A win-win for Social Media

 Most companies in the US are using social media as an important channel for communicating with customers. One of the primary reasons for using the social media is to provide information regarding products and services. Several studies such as one done by Simply Measured indicates that only about one third of the companies that use social media provide a link for customer service. Other studies suggest there is an increasing trend to provide customer service through social media.

The purpose of this blog is to examine the relationship between social media and customer service. The conclusion suggests that the proper use of social media for customer service is a win for the customers and a win for the company. Hence, using the social media for customer service reduces the cost of customer service while simultaneously improves response time of customer service to customer requests.

The advantages for customer service using social media include the following:

1.                   1..     Companies do not need to have support personnel available 24/7. This will allow the company to maximize the use of support personnel and reduce idle time. This improvement in productivity should be sufficient to justify using the social media as a way to acquire customer concerns as well as accolades.

2.                2.         Companies can utilize self-help diagnostics to reduce the number of customer interactions.

3.                 3.       Companies can acquire data from the social media to improve customer satisfaction and customer loyalty.

The advantages for customers using social media to contact the company include the following:

1.       The customer can contact the company 24/7. Thus the customer is not inconvenienced by waiting until company personnel are available.

2.       The customer can resolve made his concerns through the use of self-help diagnostics.

3.       The customer can provide detail regarding the purpose of the call prior to the review by the company. This allows company respond more knowledgeably.

4.       The customers will frequently perceive the responsiveness to their concerns more positively than if they had to wait until someone is available.

Thus the customer and company each benefit by having a direct path through social media. As customers become increasingly aware of having customer service available through social media, other methods of communication will undoubtedly diminish. Companies need to examine how social media is being used by their customers. It is not unreasonable to expect that the trend for communication between the customer and the company in the social media will continue to increase.

The bottom line is that companies who provide customer service should be developing plans (if they have not already) to restructure the customer service strategy to include connection to social media. The signs are clear that customers will increasingly use the Internet to communicate with companies.

The companies who understand this trend and plan their customer service organization to address this change in the way we do business will have a distinct advantage over their competition.

Customer Experience versus Customer Service

One of the latest phrases that is being used is the customer experience. There is certainly a customer experience anytime a customer or potential customer interacts with the company. The following paragraphs outline some of the relationships between the customer experience and customer service and some of the differences between the two.

The first similarity between the customer experience and customer service is that they both address interaction between the customer and the company.

The second similarity is that both customer experience and customer service have metrics that provide management measurable perspectives that can be used for comparison and training purposes.

The third similarity is that both customer experience and customer service are major components of the business strategy of the company.

The first difference between the customer experience and customer service is that the customer experience is more proactive than customer service, which tends to be primarily reactive.

The second difference is that customer experience does not always have a customer service component; whereas customer service will always have a customer experience component.

The third difference between the customer experience and customer service is that the customer experience can be associated with every aspect between the customer and the company from initial contact with the customer to termination of the company customer relationship whereas customer service is most often limited to customers that have already established a relationship with the company.

Some will argue that the customer experience incorporates customer service.  While this is true, the customer experience is inclusive of all functions within the corporation. Hence the customer experience includes marketing to include acquisition of new customers, transforming potential customers into revenue-generating customers, providing products and services to the customers, developing and managing the financial relationship with customers, providing education and training on the use of the products or services for the customer, and finally to repair the customer relationship when one or more aspects of the relationship is not acceptable to either the customer or the company or both.  With this perspective of the breadth of the customer experience, the most obvious manager of the customer experience is the CEO. While the CEO may be involved to some extent with customer service, this is not a function that should require the complete attention of the CEO.

Using the argument in the preceding paragraph is clear that customer service is only one component of the customer experience and as such should be managed as a component of the company or as a component of one component of the business with its own metrics that support the overall business of the company.  It must also be managed tactically on a day-to-day and customer-by-customer basis while maintaining its perspective to support the overall business strategy.

The bottom line is that customer service is only one component of the company’s business strategy; whereas, the customer experience requires a broader perspective.  The customer experience requires metrics from every operation in the company that in some way interacts with the customer (from customer acquisition to termination of the customer relationship) while the customer service operation is focused primarily on customer support.  Someone in the C-level should have direct responsibility for setting and managing the customer experience.  Maximum company performance should be attained when the company assets are properly tuned to maximize the customer experience.

