Tomorrow, April 9th, I will be hosting a free webinar.
Six Ways to Operate a World Class NPS Program. Sign up here
Update:
Here is the recording of the webinar.
Archive for Customer Loyalty
Customer Experience Is Not The Future Of Marketing: It’s The Past, Present And Future
Customer experience is everything and always has been!
Why do we recommend anything to anyone?
We only passionately recommend when we experience amazing, memorable customer service.
Sure, we might recommend because of a cheap price but that doesn’t get us as motivated or enthusiastic as great service nor does it drive genuine customer loyalty.
Side note: want to know the difference between customer experience and customer service? Find out here.
We’ve always known this recommendation thing to be formally called word of mouth (WOM) which is a marketing function. My grandfather built his entire seafood business solely on WOM and I’m sure yours did too. The organizations who thrive on WOM, regardless of era, are often more profitable because the cost of customer acquisition is very low which makes it even more attractive.
Not only does a positive customer experience drive WOM it also makes us a beloved brand and the media loves to cover admired brands. Think of Zappos three years ago, remember how many PR hits they received because of their amazing service. I suppose it could be said that customer experience is the new PR too.
Need more evidence? Learn what the ROI of Zappos’ customer service is here.
Customer experience isn’t the future of marketing because I believe they are one in the same and always have been. WOM and relationship building (another offspring of customer experience) have been around for centuries and will continue to have its presence in business.
Customer experience is sales, marketing, pr, hr, tech, everything! Now and in the future.
Andrew Mason Lost Focus Of Groupon’s Customer Experience And It Cost Him His Job
Andrew Mason (Co-founder, CEO – Groupon) is out. No shock there.
Groupon has been struggling, I don’t need to point that out. But, what has caused Groupon’s dismal performance?
Answer: they neglected their customer experience.
Last year, I wrote a two part series titled “Wall Street Hates Customer Experience” which highlighted Mason’s poor performance. Find part 1 here and part 2 here.
In Mason’s exit letter to the organization his last paragraph included this,
“If there’s one piece of wisdom that this simple pilgrim would like to impart upon you: have the courage to start with the customer. My biggest regrets are the moments that I let a lack of data override my intuition on what’s best for our customers. This leadership change gives you some breathing room to break bad habits and deliver sustainable customer happiness – don’t waste the opportunity!
Read the full letter here. It’s pretty witty.
He admits it. He ignored the customer and the outcome is completely dire for him and the company.
Jeff Bezos’ famously says, “we are willing to be misunderstood for long periods of time.” He means that he will invest into the customer experience even if Wall Street objects and shoots their stock down. Steve Jobs did the same, he would listen to what he believed his customers wanted and needed. This is why I believe Bezos and Jobs are the two greatest entrepreneurs ever.
Mason didn’t have the will to do the same and Wall Street had him wrapped around its finger ultimately spitting him out.
What’s the customer experience lesson here?
Your only motivation is to earn customer loyalty by delivering an amazing customer experience. Although difficult, ignore outside influences that aren’t coming from your paying customers.
What has happened to Mason can and will happen to you too if you don’t follow Bezos’ and Jobs lead.
See also:
The #1 Reason Your Customer Experience Strategy Will Fail
Customer Experience Isn’t Sexy (Or Is It?)
Customer experience isn’t sexy (or is it?)
As business leaders we are faced with many options to grow our business.
What are our options?
We can invest in a PR campaign which will increase our brand awareness. With a PR campaign we get to be in the media and everyone will see how successful our organizations have become.
How about a PPC strategy? This will surely bring us new leads tomorrow and put a feather in our hat because we can equate revenue growth to the campaign.
A website redesign will give us a new polished look almost immediately.
All three have their place in business but neither will grow our bottom line organically like a customer experience strategy will. Not too long ago, I wrote a post on the #1 Reason a CEO Won’t Invest in Customer Experience (find it here) which was picked up by Time magazine (read that piece here).
Quite simply, the reason is because the financial ROI of customer experience takes time. Your customers may say they will use you again and referral you, which they will if you deliver amazing service, but that may not happen tomorrow. We have to be patient to experience the ROI similarly to how organizations like Amazon are patient.
Let’s remember, Amazon started off in a garage similar to how many of our businesses started. Jeff Bezos (Founder, CEO – Amazon) says it best, “We are willing to be misunderstood for long periods of time.” What he means is that he will invest into his customer experience even when the payback is month or years away. Let’s not argue with his logic or strategy.
I get it! Launching a PR campaign is great, we get to paint our brand with an incredibly fine brush and it boosts our ego. It does sounds like fun but customer experience is going to ensure you are operating 5 and 10 years from now because your customers will be loyal to you.
Here are some stats for you from organizations who invest in customer experience:
Amazon = $269.47/share (as of Feb. 13th, 2013)
Apple = $41B in net income (2012)
Southwest Airlines = 39 consecutive years of profitability. In the freakin’ airline industry!!!
All three organizations believe in having the right customer experience systems and programs in place to grow their business.
Wait, maybe customer experience is sexy!
See also:
How to generate sales through social media by increasing customer trust
How To Generate Sales Through Social Media By Increasing Customer Trust
If I were to ask you, “What’s your social media purpose?”
Would you have an answer?
If you did have an answer, I’m sure you do, would your entire organization be able to recite the same response?
In December 2012, I polled 100 social media professionals I’m connected with on Linkedin, actual people who are responsible for the social media efforts of medium and large sized organizations, here is what I found:
As you can see, there is a handful of different reasons why some organizations are using social media.
