Through the Eyes of the Customer: Customer Loyalty

Customer Loyalty

05/27/2015

5 Good Reasons to pay Customer Service Employees a higher wage

Customer Service Representatives (CSR's) are often among the lowest paid employees in most organizations. Yet they're among the highest influencers of the customer experience. Let's look at the logic - or the lack thereof:

Employees who interact with customers all day long are in a position to influence the customer experience in a positive or negative way. Because they're in this highly-sensitive tactical position, it would be wise select employees for this job who are inherently capable of delighting the customer with better discretion.

But most companies hesitate - and rightfully so - to grant such latitude to such low-paid workers. After all, their pay is low, because they lack the aptitude and experience to warrant higher pay (and greater latitude in decision-making with respect to customers). There are five big reasons why the Customer Service Representative should be a higher-paying position.

1: A higher wage will attract higher-quality candidates.

If companies offer a higher wage for CSR's, they'll attract more experienced candidates for the position. Candidates with a higher level of experience will have more likely learned and acted upon what it takes to delight the customer, and to do so judiciously, with the mutual interests of the customer and the company. They'll be more capable of making the right decisions in those moments of truth, where the experience could go either north or south, depending on the actions of the CSR. This type candidate can warrant the trust to please the customer without giving away ranch, as is often the fear of call center managers. This brings us to the second reason...

2: Higher-quality CSR's can deliver a better customer experience.

CSR's who can be trusted with the latitude to make the best decisions in the moments of truth are better positioned and more capable of delivering a superior customer experience. When a first-line representative at a bank is allowed to waive an overdraft fee without putting the customer on hold to seek approval, the customer immediately has a better impression of the bank, and will feel their loyalty to the bank grow stronger. And this brings us to the third reason...

3: Higher-quality CSR's increase customer loyalty.

A consistently higher quality experience drives greater customer loyalty. When a customer is delighted with the service provided every time she comes in contact with the company (often through a CSR), the customer will actually look forward to engaging with the company. This is the heart and soul of customer loyalty. And loyal customers often don't keep it a secret - they recruit more customers, bringing us to the fourth reason...

4: Higher-quality CSR's are catalysts for increasing market share.

When a customer has a great experience, they tend to talk about it. This positive talk from a customer is more credible, and more powerful than the most expensive marketing campaign. Strong positive word-of-mouth attracts more new customers, and does so at a relatively low cost. And that brings us to the fifth reason...

5: Higher-quality CSR's generate higher profits.

One of the highest expense categories for a company is Sales & Marketing. But when a current customer "sells" a friend or family member on becoming a customer, the company gains the customer and the additional revenue, without the expense of sales and marketing. As a result, word-of-mouth customers are higher profit customers.

When a company invests more in their customer service team, they're more apt to generate a better customer experience. And a better customer experience increases the loyalty of existing customers. Loyal customers recruit new customers through positive word-of-mouth at a lower cost of sales and marketing, which increases profits for the company. This virtuous cycle begins when an organization makes the decision to recruit higher quality, more experienced CSR's, by offering a higher wage.

Posted at 08:00 AM in Contact Center, Customer Experience, Customer Loyalty | Permalink | Comments (0) | TrackBack (0)

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.

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?

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

07/25/2013

Beer mugs, wedding rings, and true customer relationships.

Having your own mug in your neighborhood pub used to mean something; it meant that you were a loyal patron; it meant that you developed such a strong relationship with the pub owners that they made you part of their establishment. The mug on the wall in the pub was the ultimate bond between the customer and the service provider - call it customer relationship Utopia.

It couldn't be bought; it had to be earned. Over time.

Has all that changed? Has this former badge of loyalty and longevity been reduced to another item on the menu that any wannabe can buy?

That seems to the be case at Gritty McDuff's, one of my all-time favorite brew-pubs in Portland, Maine. When I first arrived in Portland back in the early 90's, there were a few dozen mugs on the wall behind the bar at Gritty's. As I recall, you had to "earn" membership in the prestigious "mug club" by patronizing the bar enough to develop a relationship with the bartender, who would in turn, set a side a mug just for you. Ah, the early 90's...

Fast forward to July of 2013 - I was in Gritty's with some friends from out-of-town. The collection of mugs on the wall had expanded to a few hundred not only behind the bar, but also on the ceiling above the bar.

"That's a lot of customer loyalty," I thought.

Well, not exactly. The rules at Gritty's have changed since the early 90's. Today, anyone - even the first-time tourist from far away - can buy into the mug club for a $75 annual membership fee. For that, they receive a mug, a baseball cap and discounted beer. Whatever happened to meaningful relationships???

Relationship-based loyalty had been reduced to a transaction that anyone can buy into.

