent me a new card via Fedex.  It arrived the next day.

Capital One
Questioned me not one, but three times about whether I knew the merchant and if I had made the purchase.  I asked the CapOne rep to give me more information on the transaction.  She said she couldn't because the details were in Arabic.  I pulled the website, and it was in Arabic.  Despite not speaking or reading Arabic, and stating that several times, I was questioned about the transaction repeatedly.

After closing the account, I was then told a new card would be sent in 5-7 days, and that a form would be sent that I would need to fill out and return.  I asked what additional information they would need that I hadn't already reported.  The rep didn't have an answer, only telling that it was company policy.  At that point, I was "done" and ask for a manager.

I asked the same question to the managers, again the same answer.  I then reminded her that the date was 12/21, the last week before Christmas, and both of my credit cards were used fraudulently.  She said that she understood and would get a new card out to me in 2-3 days.   At that point, I asked for her manager, and finally, I was transferred to the Fraud department.  

Allen was nice enough, and was able to explain the reason for the form.  They needed a signature authorizing that I did not make the transactions so they could dispute the case.  I asked Allen if they were recording our conversation (as Amex did), and if we could just use that to support the case.  The answer was "No. We need the form."  Allen did say that he understood my situation, and would express a new card to me in 2-3 days.

Dealing with the Customer  
Over the years, I've done a good bit of research on defining the "Customer Experience."  When you ask customers what they want, the answers are fairly consistent regardless of company or industry:

• Know me - customers want companies to know them and understand their situation...how their product or services fits a need.  They also want them to anticipate and serve their needs.  With the increased use of social media, that has only increased. 
• Serve me - resolve my issues quickly...turn the "unpleasant into the pleasant."  Remember that I'm the customer, and I have options.  
• Empower me - give me access to resolve my own issues, or empower the employee that I'm speaking with to do it for me.

It sounds simple but it's, as I just experienced, difficult to execute.  The CapOne reps and managers were very nice but they weren't empowered to resolve my issue, or go off script.  Both call centers were outsourced, and probably all reps and managers I spoke with were following company policy and scripts.  The difference was that Amex knew my situation, anticipated my concerns, and resolved my issue in one phone call with one rep -- efficiently and stress free.

Two shopping days left, what's in my wallet?   American Express.

Inside the Ritz Carlton Customer Experience Model

For years, the Ritz-Carlton has been recognized for its ability to delight customers.  Although I’ve used them frequently as a best in class example for clients, I never truly experienced what makes them so good…until now.

My family and I just returned for our summer vacation where we had the good fortune of staying at the Ritz-Carlton on Grand Cayman in the Cayman Islands for the week.  While we originally booked the Marriott, a special off-season promotion through American Express and the loss of our family pet that week led to a change of plans.  

The experience was memorable even though the weather wasn’t exactly…we now understand why it’s called the off-season.  Nonetheless, during our stay we were continually delighted by the service we received. 

The Ritz-Carlton has created a perception of exceptional quality and service, and the staff delivers on it.    They are in the hospitality industry, and as a result it’s “people” business.  But their model is not just as simple as ‘serve the customer.”  They add interact, engage, and listen to the customer.  So simple and intuitive that it makes you wonder why other companies can’t do the same.   

 

Examples of how they bring this to life:    

•  The Customer Experience – not only do they understand how you might want to spend your time on vacation, they anticipate it.   For example, in the mornings by the front door they had a jogging trail map, cold towels, bottled water, and a sign welcoming back joggers.  They also set up a water cooler at the water sport station anticipating that guests want water given the amount of salt water inhaled while snorkeling…maybe that was just me.

• The Little Things – If you preferred to run indoors, they had a full service health club complete with trainers.   The most interesting thing in the gym was a 2-inch piece of a foam noodle, commonly used to float in a pool, in the cup holder of the treadmills.   It served as shock absorber, and it elevated your bottle making it easier to reach while you where running.  I’ve been in a lot of gyms in my life and none of them have had this…only the Ritz.  Most likely this insightful and accommodating amenity came from listening to customer feedback. 

• Going Beyond the Role –The doorman was our personal tour guide.  He told taxis were to take us for dinner, marked up maps on top snorkeling spots when we rented a car, and gave me directions on where I should run in the morning.  And of course, he inquired about our experiences each time we returned.   Similarly, our waitress at breakfast was also our personal shopper.   She told us the shops with the best deals, the best places for kids, etc.  Despite their title and/or their role, these employees played an essential part in defining our customer experience by going above and beyond the call of duty.

