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.
Saturday, June 30, 2012
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.
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.
Monday, May 21, 2012
When is a Customer Not a Customer?
It has been a while since The Customer Institute has published a blog. This one is a little different. There is an article on the Opinion page of the WSJ May 21, 2012. The title is "Will Regulators Unfriend Facebook?" It was written by L. Gordon Crovitz.
Mr. Crovitz makes an interesting point about customers that may change the perspective of what is a customer. He offers up a truism "if you're not paying for something, then you're not the customer, you're the product being sold." He is making the point that "customers" who are on Facebook are not really customers, they are the product that Facebook is selling. Facebook sells access to customer information. Of course Google also does the same thing as do many other websites.
When you go onto a website to browse you are essentially building inventory for the website. In this sense we, the "customers", have become inventory. Intelligent but inventory nevertheless. We are no longer customers in this sense. We have lost the power of the customer.
As noted in the article, Mr. Douglas Rushkoff spoke to Betaworks, an internet company in New York: "In the boardroom at Facebook, people are not asking, "How can we find Johnny more friends online?" They are asking "How do we make more money off of Johnny's social graph?"
The playing field for eCommerce is not the same playing field we have become accustomed to in the brick-and-mortar world. It is going to take some time to understand the full ramifications and unintended consequences of this new world of commerce.
The bottom line is that the world of eCommerce is not the same place as the brick-and-mortal world we have known. With the growth rate that we see in eCommerce, it is fast becoming the dominant market place and we must learn how to use it.
Mr. Crovitz makes an interesting point about customers that may change the perspective of what is a customer. He offers up a truism "if you're not paying for something, then you're not the customer, you're the product being sold." He is making the point that "customers" who are on Facebook are not really customers, they are the product that Facebook is selling. Facebook sells access to customer information. Of course Google also does the same thing as do many other websites.
When you go onto a website to browse you are essentially building inventory for the website. In this sense we, the "customers", have become inventory. Intelligent but inventory nevertheless. We are no longer customers in this sense. We have lost the power of the customer.
As noted in the article, Mr. Douglas Rushkoff spoke to Betaworks, an internet company in New York: "In the boardroom at Facebook, people are not asking, "How can we find Johnny more friends online?" They are asking "How do we make more money off of Johnny's social graph?"
The playing field for eCommerce is not the same playing field we have become accustomed to in the brick-and-mortar world. It is going to take some time to understand the full ramifications and unintended consequences of this new world of commerce.
The bottom line is that the world of eCommerce is not the same place as the brick-and-mortal world we have known. With the growth rate that we see in eCommerce, it is fast becoming the dominant market place and we must learn how to use it.
Friday, October 7, 2011
Farewell Steve Jobs from The Customer Institute
It is with great sadness that we at The Customer Institute bid farewell to Steve Jobs. While he is praised for many accomplishments, such as a successful businessman by turning Apple around a tits lowest point, then co-founding NeXT and Pixar. But, in our eyes, Steve Jobs was the most visionary creator of products that were focused on the customer.
Steve Jobs appears to have had the insight to see what customers wanted and needed before they did. He was relentless to produce the perfect customer-focused product. He took the "techy" aspect of computers out of the computer and gave customers a product that they could use and enjoy without being a "techy."
One has only to look back at the evolution of computers to see that for most of the 40 plus years of computing (late 40s to mid 80s), computers needed people to write code that the computer could understand. Without very specific training, the computer would ignore you and there was no way that it would respond without the intervention of a "techy."
Of course from the 40s through the late 70s, computers were too expensive for the average person. A basic IBM 1620 Scientific computer would rent for about $10,000 per month (not counting input/output devices). As the personal computer came on the scene and the cost of computing dramatically decrease, it was still a nightmare for the average person to understand the coding of MSDOS. Still the computer for the average person was out-of-reach.
With the advent of the first Macintosh, the blinders of technology were lifted so that the ordinary person could connect with the computer without the resident knowledge of computer code or MSDOS. Steve Jobs saw that the computer was not just for the "techy." He became the transformer - the one who changed the way that computers interfaced with people. He was the ultimate architect of human engineering that built computers for people.
Thank you Steve Jobs. You brought the computer to us In a way that we now see the computer as a tool that increases our productivity and provides a never-ending opportunity to improve our lives. He was the ultimate customer advocate!
