Category Archives: Customer Loyalty
Based on recent experiences I find myself moved to create a ‘Hall of Fame’. And a ‘Hall of Shame’ for well known brands based on how these businesses treat their customers. My commitment is to share the great practices of the ‘givers’ as well as the deceitful-manipulative practices of the ‘takers’.
Let’s start the ‘Hall of Fame’ with Waitrose. Why Waitrose? Yes, the stores are clean, spacious, well presented, well stocked. And our local store even has a cafe-restaurant and ample parking. Yes, the staff in the store are helpful. Yet, these are not the reason that I am choosing to place Waitrose, as the first entrant, into the ‘Hall of Fame’.
Recently, I found wife telling me that she was surprised about the quality of the tangerines: some of the tangerines were hard (too hard) and others were soft (too soft). Now, I found this interesting. Why? It was the way she talked about it. I think it fair to say she was shocked. What this suggest to me is that Waitrose, in her experience, delivers great quality products consistently.
Despite the relatively small price and the hassle involved, she decided to take them back. Why? This is not the kind of product quality she expects from Waitrose. And she was wondering how she would be treated.
Later that day, my wife couldn’t wait to tell me her experience. I was clear by the way she had a huge smile on her face that the experience was positive. What did she say? Something along these lines: “The staff at Waitrose were great. They apologised, I could tell they were also surprised and genuinely sorry about my experience. And they refunded twice the price. Not just the price of the tangerines, twice the price.”
Waitrose enters my ‘Hall of Fame’ because of the following:
Reputation for product quality – I cannot imagine my wife giving up half an hour of her time to take back a product that only cost her £3 to the likes of Tesco;
Great customer service – the staff in the store have always been friendly and helpful;
Design and condition of the stores – the Waitrose stores are clean, white, spacious, inviting, natural and for some even uplifting; and
An equitable-fair-collaborative-generous business philosophy – Waitrose lives-exhibits a philosophy of generosity and in so doing shows up as a ‘giver’. A ‘matcher’ would simply have refunded the purchase price. And a ‘taker’ would have put all kinds of hurdles in her way so that it was not worth her while even thinking of asking for a refund.
Most of all, Waitrose enters my ‘Hall of Fame’ because my wife told me she “can’t see herself not being a Waitrose customer”.
In the next post, I will kick-off the ‘Hall of Shame’ with anti-virus vendor BitDefender.
Does Amazon deserve the label of ‘Earth’s most customer-centric company’? Before I answer that question, allow me to tell you a little story about a well-known telecommunications company, one whose official strategy was to become customer-centric.
What Customer-Centricity Meant At A Well Known Telecommunications Company
I once did some consulting work for one of the world’s largest telecommunications companies. In the process, a certain kind of fellowship grew between me and the billing manager. To some extent he was a frustrated man. Why? The billing challenge was growing more and more complex: requiring more people, more expensive IT equipment, stronger oversight etc. .
What was the cause of the increasing complexity and thus challenge in billing? The number of unique billing plans in place. There were thousands of them. And most of them were legacy billing plans – many years old. So I asked the billing manager, why he didn’t just move customers to the latest billing plans. And in so doing he would be free to delete the thousands of legacy billing plans that were the cause of the headache. Can you work out his answer?
He told me that he built a ‘business case’ and presented to his boss. Yet, the proposal had got nowhere because Marketing had vetoed is proposal. What was the basis of the veto? The legacy billing plans were much more profitable for the company. Why? Because compared to the latest, competitive, price plans, the legacy plans were overpriced. And if the company took the decision to move these customers, arguably the most loyal as they had been with the company for a long time (3+ years), then this would mean giving away revenues and profits.
What did customer-centricity actually mean in this company? It involved lots of activity: vision statements, presentations, meetings, talk, customer research, mystery shopping, process changes, balanced scorecard. What it did not involve was the conscious choice to do right by the customer: to put the wellbeing of the customer on par with the wellbeing of the company (revenues, profits, share price).
Does Amazon Deserve To Be Called The Earth’s Most Customer-Centric Company?
We all know that Amazon works. It is easy to find and buy from Amazon. It is easy to keep track of where one’s order is. Amazon delivers the goods within the promised window. It is easy to return goods and get a refund. And on the only occasion something did not turn up when expected, I found it easy to get hold of Customer Services, and the call was handled by a friendly agent, who got my situation, validated my feelings, made a promise to have the issue fixed by the next day, and it was fixed.
