Jennifer Rice

Introducing White Board Wednesdays

A weekly video series on how to attract and keep customers, faster and more efficiently. Our first video is up! Only 15 min long, I explore key concepts in customer centricity. 

Click here to access the video. 

Role of Retail in Sustainability

Just posted Role of Retail in Sustainability on my business blog. I'm surprised at how few retailers are stepping up to the plate and helping consumers make educated choices on sustainable products. Best Buy is a laggard, Home Depot is a leader. If you know what Wal-Mart is doing in customer education, would love for you to contribute a comment.  

"First car I've considered crashing into a tree"

This has to be the funniest and -- sadly for Honda -- worst review I have ever seen in print. It's a review of Honda's new Insight 1.3 IMA SE Hybrid.

And the sound is worse. The Honda’s petrol engine is a much-shaved, built-for-economy, low-friction 1.3 that, at full chat, makes a noise worse than someone else’s crying baby on an airliner. It’s worse than the sound of your parachute failing to open. Really, to get an idea of how awful it is, you’d have to sit a dog on a ham slicer.
So you’re sitting there with the engine screaming its head off, and your ears bleeding, and you’re doing only 23mph because that’s about the top speed, and you’re thinking things can’t get any worse, and then they do because you run over a small piece of grit...

Definitely worth a read.

Strategic CSR in Hospitality

Just wrote a new post on Building the Ethical Reputation: Strategic CSR in Hospitality on my business blog... it includes an Opportunity Audit comparing initiatives for Fairmont Hotels, Marriott and IHG and mapping how well they support the brand strategy. Come visit and contribute your thoughts. 

Soft Underbellies

Tim Manners writes about the "vulnerable soft underbellies" of Apple and NetFlix in a recent Fast Company article.

Apple won't let us do what is ultimately the most important thing. It won't let us easily change the damn battery when it dies... This is not the stuff of which undying customer loyalty is made. They have needlessly left themselves vulnerable to any competitor able to design something of comparable aesthetics and smart enough to let the consumer have life-and-death control over its battery.

The famous Netflix promise is that you can rent as many movies as you want each month for a flat fee. Well, not exactly. Netflix recently acknowledged that it slows down the rate at which it fills the orders of its heaviest users, a practice critics call "throttling."... As with Apple, it took a class-action lawsuit before Netflix would publicly acknowledge that it is giving preferential treatment to its newest -- and least loyal -- customers.

A strategy that punishes one's most loyal consumers is hardly sustainable.

There are so many examples of this. In the wireline telecom world, service providers promote a low per-line rate while adding special surcharges that almost double the advertised price. Consumer electronics are made to last only for the life of the one-year warranty. Wireless and cable providers give special discounts and promotions only to new customers, not to existing ones. Software companies like Symantec offer frustrated virus-infected customers no way to reach a live customer service rep without paying $40 to $70 for the call (which is why I ditched their software).

What is your company doing to sabotage its success with customers? Do you even know the areas where customers are frustrated and may cause them to jump ship? Are you willing to break away from "industry-accepted practices" in order to give customers a more desirable experience?

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BTW (shameless self-promotion plug here), we've got a pretty cool online customer dashboard where our clients can measure the gap between what's really important to customers and their satisfaction level with each attribute... then track progress in closing those gaps over time. It's a great way of identifying your vulnerable spots from your customers' perspectives. Ping me at jrice at mantrabrand.com if you'd like to know more.

Maslow & Branding: Wrap-Up

In previous posts I've outlined 8 basic human needs in Maslow's Hierarchy and how they relate to branding: Security, Connection, Esteem, Control, Aesthetics,  Cognitive, Self-Actualization and Transcendence. But as Tomas commented, "such a sequential hierarchy of needs doesn't usually happen in our post-scarcity society. Rather, we should see "human needs as an ecosystem where all needs co-exist together for the vast majority of us once our basic subsistence needs are met." Exactly right... and that's the topic of this post.

As you can see from this diagram, I've changed the pyramid to a circle (I've also rephrased a few of the names to be more reader-friendly).  In the center of this example is "Web 2.0", which refers to blogs, forums, wikis, social networking, etc. You can see at a glance what's driving the massive growth of web 2.0 -- almost every core human need is satisfied through these technologies. Blogs, MySpace, epinions.com and Slashdot are all places where different types of people can converge to get their needs met. Whereas web 1.0 only offered a source of learning via one-way communication, Web 2.0 offers entire ecosystems for people to learn, share, grow, achieve, connect, and promote a cause.

I've titled the chart "Employee/Customer Engagement" for you to think about how your brand activates core needs, both internally and externally. Let's take a look at Starbucks as an example. Starbucks environment activates Belonging and Aesthetics. Ordering a half-caf blended vente latte satisfies the need for Control (I get my coffee exactly how I want it), and Ego/Esteem (pride of being an "insider" and knowing the terminology). Ego/Esteem is also stimulated by friendly employees who remember your name and exactly how you like your coffee. Starbucks is a strong brand because they meet numerous core needs simultaneously. I'd be interested to hear from John Moore or Paul  Williams on how this model works internally at Starbucks.

From an employee engagement perspective, you might think about how you can enable employees to learn, grow, achieve, or contribute to a cause of their choice. How can you give them more control over their work environment, or their career path? How can you use Web 2.0 technologies to create an ecosystem for learning, collaborating and recognition?

Everyone talks about change... but basic human needs don't change. By aligning your brand with one primary need -- Apple with Aesthetics, or Starbucks with Belonging -- then that need serves as your anchor and compass to guide business decisions over time. Then establish links with secondary needs to deepen and enrich the brand experience.

 

Above and beyond

If you live in Dallas and need computer repair or data retrieval, call Jeremy at TopGeeks. He's smart, competent, friendly and goes above and beyond the call of duty to make sure you're satisfied.  He rescued some client data from my damaged hard disk, for which I am eternally grateful! On-site service was a big plus.

what do you think?

Wow, three posts in one day; I'm on a roll!
I'm writing a presentation about brand experience, and one of the key components is great customer service. Can anyone give me an example of a nationally recognized company that's well-known for customer service other than Nordstrom's? All the examples that come to my mind are smaller, local establishments or high-end luxury brands. Every good customer experience that I've had with a mass-market national brand has been due to an exceptional individual who had a high service ethic, not due to the company's focus on service.

Missing the forest for the trees

The Good Experience blog has a great post about the difference between customer service and customer experience:

"Customer service is the job of front-line workers, servicing customer requests for help - via an 800 number, e-mail, or a retail desk. It's important to invest in good customer service, but that's just the tiniest sliver of the customer experience.

Customer experience is the job of everyone in the company. My customer experience was bad because the product, and the refund policy, are both broken. Everyone from the CEO and CFO to the product designers and manufacturing facility contributed to this bad customer experience; and as a result, they've lost a customer and generated bad word of mouth. The good customer service I received didn't - and couldn't possibly - fix the overall experience."

This is highly related to my post a couple days ago about advertising versus branding. Just as advertising is a small component of branding, customer service is a small part of experience. I suppose I could say that brand = experience. They are both multifaceted sum-totals of the various touches and connections that a customer has with your company.

"Brand" and "customer experience" are the forest; don't get hung up on any one tree. Branding is not owned by the marketing department, and customer experience is not owned by the customer service department. Think 'ecosystem.' Think grassroots economy, distributed intelligence and empowered employees. More on this in a separate post...

I hate Comcast...

I normally don't rant about negative experiences on my blog, but I'm hoping that my little post about how much I hate Comcast will bubble up high in Google rankings and that SOMEBODY at that company might think about improving their customer experience. It's all about the power of the customer, baby. Might as well stop spending millions on smiley-face advertising to get new customers, because  the viral nature of the blogosphere is guaranteed to counteract it. So you really don't need to keep reading unless you're interested in a case study on terrible customer experience.