In some ways, having your own mug on the wall after years of loyal patronage can be a bit like the wedding band on your finger, after years of commitment to your spouse. Both icons symbolize a mutual commitment, made stronger over time.

Think about your business for a minute...

Do you offer your customers any programs or symbols of loyalty? And if so, do you keep it real? Or do are you willing to sell-out, by allowing anyone to buy-in, without a commitment?

Truly successful businesses are built upon strong, time-tested customer relationships. If you express it through a symbol, be sure to keep it real!

Posted at 10:04 AM in Customer Loyalty, Marketing Best Practices | Permalink | Comments (0) | TrackBack (0)

04/05/2013

The ONE QUESTION Every Business Must Ask, Before Making a Decision

Customers shop at Wal-mart because Wal-mart has low prices, and product in stock. Wal-mart has earned this reputation by steadfastly managing logistics, and especially, costs.

But even doing what you're very good at can hurt you, if you don't measure your decisions against one simple question.

We'll get to that question in a minute...

First, let's turn to an April 3 New York Times article that describes how recent workforce reductions have prevented Wal-mart from getting fresh produce to its store shelves in a timely manner:

"Walmart, the nation’s largest retailer and grocer, has cut so many employees that it no longer has enough workers to stock its shelves properly, according to some employees and industry analysts. Internal notes from a March meeting of top Walmart managers show the company grappling with low customer confidence in its produce and poor quality. “Lose Trust,” reads one note, “Don’t have items they are looking for — can’t find it.”

The article further reports declining grocery sales at Wal-mart, and customers complaining about longer wait times at check-out, because fewer cashiers are available to staff all the registers.

Wal-mart has grown to become one of the greatest retail stories in the history of our planet by keeping costs low, and sharing those low costs with the customer through lower prices.

In other words, Wal-mart cost management has enabled them to created a better customer experience. That customer experience has driven customer loyalty, increased sales, company growth and profitability.

But according to Times report, when Wal-mart managed their costs by reducing the number of stocking clerks and cashiers, the customer experience was damaged in two ways:

Less-than-fresh, and absent produce inconvenienced and disappointed customers.
Longer-than-normal wait times at check out further disappointed customers.

The bottom line result to Wal-mart has been lost customers, lost revenue, and lost reputation.

Before a business makes any decision, it must first ask itself one important question:

"How will this decision impact the customer experience?"

If the decision will improve the customer experience, it's probably a good decision to make.

If the decision will harm the customer experience, reconsider. Short term-gains are usually eroded by long-term losses.

Had Wal-mart asked itself that question before making the decision to reduce staff, its a good bet that their tomatoes would be riper, and there'd be more customers buying them.

Posted at 08:00 AM in Best Practices, Customer Experience, Customer Loyalty, Reputation, Retail Customer Experience | Permalink | Comments (2) | TrackBack (0)

03/25/2013

The Hidden Cost of Hidden Fees, and Why Companies Lose Customers

We've all been there...

A sneaky little charge shows up on our credit card statement; a charge for something we never ordered (not on purpose, anyway!), or a bogus "penalty fee."

Back in January, I purchased a 30-day pass for unlimited Internet Access from Boingo, for my 7-day stay at a hotel in France. (The 30-day pass was a better deal than seven 1-day passes.) At just $34.95, I was a happy customer...

...until I reviewed my March credit card statement There were two more charges for $34.95 from Boingo, and I didn't remember ordering the service again in February and March. Why would I? I was only in France for 7 days.

I called Boingo customer service to find out what the charges were for, and to ask for a refund. Without question, the agent quickly issued a refund. She explained to me that "Boingo automatically renews, unless you ask us to stop."

I'll bet Boingo collects a lot of revenue that way. But I'll also bet they've lost a lot of customers because of it.

At a very basic level, there are two types of revenue that a company generates from its customer base:

Revenue generated through activities that create value for the customer
Revenue generated through activities that do not create value to the customer.

In an ideal world, all revenue would be generated through the first type of activity. Companies would only charge customers when the customer receives true value. But we don't live in an ideal world.

The Hidden Cost
There are a lot of companies that make a lot of money by charging customers for activities that have no value for the customer. And when this happens, customers revolt, and customers defect. When customers defect, they need to be replaced, and replacing customers costs money in the form of advertising and promotions. While the "easy money" that a company can earn over the short term through miscellaneous fees and service charges can be very tempting, the cancerous cost of customer discontent and defection can hurt the company over the long haul.

The Point is this:

Before implementing a fee, ask the question: Is the fee for an activity that directly provides value to the customer? Be honest with the answer. If the answer is "Yes," it's likely safe to proceed. If the answer is "No," then don't do it.