Steve Jobs appears to have had the insight to see what customers wanted and needed before they did. He was relentless to produce the perfect customer-focused product. He took the "techy" aspect of computers out of the computer and gave customers a product that they could use and enjoy without being a "techy."
One has only to look back at the evolution of computers to see that for most of the 40 plus years of computing (late 40s to mid 80s), computers needed people to write code that the computer could understand. Without very specific training, the computer would ignore you and there was no way that it would respond without the intervention of a "techy."
Of course from the 40s through the late 70s, computers were too expensive for the average person. A basic IBM 1620 Scientific computer would rent for about $10,000 per month (not counting input/output devices). As the personal computer came on the scene and the cost of computing dramatically decrease, it was still a nightmare for the average person to understand the coding of MSDOS. Still the computer for the average person was out-of-reach.
With the advent of the first Macintosh, the blinders of technology were lifted so that the ordinary person could connect with the computer without the resident knowledge of computer code or MSDOS. Steve Jobs saw that the computer was not just for the "techy." He became the transformer - the one who changed the way that computers interfaced with people. He was the ultimate architect of human engineering that built computers for people.
Thank you Steve Jobs. You brought the computer to us In a way that we now see the computer as a tool that increases our productivity and provides a never-ending opportunity to improve our lives. He was the ultimate customer advocate!
Friday, August 19, 2011
What Makes Customers Leave?
This is the last blog relating to the survey of 250 customers that responded to a survey regarding the purchase of consumer electronics that was conducted by Infinite Field Marketing of the UK. My two previous blogs on what gets customers in the door and what keeps them need a final chapter. This final chapter will focus on what makes customers leave or break their loyalty. The last part will answer the question of what would it take to keep a customer that is ready to leave.
When the question was asked what would cause a customer to walk out the door the answers were:
1. About 48 percent responded that negative contact with the staff was the primary reason.
2. The second most important reason (24 percent) was the store was too busy which made it difficult to find staff and products.
These results track the earlier results that kept repeating the mantra that customer service plays a primary role in dealing with customers.
When the survey took the next step and asked what would break a customer's loyalty the two primary reasons were:
1. About 70 percent said that bad service would be the reason, and
2. 21.5 percent said poor product knowledge.
Here again the primary reason that customers are saying they would break their loyalty to a company or store would be the result of customer service.
There is a logic that follows these results that suggests that bad service not only leads to lost loyalty but also leads to negative word-of-mouth which in the long run can lead to the demise of the company.
The final area of interest is the question of what can a company do when the customer is ready to break their loyalty and leave. In other words, the question is what is the best way to deal with a customer who is ready to leave. The survey yielded the following results:
1. About 40 percent thought that a discount would be appropriate, and
2. 28 percent said that an apology would be sufficient.
Although there were a number of other comments, there appears to be no significant pattern in them.
The bottom line that comes from this survey of what brings customers to you, what makes them happy and why do they leave has a consistent theme; namely, that customer service is very important and may be the strongest driver for business success.
The two questions that everyone who reads this should consider are:
1. Is good customer service a company policy?
2. How much is the company willing to spend to support this policy?
Experience has shown me that companies often think that initial customer training is sufficient and no refresher training is necessary. This is fallacious thinking.
When the question was asked what would cause a customer to walk out the door the answers were:
1. About 48 percent responded that negative contact with the staff was the primary reason.
2. The second most important reason (24 percent) was the store was too busy which made it difficult to find staff and products.
These results track the earlier results that kept repeating the mantra that customer service plays a primary role in dealing with customers.
When the survey took the next step and asked what would break a customer's loyalty the two primary reasons were:
1. About 70 percent said that bad service would be the reason, and
2. 21.5 percent said poor product knowledge.
Here again the primary reason that customers are saying they would break their loyalty to a company or store would be the result of customer service.
There is a logic that follows these results that suggests that bad service not only leads to lost loyalty but also leads to negative word-of-mouth which in the long run can lead to the demise of the company.
The final area of interest is the question of what can a company do when the customer is ready to break their loyalty and leave. In other words, the question is what is the best way to deal with a customer who is ready to leave. The survey yielded the following results:
1. About 40 percent thought that a discount would be appropriate, and
2. 28 percent said that an apology would be sufficient.
Although there were a number of other comments, there appears to be no significant pattern in them.