This is how bad it is: it's taken me 3 weeks to disconnect my service. When I cancelled, the gal in the billing department kindly informed me that I'd have to call customer service repeatedly to disconnect my service or else I'd keep getting bills (yes, that happened. Thanks for the heads-up.) I then received collections calls almost every day for several weeks. And every time, I'd repeat my story about why I didn't owe anything and requested that they stop calling me. And then the phone would ring the next day: "Hi, this is Comcast. I'm calling to see if you can make a payment today." Someone finally figured out that no one ever officially submitted a disconnect order. The funny thing is, I thought they'd disconnected my service because my service wasn't working. Just a bunch of static. (I'd always had problems with the digital music channels.)

3 weeks after my initial call, the contractor showed up at my door  to collect my cable box... and whadayaknow, another contractor showed up (from a different contractor company) to do the same thing. Both of them nodded knowingly when I remarked on Comcast incompetence... they both said they'd heard the same thing from other cancelling customers.

Last straw: I just got off the phone with -- guess who -- Comcast. I'd given back my box and final payment a week ago. Apparently my number got back in the collections cue because they keep billing customers after the cancellation date. Why? Because the actual line outside isn't disconnected. They have to send someone out to disconnect the line (which happens 4 weeks after cancellation) and then the customer is credited back the amount they paid. So the obvious question is, why didn't the contractor who picked up my box disconnect the line while he was here? This has got to be costing Comcast a fortune in repeat visits, billing, customer service, collections, and any residual customer goodwill... all because their cancellation process is broken.

There's more, but I won't bother going into the details. It just feels so good knowing that with a single diatribe, I can inform potentially thousands of potential Comcast customers that they'd be better off finding an alternative for their cable TV service.

Self-expression

I dashed off this comment on a BrandShift post on co-creation, and thought I'd reproduce  it here. It merits some additional thought...

Successful brands allow customers to assign their own meaning to a product or service, which gives them a feeling of ownership and self-expression. So for example, it's not really about open-source software, it's an open-source movement where participants have assigned a bigger meaning (power to the people) to a product.

Most examples of co-created products and services (like Lego Factory, Google's API, epinions.com, etc.) are really about facilitating self-expression. So even in the case of Lego, it doesn't really matter whether a design is actually implemented: Lego has facilitated self-expression and peer recognition. iTunes facilitates self-expression. epinions.com facilitates self-expression. Tivo. eBay. Amazon. Today's recipe for success appears to be: To serve as a facilitator for people to do, say or experience what they want. Because the underlying pent-up dissatisfaction in society today is having too much pre-packaged crap shoved down our throats... whether that's products, media, information, whatever. Witness the revolution of the masses. We want control.

ROI of Customer Experience

Reveries yesterday had a terrific article on Whole Foods:

"We're just basically outcompeting everyone," says John Mackey, explaining the success of his Whole Foods "organic" supermarket chain, as quoted by Seth Lubove in Forbes (2/14/05). He sure is: "Safeway and Albertsons have annual sales ten times as large," as Whole Foods, "but are valued at only $8 billion apiece." Whole Foods is valued at $6 billion. Winn-Dixie has "six times as many stores" as Whole Foods and "three times as much in sales," but "is valued at just 10 percent of Whole Foods' market value." While "profits are expected to fall 31 percent at Safeway and 6 percent at Albertsons for 2004," and A&P, Pathmark and Winn-Dixie "piled up a total of $195 million in losses" --- at Whole Foods "net income rose 32 percent to $137 million." Whole Foods, wholefoods.com, today has 166 stores and generates $4 billion in revenue -- its stock, trading at about $100 a share, is "up more than fivefold in five years."

Why?

Some of that performance is thanks to "organic foods, which can carry a price premium of 40 percent to 175 percent over regular foods."

But more importantly...

• "It's theater."
• "It's a very visual style."
• It's a mission: "Management's job is to take care of employees. The employees' job is to take care of the customers. Happy customers take care of the shareholders. It's a virtuous circle."
• It's grass-roots: "We allow innovation and experimentation to occur at the store level."
• It's taking care of the basics,  like having enough checkouts open.

I can attest to this. I live around the corner from a Simon David, which used to be an upscale brand. Now it's trashy, there's no experience, and the employees are lethargic. I drive right past it and down the road a few miles to shop at Whole Foods... where I cringe at the prices but love the experience. They obviously pay a lot more for good employees, all of whom are friendly, upbeat and caring. And it's obviously paying off for the company. You get out what you put into it.

A call to unbundle

I recently wrote about how Microsoft should create loyalty by giving customers what they want instead of trying to trap them with monopolistic practices. And then I read this article on c/net: To secure IE, upgrade to XP.

Microsoft this week reiterated that it would keep the new version of Microsoft's IE Web browser available only as part of the recently released Windows XP operating system, Service Pack 2. The upgrade to XP from any previous Windows versions is $99 when ordered from Microsoft. Starting from scratch, the operating system costs $199.

That, analysts say, is a steep price to pay to secure a browser that swept the market as a free, standalone product.

"It's a problem that people should have to pay for a whole OS upgrade to get a safe browser," said Michael Cherry, analyst with Directions on Microsoft in Redmond, Wash. "It does look like a certain amount of this is to encourage upgrade to XP."

Of course, Microsoft denies that its goal is to get people to upgrade to XP. But since Longhorn has been delayed, it appears to be a good tactic from the corporate and investor perspectives to boost revenues for the OS division. But what about from the customer perspective? Why should I pay to upgrade to XP if I can get a free, safe browser from Mozilla or Opera? What happens if/when Google launches its own browser? (or even its own OS? Seehere and here)

Microsoft continues to rely on product bundling, a tactic that was very effective in the past when the market was less mature. But now customers have good alternatives to choose from. Some customers may want bundles for convenience, but others don't want all their eggs in one basket... especially not if they have to pay more for it. Sure, we could say that it's only early adopters that will choose to download Mozilla, and that surely it can't hurt Microsoft too badly. But where there are early adopters, others are sure to follow. When information and opinions travel so freely now over the 'net, adoption curves are shorter. More people find out about viable options faster. The overall trend is toward empowering customers through choice, not entrapping them into expensive, one-size-fits-all bundles that are often overkill for their needs. So they might make a couple billion from coercing some customers to upgrade for safety's sake... and create resentment among the remaining majority who will go in search of a lovable underdog to support. Me, I switched to Mozilla months ago. It's great.

Obviously I don’t work for Microsoft and I don’t know what the technical implications are of unbundling all their software. They originally created everything to work together, which was a smart strategy that got them where they are today. They’re in court right now arguing that there will be terrible problems unbundling Windows Media Player from Windows OS. Yet is unbundling really a technology challenge, or does it simply run counter to corporate philosophy? As SiliconValley.com comments:

In the past, Microsoft has argued that removing Media Player from Windows would harm the way the OS works. But RealNetworks proved the company wrong in 2003 when, at a closed door meeting of the European Commission, it showed an audience of more than 100 European competition regulators, opponents and Microsoft itself how easily Windows XP Embedded runs without the media player. I suspect that Microsoft will be proven wrong again if the court rules it must comply with the European Commission's order. Just as Real had little trouble tweaking XP to run without Windows Media Player, Microsoft will have little trouble tweaking its monopoly to run despite the commission's order.

I’m in the middle of reading The Origin of Brands by Al and Laura Reis, which supports my opinion that it’s time for Microsoft to start unbundling. Microsoft is swiming against the current toward divergence in the software sector. Instead of fighting to exist as the Swiss Army Knife of software (how many people do you know who actually USE a Swiss Army Knive?), Microsoft should seek to provide the best of each element: knife, scissors, toothpick… whatever the customer needs to accomplish the job at hand. Another great book along these lines is The Innovator’s Solution by Clayton Christensen, who talks about how customers “hire” specific products to accomplish certain jobs. He, along with Laura and Al Reis, berate the handheld industry for cramming too many solutions into one package.

By the way, I’m not advocating that bundling is always wrong. As Reis points out, many people want bundles for convenience. But it’s usually a smaller percentage of customers that want a bundle, and companies usually need to provide financial incentives to encourage customers to purchase more than one product from the company. So Microsoft (and any other company) should certainly keep its bundles -- or better yet, offer customized bundles with a discount –- but also offer each product independently for customers who want to take advantage of the many new choices becoming available within the territory. Otherwise you run the risk of losing customers entirely.

Loyalty programs

McKinsey Quarterly has a brief article called Better Rewards for Hotel Loyalty that outlines how to improve hotel customer loyalty programs (free registration required). The bottom-line advice is appropriate for all businesses:

In fact, a hotel can learn a good deal by conducting a better dialogue with its guests and by giving frontline staff members an incentive to note their observations...

Hotel operators should also search for innovative ways to distinguish programs from those of the competition and to make them more appealing to frequent travelers. Free meals aren't much of an incentive to anyone on an expense account. Instead, these customers want their rewards to be personalized with things that matter to them: benefits such as upgrades to concierge floors or offerings (including free movies or minibar items) not covered by their expense policies. Moreover, some guests may be planning special events (such as weddings, honeymoons, vacations, or large parties) that could not only serve as the focus of innovative rewards programs but also use up lots of points—if hotels were aware of them.

This article got me thinking about loyalty programs. As I see it, there are three kinds of customer repeat business (sometimes known as loyalty):
1. Repeat business due to monopoly. Telecom and energy services pre-deregulation, and Microsoft Windows & Office, are examples of repeat customer business driven by lack of choice. When new choices become available, customers eagerly seek out alternatives if they're not satisfied with their current provider. Microsoft is beginning to face serious threats from Linux on the OS front; it's also losing share in the browser category to Mozilla and soon to Google (who recently registered gbrowser.com).

2. Repeat business from loyalty programs. A good example is my so-called "loyalty" to American Airlines. I fly AA because I have a bunch of frequent flier miles. And after hitting Gold status, I do enjoy a better experience than I did previously. However, this does not mean I'm loyal to AA. My bad experiences far outweigh the good ones and I wouldn't recommend the airline to anyone. I just fly them to get free trips. My last experience was bad enough that I'm tempted to use up my miles and start flying with another carrier... except I'm a bit stuck with AA as they have the most direct flights out of Dallas.

3. Repeat business due to true loyalty. This is where customers love their interactions with a company and eagerly refer others. For a lot more info on this subject, visit Ben and Jackie's Customer Evangelism blog. The reason why Linux, Apple and Google are making inroads into Microsoft's territory is because their customers are passionate about these brands.

The McKinsey article is attempting to get hotels to start thinking in terms of #3 instead of #2. The transition starts with dialoguing with customers and learning what's important to them. A free room isn't compelling to someone on an expense account; a free movie or a mini-bar item is. If American Airlines wanted to create true customer loyalty, they'd get serious about what customers really want: on-time flights and friendly, helpful staff. If Microsoft wanted to transition from monopoly to loyalty, it would stop pushing one-size-fits-all products and start giving customers what they really want. For example, a fitness trainer doesn't need (or want to pay for) the same functionality as a corporate marketing director. They could start with unbundling Office programs, or creating versions with less functionality at a lower cost, etc. Just skip the idea of a loyalty program altogether.

American Airlines' frequent-flier program birthed the misleading idea that companies could buy loyalty. Because it appeared to work, companies in all industries started creating their own versions. IMO, there is no such thing as a "customer loyalty program." Look at any company that has true customer loyalty and you'll find that they don't need a loyalty program. Starbuck's has enough loyal customers that they don't need to distribute "buy 10 and get 1 free" punchcards.

I'm not saying that there's no place for heart-felt thank-you's. Effective customer programs are those that trade value for value in acknowledgement of the relationship that's been built over time. Think about it in terms of a personal relationship between individuals: everyone knows that you can't buy love. But in a strong relationship, each party offers gifts -- tangible and intangible -- that reflects the value placed on the other party. And the gift should be something that's valued by the recipient. A gift that's selected simply because it's cheap and easy for the giver is worse than no gift at all. I'm thinking about a Sienfeld show where George buys Elaine a cashmere sweater for Christmas with a red stain on it, and he catches hell for being such a cheapskate.

So are you buying customers with a 'rewards' program? Or are you showing your appreciation to loyal customers by trading value for value? There's a world of difference.

Customer-Centered Brand Management

There's a terrific article in this month's Harvard Business Review entitled "Customer-Centered Brand Management." (You can purchase and download the article here for $6.)

The focus is on how brand management still trumps customer management in most large companies. A good example is Oldsmobile; the brand managers tried to keep the brand alive by repositioning it through the slogans, "This is Not Your Father's Oldsmobile" and "A New Generation of Olds." Neither campaign was effective in bringing younger users to the brand, and in 2000 GM announced that Oldsmobile would be phased out.

Why did General Motors spend so many years and so much money trying to reposition and refurbish such a tired image? Why not instead move younger buyers along a path of less resistance, toward another of the brands in GM's stable -- or even launch a wholly new brand geared to their tastes? ... We know why not, of course. It's because in large consumer-goods companies like General Motors, brands are the raison d'etre. They are the focus of decision making and the basis of accountability. They are the fiefdoms, run by the managers with the biggest jobs and the biggest budgets. And never have those managers been rewarded for shrinking their turfs.

The article goes on to promote a reinvention of brand management that puts the brand in service of the larger goal: growing customer equity. Amen to that. A brand is is an idea in the minds of its customers, and it's extremely difficult to change customers' minds. The path of least resistance is to fully understand your customers and determine if your brand can meet them where they're at. Unfortunately, most marketers try to make customers come to the brand instead of vice versa.

Johnnie Moore has some terrific thoughts on brand co-creation with customers, and how brands are emergent rather than 'managed'. You can read his thoughts here, here and here. He says in one post:

I think it helps to think of brands as emergent. Not things that unfold according to the master plan, but that emerge as a result of all the encounters between people who belong, with varying degrees of enthusiasm or loathing, to the community around a brand.

That doesn't mean, that there is no role at all for strategy and planning but to my mind it should shift attention towards responding rapidly to what's going on at the chalkface (I hate that word "touchpoints"). Because your brand is not created in the boardroom or marketing department, it's being created by us ordinary folks who stack your shelves or pick our cornflakes off them.

So if brands are emergent and fluid, what are the implications for the idea of brand equity? The HBR article answers:

Assigning an average value to brand equity is dangerous because it obscures the fact that brand value is idiosynchratically assigned by the customer. Managers begin to believe that the value of their brand is somehow intrinsic -- that, like a diamond in a necklace, the brand has an objective, inherent value.

Which leads to some great questions. How 'set in stone' do you believe your brand to be? How open is your company to bringing the customer into the brand management process? Do you see the world through a compartmentalized brand/business unit lens or through a customer lens?

Airlines headed for a crash

While it's fresh on my mind, I'll share my terrible customer experience on American Airlines. The plan was to fly from DFW to Zurich to Copenhagen, then hop on a train for 30 minutes to arrive in a small town in the south of Sweden. So we boarded the plane and sat in purgatory (the interminable time between boarding and take-off) for an hour until the pilot announced that the plane was officially out of service and they're trying to find us a new airplane. Knowing (along with most of the other passengers) that I wouldn't make my connecting flight, I was fortunate to get at the front of the line at the ticket desk to find out my options. The two gals working the ticket desk were 1) either new or incompetent, as they kept having to ask supervisors how to get things done on their computers, and 2) flat-out rude. One of them actually turned to the supervisor and audibly said, "Can I go work at another ticket counter? I just can't take it here anymore." (Excuse me? Isn't this your job?) No apologies to the passengers, nothing. We were treated like hassles to be endured, not valuable paying customers who had been greatly inconvenienced by their airline. Anyway, they finally got me on a flight to London/Gatwick, where I then spent almost 4 hours transferring over to Heathrow before continuing on to Copenhagen.

