Monthly Archives: April 2011

Are your marketing communications cultivating customer loyalty or distance?

Theory: marketing communications cultivate loyalty

Recently I wrote a post on customer loyalty – Why Companies Are Struggling in Cultivating Loyalty – and one of the readers brought up the subject of communication.  In his words:

…………..It’s critically important that companies create an ongoing dialogue with customers to determine their preferences and then create solutions to meet those needs.

One way companies can nurture the overall customer relationship is to determine the best method of communicating with customers (voice mail, e-mail, text messaging, social media, direct mail) and when they would like to receive information. Once they have determined the appropriate channel for communicating, companies can engage customers in a highly personalized and tailored way.

Companies that actively engage with customers on a regular basis can proactively offer additional products, services and information that cultivates customer loyalty.

What is the reality as opposed to the theory?

First let me say that there will be an array of realities – one for each company and even within the company the reality will be different for each customer.  Given that context let me share with you the findings from a report (Data Wastage Report 2011) commissioned by Transactis  (a company focussing on data and customer insight  services):

  • 65% of consumers said that companies have sent them offers for products they would never buy even though these customers had previously handed their personal details and preferences to these companies;
  • 58% of consumers said that some companies have sent them offers to become new customers even though they are existing customers of these companies;
  • 52% of consumer said that companies have repeatedly tried to sell them products that they have already bought.

Furthermore another Transactis report (Customer Trust 2010) highlighted the following:

  • Around 80% of consumers do NOT see any of the firms they buy from using their personal data to make attractive offers and deliver good customer service.

So what is the impact of all this on the 2000 UK consumers that were surveyed?

  • 86% of consumers say they would withdraw permission for a company to even contact them if it continues to send them irrelevant communications;
  • 88% of consumers say they would refuse to hand over any more personal information if they continue to get these irrelevant communications;
  • 81% of consumers say they seriously question the competence of companies that ask for details that they have already given to the company

My take on this: reality is much messier than theory

Some kinds of communications can cultivate loyalty.  I can remember that some years ago I received a thank you letter and plastic coffee mug from Amazon (with no sales related offers) and that surprised and delighted me.  The result was that my loyalty was cultivated.  I have also written about three other instances where the communication left me touched and loyal:

The kind of communications that do cultivate loyalty are not the ones that marketing departments typically produce and distribute. Why?  Because, these communications tend to be self-serving and rather impersonal (even if they are ‘personalised’) rather than customer-centric and personal.  Put differently, these communications do not create value for the customers that receive them:   it can be argued that whilst 20% of customers may find them useful, 60% of customers are indifferent, and the remaining 20% are left annoyed and think less of the company sending out this ‘junk mail’.  What looks like success (ROI) on a campaign by campaign basis may be failure when viewed on a longer time scale.


Why companies are struggling (and will continue to struggle) in cultivating customer loyalty

Only 17% of companies scored ‘strong’ or ‘very strong’ on customer loyalty

I read the following post - ‘Customer loyalty – does anyone care? and that got me thinking.  The author is highlighting the research carried out by the Temkin Group that shows that only 17% (24) of the 143 companies surveyed scored a ‘strong’ or ‘very strong’ loyalty’ rating.

Many underestimate what it takes to be strong/very strong in customer loyalty

In my opinion a lot of people who write on customer experience, customer loyalty and customer-centricity simply do not get how hard it is for large established companies to deliver on this stuff.  For these companies becoming customer-centric, delivering a great experience and generating loyalty is as likely as goals in the average soccer match – a rare event. Why is that?

An old quote that sheds light on the matter

There is a really good quote that gets to the heart of the matter, let me share it with you:

” A new scientific truth does not triumph by convincing its opponents and making them see the light, but rather because its opponents eventually die, and a new generation grows up that is familiar with it”   Max Planck

What am I saying?  I am saying that a big change in the customer-centric direction is highly unlikely until there are changes in the following domains:  business models, business leaders, management mindset and organisational structure.

Plenty of companies are doing well without being customer centric or delivering great customer experience

The fact is that plenty of companies do well without being customer-centric.  I explored this topic in the following post: Who says you have to be customer-centric to thrive

You can do well because you have strategic assets and I gave an example here: Bewleys shows that an organisation with strategic assets can deliver a poor customer experience and get away with it.

Existing business models are a huge obstacle in generating customer loyalty

I explored the issue of business models and how they get in the way of any customer-centric initiatives in the following post: ‘Contrary to popular opinion it is easy to become customer centred’

The organisational climate – mindset, culture, structure – is another big obstacle

If you are a gardener you will know that you simply cannot throw seeds anywhere and expect them to sprout into healthy, tall plants.  It is the same with organisations.  The way that organisations are structured, led and managed has a big influence on what kind of initiatives flourish and which struggle to take root.  I explored this in the following posts:

Do the customer experience designers have what it takes to design experiences that generate loyalty?