For me, the answer is, “We’re using social media as a means to service our customers.”
The most admired organizations in the world, found social media and thought, “We must service our customers here.” After all, they are having conversations about our service, product and industry at a million times/minute it only makes sense to have a unique presence.
Anyone reading this will have one of two stories:
1.”I once posted on an organizations Facebook page and never heard back.”
2. “I once tweeted at a company and they actually tweeted back! For that reason, I admired them as a brand.”
#2 sounds much nicer.
I wonder how many times C-suites have asked, “What’s the ROI of social media?” Well, here’s my evidence for you.
Zappos Customer Service Facebook Case Study
The other day Mashable came out with this Zappos article. It highlights Zappos’ Facebook activity and the leads it brought to their website. There are some very powerful stats here.
- Their Facebook status updates from Nov. 20, 2012 – Jan. 20, 2013 led to 85,000 website visits.
- 42% of those website visits led to purchases.
- The other 58% that didn’t lead to sales converted into “likes” “shares” and comments.
- Each status update had a conversion of 1.75%.
I know what you’re thinking, “Michel, you just finished saying that social media is about servicing your customers not sales.”
The reason Zappos is able to post a promotion or sale and have their customers click through is because they have earned customer trust! They didn’t start their social media campaign by simply posting a bunch of promotions and crossing their fingers hoping their customers would convert.
They have spent years taking care of their customers. Equally important, they have spent 1000′s of hours having conversations with their fans knowing that when the time is right they will offer a link to a sale or promotion.
Social media can be a sales tool but only AFTER you have built community and trust. This is why some CEO’s don’t understand the value in social media. They expect the ROI to be sales and nothing else when it reality it is about customer trust.
Regardless of what industry you are in, focus on building customer trust and see what happens. The world’s most admired brands have created trust and are extremely profitable.
Why would you choose any other strategy?
What are your thoughts? Why are you using social media?
See also
3 Warning Signs That Your Customer Experience Needs Improvement
One of the most under utilized business practices today is doing an internal audit of your current systems and programs. Sure, you can hire a research firm to do it for you but save the cost and experience it first hand. The phrase that best describes this is: “Inspect What You Expect.”
When was the last time you inspected your customer experience strategy?
Often, we get too preoccupied in making sure that we are keeping up with outside influences, like competition, that we neglect everything that is happening inside of our business. We’ve all heard the saying, “Work on your business, not in your business” but I think there are a few exceptions.
Customer service is continuing to receive the investment it deserves but we are not all there yet. Take a look at the organizations around that you admire such as Zappos, Amazon and Apple. Why is it that we love them?
It’s not because they are profitable (many of us aren’t shareholders and don’t see their profits).
It’s not because their CEO’s are Tony Hsieh, Jeff Bezos and Tim Cook.
It’s because they take care of us as people not as consumers!
The reason these three have grown into billion dollar brands is because they have the right customer experience strategy and programs in place to support their customer service. The ROI of exceptional customer service is customer loyalty, high customer retention and being an admired company.
Three areas where you may need to improve your customer experience
How are you hiring your employees?
You can have all the high end software or systems in the world but if the people operating them aren’t a cultural fit then it’s good for nothing. Evaluate the way you’re recruiting and interviewing your employees for there may be some quick fixes to improve that process.
When I visited Zappos HQ in 2008, I learned their ‘will vs. skill’ hiring format. A candidate comes in for an interview on day one to be tested on ‘will’ related questions. If they pass, they will come back for the ‘skill’ portion on a separate day. Adopt the ‘will vs skill’ format today to see results tomorrow.
How are you training your employees?
Too often we hire someone then hand them the keys to our business without providing the proper training. I’d imagine that most people reading this own or work for an organization that has a proper training program but what is it that you are teaching them?
Many businesses teach their employees about the ABC’s of customer service (find out what it is here) which includes very low level customer service training methods. In today’s business landscape, where our customers have more influence than ever before, we need to be teaching them of the high level theories of customer experience.
Take a look at your training program. Are you teaching your employees what organic growth is? How about defining the five customer personalities? Or, the difference between customer service/customer experience/customer centricity? If not, you have an opportunity for improvement.
Have An Average Employee Training Program? Here’s What To Do.
How are you collecting customer feedback?
Remove yourself as a business person and put your customer hat on. Within the last 24 hours you most likely purchased something like a haircut, groceries or gas for your car. Were you surveyed after your experience? I’d bet that you most likely weren’t but wish you had been.
Now, go back to being the business person that you are. Are you surveying your customers? I’d bet that you aren’t. Even if you are, you are probably asking a few questions, collecting the data then moving on. Too many organizations are guilty of gathering customer feedback then not analyzing it to make operational improvements. Perhaps, you are making operational improvements with your data but I’d bet that you aren’t sharing the customer feedback with your ENTIRE organization. If you are doing everything, then you’re amazing and I want to meet you! Email me so we can connect: michel@fcgrp.com
Did you happen to say, “No, we aren’t doing that” or “That’s a good idea for my business” to any of the content above? If so, you have an AMAZING opportunity to strengthen your business.
There you have it, a whole bunch of things to think about! I genuinely love what I do, help entrepreneurs and business owners (of all sizes) build the right programs to deliver amazing customer service. If you have any questions, please email me them so I can help you out michel@fcgrp.com
See also
Understand what make your customers tick and what ticks them off
Monday: 4 Customer Experience Links You Need To Read Today
Customer Experience Links For Today
What Your Customers Would Love To Tell You Inc
Know Your Customers Or Else Inc
Get Inside Your Customers Head Inc