Is it any wonder that the airline industry is in the toilet and in need of a major overhaul? A recent commentary on MotleyFool shares another bad flying experience and says:

These businesses (major airlines) are largely failing for two reasons. One, their antiquated structure makes it exceedingly difficult to bring costs in line with revenues. Two, they provide a commodity product in a service industry, yet overall they offer an abhorrent level of service to their customers...

Is it really a surprise that US Airways is likely heading for its second bankruptcy filing, or that Delta (NYSE: DAL) is knocking on the default door as we speak? How about American (NYSE: AMR)? Are Northwest (Nasdaq: NWAC) and Continental (NYSE: CAL) looking good to you these days?

Certainly these companies have -- with your money -- helped to build the infrastructure that makes modern air travel possible. But it would take a complete rewrite in order to make these dinosaurs competitive with the JetBlues (Nasdaq: JBLU) and Southwests (NYSE: LUV) of today (not that I'd recommend those stocks either).

Personally, I believe a fundamental change is taking place in the airline industry as we speak. Further, this change will ultimately create a completely different view of what it means to travel by air in this country, and the major carriers simply won't be able to reinvent themselves in time.

When you're operating in a commodity industry, you've got two choices. Either create a new disruptive product or service that takes you out of commodity status, or differentiate on service. The major airlines are doing neither of these. MotleyFool author Matthew Emmert is right: the airline industry is going to get blown apart in the near future. JetBlue and Southwest have started the shakeup, but there's more ahead. Thank goodness. I don't think change could come fast enough for most of us travelers.

Thank-You's

I'm having a good chuckle at myself this Sunday morning...
I came into the office to finish up a project and discovered a small package in my in-box. It was from the research group in China with whom I contracted for some mini-groups. So as one typically does when a mystery package is received, I tried to guess what was in it. Too small and odd-shaped for the focus group video. Definitely too small for a final report. Ahh.... it must be a thank-you gift from China! How cool is that? Throughout my career I've contracted countless research firms and subcontractors, and this is the first thank-you gift I've gotten at the end of a project.

"Wow, I'm going to blog on this," I thought to myself. A terrific one-to-one thank-you gift that set them apart from other researchers and showed that they cared about my business. I eagerly open it up, wondering what I received from the far East. The box contained focus group videos burned onto CD-ROMs. No note included. I felt quite disappointed, and then had a good chuckle at myself for even thinking that a research group would actually send me a thank-you gift, or even a card. Goes to show how rare it is.

So I've decided to do this in my own business. My personal epiphany from this little episode is that although I greatly appreciate my clients and I love helping them solve their business problems, I certainly don't demonstrate it like I should. I think the key challenge here is how to thank customers in a novel and genuine way. For a small business, or one with limited numbers of customers, that's relatively easy. For thousands or millions of customers, how can you do it in a way that hasn't been done a million times before (like reward points?). Citibank came out with its new Thank You commercials to promote its new reward program that features -- you guessed it -- points. I'd rather use my AAdvantage Citibank card and get frequent flier miles. I've read some harsh criticism of the campaign in the news because it's simply not believable. Points are no substitution for a heart-felt thank you. (And the ads make no sense either, but that's another post for another day.) The key is to show real appreciation, not to put a corporate marketing program in place. And this is best done through the actual customer experience. For example, I feel appreciated by the employees at Whole Foods and not at Simon David. So I drive farther and spend more money at Whole Foods, and I feel good about it.

Take the money spent in impersonal rewards points and put it towards hiring great employees, effective training and a fun work environment. Then you'll start seeing happy and loyal customers. Last week I watched some focus groups among B2B tech buyers who just wanted to receive a phone call from a senior manager (not the sales rep) once a year to thank them for their business, find out how they like the product and learn how they could help them better. Once a year!!! Just a call from a branch manager once a year would make these customers happy... and they spent several hundred thousand dollars on these systems. That would mean a couple phone calls per week for a manager to gain customer loyalty and repeat purchases. I'd call that a good return on investment.

So how are you thanking your customers? What about your employees?

All things to a few people

Thanks to Seth Godin for the link to this great story: "Media attention brings a bevy of baldies to Lodi restaurant." It's a great example of how tight focus on a small audience can lead to big success (as I previously discussed here.)

Dozens of bald men and one bald woman came to Gary's Uptown Restaurant and Bar on Wednesday evening on the strength of worldwide media attention that has put Lodi on every bald person's radar... Most people came in because they heard on TV, radio and in newspapers about the food discount offered to balding and bald men on Wednesdays.

"We were totally, totally blown away and absolutely shocked that it went international," said Gary Arnold, the restaurant owner who started the deal to boost sluggish sales on Wednesday nights.

Baldies from Sacramento, Tracy and Modesto have made the pilgrimage to Gary's, and Arnold expects Bay Area folk to show up soon, since he just did an interview broadcast there.

Arnold said a razor company has called him a couple times to talk about sponsoring a new head-shaving razor.

He recently did a call-in show for a radio station in Australia, when it was 3:40 p.m. here and the next day there. "People were calling in and asking, 'What if I have a comb-over?' They had fun, cute questions, and talking to people on the other side of the world was great," he said. A Google search for Gary's Uptown Restaurant and Bar turned up close to 300 results from the Web, ranging from TV news stations to blogs and promotions and marketing sites.

Customer Experience Award

If you've had a great (or awful) customer experience with any of the finalists for the Fast Company Customer Experience Award, make your voice heard!

Fast Company magazine is calling all consumers and business leaders to play a part in choosing the winners of its inaugural "Customer Experience Awards." By participating in a brief online survey, people can help select the winners in five distinct customer service categories, which will be featured in the October issue of Fast Company.

To select a list of best-in-class companies, Fast Company convened a panel of experts in the fields of customer service and customer experience. From an initial set of over 100 nominations, Fast Company chose fifteen companies as "Customer Experience Award" finalists, listed below:

* Chick-fil-A
* Commerce Bank
* Costco
* Enterprise Rent-A-Car
* Fairmont Hotels & Resorts
* Harrah's Entertainment
* Mini USA (BMW)
* Petsmart
* Progressive Insurance
* Sharp Electronics
* Trader Joe's
* Vail Resorts
* Wachovia
* Walgreens
* Wegmans Food Markets

Input from online survey participants and the expert panel will be weighed to help determine the "Customer Experience Award" winners in the following
categories:

* High-Tech Achiever: The finalists in this category have put technology to work for customer service -- and succeeded in areas that others have failed.

* Employee Innovator: These companies are known for innovative employee hiring, training, empowering, or rewarding that creates a customer-focused work environment.

* Leading Listener: The finalists in this category are committed to truly listening to customers and consistently responding to feedback in an effective, appropriate manner.

* Profitable Player: Great customer service can be outrageously expensive, but these companies have managed to implement successful customer service initiatives that make a contribution to the companies' bottom line.

* Customer-Centered Leader: The finalists in this category are led by executives with an intense focus on putting customers first and a commitment to setting a customer-centered tone for their organization.

Ikea: The Importance of Passion

From the Guardian:

The gospel according to Ikea teaches us that customer evangelism begins with with vision, passion, purpose, and evangelical zeal from the pulpit of the CEO. I normally don't like to include so much text in a blog post, but it's all really good stuff:

It is frequently observed that, for a broad demographic swathe of Britain, Ikea has designed our lives; it is almost as frequently noted that its customer service sucks, that the traffic jams outside its stores are intolerable, and its assembly instructions indecipherable. We love it and hate it, rely on it and satirise it, often simultaneously - as if it were not a shop at all, really, but something far more emotively substantial: a football team, or the Church of England, or the government. Attempting to quantify Ikea's spread across the planet is an exercise that swiftly induces dizziness. Last year, 310 million people visited Ikea worldwide. On some Sundays in Britain, according to one estimate, almost twice as many people visit a branch as attend church; it has been calculated that 10% of Europeans currently alive were conceived in one of Ikea's beds.

Ikea has approached its world domination project with a missionary zeal - and, as far as it is possible to tell, it takes the missionary part literally. In 1976, (founder) Ingvar Kamprad crystallised his thinking in a hyperbolic tract entitled The Testament of a Furniture Dealer, setting out Ikea's "sacred concept", and waxing evangelical on the necessity of salvation. It was, he wrote, "our duty to expand ... Those who cannot or will not join us are to be pitied ... What we want to do, we can do and will do, together. A glorious future!"...

Kamprad, now 78, has long since ceded day-to-day control of the firm to others, but his obsessive personality, and his zealous frugality, have seeped into every corner of Ikea. Famously, even senior executives travel around Europe on budget airlines such as Easyjet, and always stay, they insist, in cut-price hotels. They recall with approval the rumour that Kamprad himself never takes a fizzy drink from a hotel minibar without also visiting a nearby supermarket, so as to replace it as cheaply as possible...

Ikea's moral crusade extends uncompromisingly to the customer. Whether you like it or not, it intends to teach you the value of good, honest, simple hard work. Self-assembly, viewed from this perspective, is more than a cost-cutting measure: it's a tool of evangelism, designed to make you sweat for your own edification. (And if all the pieces aren't in the box when you get it home, a cynic might add, well, then, the challenge is simply the greater.)...

The Ikea path to self-fulfilment is not, really, a matter of choice. "They have subtle techniques for encouraging compliance," argues Joe Kerr, head of the department of critical and historical studies at the Royal College of Art. "And in following them you become evangelists for Ikea. If you look at [police] interrogation techniques, for example, you see that one of the ways you break somebody's will is to get them to speak in your language. Once you've gone to a shop and asked for an Egg McMuffin, or a skinny grande latte, or a piece of Ikea furniture with a ludicrous name, you're putty in their hands."...

But if missing boxes and poor customer service explain the hate part of our love/hate relationship with Ikea, the love part, though real, remains much harder to pin down. Besides, after several days in Älmhult, I'm wondering whether I haven't missed the point. Reading Kamprad's quasi-religious writings, watching the glowing faces of zealous Ikea co-workers, one overriding fact becomes clear. True, you can love Ikea or hate it; you may feel both things at once. What is certain, though, is that Ikea loves you. This love is not unconditional - you're going to have to work for it, primarily by assembling furniture. But Ikea really does love you, with an intensity that can be unsettling. And it has big plans for your future together.

Where would you rather shop? A retail store that operated flawlessly but employed uninspired worker drones who clearly would rather be someplace else? Or a store that had its flaws but employed passionate, friendly people whose enthusiasm was infectious? There are pros and cons to both, of course, but I think most people like to feel inspired. There is so much same-ness in our lives, so much routine... when we encounter a genuine smile and a spark of passion, we are reignited ourselves. "A candle loses nothing by lighting another candle" (unattributed). The only reason why I continue to shop at CompUSA -- after innumerable problems with customer service -- is because of an absolutely delightful girl named Vanessa (and I usually have a hard time remembering names!) who bends over backwards for customers. Now imagine if that enthusiasm for customers were part of CompUSA's corporate bible, inspired by senior management and transmitted to all employees? There may continue to be customer service issues, but I'd venture to bet that customer loyalty and evangelism would skyrocket.

If the executive team isn't passionate about the company's mission, how enthusiastic can they expect their employees to be? And if employees do not exude passion, how can we expect anything more than apathy from customers? There's been so much written on corporate visions and missions, and they don't mean diddly-squat unless people can get passionate about them. What is the gospel according to your company?

Transparency's Silver Lining

Via Ari Paparo and Frosty Mug:

Should corporate blogs allow trackbacks? You might say no when you read the laundry list of negative trackbacks on Movable Type's post about licensing terms for their Developer Edition. This is transparency at its finest: how many companies are willing to be open enough to allow feedback from customers that the entire world can see?

In my opinion, transparency is a great thing, but it takes a lot of courage. Companies need to remember that negative word of mouth is going to happen anyway. It reminds me of individuals who don't take constructive criticism well, so people end up talking about them behind their backs. Mature people -- and companies -- are open to hearing the good, the bad and the ugly so they have the opportunity to learn and grow.

Transparency tools like trackbacks & comments allow companies to engage in a dialog. I'd expect to see some follow-up posts from Movable Type along the lines of, "Hey, we heard you; thanks for the feedback. And here's what we're going to do about it." Even if they don't plan to change their pricing, they at least have the opportunity to address customer concerns. If I had the choice, I'd rather work with an open company like Movable Type than a company who doesn't want to hear what I have to say.

Compartments

The following phrase jumped out at me as I was reading the partial transcript of Peter Weedfald's keynote speech at Ad:Tech on FCNow (Peter is SVP of strategic marketing and new media for Samsung):

Samsung has been the driver of digital convergence for the last five or six years. We look at three worlds for everybody. You have a business world, a mobile world, and a home world.

So many companies get caught in the trap of focusing on where their customers are, instead of who they are. For example, most of my B2B clients insist that emotion isn't a factor in business purchases... only for home-world purchases like cars, clothes or other consumer goods. But John the IT Director is also John the father, husband, son, volunteer, runner and traveler. John may be nervous about losing his job, or he's having a disagreement with his boss, or perhaps he just got a promotion. He may have arrived late to work after an argument with his wife. His father could be ill. He often runs errands on his lunch break. Sure, John may buy Samsung products for work, on the go, or at home. But Samsung can't forget that John is still John, regardless of where he may be. John doesn't become an unfeeling robot when he walks through the door of his office every morning and make decisions on facts alone.

Microsoft takes the idea of compartmentalization even further. Seven different business units, each focusing on a type of product: Office, Windows, Mobile Devices, Servers, Developer Tools, etc. etc. Each product group has their own agenda. Yet John the IT Director purchases Office, Windows, Servers and Mobile Devices at work, but also purchases Mobile Devices, Windows and Office for his home use. His view of Microsoft products at work influences his view of Microsoft products at home, and vice versa. Perhaps he's been identified by the Server group as a Top-Tier Customer, so he receives special service and attention on this product at work. But at home he's frustrated by his inability to get support on Office since he's just one of millions of home customers. How would Microsoft do business differently if its strategies were driven by customers instead of products? What if John had a special 800 number or MVP customer code to get the same level of attention at home as he does at work? How would that impact his perception of the Microsoft brand?

Think about who your customers are, regardless of what product they use during what hours of the day. Get out of the weeds of features/benefits and talk to them like the real people they are. Earn their trust. Be likable. If you sell 'business-world' and 'home-world' products or services, stop compartmentalizing: it's quite likely that the very same customers purchase both. Identify your most valuable customers across product lines and figure out how to give them a consistently good experience with your brand. It's a different way of thinking. But when you align yourself to your customers instead of making them align themselves to you, you'll become a much more attractive choice.

Proactive vs Reactive

Great post on Ari Paparo Dot Com about solving customer problems before they arise:

I just came home and turned on my Tivo. Here's what I saw:

Friends Season Pass Alert
On Thursday evening May 6, NBC will be airing a special hour long retrospective Friends episode followed by the series finale.`Because there episodes are back to back, if you have configured your Friends Season Pass to automatically pad extra time after each show, your DVR may not capture the series finale. To ensure that no recordings are missed, please be sure that your Season Pass is NOT setup with 'passing'.[complete instructions for fixing the situation]

I'm just amazed at this. I don't even have a season pass for Friends. But Tivo realizes that so many people are going to want to see the finale, and that any one of them who misses it because of a Tivo "bug" will blame them, that they take the proactive step of alerting the user to the potential problem.

Imagine if Microsoft took a similar approach.

"We've noticed that you set up an IMAP mail account in Outlook. Outlook behaves slightly differently when use use IMAP vs. the more common POP mail. Would you like to take our interactive tutorial now?"
Or Ford.

Dear Ford Owner. You may have noticed that gas prices in your region are increasing. We thought we'd let you know some simple techniques for reducing your gasoline usage and extending the life of your car..."
Or your stock broker.

John, you may have heard about the Fed raising rates last week. We'd like to explain how we believe this is likely to affect your portfolio...

What can you do to solve a customer service problem before it arises?

Setting customers free

Remember the phrase, "If you love someone, set them free. If they come back they're yours; if not, it was never meant to be." Words of wisdom from good ol' mom. I was reminded of this phrase while reading Chris Lawer's post on Reverse Market Customer Experiences where he lists three companies that are taking risks and providing competitive information to their customers:

In 2002, General Motors launched a trusted advisor internet site called AutoChoiceAdvisor. It helps customers to select the motor vehicles best suited to their personal needs... Critically, this list includes vehicles from manufacturers other than GM.

Citibank... now provides a free online financial account aggregation service through its Myciti.com web portal. The site provides a full range of Citigroup consumer products and services, including credit and charge cards, banking services, investments, mortgages, loans and insurance... By enabling customers to access a consolidated view of all their online passwords and financial and loyalty accounts regardless of supplier, Citibank is creating powerful new opportunities for customer differentiation and service in a highly competitive, consolidating and commoditised market.

U.S. auto insurer Progressive... offer(s) a reverse market price comparison service on its web site. Previously, U.S. customers’ ability to compare rates across insurance companies was both time-consuming and complex. Now, by entering their personal information, driving history, vehicle details and other data on the Progressive web site, the company enables its customers to undertake a simple and direct market comparison. Although it sometimes loses out to its lower-priced competitors, Progressive’s customers often remain loyal simply because the service reinforces their trust in the business...

It's time for companies to learn how to let go of the need to "own" a customer. What would happen if we tried to "own" our significant others? Or "retain" them? They'd probably walk out on principle. The key in relationships -- whether personal or business -- is to earn trust and respect and affection. Customers are not objects to be acquired; they are free entities who make choices. Give value, make their lives easier, and even risk losing them to the competition by providing comparisons. Chances are, they'll love the open, honest communication and stay with you even if it costs them a bit more. So set them free.

Customer Co-Creation

I've got a new book to add to my pile. Check out the book excerpt on CIO.com from The Future of Competition: Co-Creating Unique Value with Customers. Here's the executive summary:

In their book, The Future of Competition, C.K. Prahalad and Venkat Ramaswamy contend that companies need not (and should not) go it alone when trying to create value. Their research suggests an emerging economic model of value cocreation, in which consumers and companies routinely collaborate to create personalized value. I n the world of cocreation, imagine every individual who interacts with the company as a "consumer," and discard the artificial distinctions among enterprises and households. And don't mistake self-service for customer involvement. Cocreation, the authors maintain, is not the transfer or outsourcing of activities to customers or a marginal customization of products and services. It isn't scripting or staging of customer events around the company's offerings. Those kinds of company-customer interactions no longer satisfy most consumers today. It's the cocreation experience (not the offering) that is the basis of value for each individual.

Check out the full exerpt; it's a good read. Thanks to Fresh Inc. for finding this.

Not by marketing alone

Here's a great post on Frozen North that discusses the contributions of customer service to building a strong brand. Here's a snip:

In too many companies I've observed, advertising and marketing is viewed as a cost of growing and acquiring new customers; while customer service is viewed strictly as overhead. As a result, the is little or no cross-communication between the marketing side of the business and the customer service side of the business, and certainly no common budgetary authority. So, for example, nobody (short of the CEO) has the authority to say, "This million dollars would be more effectively spent improving customer service than on an ad campaign."

The result is that marketing and service often work at cross-purposes. The mandate of marketing is to polish the brand image, to induce customers to make a purchase. Then, the call center (often organizationally lumped in with the data network and phone systems) says, "Those pesky customers just keep calling and costing us money!"

The problem is one of priorities. Every customer phone call presents an opportunity to strengthen your brand image. Most large consumer-oriented companies get millions of these opportunities a year, and waste most of them. Or worse, they ship them off to a third party outsourcer, who has no stake in the company's brand image, and only has incentives to provide the lowest-cost service.

Pardon the bad analogy, but hiring a third party to handle your customer's phone calls is like asking a friend to go on a date for you. It might be cheaper or easier in the short run, but it completely misses the point of the relationship.

Amen, Peter! It's been interesting to watch my own changing points of view on this topic. Early in my career when I worked at an ad agency, we all thought that we (at the agency) were the brand builders, that we could change people's perceptions of the brand by simply rolling out a new campaign. Moving into customer research and marketing director roles gave me the insights that Peter mentions above. And I don't hesitate to tell a CEO or CFO that his money is better spent on improving the customer experience before a dime is spent on advertising. I call it "curing the marketing black-hole syndrome" since marketing, customer service, product development, etc. must all work together to attract customers, keep them, and transform them into a free sales force. Companies that depend on one department at the exclusion of the others cannot be successful in the long term.

More on the Manifesto

I was going to write a continuation of my last post on The Guru Red Manifesto, but John Moore at OurHouse so eloquently stated what I was thinking that I'll just direct you to his post. Here's a snip:

I think there is always going to be some kind of tension between customers and other stakeholders though I balk at the idea that the relationship is built on that tension; I'd say that good marketing resolves these conflicts in ways that work for all parties... The confrontation word suggests a Mexican stand off, a game in which one side can only win by the other losing. That's not the ideal of conflict resolution which aims for win:wins. By focussing on the money, the RedGurus may well be giving a good pragmatic steer against idealism and fantasy on the part of entrepreneurs; but they may also be missing how people actually create real value in relationships.

And then I went back to the Guru Red Manifesto for more. Here's what I found:

Do not sell. Campaign. Reconcile current competency with current opportunity. Maneuver your forces. Exploit center of gravity. Calibrate time, space and energy. Combine segregated sales and marketing functions into an integrated campaigning function. Replace soft selling metrics like satisfaction, delight, recall and impressions with hard campaigning metrics like objectives, revenue and margin. Build revenue engines and not sales organizations. Focus on speeding up cycle time. Develop and amplify competitive instincts. Utilize logos, ads, commercials, trade shows, etc., as ammunition and weaponry, not as artistic expressions or award opportunities.

As with the previous post, there are parts I agree with and others I don't. Absolutely, everything should work synergistically (overused word, but effective) in an integrated campaign. I'd add that it's not only sales and marketing that must work together, but product development and customer service as well. And yes, marketing materials should be used as ammunition, not as award opportunities.

But let's not throw the baby out with the bathwater. Let's keep 'soft' metrics like satisfaction and delight. In a recent satisfaction study for a telecom client, we found that 'very satisfied' customers were 60% likely to refer a friend, compared to only 28% of 'somewhat satisfied' customers. Here's another stat: 'somewhat' and 'very' satisfied customers were 2 1/2 times more likely to purchase additional products than neutral or unsatisfied customers. No real surprise here: customer satisfaction directly leads to additional revenue. Delight your customers and they'll stay with you, spend more money with you, and bring you new customers. Creating a free sales force within your customer base might be tougher -- but infinitely cheaper and more effective in the long run -- than putting all your efforts into paid distribution channels. Think of customer delight as yet another component of your 'revenue engine'.

