Customerspective

Sound of the Music (Today)

Focus your efforts, resources and capital on acquisition or retention?  That is a critical question in today's B2C business environment and one that we at Vox feel the vast majority of firms answer incorrectly.

New customer acquisition is exponentially more expensive than retaining existing customers, but most business place the utmost importance on acquisition while placing minimal, if any, efforts or focus on retention.  Guess what - not only is it more expensive to acquire new customers today, it is only going to get harder moving forward.

As people are inundated with marketing, messaging and communications from an ever increasing spectrum of sources and channels, we are all becoming attuned to just ignoring the vast majority of messages that "hit us" - just as was the case with the Subway Stradivarius - a perfect example of how people just don't have the time or inclination to care about your messaging or marketing efforts even if you have the best next thing since sliced bread.

You may have the best product or service in the world, but if potential new customers tune you out it means nothing... Wouldn't it be easier and more beneficial to focus your limited resources on the customers who are (for the time being) already listening to you? We think so... Check out our Customer Experience Calculators to see how Acquisition and Retention stack up against one another.

Don’t Shoot the Messenger

Good News vs. Bad News vs. No News:  Which do you prefer?

Nobody likes receiving bad news. 

Nobody likes being the bearer of bad news either. 

But what if bad news is unavoidable? 

Then what?

As we all know, business tends to be a mixture of good news and bad news – reactive behavior and proactive behavior.  In order to obtain a business case success, one must weigh his options. 

Let’s pretend John works for a bakery.  He is hired to make a 3-tiered cake for a party in three colors – yellow, blue, and pink.  John’s super busy, makes the cake, and colors it yellow, blue and green.  By the time he realizes his error, it’s too late to fix.  The cake must be at the party in 15 minutes.  So, what’s John to do?

John has two options:

a.)     John can drop off the cake saying nothing about the color mix-up.  He can then be reactive to their inquiries about the color of the cake.

b.)     John can be honest and upfront with his customers.  He can be proactive, admitting a mix-up, and offering options on how to rectify the situation.

Sadly, I think many people in business today may have chosen option A (or at least been tempted to) – to avoid confrontation and “bad-business.”  But, in reality, option B is the way to go.  Sure, maybe the customer would be upset at first, but I do believe in honesty and in the attempt to turn a wrong into a right.  This can outweigh any disaster caused – unintentionally or otherwise.

The customer may not end up ordering a cake from John again, but I do believe they are more likely to come back if the cards were all laid out on the table, rather than being hidden under a placemat. 

The moral of this story – be proactive with customers, even if it’s news they won’t want to hear.  The sting will hurt more in the long run if the truth is avoided.   

Be Introspective and See the Customer's Perspective

Last month, Starbuck's CEO Howard Schultz circulated an internal memo to his management team. He asked them to take a step back, look at the company and find ways to get back to the company's core beliefs that started their success.

I've been watching Starbucks' growth with a critical eye, especially after I read Schultz's book a couple years ago. The growth they were experiencing then, and still are, conflicts with those core values Schultz wanted to bring to Starbucks' customer - a quality cup of coffee and the simple experience around it.

You can decide on your own what you think of Starbucks. But the point -- that Schultz has hopefully drawn a line in the sand and said they must step back and reanalyze where they started and where they are now -- is key to understanding any business and how you can be the best to your customers. Because in the end, it's all about the customer and what you give them.

A Lost Customer...and for what?

Moving is an event all its own. It’s not as simple as, “I’m moving. Pack up belongings. Move. Unpack. Settle in and smile.” Moving nowadays involves many more “little issues” that you don’t think about until you actually move. With that said, my recent move proved to be an “experience” all it’s own.

I hired movers for the first time in my life, which despite all the horror stories, ended up being an expensive, but pleasant experience. The physical move lasted only 3 hours! “Great, I thought, I’m almost done!”

Not quite.

I have to get my mail forwarded to my new apartment. I have to call all my credit cards and student loan companies to update my contact information. I have to locate the Chicago office that sells parking permit #62 so I can stop receiving tickets for parking in front of my new apartment. I have to go through everything I own and throw something out. I have to find a new route to work - what trains do I take? Where is the nearest grocery store? Oh no, my old gym is too far to get to now, but I have a contract with them. Can I cancel that? Where is a closer gym? And most importantly, what and where are the take-out restaurants that will deliver dinner to my place almost 5 days a week? My old “menu” of places consisted of a Chinese restaurant, an Italian restaurant, a diner, and a Mexican place - all phone numbers that were efficiently programmed into my cell phone. But now, the comfortability of knowing what was where and what I wanted had vanished. I needed to find dinner delivery, and fast!