This level of performance has kept me doing business with Amazon despite my concerns over Amazon’s tax avoidance strategy, and the concerns about how Amazon treats the folks who work in the warehouses. And to some extent my disposition towards Amazon has been a pragmatic one rather than one of affinity with what Amazon stands for.
This week the situation changed. What happened? My wife signed up for the Amazon Prime offer and she then enrolled me into it as well. As a result, I found renting and watching a movie (on demand) with my eldest son. The experience of selecting, paying for, and watching the movie was effortless.
The next day, to my astonishment (I do not use the world lightly), I found myself reading the following email:
We’re contacting you about your recent attempt to purchase “The Wolverine”. We recently learned that a technical issue may have prevented you from being able to watch this video. We’re very sorry about this.
To help make it up to you, we’ve issued a £3.48 for this order. The refund will be applied to your original order payment method and should complete within the next 2-3 business days.
We look forward to seeing you again soon.
Please note: this e-mail was sent from a notification-only address that cannot accept incoming e-mail. Please do not reply to this message.
Why was I astonished? I was and continue to be surprised that there is a commercial organisation that gives! What does it give? Proactive service. An apology. A refund. And all on the basis that a technical issue may have prevented me from watching the movie!
Once I got over my astonishment who was I left thinking-feeling? Given that I had watched the movie without any problems, and Amazon had been generous, I found a strong urge to contact Amazon and ask them to take their money back. Why? Because, I was brought up to repay good with good, generosity with generosity, considerateness with considerateness. Then I read the bottom of the email and found I could not reply to the email.
What did I find myself doing within 24 hours of receiving this email? I found myself buying a book, that I had been meaning to buy and had not bought, for £9 and watching a movie that I had not been intending to watch (this week) for £3.49.
Why did I do this? It occurred to me that I could not treat badly one who has treated me well. And as such I felt a pull to repay Amazon’s ‘goodness’ by repaying the £3.49, which I did by buying and watching a movie on the day of the email.
If the acid test of customer-centricity is putting the needs-interests of customers on par with the needs of the company then I am in no doubt that Amazon is customer-centric. Is this enough to show up as Earth’s customer-centric company? No. To win that mantle it occurs to me that an organisation chooses to prosper only by doing right by customers. That is how Amazon shows up for me this week. I cannot imagine any other company (that I am doing business with) taking the stance that Amazon takes in relation to its customers.
For those who are cynics, I get that Amazon may have taken a pragmatic decision to provide the refund so as to reduce the number of calls (and/or emails) coming into the call-centres. Even if this is the case, then the action that Amazon has taken is smart. So at the very least the folks at Amazon are smart in a way that also benefits customers.
Why Not Replace People With Technology?
In the second half of the 90s I was involved in consulting in the area of shared services. Being a sidekick I got to witness the sales pitch. What was the sales pitch? No human beings. Everything in the back office was subject to business rules. The business rules could be codified, programmed and back office work could be automated. No human necessary. Nirvana: 24/7/365 nirvana of efficiency guaranteed to deliver the same outcome each and every time.
Today, I notice the same love of technology as regards the front office: where the customer meets the enterprise. In this age of technology do people still matter? Do we need sales people given that content marketing will generate the interest, product demos can be put on the web, and the ‘inside sales’ people can take the orders? Do we need to have any people in marketing given that big data will generate the insights, decision engines will contain the heuristics, market resource management systems will hold the marketing assets, and marketing automation will take care of the execution of marketing campaigns? Do we need people in the call-centres taking calls given the extensive self-help that can be enabled through digital channels and every customer would prefer to interact via Twitter? Do we need people in the stores? Why not rebuild the stores so that they resemble a combination of a website and a vending machine?
What Do These Two Women Say On The Matter?
Allow me to share a conversation that I overheard the other day between two women. Before I do that let me set some context. Waitrose is supermarket chain in the UK and it is owned by The John Lewis Partnership. The John Lewis Partnership has been and continues to do well despite tough times for retailers. Tesco used to be the darling of the CRM press and used to be the dominant supermarket chain. It has not been doing so well since austerity hit. Morrisons is the fourth largest chain of supermarkets in the UK.