• It’s about the BRAND – They understand and maintain the brand like few others.  The tennis courts by Nick Bollettieri, the golf course designed by Greg Norman, the world famous Silver Rain Spa from Sweden, and for good measure Tiffany’s onsite.   Brand was everywhere, on water bottles, towels, the morning newsletter, etc.   A premier brand that only associates with other premier brands. 

• Creating the Perception of Value – This gets back to understanding what guests want to do during their vacation.   The Ritz charged a $35 a day resort fee.  That fee included the use of water sport equipment like snorkeling gear, kayaks, and paddleboards, but then they charged for other items like Hobbie Cat sailboats, etc.  The nearby Marriott on the other hand had outsourced their water sports to a local vendor that charged $15 a day for snorkeling gear, and $25 dollars an hour for Kayaks, etc.                                                 With a reef just in front of both hotels, guests at both snorkeled almost every day and/or used the gear to snorkel at other locations around the island.   For a family of four, we paid $35 a day for 4 snorkel sets plus the use of the other items listed above.  Marriott guests paid $60 a day simply for the snorkeling gear.  Anticipating that guests would use snorkeling gear daily, The Ritz built it into a daily fee which we learned about at the beginning of our stay, instead of feeling like we were being “nickeled and dimed” to death each time by renting daily.  Packaging “solutions” is a constant challenge for most organizations.   The Ritz understands how customers want to use their products so it can build high value solutions.  

• Technology – the staff on the beach and at the front door wore headsets and microphones.   As I mentioned earlier the staff took the time to personalize your visit and get to know you and your name.  As you went from one location to another they would alert their counterpart that you were on your way.  This provided them time to greet you by name and to anticipate what you might want…towels for the beach, a taxi, etc.  Simple CRM, applied in a very effective manner.

• Constant Collection and Use of Customer Information – Regardless of where their staff came from (France, Bali, England, etc.) they all took an interest in their guest’s stay.  They collected information about what they liked, disliked, and then preserved it to pass along to other guests.  In a sense, staff members built their own internal Trip Advisor based on guest feedback.  For example, one night we wanted to go to a Mexican restaurant for dinner.  I searched in a local restaurant guide and found one.  When I asked the Concierge about it, she said she never heard of it, and recommended another restaurant.  Finally I found a person at the front desk that knew where it was, but he proceeded to recommend the same restaurant as the Concierge.   Deciding that the other restaurant was too far, we went with the one I found. It was terrible.  No one knew of it for a reason.  Even the Taxi couldn’t find it despite having been on the island for 20 years, and it turned out to be only 2.5 miles from the hotel.

Ultimately the secret to their success is simple…they understand, personify, and cherish the brand, and they engage and listen to the customer.

  

5 Key Questions for Creating a Compelling Value Proposition & an Integrated Communication Plan

I’m about to share with you the secret formula for; 1) creating a rock solid, compelling value proposition (for products, services, solutions, etc.) and, 2) aligning (enterprise wide) your corporate communications. It will seem like a very simple approach, and it is, but once you try to get consistent answers from the organization to the following questions (in order) you will understand why this is so challenging...and why so many companies fail.

Keep this in mind, effective communication to customers must happen through a consistent delivery of the right message, to the right customer, at the right time, in the right channels to facilitate effective, efficient dialogue.

This is how you do it. You have to be able to collectively (with the right internal groups) answer the following five questions in order:

1. Who? – what audience/segment are you targeting, and why
2. What? – what do you want/have to say to that segment that is relevant
3. Why? – why would they listen
4. When? – when do you contact them, and how often
5. Where? – where do they want to receive the message

Sounds simple right? If only. Here are a list of challenges you will face when go through the process:

• Who - right off the bat, you will find folks arguing about your target audience, the segmentation approach, the segments, etc.
• What – oh, you’ll have plenty of things you what to tell whatever audience you settle on but you will struggle with relevancy
• Why - now comes the killer question…why would they listen? Seen this question bring grown men (and women) to their knees. The reasons are many; Marketers don’t understand the products, products aren’t differentiated, etc. Getting this question right is the key to the whole process.
• When – the challenge is deciding on at what point in a sales process, a marketing campaign, events, etc., and the frequency of contact. Touch them too often and/or at the wrong point you’ll get opt-outs, too infrequently, you’ll get no mindshare.
• Where – notice that I said, "they", and not "you" on where the communication happens. Yes, it's about your customer and where they go for information not where you want to put it. Find out where your audience goes to get information and/or determine their perference for receiving it. The othe challenge is ensuring that the message fits the channel. Certain messages/value proposition, etc. fit a certain channel better than others. It’s worth the time to figure this out.

