emergencemarketing.com

A new research study by the Society of New Communications Research (disclosure - I am a senior fellow in the society and have been peripherally involved with the study), “Exploring the Link Between Customer Care and Brand Reputation in the Age of Social Media,” found that affluent consumers are using social media to share their customer service experience and learn about other’s care experiences when making purchase decisions.

Some of the top findings include:

• 59.1% of respondents use social media to “vent” about a customer care experience (ed. note: glad to see I am in the majority…)
• 72.2% of respondents research companies’ customer care online prior to purchasing products and services at least sometimes
• 74% choose companies/brands based on others’ customer care experiences shared online

Again - proof that while positive word of mouth may outweigh negative word of mouth, and that off-line word of mouth may outweigh online word of mouth, the online negative word of mouth may have much more impact on purchasing decisions as they are found while the buyer is in active buying mode.

You brand is defined by the consumer, not by you - I think everyone can agree with that. In the same breath, most marketing pundits will add the fact that you can no longer control your brand - an assertion I am not sure goes hand in hand with the first one.

You brand gets defined by the UI (User Interface) of your company, the interface through which your customers and prospects interact with your company. That interface gets determined by pre-sale activities - i.e., advertising, retail layout, retail personnel attitude, telemarketing, sales people’s knowledge of the industry, etc -, as well as immediate post-sale activities - i.e., packaging, ease of use to set up the products, available help options, etc. -, and the long term post sale activities - i.e., telephone support, return policies, warranty policies, on-site support, etc. That makes up a lot of links in the chain that determines your brand in the mind of the consumers which your company controls.

So in effect, you do control the brand in the mind of the consumer. If some link in the chain is broken, meaning not supporting the overall brand promise you are trying to establish for your company, that is when you lose control of your brand. That is when people will start talking with one another about the fact that what you promise and what you deliver is different. Once that starts, you should focus on fixing the overall UI of your company instead of getting into communication fire-fighting mode or crisis communication mode.

The other day I went to my local CVS to buy some new razor blades and shaving cream. I was a bit surprised that they had their blades behind some sort of mechanized dispenser, but decided that it was probably meant to prevent theft of these expensive thingies. After picking up my blades and shaving cream I realized that the dispenser had triggered a store-wide message on the PA system saying something like “customer assistance in the shaving department…customer assistance in the shaving department…customer assistance in the shaving department…”. Now I did not need any assistance - I knew exactly what I wanted. I proceeded to the cash register with the PA continuing to blare its annoying message causing people to look at me strangely since I was the only walking around with shaving paraphernalia. It made me feel as if I had done something wrong - a real crappy buying experience. After standing in line for a little while one of the store employees spotted me as the guy who had triggered that alarm - and told me that I had bought the wrong shaving cream. I looked at my cream, the one I always buy, and told her that this is what I wanted. She argued that the razor blades I had bought, which were the Gillette Mach III, around for more than a decade, required a different type of shaving cream. With everyone in the store staring at me, I decided to follow the annoying lady back to the shaving aisle, where she pointed me to the “right” shaving cream, one that I do not like because it clogs up my blades 3 times as fast. So I told her that I did not like that cream - at which point she lifted her shoulders, as if I were one of those pathetic losers, and declared that I would then have to pay for them. That is when I realized that this was one of those good old 20th century bundling deals from Gillette. I tried to confirm with my helper - “so you mean this one if free if I buy it with the blades?”, but she had already given up on me and walked away.

But that’s what it was - a good old product bundle. One where one of the products, the real cheap one, would cause the other, the real expensive one, to become obsolete about 3 times as fast as with the other shaving cream, which btw also happened to be from Gillette.

We live in an age of unbundling - the customer wants and is expecting best of breed product choices, not just proprietary product suites. Technology companies have learned how to cope with it (well most of them anyway), restaurants in food-courts have learned how to deal with it, and just about any industry that has seen unbundling happen has found renewed growth and new business opportunities.Product bundling is not a good marketing practice anymore - especially when it is meant to move more crappy products that cannot succeed on the their own through the supply chain!

Gillette - please take note… and CVS, leave me alone if I do not ask for help - please!

A new survey from Bazaarvoice and the Keller Fay Group found that a vast majority of online reviewers are motivated by goodwill and positive sentiment (summary of the survey can be found at Marketing Charts).

Other findings of the survey include:

• Positive reviews outweigh negative ones 8 to 1
•  79% of online reviewers do it to give back to the review community
• Reviewers buy products online (85%), and engage in social networks (25%)
• 20% of reviewers post messages on other people’s blogs or chat rooms; 19% post on independent product-review sites such as ePinions or CNET; and significantly more post directly on a retailer’s own website.