And finally I took a look at the customer experience designers themselves and questioned whether they have what it takes to actually design customer experience that work for customers: The problem with Customer Experience is the designers

Conclusion: the heart of the challenge is  leadership and ‘change management’

The heart of the challenge in cultivating customer loyalty is one of leadership and change management.  Specifically, giving up the existing ways of thinking about, organising and doing business.

This challenge is a difficult one at the best of times.  It is especially difficult when the people who have to change are the people at the top of the organisation.  Yet there is good news:  Gerstner managed to bring about a transformation at IBM.  It helped that he really had nothing to lose as IBM was a basket case and headed for oblivion!

Why you have to meet and exceed customer expectations

It is important to communicate and set expectations correctly to avoid disappointment

Cheryl Hanna wrote an interesting post titled “The Art of Meeting Customer Expectations” in which stresses the need to clearly communicate and agree upon expectations between the organisation and the customer.  She goes  on to tell us how her non-tech savvy mother ended up buying a Blackberry because the sales person assured her that it was easy to use.  It turns out that her mother does not find it easy to use and she is frustrated and unhappy.

I am in agreement with Cheryl on the need to set the right expectations up front.  I have written about how the folks in Marketing and Sales are the source of most poor customer experiences: both of these functions tend to promise what the rest of the organisation is unable or unwilling to deliver.  I have been the delivery person who has had to sit down with the customer and explain that despite what the sales person said it is simply not possible for me to provide the Sun and the Moon overnight and at that price.

Research suggests that customers have 4 distinct expectations

Where the story gets interesting is that Francis Buttle wrote the following in response to Cheryl’s post:

“I agree that it’s critical to understand expectations. The trouble is there are different levels of expectation. I published some research on this back in the early1990′s. The fieldwork showed that customers can think of expectation at 4 levels of abstraction, as follows.

1. Expectations of performance : “I expect to have my car serviced within 2 days of calling the workshop”
2. Desires: “I want my car serviced the day I call the workshop”
3. Experience-based norms: “Most people normally have to wait 3 days to have their car serviced”
4. Ideal standards: “My car should be serviced overnight and delivered to my home the next morning”

Competitive advantage is enjoyed by meeting ‘ideal standards’, but this can be extremely costly to deliver.”

Should we meet or exceed expectations?

Reading Francis’ comments I was reminded by the incessant conversation around whether one should meet or exceed customer expectations.  On the one hand you have folks who are absolutely convinced that you have to exceed customer expectations and delight customers.  On the other hand, there are folks who are adamant that exceeding customer expectations is simply flushing money down the toilet as it does not necessarily lead to customer loyalty and a return on investment.

In the real world only one expectation really matters

My personal experience suggests that the real world is a lot simpler than many of us make it out to be.  Allow me to explain.  Whilst Francis’ research may show 4 different types of expectations, I believe that the one that matters is the one that we are conditioned to expect – what Francis Buttle refers to as ‘experience based norms’.   That is to say what I have been used to (personally) and what my social circle tells me that they are used to.  That is the expectation that I am expecting you, the supplier, to meet.  If you fail to meet this then I will be disappointed.  If you exceed that expectation then I will be pleased.

In the real world you need to both meet and exceed customer expectations

The world is full of suppliers that are competing for my business.  If you want to end up on my radar then you have to both meet and exceed my expectations. If you meet my expectations then I am likely to do business with you.  If you exceed my expectations from time to time then you will stand out and thus help yourself to a bigger share of my spend on your category of product or service.

Allow me to illustrate this through an example.

How Diet and Fitness Resources has put itself firmly on my radar for fitness supplies

Recently, I wanted to buy a Swiss ball and so I searched for it on the Internet and found plenty of suppliers.  So why did I end up buying it from Diet and Fitness Resources ?  Quite simply because their website was the one that I found the easiest to read / make sense of, their price was competitive and I liked the fact that the delivery charges were clearly spelled out on the home page and were reasonable.  Other suppliers made it hard for me to get hold of this information; one supplier had made me go through the purchasing process only to hit me with a delivery charge of £10 right at the end – a charge I was not willing to pay.

So I chose to do business with Diet and Fitness Resources because they were the first supplier that I came across which met my expectations around the website, the price and the delivery charge.

Once I had placed the order I got an email confirmation about my order.  The email confirmation itself met my expectations as I am used to getting these confirmations when I buy stuff on the Internet.  What exceeded my expectations – because I remember noticing this and being surprised – was the fact that the email came from a human being (Zoe Harris) rather than a faceless autoresponder.

The next surprise that I got was the second email which arrived within half an hour of the first email.  This email was once again from Zoe and simply stated that the order had been dispatched.  This took me by surprise because many suppliers do not send this kind of email and the ones that do tend to take between 1 – 3 days to dispatch the goods and send the email.  Whilst I was surprised, I did not actually pay any attention because the Diet and Fitness Resources had set the expectation that I was likely to get the goods 2-3 days after placing the order.  And that is exactly what I have been used to with other suppliers.

When the Swiss Ball arrived the next day, Diet and Fitness Resources were firmly established on my buying radar.  Why?  Because they had under-promised and over delivered.  Put differently they had exceeded my expectations.  And they have done so on the very first occasion that I have done business with them.