This approach creates an execellent output but it will take time, discipline and many iterations to get right...good luck.

US Airlines…Nickle and Dime Nosedive

Last week I took a flight to Orlando. Since I fly a good bit and I have reached a preferred status (whatever that means) on USAir, I got bumped up to first class. Big deal! No meal, a 30-year-old plane, a terminal and jet port that looked out of a third-world country. I know I sound like a whiner, but hang on, I have a point.

The industry that led the way on defining the customer experience in the glory days of “jetting” and customer loyalty with reward cards has lost its way. In particular, the U.S. carriers are lost in a forest of bankruptcy. As the rest of the world moves towards enhancing customer experiences and building customer advocacy, the airline industry seems to be doing everything it can to move in the opposite direction.

For example, the airline I mentioned above now charges $15 dollars for the first (yes, the first) bag checked. As a result of that brilliant money making idea, we now have flights delayed because everyone is trying to jam their bag into an overhead. Or how about charging for water, tea or coffee? Brilliant. Yes, on this same airline coffee and sodas will now cost you two dollars. On the flight down the price of beer and wine was $6; two days later on the return it was $7. It’s probably close to $10 by now.

Maybe you’re saying that they have to do that because of fuel cost, labor cost, etc. Well then, how is it that Virgin Airlines, in particular Virgin Atlantic in the States is able to make money in this industry despite its new planes, expansion of routes, etc. Because Sir Richard knows it’s about the Customer Experience!

Southwest Airlines has turned this into a whole campaign. The strong, well managed will make the weak pay for this approach. The bottom line is that “nickel and diming” your passengers/customers isn’t going to make the airline profitable again. In fact, it will probably do the opposite.

What will help restore profitability to the airlines? Well I’ve a got a few ideas: how about we start with Innovation…and then good management practices and …and then decent labor contracts, etc.! BusinessWeek ran an piece on the performance of innovative companies in its September 22, 2008 edition (see image to the left) . Companies known for delivering innovative customer experiences have an average stock return of 2.5% and revenue growth of 5.1% from 2004-07. Those with innovative business models were more impressive with a 16.6% return and 7.2% growth.

So I say to the airlines, to get flying again…innovate yourself out of this nosedive…and give me back my free coffee!

The Customer Experience...and why your company can't deliver it

Let the bloggin resume, thought that you might enjoy hearing this story.

What your customers (and your sales force) are trying to tell you about the customer experience

Pick up any book on Customer Service and the first tip on how to improve or provide a good customer service experience is to “listen to the customer…” This advice is so incredibly obvious and intuitive that you shouldn’t need a book to tell you that! Yet putting it into practice is incredibly hard to deliver. Why? customers want...at least one company's customers

We recently completed a project for a Transportation Company on improving its customer service operation. Our task was to find out what their customer wanted in a good customer service experience. We surveyed over 500 customers, conducted multiple focus groups and held one-on-one interviews. And after all that data collection, what did the customers say they wanted?

They wanted the company to…get ready for this…”know them.” Know them and their business, and have an understanding of their business so that you can anticipate their needs and be a valuable partner. Doesn’t sound too difficult to deliver, right?

In this company’s case, it is difficult. They have no customer service standards and no rules to govern interactions. Oh, they also lack a centralized customer database or incentives to capture and archive customer conversation and data. To make matters worse they deliver customer service in a decentralize environment with over 100 centers, all operating independently.

Given that scenario you would think that this company could implement some simple fixes that would have a big impact—and there are some simple fixes. But what is interesting is why the company is in this state in the first place. When you get to the core issue you begin to understand the challenge.

At its core, this is an operations driven company, and customers can sometimes get in the way of efficiency. Their culture and core operating model is to move a box as quickly as possible from point A to B without damaging it. Customers who have special needs and/or require assistance slow the process down. In this company’s environment, delivering good customer service can sometimes be too costly and/or too inconvenient. The bottom line is that the process is more important than the customer.

So what does this tell us? Well, it may begin to explain why your company can’t deliver on customer expectations as well.

This is the introduction to a white paper on improving the customer experience that will be released soon. To receive a copy of the full story please click here.