Luckily, there were take-out/delivery restaurant menus stuck in my mailbox, scattering the floor of the foyer walking up to my apartment, rubber banded to the front doors, and cleverly shoved underneath my windshield wipers. So, I was in luck. i’m not going to go hungry here!

The first place I ordered from was a somewhat higher class Chinese/Sushi restaurant. I was excited - I had never ordered sushi in before. Nice! So, I ordered in for myself and a friend using a credit card, having been told on the phone that delivery time was 45 minutes to an hour. About an hour and a half later, my doorbell rang and I buzzed the delivery guy in, who emphatically apologized for being late, I gave him a gracious tip (thankful that he acknowledged his lateness) - he then went on his way, and I went on mine. The food was delicious! Even though he was late, he apologized. I thought I had found a keeper.

Again, not quite.

The following day, I was viewing my checking account information online, and to my surprise, “Fantastic But Slow Moving Chinese Restaurant” had charged my account twice for dinner! And not even the same amount - one charge was what the meal, with tip, really came out to, and the other amount was $20 more! So, I called them to inquire about this mystery charge and this is how the conversation went:

ME: “Hello, I ordered from your restaurant last night and was just reviewing my credit card information online, and you charged me twice for dinner- at two different prices!”

THEM: “What’s your name?”

ME: “The order was placed under “Niki.”

THEM: “Oh, yeah, I remember you. The girl must have hit the wrong button. It’s not really a charge.”

ME: “Well, then what is it? I have 2 withdrawals in my account from your restaurant and there should only be one.”

THEM: “She just hit the wrong button probably. It’s not really a charge.”

This conversation lasted a little longer, with this man named Frank insisting that this was not a real charge, though the amount ‘charged’ was no longer in my account! He rudely told me the money would be reimbursed in 5 business days, never offered an apology, and hung up.

Five business days later, and no reimbursement. I called back. I asked to speak with the manager. When he got on the phone, he seemed to know who I was after stating my name. “It should be in there tonight,” he said almost like he was annoyed with my call. Never an apology, never a “sorry for the inconvenience” - nothing. And this was the manager I was talking to! I offered up the fact that I was indeed frustrated, that I hadn’t even been offered an apology. I said I know mistakes happen, but in this instance, I can’t believe an apology wasn’t offered. And still none, and he basically hung up on me.

Lucky for them, I was reimbursed the following day. But the moral of this story is this: Good food. Good location. Wait time was longer than expected, but I was still ok. But, POOR customer experience. And they just lost a potentially loyal customer. And there were three simple words that could’ve changed that, “I am SORRY.”

Please Don't Touch the Merchandise

In my last post, I told you how much I disliked shopping in stores before the holidays. After the holidays, I had a few gift cards to dispose of, so I reluctantly made the rounds. The stores seemed to be just as crowded as before, probably due to people taking advantage of the post-holiday sales and their days off of work.

I actually gave up and didn’t even try anything on while I was in the mall, but I did browse a few stores on my way out. Sadly, the store that made the largest impression on me did so only because it was full of unhappy little signs. Each sign was a stern command not allowing something—no cell phones, no trying on earrings, no more than three children at a time in the store, no stuffing merchandise into your pockets. Well, ok, the last one wasn’t written exactly that way, but that was the gist of it.

The store clearly had a shoplifting problem, but I doubt that all the mean signs reduced their losses. Frankly, if I were a prickly 15-year-old, they probably would have spurred me to get away with as much merchandise as possible. I am not a security expert, so I don’t know what steps they should be taking to protect themselves, but I can tell you that I didn’t buy anything in that store, nor will I go back there again.

In France, it is the custom to greet the store owner with a formal, "Bonjour, Monsieur" (or Madame or Mademoiselle, as appropriate)--a very friendly and old-fashioned custom. I’ve also read that if a store owner can get a customer to say “Hello” to them and look them in the eye, the likelihood of a theft plummets.

This doesn’t surprise me at all. It just makes me sad that we don’t do more to promote connecting with customers instead of chastising them.

Eye of the Beholder

I recently had an eye exam as it had been two years since my last screening and it seemed like my current prescription might not be correct any longer - too much time spent staring at a computer.