As promised here is the gist of the conversation (between two women) that I overheard at the weekend:
Mrs A: “Waitrose is known for their great customer service and rightly so. It’s easy to find someone to help you. And when you ask for help in finding something, the Waitrose person walks you across the store and takes you right to the item you are looking for. They are so helpful.”
Mrs B. “I was in Waitrose this week and wasn’t sure what ingredients I needed for eggs Benedict; I haven’t cooked them before. So I asked for help. The Waitrose man didn’t know either but he told me that he would find out. I saw him walk to one of his colleagues. Then he came back and told me what I needed and how to cook eggs Benedict. He was so helpful: he made my problem his own. That’s such good service.”
Mrs B. “The staff in Morrisons don’t walk with you to the item you are looking for. Yet, I always find them warm, friendly and helpful.”
Mrs A. “I don’t like Tesco. It is hard to find people in the store to help you. And when you do find someone to help they tell you where you can find the item, point towards it, and then leave you to it. They don’t walk with you and show you where it is. They don’t care – not at all like the Waitrose people.”
Mrs B. “I used to do all my shopping at Tesco. Then Tesco got greedy – pushing up prices and cutting down on the customer service. Now, I shop for the basics at Morrisons and the rest from Waitrose.”
My Take On The Situation
I’ll leave you decide whether people matter or not in the age of technology. For myself, I am clear that humans are simply more at ease in dealing with other human beings. And there is no substitute for great customer service – the way that the folks in Waitrose (and John Lewis) stores interact with their customers, and amongst themselves.
Before you rush off to revamp your customer service remember that one ingredient does not a dish make. A great dish always consist of the insightful application of a recipe – and the recipe requires a mix of ingredients, in the right measure, and sequence, cooked for just the right amount of time. How does one generate such insight? Through experience: on the battlefield of life. What is the recipe? The business philosophy and organisational design: what matters, who matters, the operating principles, how conflict is handled, how rewards are shared, how people are structured into groups, and how interactions-relationships-differences-conflicts are handled…
Please note: I am not in the business of giving advice (in this blog). So you shouldn’t take anything in this blog as constituting advice. In this blog I find myself involved in sharing my thinking and experience. That is all. Then you make of it what you make of it.
In this post I complete my take on the key assertion and the 4 findings put forth in the book The Effortless Experience. Before I launch into this post let’s recap the following points from the first post.
Recap of the essential points from the earlier post
The four major findings put forth by the authors:
- A strategy of delight doesn’t pay
- Satisfaction is not a predictor of loyalty
- Customer service interaction tend to drive disloyalty, not loyalty
- The key to mitigating disloyalty is reducing customer effort
Let’s also get clear on the scope of the research that gave rise to these findings. The primary mechanism was post (contact centre) call surveys completed by customers. And the scope did not included the end 2 end customer experience:
An important disclosure before we reveal the results and their implications: we intentionally limited this study to service transactions and their impact on customer loyalty.
And my position? I shared in the first post that these findings show up for me as a statement of the bleeding obvious. And it occurs to me that the headline grabbing finding “Satisfaction is not a predictor of loyalty” is misleading if not flawed. Now I fulfil on my promise to share my rationale.
Dealing with findings 2, 3, and 4
How many studies do we need to get that satisfaction is not a predictor of loyalty? Just look into your experience! I can be satisfied, even delighted, with a physiotherapist and switch to a chiropractor. Why? Because by switching I reduce my travel time from 45-60 minutes (each way) to 15-20 minutes each way. I can be satisfied with a particular restaurant and try out new restaurants that show up on my radar – usually as result of some recommendation. I can be satisfied with a particular mobile telco and switch because of some promotion heavily promoted by a competitor …
Who does the customer turn to when s/he has a pressing issue which needs to be dealt with? Customer Services and the folks sitting in some distant contact centre. What does it take for a customer to make the call to these contact-centres? My experience that many of us only call the contact centre if and only if we cannot address the issue through other means: internet, self-service channels, friends….. Why? Because, on the whole the experience of dealing with contact centres is effortful and painful.