Ending The Relationship

Great post on Business Evolutionist about Managing the Total Customer Lifetime:

Every customer relationship has a "life" - if I can use that as an analogy... the first exposure or purchase might be thought of as "birth"... but how do you determine "death"? A customer leaving might be beyond your control, regardless of how great the experience is. For instance, consider this quote by Al Ries:

"When a guy gets promoted, he doesn't get a more expensive Chevy, He buys a BMW."

At first, I took that quote at face value. It makes sense. But, just because the person buys a BMW instead of a more expensive Chevy, does that mean that he is no longer a customer of Chevy? Might that guy buy a Chevy for his kid when they're old enough? Perhaps he tells others how much he loved his Chevy?

In other words, where does the customer relationship end? Is the relationship defined by one transaction or multiple transactions? Should the relationship be defined by transactions at all?

Excellent question. Most companies think in terms of transactions, not relationships. They don't consider the initial purchase to be the start of a relationship; it's simply a sale. If it's a subscription-based model like telecom services, the objective is to stop customers from leaving... not to create a strong relationship. I think of good companies like magnets: they automatically attract and keep customers because that's how they're designed. Non-magnetic companies pick up customers and drop them because there's no bond, no stickiness that maintains the connection. When a customer deals with a magnetic company but moves on because of life changes -- like in the example above -- s/he's still quite likely to refer that company to others. It's all a question of what the company is "being" versus "doing."

A personal touch

In today's ClickZ branding report, Martin Lindstrom echoes my desire to bring communication back from the machine realm to the human realm (at least in part):

When did you last receive a letter? You know, paper folded into an "envelope" with a "stamp" signifying payment for transportation to the destination. A handwritten letter, sent to you, personally. Apart from Christmas greetings, I can't recall the last time I received a real letter. Whenever it was, I'm certain it was the event of the day.

Ironically, technology we've nurtured to enable faster, more effective, cheaper communication is experiencing a backslash. Not long ago, e-mail was hailed as the discovery of the century. Any organization with a modicum of interest in innovation began offering cheap, instant communications. We've been swept along, busily transferring the conventions of traditional letter-writing to e-mail composition.

Stop! Consider: E-mail may no longer be it. While everyone competes for consumer attention with direct e-mail, we don't see the technique may no longer work. I'm willing to bet a campaign aimed at getting people to buy is more effectively conducted offline.

In the long run, you're better off posting a letter. Spend the money making your communication tactile. Perhaps include a real signature or, better yet, write the letter by hand. Your message would be delivered with 1,000 times more potency. The cost would be only marginally higher than an e-mailed version.

This is only part of the story. Aside from selling products, such a tactile approach would build your brand, too. Recipients would remember the letter; they're unlikely to remember one e-mail out of who-knows-how-many per day. Can you name the last five commercial e-mail messages you received? Can you remember even one of them?

I'm not telling you to dispense with e-mail altogether. But think about combining channels more. Be less focused on the short-term attraction of cost savings made possible by the ability to send millions of e-mail messages free of charge. Think about the fact that, although we can send millions of free e-mail messages, hardly any will be opened. There are just too many of them. Many arrive with the perceived risk of a virus. Direct e-mail messages are more likely to be deleted in fear than greeted with cheer.

There's a company here in Dallas that helps companies retain customers by sending hand-written letters and calling just to see how things are going. They don't try to sell the customers anything; the intent is to make human contact. And it's working. Their business is growing and retention rates are increasing dramatically (and if I can find this company's name and URL, I'll repost with that info!). Bottom line, electronic personalization is ok, but the human touch is even better.

Anticipation

Here's a great blurb on the customer experience for purchasing a Mini Cooper:

So high is demand for Minis that the waiting period for a customized car (which account about 95 percent of those sold) is now generally in the 8-to-12 week range. So, Mini (which calls its dealers "motoring advisors") keeps its waiting customers happy with "Make Waiting Fun" welcome kits that "include retro 1950s games like Interstate Highway Bingo" and a "Mini Parking Only" stencil. Mini also created the "Where's My Baby" program online, which enables waiting buyers to track the progress of their cars, and a bulletin board where waiting -- as well as existing -- owners can exchange questions and share their experiences. The site has attracted some 12,000 registered users, most of whom seem to have "named" their cars. The real payoff, though, is the viral effect. Notes John Stramatos of Nissan, who stays in touch with long-waiting 350Z, www.z.com, buyers via postcards and coffee-table books: "Those people bring in other customers."

The Mini team understands that the period between purchase and delivery is a crucial one for customer satisfaction.... this principle applies whether you're selling cars or phone lines. In the telecom world, customers must wait for installation of a phone or internet line. Often there's a breakdown in the hand-holding process; customers want to know when they're getting their service and make numerous calls to find out the status. This creates a burden on the inbound call center and frustration for the customer. One of my clients is working on a web interface that will show a barometer for the status of T-1 installations, which is often a 45 to 60-day process. They're also creating a scheduling desk to make proactive communication with customers about the status of their order.

If the purchase process in your company includes a waiting period, what can you do to alleviate 'buyer's remorse' and create anticipation?

The Secret to Cisco's Success

I just read this article on BrandChannel about Cisco. The author opines that the company's success is due to its advertising and tag line. Wrong. Sure, advertising helps, but the secrets to Cisco's success are: the products are reliable, their customer support exceeds expectations, and customers are fanatical.

I did some focus groups a couple years ago among IT Directors in 5 major markets. Whenever Cisco was mentioned, almost every group member had a great story to tell. My favorite: one guy's network went down at 3:00 in the morning. His Cisco rep showed up at his office at 3:30 and helped him get it working again. No one in the group had ever had a vendor go the extra mile like that.

Here's what Kirby Drysen, Director, Customer Success Engineering at Cisco, has to say about their customer-centric corporate culture:

At Cisco, we view customer satisfaction as a continuous process rather than a singular event. This process is based on two principles: 1) maintaining a continuous flow of customer feedback, and 2) engaging our field teams and business units in the survey process.

The continuous flow of customer feedback is an ever-present reminder that customer satisfaction is achieved or destroyed with each interaction or customer experience. Rather than wait for an annual satisfaction score, our employees can identify problems almost as soon as they occur and work to resolve the situation quickly. And, access to real-time information promotes accountability rather than excuses for why the customer complaint was not resolved.

By involving those who work with our customers in the survey process, we ensure the questions we ask customers are relevant and actionable. In turn, this drives a strong sense of personal ownership among our field teams and business units to take action on the information, and allows us to maintain constant energy for driving customer satisfaction.

With a culture like that, advertising is secondary. Is it any wonder that they maintain 42% market share in networking products? Cisco is a great case study of brand rule #1: build a strong customer-centric brand and sales will follow.

Promoters Versus Detractors

There's a great article in the December issue of Harvard Business Journal: "The One Number You Need to Grow." . That one number is how many customers promote your business. Instead of measuring customer satisfaction, simply ask your customers one question: "How likely is it that you would recommend (company X) to a friend or colleague?" The author's research indicated that responses to this one question were highly likely to predict actual customer behavior that would lead to profitable growth. The article summarizes what Church of the Customer has been evangelizing: "The only path to profitable growth may lie in a company's ability to get its loyal customers to become, in effect, its marketing department."

