Saturday, June 30, 2012

Did You Ever Hear of the Gettysburg Principles

David Weinberger wrote an interesting article in the Harvard Business Review which describes an interesting perspective of how to build customer loyalty. He offers the question of whether a company meets the Gettysburg principles. From Lincoln's Gettysburg address the question asks for a given business is your business of the people, by the people and for the people?

OF THE PEOPLE means that the company appears to share the same values as its customers. It also appears to treat its employees like individuals rather than numbers. It also has a sense of humor and can admit it is not perfect. Mr Weinberger suggests that Ben and Jerry's does a pretty good job of being OF THE PEOPLE.

BY THE PEOPLE means that customers appear to have played a part in creating it. Wikipedia is just such a company. Customers beleive they are a part of the company even if when they have no ownership.

FOR THE PEOPLE means the company is completely focused on the customer. The company wants to satisfy the customer with every aspect of its business. Apple stores may be a good example of being FOR THE PEOPLE.

It is not easy to provide customers with all the principles to get loyalty. It is possible to gain loyalty by meeting two of the three principles. The good news is that each principle is not a black or white characteristic. That means it is not that you either have it or you don't. There is a range of values for each and a company does not need a perfect score for a principle for it be considered.

Some of the examples that Weinberger are:
1. Amazon provides excellent customer service makes it a company FOR THE PEOPLE. It's openness and the fact that it provides openness of its customer reviews suggests it is BY THE PEOPLE. however, its corporateness does not offer customers a chance to feel that it is OF THE PEOPLE.

2. Craigslist seems to hit all three principles. It seems to have built loyalty even though better technology services have come along because it appears to satisfy all three principles.

3. Google has hit all three in the past. Since it has become a mega corporation it is no longer OF THE PEOPLE and with its increasing interest in putting advertising on the pasges it is losing its ability to be FOR THE PEOPLE.

4. Facebook seems to be clearly BY THE PEOPLE. It no longer feels like it is OF THE PEOPLE or FOR THE PEOPLE. The loss of these two principles may be one of the reasons that Facebook is losing some of the glamor it once had.

These three principle really are another way of stating customer loyalty.

The bottom line is that companies should try to be OF US or FOR US even when it can't be BY US. When a company loses sight of these principles, customers will lose the connection and become vulnerable to competitive offers. When selling on the internet that competitive offer may be only one click away.

Wednesday, June 20, 2012

A New Dimension - Customer Rage

A national phone survey of 10,000 households was completed in September, 2011. The study was performed by the Center for Services Leadership at the W.P Carey School of Business at Arizona State University. The objective was to get an in-depth look at dissatisfaction.

The results of the study suggests that more than 50 million Americans had a problem with a product or service bought with the past year. The study is based on one conducted by the White House in 1976. This study is the fifth wave of that original study.

Some of the findings of the study are:
1. Complainant satisfaction has decreased 2% since the original study.
2. 90% of those complaining in the latest survey say they just wanted to be treated with dignity.
3. 40% believed they were treated with dignity.
4. The percent of respondents who reported experiencing a product or service problem has increased from 32% in the original study through a gradual climb to 45% in the most recent study.
5. The number of angry customers is high but the level of rage has dropped from 68% in the 2003 to 2011 to 60% in the new study.

In this case rage is noted as those customers who were either extremely or very upset.

Some other findings included the following:
1. The biggest peeve is customers lose time dealing with the problem. The average number of contacts required to resolve a problem was 4.4 contacts.
2. 61% of those who complain say the time spent complaining was worthwhile.
3. 88% of those in the new study shared their story with others.
4. 27% of those who complained posted the problem to the Internet.
5. More people posted good experiences to the the Internet that those who posted bad experiences by a margin of two-to-one.

The study indicated that spreading stories by social networking is more than 11 times greater than traditional word of mouth.

Ultimately 47% of those who complained felt they got nothing.

The bottom line is that customers appear to be complaining more and getting little satisfaction as a result of their complaining. Studies in the past have shown that ineffective handling of customer problems may be worse than not responding to complaints at all. On the other hand a well managed complaint can increase customer loyalty. The decision of which is better is obvious. This is not rocket science.

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