It occurs to me that customers increasingly turn to Customer Services as a last resort and usually with the more complex issues/problems. And on the whole the Customer Services function is not designed to help customers with these complex issues/problems; contact-centres are staffed and run to minimise the cost of operations not to deliver a good customer experience. As a result of the mismatch between the needs of the Customer and the design-operation of the contact-centre customers often have to force a solution out from the contact-centre. That is to say that at best the interaction shows up as effortful. And there are many instances where the contact centre is unhelpful: quoting policy or making promises and not delivering on them as Customer Services has little power in the rest of the organisation. Given this is it any surprising that “Customer service interaction tend to drive disloyalty, not loyalty” and “The key to mitigating disloyalty is reducing customer effort”. Don’t take my word for it, read this post for my British Gas experience.
Dealing with the profound finding: “A strategy of delight doesn’t pay”
Take a look at delight. What shows up? For me, taken a phenomenological approach, the following shows up:
- I rarely find myself delighted in the course of interacting with companies of which I am a customer.
When I do find myself delighted it is because someone who is a representative of the company , or the company itself, has ‘given’ me something that shows up for me as valuable and which I did not expect.
Delight is contextual – the content which shows up as delightful in one context does not necessarily show up as delightful in another context. For example, being upgraded from an economy seat to a business seat, in Virgin Atlantic, for a transatlantic flight showed up a delightful. If I had been upgraded in the case of an hour flight the hassle would have probably outweighed the ‘delight’. Friendly-chatty service show up as delightful when I am relaxed and have plenty of time to spare; the same friendly-chatty service shows up as annoying-intruding-unprofessional when I am in a hurry and simply want the job done, the outcome delivered. If getting the job done turned out to be easier than I imagined, involved less effort on my part, then I tend to be delighted at how easy-effortless the experience was – whether conducting research, making a purchase, or contacting the customer services team and getting help with an issue.
In service transactions there is something like a recipe for generating delight in customers. The recipe involves: solving the customer’s problem; doing so quickly not leaving the customer hanging and most likely worried; minimising the effort that the customer has to make; and last but not least the human element – how you treat the customer as a flesh and blood human being with or without respect, with warmth or with coldness/indifference, as a unique fellow human being or just another call to be handled asap to meet the call time metrics….
How do the authors of the Effortless Experience see, define and measure delight? They see it very differently to me. They do not see delight in phenomenological terms: that which shows up in the customer’s lived experience – body and mind. No, they have defined a strategy of delight as consisting of a number of tactics falling under the category Moments of “Wow”:
“Moments of “Wow”
- Willingness of service to go above and beyond
- Applying knowledge about customers
- Exceeding customer expectations
- Teaching the customer
- Offering alternatives
- Perceived value of alternatives”
So what the author’s research is testing, if it is testing anything, is the effectiveness of these tactics in generating delight and thus loyalty. What if these tactics annoy customers rather than delight customers? Just this week, I rang my broadband supplier as my patience had run out. The contact-centre agent was helpful. In between conducting the tests, and understanding the size of my home, she was telling me about a special offer (wireless range extender) that the company had on, encouraging me to take advantage of this offer, and telling me she would be happy to guide me through the online process. Did this land as delightful for me? No! Why not? Because I just wanted her to fix my broadband so I could get my work done! I didn’t ring to get advice. I didn’t ring to get a free wireless range extender. I range because the broadband was slow, had been slow intermittently over weeks, and that day I desperately needed the broadband to work because I had pressing work to get done and for that I needed a fast (enough) internet connection!
Now take a look at what the authors have placed under the category of Customer Effort:
- Number of transfers
- Repeating information
- First contact resolution
- Number of contacts to resolve
- Perceived additional effort to resolve
- Ease of contacting service
- Channel switching
- Time to resolve”
It occurs to me that many of the factors that are likely to lead to delight showing up in customers, as a lived bodily experience, in-around-after a customer service interaction have been placed in the Customer Effort category.
If I am correct, this exhaustive research, the millions of data points, and the subsequent profound finding “Strategy of delight doesn’t pay” is:
- misleading at best;
- has been misinterpreted and misreported by many in the media (including bloggers) who failed to dive into the fundamental grounds of this research;
- does not prove that leaving customers feeling delighted does not generate an economic return.
I get that I make mistakes. If you see mistakes in the analysis that I have shared with you then please point them out to me by commenting.