Added Value

02/27/2015

If you've ever been a consumer (who hasn't), you've been hit with a service charge that you felt was unreasonable.  Perhaps the most notorious is the banking industry's "overdraft fee," especially when it tags an additional $35.00 onto the cost of a  $2.50 cup of coffee that you  paid for with your debit card.

Empty wallettWhile the institution that charges the fees often says they're intended to "cover the cost" of a customer action, the bottom line is that today, most of these administrative costs are invisible or non-existent to the institution.  No human being at the bank administers anything in these situations; the process is entirely automated.  

So why do these institutions keep charging these fees?  Because it's become a valuable revenue stream for them.  Their lack of innovation prevents them from generating new revenues through services that customers actually value.  Therefore, they have to keep charging these evil fees in order to achieve their revenue goals.

A business that profits from a customer's mistake or misfortune is not worth patronizing.

So, where does Enterprise enter into the equation?

I rented from them recently, as I often do.  I drove through a $1.00 toll without stopping to pay.   Enterprise was  billed the dollar from  by the Maine Turnpike Authority.  This week, I received a letter from Enterprise, passing along the $1 charge,  along with a $13 "administrative fee."

When I called Enterprise to object to the 1,300% penalty fee, the agent waived the fee before I  could even request that she do it.  That's right, my entire conversation was less than 30 seconds.  To be honest, I was ready to spend a lot more time pleading my case. But Enterprise wasn't.  

Reason #1: Eliminating or waiving administrative fees saves time and labor costs.

And when the agent voluntarily waived the fee, my admiration for the company only got better.  It's clear to me that Enterprise is driven to be fair and reasonable, and profit by delivering services that customers ask for, and benefit from.  The experience increased Enterprise's reputation in my mind.  

Reason #2: Eliminating or waiving administrative fees improves a company's reputation in the mind of the customer.  And ultimately, that's the only mind that matters.

That act of customer-focus by Enterprise, and their increased standing in my mind, will cause me to rent from them again.  Which brings us to...

Reason #3:  Waiving or eliminating fees creates customer loyalty.

For further proof that customers like companies more when those companies stop charging for things that are outside the core value proposition, look no further than LL Bean, or Amazon. Since LL Bean has stopped charging for shipping (customers also don't like to pay for shipping), and Amazon offered the "Prime" service, they've both seen customer loyalty (and revenue) grow.

Enterprise employees
  

Posted at 08:40 AM in Added Value | | |

Tags: core product, customer loyalty, customer service, customer-centric, overdraft fees

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04/08/2014

Are Premium Subscriptions the new path to Customer Loyalty?

It started with Amazon.

They offered me a , and I bought in.  For $79 per year, I get free 2-day shipping on everything I  buy from them, all year long. I love the idea of ordering a book, and having it in land on my doorstep two days later.  I'm embarrassed to admit that my desire to maximize the value of my Prime subscription has caused me to give much of the business to Amazon that I used to give the local bookstores. Amazon sees that as pure customer loyalty.

Amazon prime

Now United Airlines is offering me their version of Amazon Prime...

I received an email from United today, offering me a year's worth of Economy Plus Seating starting at $499.  If I were to do the math for the extra legroom the way I did the math for the 2-day shippinng, I migh buy in. 

If your product is one that customers buy again and again, an annual subscription to a premium serivce might offer you greater cash flow (United expects to see a new revenue stream from these subscriptions) and greater loyalty from those customer who buy in (even when you cost slightly more than the same service from a competitor, they'll buy from you to  take advantage of the "free premium.").

But before deciding that a Premium Service Subscription is a no brainer for  your business, consider this:

Do you  have an "Amazon Advantage" (full inventory coverage on your category)?  United doesn't fly to a lot of places that I go, especially starting  from Portland, Maine.  Therefore, their offer won't give me the perceived value that I get from Amazon Prime. If you can't satisy your customers' every demand within your product category, they  won't see the value in a Premium Subscription Service.

Have you bought into a Premium Subscription Service?  For what kind of product?  How often to you re-purchase?