This is great news, but it does not negate the fact that even though they are outweighed by positive reviews, negative online reviews remain “findable” for a very long time and can hurt a product or company way more than off-line negative reviews. So vendors should still do whatever they can to avoid negative online reviews.

10/03/07 Update: Somebody from T-Mobile got in touch with me and offered me a Blackberry Curve for less money than what new users buy it for. I took the offer. Thankfully someone at T-Mobile is watching out and taking action - but I still think they would benefit from making this a proactive program instead of a reactive one.

I am a T-Mobile user and yesterday I tried to upgrade to the Blackberry Curve. Even though I am long-time loyal T-Mobile customer, spending $180+/mo on their services, I would have to pay $400 for the new handset instead of the $250 that new customers have to pay. I was furious but the guy in the store could not do anything and recommended that I call customer service - which I did. Half an hour into that call I got the same response.

Obviously I am about to become an iPhone user until those guys screw up - no matter how much it will cost me to break my contract (earth to T-Mobile marketing - it isn’t about the money, it’s about principles on how you treat your customers).

It is of course not the first time that this has happened to me, as I am sure it has happened to you. This time around, however, I figured I would do some back of the envelope calculations to demonstrate the stupidity of this particular marketing technique/abuse campaign.

I am a very loyal customer and if they would have switched me and not screw up too badly in the future I could have easily been with them for another 4 years. At $180/mo, that is a loss of $8,640. I am also a big recommender when I like a product or service, and can point to many people who switched to T-Mobile because of my recommendations. Let’s say that 4 people become subscribers every year based on my recommendations (might be more with a cool toy like the Curve), and let’s further assume that 50% of those would have joined through some other marketing outreach program from T-Mobile. For the sake of this exercise let’s say that those people who do sign up based on my recommendations would spend half of what I spent. That means that by losing those recommendations they would lose $8,640 in referral business the 1st year, $6,480 the 2nd year, $4,320 the 3rd and $2,160 the 4th year. And supposing that the customer acquisition cost, not including handset subsidies, is around $200/customer, the other 8 referrals who might have joined based on other outreach programs might have saved them another $1,600 in acquisition cost.

So the lost opportunity so far for not giving me the discount is $31,840. I know, it should be converted into its net present value to get the real number - but for a $150 rebate??

Now that is not all. I am sufficiently turned off with this idiotic marketing behavior that I am willing to write about it on my blog. With 18,000 unique visitors/month according to Google Analytics and close to 1,200 RSS subscribers according to Feedburner, I can only assume that a few people will not switch to T-Mobile because of my bad experience. Add to that the number of social networks that I belong to and where this recommendation will get syndicated, and the amount of lost business because of my negative recommendation could actually be far worse than the lost business caused by me no longer being a customer and referrer.

How stupid can this be? And when will the government step up and let us own phones that are no longer locked to a particular service provider?

[Tags: t-mobile social networking word-of-mouth WOM customer lifecycle value customer referral value]

There are some companies where employees do not really care whether you have a bad buying experience - either acting completely unapologetic or worse, making you feel like it’s all your fault.

Not so with Lenovo and Starbucks.

After my recent buying experience with Sony I bought a Lenovo laptop. And just like Sony they ran out of parts for my laptop just before their promised ship date. Unlike Sony, they are the ones that alerted me of the manufacturing delay. The email was very apologetic, gave me an option to cancel my order if I could not wait, and offered me a free gift for the inconvenience if I decided to stick with them. Guess what - I took the free battery and was not in the least annoyed with the delay. In fact it made me feel good about the way the company was dealing with customer problems. Because at the end of the day, you know that something will always go wrong - and it’s not the fact that something goes wrong that makes you lose customers - it is the way you choose to deal with those exceptions that affects customer loyalty.

The same happened at Starbucks this morning. I was in a bit of rush and found out that they just started brewing the dark roast and that it would take 4 minutes to get my coffee. Watching coffee brew for 4 minutes is an eternity. I was a bit miffed - thinking that maybe Starbucks’ employees had gotten infected with the same bug that is plaguing their neighbor . Sensing my unhappiness, all three employees at the store this morning found a way to apologize, and one gave me a coupon for a free drink the next time I visit a Starbucks. Even the coupon apologizes - telling me that they hope that my next Starbucks experience will be a good one!

Guess who I have talking about all morning?

OK - enough about customer service now, let’s get back to marketing…
…but wait…isn’t this marketing?
[Tags: customer support customer satisfaction customer+service ]

As I was trolling various support forums to find how to best connect my Tivos with the new Verizon FIOS service I ran across a support chat transcript that made me laugh out loud.

The exchange in its entirety can be found on the TIVO support forum, but the piece that got me laughing was

David Adams: Can I be escalated from this chat?
Kevan: Basically in regards to these chats the representatives (IE me) have the full capabilities as a supervisor to get an issue resolved in any way possible. Unfortunately, for this issue we do not support.

