Thursday, May 23, 2013

Do You Think Your Customers Don't Know You Are Watching Them?

The book 1984 brings to mind the concern that big Brother is watching you. The Radicatti Group recently published the results of the study that shows that as much as 83% of all e-mail traffic is spam. Customers are wary of sharing their e-mail addresses and personal information for fear that information will be used for purposes other than their benefit.

There is an anxiety in the marketplace that companies are being too invasive with respect to their customers. With this comes the assumption that collecting data from the customers invades their privacy. The underlying customer assumption that many companies make is customers lack a faith in believing that the information gathered by the company is for their benefit.  This assumption may no longer be true.

If 21st century companies do not understand that customers already know that they are watching them and accruing information about them, they are either na├»ve or don’t care. In fact, there is a cultural shift with customers that is slowly taking place. Many customers no longer see data collection as being inherently invasive; rather customers are beginning to understand that the data they provide has the potential to reduce costs (and prices) and improve services.

The key gradients to move customers from not trusting the company to use their data are: (1) trust and (2) communication. In other words, 21st-century companies need to focus on communication with the customers so they can build a strong relationship and understanding of how the information will be used. This only occurs when there is trust between the company and the customer.

One point that companies overlook is that they are asking for something of value from their customers (information about the customer) without “paying” them for it.  In this sense “paying” the customer means giving the customers something of value in return for the valuable information that they have just given the company.  

The bottom line is customer data has value to the company and the company should be willing to return value directly to their customers for that data. Customers in 21st-century are wise enough to know that you as a company are watching them and capturing data about them. When you communicate with your customers and show them that the information they share with you will be used to improve the quality of your products and services, they will be able to see and appreciate why it is important for them to provide that data. The next step is to return something of value to your customers.
Trust is required by the company so that customers will provide accurate information. Trust is also required by the customers that the information that they share is for the sole benefit of the company to improve the level of product quality and service. We can only hope that the company and their customers will honor that trust.

Friday, May 17, 2013

What About the Customers in the Middle?

There is a general rule in the market that customers will generally only offer feedback when they either have a really bad experience or great one.  If you believe that customers rarely say a word when their experience falls somewhere in the middle you are missing some valuable information. The point here is that most of the customers will typically be in the middle and they are the ones that will drive the success or the failure of business.

Most companies maintain a well-oiled customer satisfaction measurement system. There may be additional dimensions to the measurement that will lead them to believe that they are also measuring customer loyalty. When companies measure customers that have either had a bad experience or good experience, their measurement is inherently biased. They have missed the opportunity of measuring their entire database of customers from this selection process.

Most customers will reside in the middle and will not have had either a bad or great experience.  They are generally ignored and not measured.  In order to understand the customer experience of your entire customer base it is necessary to include those customers in the middle.  ForeSee, a survey company, ran an experiment that compared customer satisfaction scores from satisfaction surveys (which probably measured responses from customers with a recent experience) and then compared the scores from a random sample survey which included all customers. They found that the random sampling does a better job of measuring the wider range of customer experiences rather than just a select group of customers that often respond to the surveys from good and bad experiences.

A boss I had many years ago reminded me not to expect what I don't inspect.  The bottom line is that measurement of customer satisfaction must be done properly. The process of customer selection must include the customers in the middle.  If you are currently measuring only the customers with bad experiences and customers with great experiences you may be missing out on some rich information that resides with the customers in the middle. 

Saturday, May 11, 2013

Satisfaction Has a Legal Meaning

You may not be aware that the term "satisfaction guaranteed" has a legal meaning.  The Federal trade commission’s advertising rules are very specific about using the term "satisfaction guaranteed." Most courts when addressing cases regarding satisfaction have stated that satisfaction means "what ever a reasonable person would expect from a product or service."

The Better Business Bureau code of advertising and FTC rules both suggest that the term "Satisfaction guaranteed" should be used by a seller when advertising only if refunds for the full purchase price can be expected when requested by a customer. If there are any limitations or restrictions on a guarantee, those conditions should be clearly and prominently displayed for the customer.

Here are a few examples of a proper “satisfaction guaranteed” ad:
1.       We guarantee your satisfaction with our product/service.  If you're not completely satisfied, we will gladly refund the full purchase price.

2.       Return the product in its original package within (some limited amount of time) and we will fully refund your purchase price.

3.       If our service does not meet your complete satisfaction, your full purchase price will be refunded.

This is serious business. Businesses have been taken to court by customers and have been penalized a significant amount of money. The bottom line is that satisfaction is not only a wonderful word for marketing but also brings the responsibility of making the customer “satisfied".  There is a very strong trend in the market that customers are becoming more litigious. Not all customers are nice customers.

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