Three lessons around customer expectations

  1. If you the supplier meet my expectations then I will do business with you.  However, if you want more than your fair share of my spend on your category of product then it really helps if you exceed my expectations occasionally.  And a great moment to exceed my expectations is on the first order I place with you Why?  Because it is critical moment, it is where I am trusting you, and if you over deliver then you will stand out.  That is simply how it is to be human.
  2. It is especially important that you exceed my expectations when I feel most vulnerable. I  am most likely to feel vulnerable when I place my first order with you; when I have my first significant problem and need your help; when I am stressed; when I need you to be compassionate and bend the rules in order to take my situation into account and help me out.
  3. Whilst you the supplier can take action to shape my expectation the reality is that I already have my own expectations.  They have probably been set by your competitors.  And if you are selling goods over the Internet then it is likely that those expectations have been set by Amazon.  So you have to match those expectations or hope that Amazon does not supply the products that you are selling.  Alternatively, you have to be willing to offer a cheaper price to tempt me to buy from you.

Are you delivering a P.L.E.A.S.A.N.T customer experience?

The receptionist at my local physio clinic failed to deliver a P.L.E.A.S.A.N.T experience

Recently, I became a customer of a local physiotherapy and chiropractic clinic.  At the first visit (the diagnostic) everything went well and I was delighted that my ‘consultant’ was able to see me the next day to work on me.  I turned up on the day and walked into reception.  The receptionist did not greet me – interesting that I noticed that.  So I took a couple of steps forward and told the receptionist my name and that I had turned up for my 10:50 appointment.

The receptionist looked into her system and told me that the appointment was scheduled for 11:20.  To which I replied “That’s odd, this appointment was made yesterday and it was for 10:50!”  The receptionist (a young woman in her 20s) simply looked at her screen and replied that the appointment was for 11:20.

What got me was the attitude.  It was an attitude of I don’t care, I am not interested in you or your issue.  Furthermore, it came across that the computer system was right and I was wrong!  I remember thinking how difficult is to say (genuinely): “I am sorry we messed up, does this change cause you a problem?”  And then simply give me the space to air my concern or upset.

Here is simple checklist to help you deliver a P.L.E.A.S.A.N.T customer experience

Polite and courteous – are you using appropriate language to welcome your customers?  Do you say hello, good morning, good afternoon, goodbye, thank you, what can I help you with today etc?  Do you greet your regular customers by name?  In my view this is a neglected area especially with younger members of staff – too many simply do not get the critical importance of politeness and courtesy in human to human encounters. In my case, the receptionist, did not greet me with even a simple “Good morning”.

Look and listen – do you look for opportunities to listen to customers?  Do you give your customers undivided attention?  Do you listen to what is unsaid as well as what is articulated in language? Do you pay attention to your customer’s body language?  In my case, if the receptionist had listened to me she would have got that I was concerned about leaving my children on their own for an extra half an hour.

Eye contact – do you establish and maintain friendly eye contact leaving your customers feeling that you are interested in them and what they have to say?  In my case, at the clinic, the receptionist spent more time looking at her computer then she did at me.

Appearance – do you appear approachable and friendly when faced with a customer in person or on the phone?  Do your clothes make the kind of impact that the customer expects in your setting?  Does the website/retail store make the right impression?  How about the appearance of the location?  In my encounter with the receptionist, I remember thinking “She belongs in a beauty salon or behind a perfume counter, not in a health clinic!”.

Smile – are you genuinely pleased to hear from / see your customers?  Even if you are not, do you put on a smile (not  a big fake grin) to make your customer feel welcome? In my case, the receptionist did not smile once, though my ‘consultant’ made up for this when she welcomed me with a genuine smile (at least it occurred as genuine).

Anticipate – do you care enough about your customers to anticipate and cater for their needs?  I am talking about more than event driven marketing.  For example, why is it that physio clinics provide uncomfortable seats in the reception area?  Do these people not get that the reason most people come to them is because they have some kind of back problem?  Or why do these clinics not go that one step further and anticipate that many customers would welcome access to videos that show them how to do the recommended exercises?  The key to this step is to step out of the ME circle into the YOU (Customer) circle

Nurture – how well do you nurture the relationship with your customers?  Are you eager to hear from your customers?  Do you make it easy for them to contact you with suggestions, questions, complaints?  Do you get back to them with what you have done to act on their suggestions, complaints, questions?  How eager are you to actually serve your customers?  Does this come across to your customers?  Do you remember their birthdays?  Do you say thank you by providing special recognition or offer?  Do you ask for their help in improving / growing your business?

Truth and trust – are you truthful with your customers?   Do you regularly and consistently build trust by delivering on your promises?  Do you acknowledge your mistakes truthfully and set about clearly to make things right and rebuild trust?  Do you give customers all the information that they need to make an informed decision?   Do you publish the ‘bad reviews’ as well as the ‘good reviews’? Do you promise only what you can deliver?

Follow

Get every new post delivered to your Inbox.

Join 4,224 other followers

%d bloggers like this: