How to increase (online) sales by focusing on the customer experience

Let me share an interesting experience with you

Last week I got fed up of lugging a heavy backpack around whilst travelling on business – it was putting a strain on my neck, shoulder and back.  As I was busy doing some consulting work with/for a bunch of fabulous people in Ireland I asked Sue to look into some suitable laptop bags with wheels and a telescopic handle.  This is the bag she ended up buying for me:

What is so great about this bag?  Before I answer that question I want to backtrack and let you in on the process that I went through to select this bag.

Sue did her research based on my sketchy requirements and offered me two options – two URLs.  I clicked on the first link and it took me to this bag.  I clicked on the second URL and it took me to another website and a bag that looked remarkably similar to this one.  So why did I ask Sue to buy this bag?

The first etailer is practice Sales 2.0 whilst the second etailer is firmly stuck in Sales 1.0.  What is the difference you might ask?  From my eyes, the customer’s eyes, the first etailer has looked at the sales process through my eyes and designed it such that it is a no brainer for me to buy from this vendor.  The second etailer has a product and is simply putting it on display and hoping that someone will buy it.

Who is the first etailer? Amazon.  Who is the second etailer? Some online luggage etailer – I think because I cannot even remember the name of this etailer.

Why did I buy from Amazon?

When I was faced with making a simple choice – two similar (but not identical) bags from two different etailers – how did the situation occur for me?  The most important question was this one: which bag will perform the service (‘the job’) that I have in mind?  I was not looking for a bag – I was looking for a solution to a problem!  Amazon provided reviews of this bag.  The reviews were from actual users of this bag (including a pilot) and through these reviews I was able to picture how well this bag would do the job. The competing retailer simply provided a list of product specifications – data – that simply had no meaning, no imagery, in my mind and thus did not provide the assurance I was looking for.

What was my other main consideration?  Can I count on Amazon to get this bag to me this week when I return to the UK?  Notice that I had already favoured Amazon and Amazon would only be selected out (and the competing retailer in) if it failed this test.  This was an easy question to answer because I have bought many times from Amazon and it gets my order to me within 2 -3 days. And recently, the next day – when I paid for next day delivery.

So, lets revisit this through the lens of my favoured formula: Customer Value = Benefits – Effort – Risk – Price +/- Treatment

I asked Sue to buy the bag from Amazon because Amazon created more value for me. How?  The ‘Treatment’ variable does not matter because I was interacting with websites not human beings.  The ‘Price’ variable did not matter because the price of the bags was almost identical – this bag from Amazon was slight more expensive.  That leaves three variables: ‘Benefits’, ‘Effort’ and ‘Risk’.   I had done business with Amazon before and it has an outstanding reputation (as evidenced in the latest survey) so it won hands down on ‘Risk’ – that is to say no risk in doing business with Amazon versus unknown risk with the competing etailer.  Amazon won again on both ‘Benefits’ and ‘Effort’ – Amazon, through the user reviews, did a better job of illustrating the benefits and made it easy for me to find out about these benefits.  The interesting part is that for all I know the other bag from the competing etailer may have been stronger on actual ‘Benefits’ – that is to say that it might have done the job better than this bag from Amazon.  Yet, I will never find that out because the competing etailer did not do a good enough job of illustrating those benefits.

What are the lessons?

1. We, the customers, don’t buy products we are looking to get specific job/s done through products and services. So go and figure out what the job/s are.

2. You can have the best solution to the job that your customer wants done and lose the sale if you don’t really know the customer’s needs and buying process.  So go and figure out what matters to customers (during the buying process) and how exactly they go about buying (notice I made the product decision before the vendor decision, someone else may have done it the other way around). Different customers will buy differently so ensure that you have flexibility in any process / interface that you build.

3. Take the risk out of the buying process – the product and your company.  Provide a product selector that makes it easy for the customers to select the best product for the job the customer has in mind. Provide testimonials from credible sources: customer like them, trusted independent bodies like Which? Provide figures on how many of these products you have sold and what kinds of people buy them.  Provide easy to understand, no quibble, guarantees.  By the way the more important the purchase the more the importance (weighting) of the ‘Risk’ variable: there is more risk in hiring a consultant than buying soap powder.

4. Make it easy for the customer to buy from you – take all the effort out of buying.  Look at the buying process from the customer’s eyes and take out all the obstacles.  Take out all the industry jargon that confuses customers.  Take out the complexity in any decisions the customer has to make – reduce the number of decision and reduce the effort needed to make a decision.  Reduce the number of steps.  Ask for the minimum information that you need.  Make it easy to pay through a number of different payment options.

