Why marketing is one of the main drivers of customer dissatisfaction

I find it interesting that on the one hand the CMO is often given the leadership role in improving the customer experience and on the other hand the marketing function is one of the  prime culprits in generating customer dissatisfaction, calls into the call centre and customer churn.

How exactly does the marketing function contribute to customer unhappiness, negative word of mouth and customer churn?  By misleading the customer – sometimes unintentionally but often intentionally.  Lets make this real by sharing some examples:

Recently Vauxhall (GM brand in the UK) has had to change its Lifetime Warranty advert after customer complaints.  Why did some people complain and get the ad changed?  If you read the small print you find that the Lifetime Warranty is not a lifetime warranty in the sense that the normal person understands it.  Specifically, the warranty covers only the first 100,000.  And it applies only to the first owner – the warranty is not transferable to later owners.

How many people will buy a Vauxhall car without reading the small print and then be disappointed?  How many of these customers will then ring the contact centre to complain?  How many will go on to tweet about their negative experience?

My wife shops with La Redoubte regularly so she was pleased when she got a promotional offer through the post.  She proceeded to spend a considerable amount of time and psychic energy in choosing the two garments she wanted.  Then she range the contact centre to place her order.  Only after she had placed her order did she find that she could not get the promotional discount: apparently the promotion did not apply.  Yet the agent could not explain why not – at least not to my wife’s satisfaction.

Result: my wife is no longer an advocate and a loyal shopper that La Redoubte can take for granted.  I will be writing a post about this soon to draw out some insights.

In the UK, the mobile operators are advertising very favourable offers.  When you look at the offers you find that at a price point in the 18 month contract, the customer has to reclaim a certain discount (that is used to advertise low monthly charges) and has to use specific procedure and complete this procedure in a specific time.

The marketing thinking behind this is clear:  you can get customers because the pricing looks attractive and yet the customer’s end up paying more because the redemption process has been designed to make sure that only the most diligent customers will successfully redeem the discount.   How many of these customers will ring the contact centre to complain?  How many are being taught to distrust marketing communications?

Then you have my BSkyB experience that I wrote about back in September 2010.  Where I shared my story of how I was lured in by the slick marketing promising a bundled offer and an easy life only to find a very different reality:  How to turn an advocate into a detractor?

Are these the only companies that are engaged in these practices?  No.  I am not pointing my finger at these ‘bad’ companies – they are no better and no worse than the majority of companies.  Why is that?  Because the practice of misleading customers either through sloppy communication or deliberate manipulation is widespread.  It is even considered good marketing!

How about thinking and talking about business in customer terms?

It strikes me that organisations can take a big step forwards in becoming customer centric simply by measuring, reporting and talking about the impact of their actions on customers and the value that customers represent to the business.

Allow me to illustrate this by using a consulting experience at a brand name telco.  One of the things that really matters to customers is how easily, quickly, effortlessly, conveniently they can get a replaced handset if they have an issue with their existing handset.  The functional department that is charged with this task is the Device Logistics.

What do you think the focus of the typical Device Logistics function is?  The focus of the function is, typically, on devices, operating cost and service levels.  As a result management talk about and measure the no of devices that needed to be shipped, no of devices on back order, lead time between ordering and receiving handsets, no of devices shipped, no of devices delivered to the customer address within the SLA, productivity and cost of operations.

Not once did I hear conversations about customers, nor the impact of policy and practices on the customer’s life or attitude towards the company.

Now imagine thinking about the Device Logistics function in terms of impact on customers.  If such an approach was taken then management would be measuring and talking about the following types of matters:

  • How many of our customers have been impacted by our delivery process in the last month?
  • How many customers have we lost as a result of our policies and practices?
  • How much revenue, profit, lifetime value has walked out of the door as a result of these policies and practices?
  • What kinds of customers – Gold, Silver, Bronze, Young, Professional, Older – are we losing?
  • What will it cost the business to replace these customers with new customers so as to replace the revenue, profits and lifetime value that has walked out of the door?
  • How many potential new customers have we lost as a result of the bad word of mouth from existing customers who have been disappointed by us?
  • What is the cost associated with this bad word of mouth?
  • How many customers ended up calling the contact centre to ask questions and/or make complaints about the handset replacement process?
  • What cost did the business incur in dealing with these customers – their questions, their complaints?
  • How many hours did customers spend waiting for us, at home, to receive their replacement handsets?   What is the cost to our customers of this waiting?
  • How can we do away with the biggest cost and inconvenience – making them staying at home all day – we impose on our customers?
  • What would be the impact on customer retention, customer loyalty, as a result of designing the handset replacement process from a customer perspective?
  • How can we engage our customers in the handset replacement process so that we all come out as winners?

Thinking in terms of customers and impact on customers – in terms of customer satisfaction, customer retention, customer loyalty, word of mouth, brand reputation – can be applied to every single function that touches the customer.

My assertion is that organisations will only make the transition towards becoming customer centred, designing and delivering better customer experiences, when the organisation as a whole and silo’s in particular think about operations in customer terms.  Specifically, the impact of operational practices on customer retention, customer loyalty and word of mouth.

What do you think?  Have you seen this in practice? If so where?

Great performers focus relentlessly on perfecting the basics

In pursuit of the sizzle too many companies especially those that are marketing communications driven forget the steak – the product/service the customer will actually experience.

Over 10 years ago I co-developed (with my fellow consultants) a customer relationship strategy for an established telco.  This was a brand that regularly was perceived as having a poor quality network and this was in part due to weaknesses at the retail stores (taking on customers in areas that had a poor quality signal) and in the customer services function – this information came directly from the customer base.

If this was not enough spur to action there was information that showed that the customers of a MVNO (mobile virtual network operator) rated this MVNO very highly in terms of quality of network and in terms of customer service.  Given that the MVNO was piggy backing on the infrastructure built and operated by the established telco, this finding should have been a wake up call to get the basics right: only sign up the right customers and then provide excellent service when customers rung Customer Services for help.

Instead of focussing on the basics, senior management were focussed on all things internet.  Why?  At the time the Internet was sexy and any company that had an internet strategy increased its share price, usually dramatically, overnight.  Meanwhile, what really mattered to new and existing customers continued to take a back seat.  And the smarter competitors continued to pull ahead and take market share.

In 2010, the situation has not changed much.  Many companies continue to do the same: ignore the basics and focus on the latest in-thing.  In the latest email that I have received from Drayton Bird (a direct marketing legend)., he shares the following story:

“Recently, after scrupulous research over many months, my partner Marta decided to buy a new flat screen TV, which she did through Amazon.   They use Parcelforce – “proud winners of Business in The Community’s Healthy Workplaces Award 2006”, who also seem rather excited because “Hitwise have recognised our online developments this year”.

It’s good to know they’re all slaving away in such a splendid environment and such hot stuff on-line, though I wonder what exactly “on-line developments” are.  It was their touching attention to things that don’t really matter to their customers that prompted my heading. Because if you want to talk to them there is even a text phone number for the Deaf and Hard of Hearing.

But what if, like Marta, you want to get a TV set delivered?

What if they’re so useless they can’t tell you even vaguely when it is likely to arrive – just any time between 8:00 am and 6 p.m. on a certain day?

And what if they couldn’t even get the day right – so you spend 10 hours waiting – and it still hasn’t arrived?

Then, what if the much-praised on-line developments tell you it’s just arrived at 7:34 pm – which you know is a lie because you and two other people are looking out of the window?

And what if after you (eventually) get a reply from somebody on the phone – during a call you’re paying for – which confirms that they do indeed only deliver – or in this case fail to deliver – between 8 and 6?

What then?

Well, you hang around the next morning till it does arrive.

Then you get an e-mail saying “Thank you for using our website” – with an apology, kind regards and of course details of the deaf phone number I mentioned, signed by an “Internet Advisor”.

Hey, guess what, Parcelforce? I don’t want internet advice. There are plenty of people like BT Broadband screwing me around on-line already, and they need no help from you.

I want you to deliver things. That’s all you have to do. That’s why Amazon (mistakenly, it seems) use you……”

To paraphrase one of my favourite characters (Richard Feynman): Reality must take precedence over public relations, for customers cannot be fooled.