 

  United Economy Plus

 

Posted at 08:00 AM in Added Value, Customer Loyalty | Permalink | Comments (2) | TrackBack (0)

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04/10/2013

What is Customer Delight?

The other day, I wanted to print a newspaper article that I was reading from the screen of my iPhone.  I have a wireless printer in my office, but I'd never tried to print to it from my phone.  Until now...
 
IPhone Printer messageI tapped the print command on my phone, and crossed my fingers...
 
The name of my HP8600 appeared on the  screen, as a wireless printer within range.  So far, so good.
 
Now the big test:  I tapped the printer name, and held my breath...
 
Within seconds, I heard the printer loading the first page, and commence printing - SUCCESS!!!  The product worked, as advertised.
 
But then something else happened, that I really didn't expect:  My phone told me that my printer ink was running low.  This was good information, because I was headed out  to an office supply store.  
 
Was it my phone's job to monitor the ink levels in my printer?  No.
 
Was the information useful to me?  Absolutely!!!
 
In fact, I was delighted that my phone gave me some timely and valuable information that I would never expect it to give me.
 
That's what customer delight is - it's getting something good that you didn't expect to get; customer delight is when you're pleasantly surprised by receiving unexpected value while using a product, receiving a service or participating in a process.  Customer delight is about pleasant surprise.
 
How have you experienced customer delight?  How are you and your company surprising your customers, with moments of delight?

Surprise

Posted at 05:00 AM in Added Value, Customer Experience | Permalink | Comments (0) | TrackBack (0)

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03/27/2013

Charging customers for "Just Looking" may not be such a crazy idea.

A  store in Australia has  been critized for charging customers $5 to come into the store.  In other words, if you're "Just looking," it's going to cost you five bucks.

While many people have criticized the store for taking such a bold step, creating a "cover charge" to enter a store isn't such a crazy idea.  You just need to frame it right, and provide enough value for the fee.

The strategy is already working successfully in other consumer-oriented businesses:

5 dollars for just lookingWholesale clubs: 
If you want to enter a SAM's Club, you need to show your membership card at the door.  To get that membership card, you must pay between $40 and $100 annaualy. 

Amusement Parks:
If I want to take my family to an amusement park, I'll have to pay to enter the park, then I'll also have to pay to go on rides, and have refreshments.

Nightclubs:
If you want to go into a nightclub, you'll have to pay a cover charge (after waiting in line).  Then you still must pay for drinks once you're inside.

Here's The Point:

People are used to paying cover charges to enter an establishment.  What makes it acceptable is the value received for the cover charge.  This value can take different forms.  

In the SAMS's club example, the value is lower prices.

In the nightclub, the value is the pure experience: a unique environment, with a perceived entertainment value.  The amusement park value is similar - a unique experience.

In the best-selling book, "," authors Joseph Pine and James Gilmore explain this dynamic well:

"The history of all economic progress consists of  charging a fee for what  once was free."

Charging a $5 fee to enter the store isn't such a crazy idea.  If the retailer can create a "wow" experience that will cause  customers to want to go inside, the $5 cover charge will be considered a true bargain, instead of an outlandish insult.

And of course, the retailer must also frame the fee as an admission for the experience, instead of a penalty for "showrooming."

If you can deliver a unique experience, customers will not only willingly pay for that experience,  but they'll bring their friends with them, and gladly wait in line to pay you for it.

  Waiting in line at nightclub

 

Posted at 08:00 AM in Added Value, Customer Experience | Permalink | Comments (0) | TrackBack (0)

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12/18/2012

Service for Customers' Sake: The TSA is making changes to improve the Customer Experience

"You can't focus exclusively on security; you've got to be mindful of customer service."

Airport pat downThat's a quote from Stephen M. Lord, Director of Homeland Security and Justice Issues for the Government Accountability Office.  Who would have thought??!

If you've done much air travel since 9/11, you've experienced the "all business" approach of those TSA agents in the airports, and their annoying tactics, from the shoe and belt removal, to  the random bag checks, to the ever-popular pat-down. 

At times, it seemed the TSA agents would do everything they could to make our lives as passengers in a hurry, more difficult.