5. Brand (reputation) matters.  I cannot help but think that I was already favouring Amazon even before I clicked the URLs.  How do I know?  Because I clicked on the Amazon URL first.  Why? Because I recognised the brand and have a positive story running around in my mind about Amazon being a great company to do business with.  If I have not done business with you before then all I have to go on is your brand (your reputation) – if I have any concerns around your brand then you increase the ‘Risk’ and that may drive me to your competitor or lead me to ask you to reduce your ‘Price’ to compensate me for that risk.  So brand is particularly important for winning new customers. 

Do you see anything that I do not see?  What are your thoughts / experiences?

Customer Experience: what is in unlimited demand yet in limited supply in the modern world?

The Customer Value Equation

My approach to the Customer is fundamentally one of creating superior value for the Customer.  In an earlier post I spelled out my formula for creating superior value:

Value = Benefit – Effort – Risk – Price +/- Treatment

If you want to create more value for the Customer then you can focus on any of these five levers.  In this post I want to focus upon the last one “Treatment”. Fundamentally “Treatment” is how you leave your Customer feeling.

The Values Proposition:Do Small Things With Love

In Why Is It So Hard to Be Kind? William C Taylor shares the story about how his father was treated as an economic object (“I-It” in  Buber’s terms) by his Cadillac dealer even though he had been a loyal Cadillac customer.  Then William contrasts this to the way that he was treated (“I-Thou”) by a Buick Dealer.  To cut a long story short the Buick dealer: honoured an expired loyalty certificate that the Cadillac dealer would not honour; allowed William’s father to take the car for the weekend – without being asked; and then built an amazing bond with William’s father.  How? In William’s words:

“Monday rolled around and my father found himself being rushed not to the dealer but to the hospital, with what turned out to be a medical problem that required surgery (He’s doing great now, thanks.) As he was lying in his hospital bed, thinking about whatever it is we think about in these moments, he realized that the Buick Lacrosse was sitting in his garage! So he called the dealer from the hospital and asked how he could get the car back. “Don’t worry about the car,” he said. “Just get better.” And the next morning, what should arrive at the hospital but a lovely bouquet of flowers and a nice note from the Buick dealer!

In a follow up post William shares his visit to a retinal specialist and this is what he says about his experience:

“This doctor did an utterly competent exam, explained my situation, and offered a sound course of action. So I’m fine. Yet I keep thinking back to the experience, not because of the quality of the medical care I received, which was superb, but because of how uncaring the experience felt.  As I sat in the waiting room, it seemed more like the offices of a payday lender or a bail bondsman than that of a highly credentialed surgeon. “If you arrive late, your appointment may be rescheduled,” one sign warned. “Copay is due upon arrival,” another signed explained.  My fellow patients and I were nervous, anxious, worried about our eyesight. Yet it felt like the doctor thought of us as a collection of truants, tightwads, and general layabouts.”

William goes on to write:

“There is a temptation, amidst the turmoil, for pundits to conclude that the only sensible response is to make bold bets — new business models that challenge the logic of an industry, products that aim to be “category killers” and obsolete the competition. But I’ve come to believe that a better way to respond to uncertainty is with small gestures that send big signals about what you care about and stand for. In a world defined by crisis, acts of generosity and reassurance take on outsized importance.”

“Nobody is opposed to a good bottom-line deal,” I concluded at the time. “But what we remember and what we prize are small gestures of connection and compassion that introduce a touch of humanity into the dollars-and-cents world in which we spend most of our time.

“As the value proposition gets rewritten in industry after industry, it’s organizations with an authentic VALUES PROPOSITION that rise above the chaos and connect with customers. Few of us will ever do “great things” that remake companies and reshape industries. But all of us can do small things with great feeling and an authentic sense of emotion.”

James G. Barnes said something very similar when he published his book Secrets of Customer Relationship Management.  What was the subtitle? “Its All About How You Make Them Feel

What does Frederick Richheld have to say?

In Profiting From the Golden Rule Frederick Richheld stresses the importance of the “I-Thou” orientation.  In his words:

Our system of financial accounting rewards quarterly profits, but struggles mightily to place a value on ethical behavior

“Reputation is earned through the simple, age-old concept of the Golden Rule: treat others as you yourself would want to be treated. Each time you live up to the Golden Rule, your reputation is enhanced; each time you fail, it is diminished. And the mathematics of long-term financial success — revenues, profits, cash flow — square perfectly with this scorecard.”

“We all want to be treated with honor and respect in ways, large and small, that enrich our lives. Such experiences not only make us happy, we want to share them with people we care about. By recommending an experience, we’re signaling our trust that our friends will be treated similarly. Recommendations also signal to businesses how customers view their relationship with the company. When customers feel so well treated that they enthusiastically recommend a company to friends, they are promoters. When treated so badly they recommend avoiding the company, they are detractors. Both have direct and measurable economic consequences.”

What is in unlimited demand yet is in limited supply in the modern world?

We strive to deliver something for which there is unlimited demand–being treated with honor and respect. There seems to be a very limited supply of that in today’s world.” CEO Dan Cathy, Chick-fil-A (an award winning US company)