Here's one of the takeaways from the article that will help me do a better job in consulting for my clients. I've been working with an online research firm to develop online customer surveys with live cross-tabs for several clients... it's pretty cool, and generates extremely useful and actionable information. I always include questions on likelihood to recommend and likelihood to purchase additional products. However, here's how the HBR article recommends structuring the survey:

"Resist the urge to let survey questions multiply; more questions diminish response rates along with the reliability of your sample. You need only one question to determine the status -- promoter, passively satisfied, or detractor -- of a customer. Follow-up questions can help unearth the reasons for customers' feelings and point to profitable remedies. But such questions should be tailored to the three categories of customers. Learning how to turn a passively satisfied customer into a promoter requires a very different line of questioning from learning how to resolve the problems of a detractor."

Great suggestion.

On a related note, here's the 'duh' quote of the day from the top story at Reveries. They're interviewing Robert Lutz, GM's Vice Chairman of Product Development, on getting Pontiac out of the 'cheesy' category. He says, "You just have to get vehicles more to the point where people want them."

Marketers: Stop the Madness!

To expand on Chris Lawer's thought on plentitude in modern society, here's an exerpt from today's Reveries called "Curbed Choices" that discusses the customer trend of "Enough already!"

Christopher Lee, a former Reebok creative director, just opened a shop in a converted warehouse in the Islington section of London. Called Microzine, the idea is to "dose consumer fatigue with the tonic of quirky but well-chosen goods." Says Christopher: "Everyone's got the same product, and consumers are fed up. They want something exciting and they want it edited down." He says he understand this because he, himself, hates to shop!

Barry Schwartz, a Swarthmore psych professor and author of The Paradox of Choice: Why More Is Less, says Christopher represents growing numbers of consumers who "have begun defecting from the culture of shopping, surfeited with information and alienated by what increasingly seems like the mere illusion of choice." He explains the problem this way: "You've got an economy that is 90 percent driven by consumers and reliant on convincing people to keep buying stuff ... You also have a culture in which people are saturated, looking for ways to simplify their lives and to reduce time spent trying to figure out what to buy." Or, as Christopher Lee puts it: "If you buy a stereo, you don't want to see 400 stereos."

Times like this, it's tough to be a marketer. When our product is one of too many choices and it doesn't have a significant, meaningful point of difference, we've got a tough row to hoe. I'm glad to see this consumer trend of "Enough!" because it sends a strong message to management teams in every industry: focus and innovate, or die. Instead of coming up with the 400th model of TV, create Tivo. Instead of producing the nation's 400th coffee brand, launch Starbuck's. Instead of operating the 400th grocery store, Whole Foods.

I was musing on how marketers could earn their spot at the executive table to have more influence on core business decisions, break down silos, and impact internal stakeholders. I think the two primary ways are: measurable results and customer-driven innovation ideas (I'll deal with measurable results in a later post). Marketers have their fingers on the pulse of their customers. Marketers are driving customer research and have the ability to act as the voice of the customer in their organizations. When the marketing department chooses to drive customer-focused innovation (proactive) instead of simply selling whatever comes out of product development (reactive), that's when we come into our full power.

This power for too long has been held by sales and distribution channels -- especially in the B2B world -- who cry to management, "We need more options in our bag! We need lower prices!" And too often, management concedes... because sales is "closest to the customer, so they must know what customers want," when in fact sales just can't sell what they've got. Either the existing products don't really fit customer needs, or they're too similar to competitive products. The answer isn't to give customers more options, but less. The answer isn't to lower prices so customers will buy, but to come up with a simple, innovative solution to meet their needs... and customers won't hesitate to pull out their checkbooks.

It's time for marketers to recognize when prospective customers are oversaturated with choices. It's up to us to say "Enough!" before our customers do it for us. We are the bridge between customers and corporate decisions, and it's up to us to stop the madness.

Intuit, Chapter 3: The Power of the Blog

For those of you who have followed my agonizing experience trying to get a replacement QuickBooks CD, I still have not received it. Apparently no one realized (or bothered to check) that the warehouse had no CDs in stock, and therefore the thrice-promised overnight package was never sent. When I called this morning (call #6) to explain the situation again, the rep put me on hold to speak with her supervisor. When she got back on the line, she informed me that they wouldn't be able to send me a CD until mid-January, but they'd be happy to give me a discount on a newer, in-stock version. So for a mere $100, I could get my software tomorrow, 3 weeks after it was requested. Completely unacceptable! When I then spoke with the supervisor, he was resistant to sending me a CD for free... until I mentioned the fact that I'm publishing this entire story in my business weblog and that Intuit was likely going to lose not only my business, but a lot of other potential business. He suddenly became very nice, mentioned that he had some CDs (newer version) handy right in his cabinet, and he'd be happy to overnight it for tomorrow a.m. delivery, for free. Ahhh, the power of connected consumers. This is just the tip of the iceberg; I can't wait to see how weblogs transform business in the next few years.

Community, clarified

Thought I should clarify my earlier post re: community... it's not an effective brand-building tool without the fundamental customer experience supporting it. An online discussion board hosted by a company that lacks loyal and passionate customers does not a community make. Build the brand experience first, then facilitate the community. It can't be created in a vaccuum.

Community: the most powerful brand-building tool

We could debate all day long on the most powerful branding tool, but after reading this article on Reveries about the power of community, I think this gets my vote. The article features companies like Saturn, eBay and Starbucks (Paul, I expect a blog post on this one!) and it's a good read. We already know that customers are our best sales force... when they're rallied together into a community, their individual powers are combined into a brand-building force to be reckoned with.

eBay's Brand Barometer

Good article on e-Marketer: eBay's Brand Barometer.

eBay has 100,000 new users on a per-day basis, and 120 million searches take place each day, with 7.4 million bids. These numbers are significant, and that means there's a lot of velocity that takes place at eBay. Marketers are trying to figure out what's the best way for them to tap into that dynamic environment...

It's very interesting to be able to turn to eBay as a reflection on pop culture itself and to see what items are selling at what prices, what's hot. Lots of marketers have realized that this is an opportunity to tap into that marketplace on the pulse level as well and learn from these individuals who are highly passionate about their interests and their affinities, and also to be able to build their own communities within eBay. That's one of the big learnings that I think will be taking place in the future -- understanding more about your customer on a one-to-one level, profiling your customer on behavior, not just demographics, and being able to learn more about what makes them come back to your product over and over again.

So eBay is positioning itself to corporations as the middleman not only to sell product, but also to facilitate customer learning. They're providing the feedback loop that's necessary for every brand to improve its value proposition. Compare that with a recent study by WebTrends and Drilling Down that found:

"...a surprising 52% of marketers recently surveyed online don’t currently measure customer retention. Only 28% look at repeat visit and purchase rates, only 16% segment customers based on the retention-specific metrics of frequency and latency, and only 3% do detailed cross-channel marketing analysis, according to the survey of more than 500 respondents.

Some 31% of those surveyed don’t measure the results of search marketing campaigns, while only 41% even measure click-through and general traffic. Only 16% measure web activity through to conversion, while only 11% have competed a detailed ROI analysis of campaigns including lifetime value of phrase by revenue.

“The web is in its early cycle and people are just beginning to understand the power of how it all works together,” says Drilling Down consultant Jim Novo. “Most companies are excited to be acquiring customers and doing it profitably. That’s what everyone has been focused on. But that doesn’t mean they`re allocating marketing money in the right place, because a lot of those customers might buy just one time."

These companies have absolutely no idea what they're doing right. Or wrong, for that matter. If they can't take the time to measure ROI on a campaign, you know they're not taking the time to learn why those customers buy, don't buy, or choose not to buy again. They're celebrating because they're "acquiring" customers profitably (see my rant on why that's impossible) when they may actually be delivering a sub-optimal customer experience. Hopefully the enormous influence of eBay will help spur companies along the the customer-learning path. We're not yet to real dialogue and partnership with customers, but we're moving in the right direction.

Way to go, Starbucks!

Terrific detail on the Fast Company blog about a customer experience program at Starbucks. Great way to engage the employees and the customers in a fun experience that drives sales.