As I suspected, my eyes have changed over the past two years although much to my surprise, they have gotten better - not worse!  While this would normally please me, it has actually caused me to have a bad customer experience that I never would have anticipated.

You see, my wife and I have vision benefits as part of our health plan.  This vision coverage entails the typical benefits, such as an annual screening for free, annual lens replacement, and a "free" new frame every other year (albeit "free" only up to a rather low price point.)

I like my existing eyeglass frames, so I simply want to get a set of new lens at my updated prescription.  When I returned to my eye doctor to drop off my frame so they could create the new lenses and fit them into the frame I figured they'd be able to crank them out in a couple of hours or at most need to keep them for a day.  However, I was informed that for my new lenses to be covered by my vision plan they were required to send them in to an approved lab to do the work, which would take 2 - 3 weeks. 

At this point I asked, "Well, how am I supposed to go 2 - 3 weeks without my glasses? These are my only pair..." I was then told if I needed the lenses done right away they could be created onsite, but only for "simple" lenses with no special treatments - and I would have to pay for them out of pocket.

Were they serious?  Am I the only person that sees the absurdity of this situation? (pun intended)

So, I am now left checking if any 1-hour vision care centers are in my vision plan network... If not, I have to decide whether I want to pay out-of-pocket or be blind for 2 - 3 weeks.  Not quite what I expected from a vision plan.

The point here is not only is my vision plan provider, VSP, not providing a quality customer experience to me, it is also costing itself additional money - should I chose to go with a whole new pair of eyeglasses rather than send in my current frames.  A recommendation would be for VSP to have a different method to handle situations such as mine; maybe in this case having my lenses done at my doctor's office so I'm only without my glasses for a day or that my frames would be over-nighted to the lab, completed within a day, and then over-nighted back to me so I'm only without my glasses a maximum of 3 days.  Either would be a more understandable and acceptable experience in this case.

Bearing down on good experiences

So, the Bears are going to the Superbowl! Woo hoo! Whatta game!

If you are a Chicago sports fan, you will understand the underdying devotion and frustration we have with our ball teams. It does bring the city together when we are on a winning streak.

I’ve noticed it lately when in stores. Instead of the usual grumblings at a checkout counter, there’s idle and hopeful chatter about how the team will do on Sunday. It brings a solidarity and connection between merchants and customers. Too bad this is lost on a day to day basis. We should be happy to connect with each other on any level, not just a winning football team.

That said, on to Miami! Go Bears!

Tis the Season to Be Jolly?

With Christmas only days away, the stress has risen for shoppers trying to finish buying all of their gifts. And with stress, comes anger. Lauren Villagran’s article, “Merchants Try to Deal with Mad Shoppers,” touches on the crazy life of retail workers during the holidays.

Villagran notes that “merchants from toy sellers to electronics chains have buckled down to deal with irate shoppers. Their strategies vary but the goal is generally the same: to keep customers happy (and from wrestling each other in the aisles) and employees safe.”

How do you “keep customers happy” with so much stress and anger in the air? In her article, Villagran talks of some of the different strategies retail stores are doing to deal with customers.

To keep customers under control -- lest a stressed-out shopper become a violent shopper -- Boire [president of Toys “R” Us in the U.S.] said the chain beefs up security during the holidays, including hiring plainclothes officers to police its aisles and checkout lines.

Electronics retailer Best Buy Co. preps its employees for the holiday rush with preseason rehearsals. Best Buy stores do a "dry run" of the frenzy... Seasonal employees are made to wait in their respective departments when, at once, the other employees bully their way toward the department with a flood of questions. Employees are "armed with a strategy" for organization and inventory.

It looks like some stores have found a way to work with the anger, but are they keeping customers happy? Is there anything the stores can do, or is this one up to the customers? Honestly, it seems like the customers (including myself) have forgotten … Tis the Season to be Jolly.

Happy Holidays!

Creative Christmas Selling

It's the holiday season, and everywhere I look, there are "impulse" sale items stacked to the roof. My local Walgreens drugstore and Jewel supermarket seem to think that all I need for Christmas / Hannukkah / Kwanzaa is a 19" color TV or a designer perfume or a CD or DVD to complete my holiday shopping list.

I just don't understand. Sure, I might be one of those people who waits for Christmas eve before I start shopping, But even if I was that frantic, why would I go to a supermarket over any place else to buy electronics or perfume or music or videos?