But time are changing, and so is the TSA.  A recent New York Times article describes how the TSA has begun a number of intiatives to improve the experience of airport passengers.

What's in it for the TSA? 

Greater customer loyalty?

No.

Word-of-mouth marketing?

No.

Better Customer Service for the sake of Better Customer Service?

Perhaps.

Customer Service doesn't always require a profit motive.  Sometimes it can be simply for the customers' sake.

  Happy

Posted at 06:42 PM in Added Value, Customer Experience, Customer Service | Permalink | Comments (0) | TrackBack (0)

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07/04/2012

The Lesson of the e-Receipt about Relative Value and the Customer Experience

Last week, I bought a pair of shoes.   The cashier asked me how I'd like my receipt:

  1. a paper receipt from the  register
  2. an e-Recipt delivered to my email
  3. both a paper receipt and an e-receipt

Fat walletWithout hesitating, I opted for the email receipt.  That would mean one less piece of paper in my wallet.  One less receipt to lose now, and spend time finding later,  should I need to return the shoes.  One less step  in the transaction.  One less thing to deal with.

For me, the paper receipt offerned no value; it would only add to the clutter in my life, and cause me to have to take additional steps to later remove that clutter (searching for a trash can, and cleaning out my wallet.)

"It's only  a paper receipt," you wonder. Why is he making such a big deal about it.?"

Well, you're right - it is only a  small, relatively insignificant component of the transaction.  In fact, it's a piece of necessary overhead that we've accepted as a fact of retail life. But it's also a powerful example of transaction overhead - those "requirments" that surround the act of finding, evaluating, buying , using and owning a product or service, but add no value to either of those steps.

If you were to remove all the low-to-no-value components from the buying experience, all that would be left would be value - pure value. 

Think of how customers buy your  products or services.  What are the low-value elements that you or your processes impose upon them?  What would happen if your removed  those elements?  Or at least transformed them to become less visible to  the customer?  How would that enhance the customer experience?Shoes

Posted at 08:50 AM in Added Value, Best Practices, Customer Experience | Permalink | Comments (0) | TrackBack (0)

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05/27/2012

Upsell by helping the customer to see the value.

Don’t just sell more; sell more value.

Upselling. 

At the drive-through when you order a cheeseburger, the cashier asks, “Would you like some fries with that?”

At the register, the cashier asks, would you like the two-year warranty with that that covers all repairs for any reason? 

At the car dealership, the salesperson highly recommends the leather upholstery and the towing package.

Upselling adds more top-line revenue, and from the company’s perspective, that’s good.  But if done poorly, upselling can alienate the customer, and that’s bad.  Alienated customers don’t come back. 

Mac friesSo, the challenge is how to upsell well, without alienating the customer.  Or better yet, how to upsell in a way that gives the customer good reason to smiling, because they feel that received more value than they originally expected.

That’s exactly how my wife and I felt, after a recent Sunday morning stop at the Starbuck’s in the Barnes & Noble Booksellers #2048 in the in .  The woman that took our orders was a master upseller.  But here’s the interesting part about it….  We didn’t feel like we were being sold anything; we felt like we were being offered a better value; we felt that the person who had the information was sharing the information with us, to help us get the best value that we could.  And as customers, we appreciated it in a big way.

So, what was her secret?

She wasn’t selling; she was sharing information  with us; she was helping us to see a way to receive more value.

We ordered four items, totaling $12.55.  But she didn’t simply take our order; with each item, had something to say, that was all  about  us.

Example:

My wife ordered a medium Caramel Macchiato.  The server suggested that for just 30 cents more, we can have a large size.  As  she said that, she held the two cups next to each other, so that we could clearly see how much more Caramel Macciato we’d have for just 30 cents more.  In a very literal sense, she showed us the value.  And we gladly bought it.

Here’s the point:

When upselling, don’t simply suggest the additional item; don’t just ask the customer if they want it, and don’t just tell the customer why it’s a good deal.  Instead, share information in a concrete and visible way, that will make it easy for the customer to see the value themselves.

