Customer Services Across the Atlantic: What we can learn from each other

I spent some time traveling, working and speaking in the US recently.  This particular trip, I paid much attention to customer services and to see how different organizations do things.  Overall, I can conclude that there is much that we can learn from each other about customer services.  There are some things that the Europeans seem to be good at, and others that the Americans seem to be doing well.

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Customer satisfaction doesn’t cut it anymore

There is much talk about satisfying customers.  In fact nearly any marketing text you pick up, and the main definition of marketing is ‘satisfying’ customers.  Researchers, managers, experts in the past have said that satisfaction can lead to loyalty, profitability, customer retention, etc.  However, this is now changing.  I believe we need to do a major rethink on this topic.  Customers are no longer satisfied with being satisfied!!!

What is satisfaction?  Well satisfaction is essentially meeting the customers expectations.  If you promise to deliver a document by 1 pm, and you do it at 1pm, the customer will be satisfied.  If you’re late, then that results in the dissatisfaction.  However, if you are considerably early, then that results in a higher degree, which can also be called delight.

The problem with satisfaction is that competition has increased.  There are many companies out there offering similar products and services.  With the globalization of the economies, the number of new companies entering markets from countries like China or UAE are increasing.  Similarly western companies are expanding into these countries.  Hence, overall we have an increased level of competition.  Each company is trying to excel and beat competition.  Furthermore, the customers are much more aware of their surroundings today, than 10 years ago.  The internet, and more specifically Social Media, has really revolutionized the way how we communicate and how information flows.  Customers can find out about a sale, or promotion, or the latest features of a product even before any of these are launched.

Research now says that there is no guarantee that satisfied customers will become loyal (any level of loyalty).  So what does that mean for companies?  Companies now need to go beyond satisfying their customers if they want to get them to come back.  Hence strategic management needs to rethink their goals and objectives.  I think companies should now aim for delight, instead of satisfaction.  Companies that can make their corporate culture around this idea will be winners.  Delighted customers are ones that are most likely to not only come back to you, but also achieve higher levels of loyalty.  Moreover, these guys will be telling not tens, but hundreds or even thousands of their pals (through social media) about what a fantastic company you have.

In the short-term, it may mean an increase in costs.  However these are far out weighed by the benefits they bring in.  A number of companies that I’ve worked with that have adopted this philosophy have seen their revenues and profits increase over time.  Moreover, they have also seen their marketing budgets decrease, since word of mouth brings in more customers than any other form for them.  Interestingly this is true for both B2B as well as B2C companies.  Moreover, it works for all sizes of firms, from SMEs to Multinationals.

What do you think about this?  Do you see an problems or issues in implementing this strategy?  What other benefits could companies get by doing this?  I would love to hear your views.

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Creating memorable experiences!

First, apologies to those who posted comments, and they’ve only just come up on the blog.  There were quiet a few spam comments, which I had to go through before I found the real ones.  To make things faster, you can register and then post.  Second, the visitors have crossed 2100, with over 20,000 hits.  I now have visitors from all continents, and 50 different countries.  The top visitors continue to be from the UK, USA, The Netherlands, Canada, and the rest of Europe.  Although visitors from the Middle East are catching up.  Will post the full list later in the week.

Memorable experiences, what are they?

Last week I discussed emotional loyalty.  This topic generated much discussion.  Several Linked in groups had this as the number one topic of discussion.  One of the key factors in developing this was memorable experiences.  I thought it would be good to talk about this topic, as it came up numerous times in various discussions.

So what are memorable experiences?  A memorable experience is something which is out of the ordinary.  Something special, or unexpected.  Often we can link this to delight or a pleasant surprise.  When we talked to customers who appeared to be almost identical on paper, one main factor that distinguished the category of loyalty they belonged to was the fact that most emotionally attached customers felt that they had had memorable experiences with the firm, where as those who were only attitudinally loyal had none!

How to create memorable experiences

So what did the organizations do to create these memorable experiences?  Sometimes you don’t have to do much.  One customer was very happy when her flight was upgraded because she was flying on her birthday.  Another said that the hotel left flowers, and a bottle of champagne for the couple on their anniversary.  Amazon used to give out vouchers to people who purchased from them!  Most of the cases of memorable experiences or delight resulted from small acts such as these.  The interesting thing is that these customers remember them, even if this took place years ago.  Moreover, after having such an experience, their perception of service changed.  Most thought perceived the ‘normal’ level of service as very good.  Hence, one act changed the way how the customer looks at the company’s brand, and its services from a totally different perspective.

There were other ways of creating memorable experiences.  One of the most important of these is great service recovery.  Often those customers that were not emotionally attached had things like this to say, ‘we complained, but nothing happened’ or ‘yeah they did give us compensation but it wasn’t worth it.’  Usually the compensation was too little, too late, or did not exist at all.  On the other hand, the emotionally attached had received great service recovery, which was much more than what the customer expected.  For instance, one customer’s food was not done right.  The restaurant apologized right away, replacing the meal with the right one, gave the person a huge discount and then told him that the next time he would get 50% off his bill!  It is acts such as these which result in the memorable experience for the customer.  Some of the main factors are to acknowledge the mistake as quickly as possible, apologize to the customer, and then compensate the customer for the bad product / service, making sure that the level of compensation is more than the loss.

Another interesting method of creating delight or memorable experiences is by delivering a consistently good quality of product or service.  For instance, many Sony customers felt delight with the products, simply because the products always were up to the level of quality that was expected of them.  In this case, the company was not offering a surprise, or something extra, just delivering on the quality they promised.  Overtime, the customers start to feel good about the product or the service, and this results in an overall memorable experience.

All of this does not mean that after one memorable experience, you can disappoint the customer.  The high level of quality needs to continue to the emotional attachment bond to get stronger.  There are many aspects to this discussion, such as employee empowerment, corporate culture, etc.  Unfortunatley I don’t have time to discuss these right now.  However, I would like to find out what you think of delight or memorable experiences, as well as service recovery.  Have you had such experiences.  Or what does your organization do to create these.  If you don’t then why aren’t you?

Pakistan Floods

Last week I posted a small note on the flooding in the country.  Its good to see that a number of people clicked on those links.  Just a reminder, now the area covered is the size of Italy, or the United Kingdom!  Over 20 million are now affected.

Awards in customer experience

I will be the chair of Judges on the UK Customer Experience Awards 2010 (http://www.uk-ce-awards.co.uk/judging/).  The nominations for this year are closed, but you can come and attend the event.  Click on the link to get more info.  I am also on the Chair of Judges for the UK Theme Park and Visitor Attraction Awards 2011 (http://www.tpvaa.co.uk/judging/).  The nominations for this particular one are still open, with only 35 days left.

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Exploiting the power of Online Social Media through Group Buying

While attending the IQPC Conference on Online Customer Experience, I realized that there was a great potential to bring back group buying web sites.  Just in case you don’t know what that is, I though I would paste portions of an article I did for a magazine on group buying…

What is group buying?

A while ago a few friends and I went out to purchase a particular brand of a digital camera.  We went to the vendor and asked him to reduce the price since there were five of us purchasing the same digital camera.  This beautiful concept, known as group buying, helped us get a good discount on the camera.  If any one of us had acted alone, we definitely would have had to pay the full retail price.  Interestingly enough the vendor was not at all displeased when selling the cameras at a discount.  In fact he was really happy to see a bulk quantity of his product being sold in one go.  One of my friends commented on how wonderful a concept this was, and unfortunately it did not apply to the internet.  Interestingly, just about any type of business model you can think of in the physical world does exist online.

The group buying model works on the concept of large groups of people purchasing products.  The larger the pool of buyers, the greater the amount of discount will be available to the consumers.  Group buying sites work slightly differently than the usual online shop.  First a customer visits a web site, and selects a product.  The consumer is then given a few choices for the price he/she wishes to pay for the produce.  For instance, with the camera, it would have its original price, a discounted price if 10 people were to purchase, and even a lower price if the number of people willing to purchase were 25.  If a consumer chooses the lowest price, then he/she will have to wait till 25 people sign up to purchase that particular brand of camera.

The obvious benefit is that the consumer gets a discounted price.  Perhaps the lowest price in the market will be offered at a group buying web site.  Moreover, the consumer doesn’t need to know 25 people to get a group buying discount.  People all across the globe can join the group buy.  The site selling these products also benefits from this model.  They are able to negotiate a discount from the manufacturer or the supplier.  The web site keeps a certain profit margin and passes the rest of the discount on to the consumer.  Therefore compared to the regular online shop, a group buying shop is far better, since the site is able to sell a larger quantity and make a bigger profit.  The manufacturer or the supplier also is happy with the deal.  They are happy because they sell in bulk quantity, and often times are able to dispose off excess inventory through these types of web sites.

The major downside to group buying is that the buyer has to wait till the required number of people signup.  This may take anywhere between an hour to weeks.  Therefore if a customer is looking to purchase a product and get it delivered immediately, a group buying site will not be the best place.  Moreover group buying sites come in two different variations.  Each variation has its own merits and demerits.

Why Now?

About 6-8 years ago, several group buying sites took off.  Unfortunately none of them became very successful, and most perished.  At that point in time the idea for group buying was, perhaps, ahead of its time.  However, right now may be the best time to get into this.  Why?  Well, now consumers have the power of the Social Media.  The average consumer is linked to over a 100 people!  For instance, I have over 600 in my various networks!!!  So getting the desired number of people to purchase a produce will be much easier and faster than it was 8 years ago.  Therefore I believe that it is the right time to start the group buying business model.  If you have an Online Social Community and are not sure where to take it, or how to get the most out of it, they is one thing which may be of use.

Who can use this?

Well really anyone can do this.  Group buying works for both B2C markets as well as B2B markets.  In a B2B market, SMEs can team up to buy raw materials or goods in bulk and get a cheaper rate, allowing them to compete with the bigger businesses.  In the B2C market, just about any business can start doing this.  Have extra stock, or would like to move things in bulk, or not sure if a product will sell.  Just create a group buying page for it.  This can be in addition to the usual goods you sell, and can be done on the same website as the one you currently have!  For example, if you’re CVS (US) or Boots (UK) and are not sure if a new brand of vitamins will sell.  Why not offer it as a group buy good.  If you get enough order, then you will know that there is more demand for this product.  Hence, avoiding the risk to pre-order stock!  This concept can even be used on a greater level.  I get to speak with managers from companies that are fed up with the dirt cheap prices of lower quality goods from China or India.  Well, how about a buyers forum where companies from the ‘smaller’ countries get together to obtain raw material, and hence reach economies of scale?

There are numerous applications of group buying.  I have done much work on this topic and published a number of articles as well as a couple of research papers.  If you’re interested to know more, get in touch.  If you would like for me to talk about a specific topic, please do let me know.

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