These displays don't make me feel that there's something different or unique about a store. They don't make me feel that the store recognizes and values me as a repeat customer. Instead, the message I take away is that all this stuff is a commodity, unrelated to their core product offerings (food, drugs, newsstand items, etc.), Also that I as a consumer am not valued as a long-time customer – instead, I'm a commodity. And if I want to buy this stuff, I should go wherever is easiest or cheapest – which is not the way to create loyal customers.

Thinking about holiday or any seasonal sales efforts the thing that seems key is to create a niche that adds value for core consumers - consumers that are at least receptive to your brand. Hallmark did this with their summertime sale of Hallmark Christmas ornaments.*

Starting in 1973, they launched the Christmas ornament line, and asked permission of customers that bought the first ones to notify them next year about the new ornament releases. In 1999 Hallmark made $100 million in summertime sales on the Christmas ornaments line without doing any advertising.

Not every retailer can do this for every holiday, but most should think about some variety of branded merchandise / permission marketing offer associated with the core offerings for which most people shop their stores. And as Hallmark demonstrated, you can have Christmas in July (time-shift a seasonal market to a different season).

This is so much more effective than opportunistic electronics end-caps in grocery stores. Sure you'll get some sales, but you're in a race to the bottom with every other similar store - and there's always the chance that the commodity merchandise that worked last year (like portable DVD players) will bomb this year because of factors outside your control.

The value of engaging customers and respecting their focus can't be overemphasized.

*Note: I originally heard the Hallmark story from a recording of Seth Godin's presentation at one of Google's annual meetings. He's got a lot of great stuff out on the web (video, audio, print). I highly recommend browsing his blog and website.

CRM in Real World Interactions - Part 1

In my last post ("Welcome Back! Long Time, No See"), I commented on how face-to face interactions are being affected by the reliance on technology, subsequently missing real customer relationship development opportunities. After posting it, I realized that it wasn't very fair. Technology and CRM tools can be useful for improving the Customer Experience in real world situations with creative implementation. So I decided to devote a few brain cells towards imagining some scenarios that could be implemented with today's tools and technology.  Here is what I came up this week.

Grocery Stores:

After a busy day at the office, Beth (our imaginary customer) is driving home when she decides to stop by the store for some groceries.

On entering the store, she goes directly to the first available Customer Service Kiosk and, having forgotten her "Preferred Client" card, uses her index finger to log in. The system shows Beth her current shopping list with her son's wish list, added earlier at home over the Internet. The system offers Beth some interesting new products fitted to her needs and a list of personalized coupons. She then prints out her shopping list and coupons, sorted by the store’s aisle layout so she won't have to backtrack.

As she shops, a chip embedded in Beth's cart stores her information and a wireless device indicates her location in the store.

Beth is speeding through her list until she notices that one item is out of stock. Of course, the list shows several recommended substitutions for the missing item, but Beth is not sure which to choose.  She decides to ask for help and presses a Customer Help button on her shopping cart. A nearby attendant, alerted by an automated text message on his two-way radio, approaches her.

"Good evening, Ms. Johnson, It is good to have you back!" says the attendant.
"Are you by any chance wondering about a substitution?"

"Oh yes, thank you!  I was looking for a dandruff shampoo for my husband, but his favorite brand is out of stock," she tells him.

"Not a problem!" He swiftly picks up his hand computer and downloads her list and shopping history. "We have several other good brands, but I see here that your husband bought ACME shampoo the last time he was here. Was he happy with that purchase?"

"Yes, I think he said he still preferred the other one, but this brand was ok," she says.

"If you like, I can get one for you. If not, I personally think this other brand here is very good. It's a little more expensive, but it is more effective," he adds.

"Oh, thanks! I will try that one," Beth decides.

Satisfied with her choice, Beth walks towards the checkout and a small display on her cart indicates which cashier has the shortest line. At the checkout, the smiling cashier greets her with a "Hi Ms. Johnson, did you find everything you needed?" while quickly scanning her purchases. As the cashier thanks her, she adds, "Did you know that you can call us ahead of time and have your whole list ready for you by the time you arrive?"

She didn't know that, but she is already considering doing that the next time she shops.

. . .

Forget all the Sci-Fi movies' wildest predictions (although Minority Report has an interesting take on possible future customer experiences), the example here is imagined, but quite feasible with today's technology. I wouldn't be surprised if someone is already doing something like it already. 

Are you?  Let me know and I will post your story.   

Next week I will post another example. I am thinking about drive-throughs…