Help the customer to clearly see the value, and you’ll accomplish two things:

You’ll deliver a better customer experience.

You’ll improve customer loyalty.

And yes, you’ll increase top line revenue.

To upsell well, share information with your customer to  help them clearly see how they can receive more value.

2 coffee cups

Posted at 01:25 PM in Added Value, Customer Experience, Retail Customer Experience, Selling Skills | | Comments (2) | TrackBack (0)

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12/05/2011

How QR Codes are Used in a 200-Year-Old Mansion

It’s fascinating to see how people lived two hundred years ago.

Mclclean house frontThe McLellan House in Portland, Maine was originally built by a shipping magnate in 1801.  Through the efforts of the Portland Museum or Art, the McLellan House has been preserved as a wonderful place to learn about 19th century architecture and design.  It's also a great place to learn how QR codes can deliver a better customer experience. 

This past Friday night, my wife and I joined some friends in touring the house, and this was far more than a walk through.   While there were no tour guides within the house, we came away from the tour having enjoyed a complete room-by-room learning experience.

Mclellan house stairsWhat made the experience so fulfilling was the way that QR codes were placed surreptiously throughout the building; in many rooms and hallways, and on artifacts inside this stately mansion.  The QR codes are used in an innovative way to enrich each patron’s experience, by delivering short contextual videos throughout the tour.  Among them are a video of a master woodworker restoring the flying staircase (shown at left),  and the creation of a painted floor cloth.

Like most consumers, I’ve become accustomed to seeing QR codes printed in magazine advertisements, as a direct link to a webpage, and as a way to draw the reader  farther into lead qualification, or a sales process.

The Portland Museum of Art uses QR codes in an entirely different way; not to sell, but to serve; to serve their patrons with a richer, higher quality experience while touring an exhibit.  This is in fact something that any business can do; using QR codes to deepen customer touch-points in a way to enrich the customers’ experience, and ultimately build customer loyalty.

So, how can you put QR codes to work in your business, in ways that will delight your customers, so that they tell more people about you?  Think of the various high-traffic  touch-points between your company and your customers, and then think about how live videos might enhance that touch-point.QR Code

For example, if you sell products that require assembly, consider printing a QR code on the front page of the assembly instructions.  Your customer can take a picture of the code with his smart phone, and be brought directly to an on-line video that shows the customer how to assemble the product.  That would be a lot easier for the customer to follow, than small-font text, wouldn’t it?


Check out this list to learn about some of the cool ways that others have used QR codes.  Then think how you can do something similar for your customers.  

If QR codes can tell the story of a 200-year old building, just think how they can create a rich history for your business.

Posted at 06:00 AM in Added Value, Customer Experience, Technology | Permalink | Comments (2) | TrackBack (0)

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08/24/2011

How Marketing Myopia has Killed the US Postal Service

Times are tough for the U.S. Postal Service, and there’s much concern among Americans over the fate of the US Postal Service, and how to fix what’s broken.

When we look at the USPS, we need to look at it in a larger context.

The USPS began moving mail from sender to recipient in 1775. In that larger context, the USPS was in the communication business.

Old mail box Roughly 100 years later, the telephone was invented, and gradually provided an alternate means of communication.

About 100 years after the invention of the telephone, email was invented, and provided yet another major means of communication.

Around that same time, Federal Express (now FedEx) was founded as an express courier, who promised to deliver your mail a lot faster that the USPS.

As people and businesses began using these other forms of communication, there were far fewer pieces of mail that needed to be delivered, so the USPS began to see a steady decline in revenue.

But the USPS still considered itself to be in the mail delivery business, even though its customers were communicating began communicating through different channels.

If the USPS saw itself as being in the communication business instead of the mail delivery business, it might have evolved into a very different enterprise than what it is today.

To understand this "myopic mission" of the USPS, it helps to think of the railroads:

Before the Interstate Highway system was built in the 1950’s, people more frequently travelled by railroad. Back then, railroads were a much bigger industry; many more towns had a train station, and daily train service.

Transportation occurred largely by rail. But the big railroad companies didn't consider themselves to be in the transportation business; they considered themselves to be in the "railroad business."