Brilliant! Isn’t it? I wonder why I did not think of that earlier!

Just give every phone operator the title of supervisor and you will never have to deal with those pesky escalation requests anymore. Plus, your call center performance metrics will likely improve as you will have less “reported” escalations and “faster” customer problem resolutions.

[Tags: customer support call center customer+service ]

And I am not talking about product UI (User Interface) - I am talking about the “company” UI from the customer’s point of view. After all my poor buying experiences with companies that have very bright and dedicated people working for them, it became clear to me that most companies should hire or staff a group of independent customer advocates with UI experiences to ensure that all the touch-points through which a customer can interact with the company are all compatible with one another and are all delivering against the same promise that is being made during the pre-sale cycle. That includes packaging, in-store support/returns/etc, phone support/billing/etc., web support/shops/registration/etc, and any other way through which a customer could interact with the company after they first buy a product.

The fact that HP as a company has multiple logins for different shops, and that a “customer” case manager for one division can not handle problems the customer has with another division would go away if you would have a customer-centric company UI group who would police this stuff. The fact that my insurance company sends me statements with a different look and feel, different information in the same places, and different content for the various policies I have would go away as well. The fact that most corporate web sites are organized around the companies’ divisions instead of being customer-centric would also go away…you get the point.

A good example of a company doing this right is Apple. I recently bought a new iMac for my son, as well as a new Airport Extreme to upgrade my home office network. I registered those products online, and required some support for setting up disk and printer sharing with the new Airport. I have also been using iTunes to buy my music for years. At Apple, all the touch-points reinforce the same message - we are easy and fun to work with. From the store interactions to the packaging, to the online support and registration systems, all the touch-points are perfectly tuned to one another and they all have “me” at the center.

[Tags: company UI customer service customer-centricity wom apple marketing]

John Hagel speaks a lot about a new type of ROI - Return On Information -, and how ROI needs to be optimized for both the company as well as for the customer. As a company, if you do not know who the top 20% of your customers are who bring in 80% of your profit, you do not have a good ROI.

As a customer, I just experienced some very low ROI situations - which really affect the way I feel about the company.

First was my cellular provider T-Mobile, which I had to call last week as some people with Cingular accounts could all of a sudden not reach me anymore. After going through the usual interactive voice response system “hell” and providing my home number, home address and last four digits of my social security I finally reached a live person, who started the conversation by asking me for my home number, home address and last four digits of my social security. I thought I was going to strangle him and when I asked him why he had to get that from me again since I had already provided all that rich information to their system - he responded that “his” system had no way of knowing that I came from that “other” system…sigh. At least he was helpful, which is sort of surprising with today’s cellular providers.

Next came my buying experience with HP. I bought a new Media Center PC from their online home office store. That went smoothly…registered, used a simple password with all letters, and when I was finished I got a friendly confirmation with a $10 coupon. The problem was that I did not like the monitor choices on their site. In looking around I found what I wanted in their small & medium business online store. So I tried to log in, only to find out that my log-in credentials from the home office site did not work. I had t recreate a new account, and this time I was asked for a password that had to have a combination of letters (with at least one in Cap), numbers or special characters. This one also asked for my mother’s maiden name! When I typed in the discount code I had received from HP (I know, it was the home office store - a different division), it was rejected. On Sunday, when I tried to access that account, I could not. Evidently I had forgotten what password I used, and since I had given a fake maiden name for my mother (that is none of HP’s business), I could not reset my password. Since they were closed on Sunday, I had to wait until Monday to reset my password, which is when my order was scheduled to ship. When I looked at the home office division, they were open on Sunday, but I figured it was not worth the aggravation trying to call someone there to reset my password on the fort knox computer from the small and medium business division….sigh.

How much would it cost them to get systems that are customer centric instead of division centric? And what do you think their ROI (return on investment) would be to deliver a better ROI (return on information) experience for their customers?

Sigh…

[Tags: customer service HP IVR t-mobile roi return on information]

New research published in the latest issue of the Harvard Business Review (available for free here) shows that changes in product quality do not immediately get perceived as such by customers - in fact it can take years for perceptions to catch up with actual changes.

The study, which covered 241 products in 46 categories over a period of 12 years, and which involved over 30,000 consumers, found that most of the perception catch-up happens after the second year following the quality change. Full adjustment to the changes takes 5 to 7 years. Those numbers vary depending on the brand, frequency and purchase and other factors, but even with products where consumers were quick to gauge the change, like toothpaste, it took 3.9 years.

This has some far reaching implications. Not only does it explain other research that shows that it takes 5 to 10 years for product quality improvements to result in higher profits, it also means that companies have a long time to course-correct when something bad happens with their product (assuming they do not get hammered in the blogosphere that is).

[Tags: product quality customer perception]