The bottom line that comes from this survey of what brings customers to you, what makes them happy and why do they leave has a consistent theme; namely, that customer service is very important and may be the strongest driver for business success.
The two questions that everyone who reads this should consider are:
1. Is good customer service a company policy?
2. How much is the company willing to spend to support this policy?
Experience has shown me that companies often think that initial customer training is sufficient and no refresher training is necessary. This is fallacious thinking.
Tuesday, August 16, 2011
What Keeps Customers Coming Back?
The research mentioned in yesterday's blog also provided some insight on what makes customers loyal to a particular store. Rene' Wright, head of computing at Best Buy UK is quoted as saying "if someone has walked out of a store having had a positive shopping experience, they are much more likely to return, consider, recommend and purchase from you in the future."
The research by Infinite Field Marketing provides support to that notion with the following statistics from their survey of 250 shoppers.
1. Approximately 55 percent of the respondents sad good service was the most important.
2. About 21 percent said that price was the main reason
3. There was approximately 11 1/2 percent of the respondents that said convenience was most important.
4. Product knowledge was most important for only about 8 percent of the respondents.
The message is the same as yesterday; namely good service is a key driver to customer loyalty. Of course, returning to a store or company does not necessarily assure purchases.
Making it easy to do business has long been considered an excellent step to build trust and a good relationship. As has been noted in previous blogs just solving the customer problem with no hassles is often the most important aspect of the customer interaction.
The bottom line is reputation and customer service appear to be consistent drivers of loyalty. While location, price and product knowledge are also necessary they may not be the glue that sticks to customers and brings them back.
The research by Infinite Field Marketing provides support to that notion with the following statistics from their survey of 250 shoppers.
1. Approximately 55 percent of the respondents sad good service was the most important.
2. About 21 percent said that price was the main reason
3. There was approximately 11 1/2 percent of the respondents that said convenience was most important.
4. Product knowledge was most important for only about 8 percent of the respondents.
The message is the same as yesterday; namely good service is a key driver to customer loyalty. Of course, returning to a store or company does not necessarily assure purchases.
Making it easy to do business has long been considered an excellent step to build trust and a good relationship. As has been noted in previous blogs just solving the customer problem with no hassles is often the most important aspect of the customer interaction.
The bottom line is reputation and customer service appear to be consistent drivers of loyalty. While location, price and product knowledge are also necessary they may not be the glue that sticks to customers and brings them back.
Monday, August 15, 2011
What Drives Customers to Stores?
A study commissioned by PCR and compiled by Infinite Field Marketing addressed the topic of what drives customers to stores. The study consisted of 250 respondents in the UK. One of the key concerns of the study was when purchasing an IT/consumer electronics product what makes you go to the retailer in the first place.
Too often studies start after the customer has arrived and then examines the customers attitudes and performance. This study has an unusual starting point by first examining the factors that lead customers to the store in the first place.
While their findings are not unexpected, they have quantified and calibrated what many have perceived in the past. The major findings of what drives customers to the store are:
1. Reputation seems to be the clear leader with 36 percent of the respondents identifying this as the most important factor.
2. The second factor was cost and approximately 25 percent reported that as the driving factor.
One conclusion that continues to show in the research is that customer service is a key component of reputation. Since word-of-mouth has become an important factor in in both marketing and PR, reputation often has customer service as a cornerstone of their reputation both in the UK as well as the US. It would be no surprise to find similar results in other countries.
The bottom line is that customer service may be one of the most important forces that drives customer TO YOUR STORE. Some proof can be found in the results of this survey.
Too often studies start after the customer has arrived and then examines the customers attitudes and performance. This study has an unusual starting point by first examining the factors that lead customers to the store in the first place.
While their findings are not unexpected, they have quantified and calibrated what many have perceived in the past. The major findings of what drives customers to the store are:
1. Reputation seems to be the clear leader with 36 percent of the respondents identifying this as the most important factor.
2. The second factor was cost and approximately 25 percent reported that as the driving factor.
One conclusion that continues to show in the research is that customer service is a key component of reputation. Since word-of-mouth has become an important factor in in both marketing and PR, reputation often has customer service as a cornerstone of their reputation both in the UK as well as the US. It would be no surprise to find similar results in other countries.
The bottom line is that customer service may be one of the most important forces that drives customer TO YOUR STORE. Some proof can be found in the results of this survey.
Subscribe to:
Posts (Atom)
Posts