What Makes an Ideal Customer

Brian Woolf has authored two books on best customer marketing.  He is often referred to as the "Godfather of best customer marketing".  He says that as a general rule best customers:

1. Spend the most each year
2. Have the lowest defection rates
3. Visit the store most frequently each month
4. Buy items with a higher average price
5. Buy higher gross margin percentage items
6. Buy from more departments and categories
7. Have lower processing costs (larger order sizes, fewer questions about whre to find items, and fewer losses from bad checks).

The list is comprehensive and certainly defines the type of customer that is a good revenue source as well as a source of high margin.  It is possible that a non-loyal or unhappy customer could provide the same attributes of revenue and margin for reasons such as most convenient location, quickest shipping or the only one providing specific products or services not readily available from other sources.

This list seems to overlook a few VERY important "Rules" that in the opinion of The Customer Institute really define an ideal customer rather than a "best customer".  The following list of four customer relationship aspects do not require the previous list of 7 but, in the opinion of The Customer Institute, are sought by most companies.

1. An ideal customer will allow the company to make a mistake and understands that no company is perfect.  That customer will allow the company to correct the mistake and not penalize the company.
2. An ideal customer will recognize that ever company can only stay in business if they make a profit.  For that reason those customers will not challenge every price.   Yes, sales are important but in the long run the company can only survive by making a profit.
3. There is a bond of mutual trust between the ideal customer and the company.  Both the company and the customer know that the information shared is the truth and is accepted with that knowledge.
4. The products and services of the company fit the needs of the customer.  There is no attempt to sell either a product of service that does meet the needs of the customer.  There is no attempt to sell a product or service that does not satisfy the customer need and the customer knows that.

The bottom line is that the ideal customer is more than a source of revenue and profit.  The more important aspect of the ideal customer is one whose needs fit the products and services provided by the company.  In addition the values of the company are complementary with the customer and provides  the basis for an ethical relationship to exist.  Business is more than dollars and cents. 

Word-of-Mouth Works - A Different Perspective

Everybody knows that word-of-mouth is a major component of customer satisfaction. Most everybody thinks that most word-of-mouth is negative. There is been some interesting research done lately that gives a different perspective of word-of-mouth.

A shopper survey performed by Brick Meets Click suggests that positive experiences may occur more frequently than negative experiences. They asked 1000 grocery shoppers about their experience shopping online. For those who shop online – those who had extremely positive or negative experiences how likely they would share them with others. The results are not what I would have expected; namely, only 60% of those who had a negative experience indicated they would share that experience with others whereas 95% of those who had a positive experience indicated they would share that experience with others.

This information suggests that online shoppers are acting differently than those who are brick-and-mortar shoppers. There is no clear research at this point in time to explain the change from what has been the belief that customers are more likely to provide negative responses from negative experiences than those customers who have a positive experience. Until we understand the components that drive these responses will not be able to construct customer models that will create positive word-of-mouth and higher levels of satisfaction and loyalty.

The bottom line is that online shopping appears to have very different characteristics than face-to-face shopping. This is an exciting time when consumers are in flux in the way they shop and the way they perceive experiences while shopping.

The Customer Experience is Evolving

Social media and texting are having a profound impact on the way customers and companies communicate.  Their have been studies done by Hailo, a taxi app and by the Pew Research Center.  Statistics that have been published by Andrew Prokop indicate findings that suggest the evolution.  These findings include:

1.       Text messages represent the two most often used method of contact by cell phone (both sending and receiving) whereas the voice phone call ranks as the 6^th most frequently used method.

2.       American women text more frequently than men (14%)

3.       80% of American adults text every day.

4.       Text messages are opened more frequently than emails (98% versus 20%)

5.       Americans exchange more texts than phone calls

6.       More calls are coming to call centers from cell phones than from and lines

7.       One study from 2012 (source unknown) noted that texting was rated higher than voice communication in terms of customer satisfaction (text scored 90 out of 100 points and  voice scored 77 out of 100).

These statistics raise two issues (one good and one not so good)

The good news is that by cross training support personnel to respond to both productivity can be dramatically reduce the dead time that occurs during a lull in the arrivals.

The bad news is that the incremental stress that will be experienced by call center personnel and support personnel despite their ability. The fact that service personnel may be trained to have the ability to multitask multiple text messages as well as dealing with customers on the phone may have a deleterious effect over time.

The real problem is that text messaging is fast becoming (if it has not already become) a new means for supporting customers.  This is an issue that cannot be ignored and must be managed. 

The bottom line is that the world of on line support has just experienced a dramatic new dimension that can be used either as a strategic advantage or, if ignored, will become a major deterrent to customer satisfaction and loyalty.