When alternate modes of transportation were developed (highways & affordable air travel), fewer people chose to travel by trains, and eventually, passenger train service all but disappeared.

The Railroad industry failed to evolve and adapt to newer modes of transportation. Hence, it downscaled dramatically.

Similarly, the USPS has failed to evolve and adapt to newer modes of communication. Hence, it is now downscaling dramatically, by closing many of its brick-and-mortar branches.

So, how do we solve the problem?

We solve the problem by eliminating the USPS' non-profitable services, and focus more on those services that the USPS does well.

What else do we do to save the USPS?
We cut back on daily mail delivery, and go to every-other-day, or we outsource USPS mail delivery to another company that already has a fleet of delivery vehicles on the same roads (and in the process, reduce the carbon footprint!)

And we re-define the business in a way that aligns with 21st century communications.

And when the sun sets, if the USPS has gone out of business, its customers and the private sector will adapt, as they always have, with more effective and more efficient solutions.

The message here for any business that ever feared facing extinction is this:  Define your business according to the problem that you solve, and not the product or service that you deliver.  And once you’ve done that, never stop thinking of new ways to solve that problem.

So ask yourself:  What business are you really in?

Old train 

Posted at 03:51 PM in Added Value, Marketing Best Practices | Permalink | Comments (6) | TrackBack (0)

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06/01/2011

How Dominos Bakes a Better Customer Experience into Every Order

I love when a company surprises me with something that's both cool and convenient.

Dominos did that when I ordered a couple pizzas from their web site last night. 

After selecting the pizza, toppings and crust and, I  clicked “Order.” 

That's when it happened...   Pizza-margherita

Up popped the “Domino’s Tracker” – an application that shows you exactly where your pizza is in the preparation and baking process.  At first I thought it was nothing more than a novel idea – a little bit like the NORAD website on Christmas Eve, where you can visually track where Santa is at a particular moment, as he makes his annual world tour en route to your house.

That's when it hit me...

The Domino’s Tracker could make my life easier, by telling me when I should leave the house to pick up the pizza, to get it at just the right time.   How many times have you arrived too early, and had to wait around, or too late, after the cheese no longer has that delicious just-melted texture?

With the Tracker on my computer screen (or my smartphone), I could see exactly when the pizza was going into the oven, about to leave the oven, and being boxed and prepared for pick up.

But this blog post isn’t just about pizza; it’s about what a company can do to add value to a normally mundane experience; adding value by making it both fun and functional.  And this concept can be applied to any business, if you can bring yourself to think outside the pizza box. 

Think about the product or service that you market, sell or service.  Now think about all that goes through the customer’s mind, as she goes through the process of researching, selecting, ordering, installing or using your products or services.  What does the customer think about, and what actions does she take throughout the process?  What assumptions does the customer have to make?  What information can you as the seller provide, that would be useful to the customer?  What action steps can you perform for the customer, to make her life easier?

Domino’s went through this same thought process when they created the “Domino’s Tracker.”  It solves a simple, but persistent problem that every customer has after ordering take-out:

“Exactly when will my order be ready?”

But the “Tracker” isn’t only practical.  (Only practical can be boring, and soon taken for granted.)  Domino’s makes it engaging by delivering the information in a fun-to-follow-format that inevitably draws your eyes to the progress meter.  And they make it more personalized by allowing you to select any of several themes for your Tracker.  And you can even change the theme mid-stream, if you like.

Most product companies try to differentiate their offerings by focusing primarily on the product.  But while Domino’s has taken steps to improve its pizzas, they’ve also enhanced the customer experience beyond the pizza, by delivering useful information that every customer can appreciate, and delivering it in a way that’s fun and engaging.

In fact, the next time I order pizza, I’ll probably order it from Domino’s again, just so I can watch the Tracker.  But I’ll also know exactly when to stop watching, and when to start driving to go get the pizza.

Tracker 2 

Tracker 1 
 

 

Posted at 03:00 PM in Added Value, Customer Experience | Permalink | Comments (17) | TrackBack (0)

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