Bank of America used this logic in late 2011. They announced plans to implement a $5 monthly fee to all customers with debit cards. Customers revolted, and Bank of America reversed the plan. While the relatively small monthly fee would have generated millions of additional monthly revenue for the bank, Bank of American realized, based on the customer response, they were likely to lose tens of thousands of customers, if they were to implement the $5 monthly fee. The long-term cost of losing the customers, they realized, would be greater than the short-term revenue gained from the fee.

Be a value creator, not a value detractor. You customers will likely thank you, long into the future.

Posted at 08:00 AM in Best Practices, Customer Loyalty, Trust & Transparency | Permalink | Comments (0) | TrackBack (0)

02/07/2013

How Marriott's use of Twitter will make me a Loyal Customer

When I checked into a Marriott hotel in early December, I inadertently gave the receptionist my debit card for indicentals. When I checked out of the hotel four days later, I paid for my stay with a company credit card.

Unfortunately, the debit card number was still in their billing system.

Three weeks later - the Saturday before before New Years, to be exact - a large charge suddenly appeared against my checking account - and the charge came from that same Marriott.

I called the hotel, and explained the situation. The hotel staff listened, and politely informed me that nothing could be done until at least Monday, when the bookkeeping staff returned.

That was a problem - my wife and I had big plans for the weekend, and a billing error by the hotel had virtually drained our checking account!

Without expecting any results, I sent out the following Tweet:

Within 5 minutes, I received the following text on my cell phone - at first, I assumed it was just another marketing text, until I read what it said:

After sending my reservation number, I received the following:

And resolve it they did. Within an hour, a Social Media contact at Marriott was on the phone with my bank to be sure that I would have funds available for the weekend. I didn't expect this level of personalized service, but I was absolutely pleased to receive it!

I learned that at that time, Marriott's entire social media team consisted of three people. But that staff was plenty big to resolve my issue, and resolve it quickly. So I wondered: How could such a large company have such a small yet effective social media group, particularly when they're marketing and selling into such a large global customer base?

As far as I can see, there are at least two factors at Marriott that make this possible:

1. They have a Clearly-Defined Process for using Social Media:

They're tasked with "listening" to Twitter, and the other Social Media for mentions of Marriott. Any mention that in their judgement, requires follow-up, is assigned to individuals inside or outside the Social Media group, for resolution.

2. Their Social Media agents are Empowered:

These social media people are granted authority to make customer-focused deicsions without consulting a manager. And they are empowered to assign issues to other people outside of their reporting structure, to "make somethign right" for the customer.

For this particular customer, a small social media staff can have a big impact on the customer experience, and cumulatively, on the brand and reputation of a company. Like any other business tool, success is all a matter of how you use it.

I've re-told this story many times, and remain impressed with the way a large company can leverage a small social media staff to drive huge results. As my travel begins to pick up in the new year, guess what hotel brand I'll be choosing more often?

Posted at 04:29 PM in Customer Loyalty, Customer Service, Reputation | Permalink | Comments (2) | TrackBack (0)

11/28/2012

If you're going to survey your customers, go the distance, and close the loop!

I'm one of those people that almost always completes those satisfaction surveys after making a purchase, taking a flight, or staying at a hotel. Customer feedback is an important link in the customer experience chain, so if I don't give it, I probably shouldn't expect to get it (the improved experience, that is).

About ten days ago, I stayed one night at the Hilton Garden Inn Denver South/Meridian in Colorado. Two days after checking out, I received an email from the hotel, asking me to complete a brief satisfaction survey. I finally got around to completing and submitting the survey yesterday.

Today, I recieved an email from the General Manager at that hotel thanking me for staying there, and for taking the time to share my feedback. And then he asked me a question about one of my responses.

Here's why I felt this was an event worthy of a blog post - of all the surveys that I complete, surprisingly few companies acknowledge them, and those who do usually do it through an impersonal, automated email.

It's rare that a company actually follows up personally to close the loop on a customer's survey resposne. But those who do, are very often the leaders in their industries, with the highest levels of customer satisfaction, and customer loyalty.

Is that a coincidence??!

If you ask a customer a question, and the customer answers your question, would you ignore them, or respond in kind? Why should a survey be any handled any differently?

Posted at 05:33 PM in Best Practices, Customer Experience, Customer Knowledge, Customer Loyalty, Marketing Best Practices | Permalink | Comments (2) | TrackBack (0)

11/21/2012

What the economics of customer loyalty can mean to the future of the sales profession

After reading an article in Forbes entitled "Calculating the Economics of Loyalty," I had one of those apocalyptic moments:

If enough companies truly understand the real value of customer loyalty, they might completely change how they invest in customer aquisition. In other words, the profession of selling, as we've come to know it, may change forever.

Here's why:

Loyal customers feed your bottom line two ways:

They buy more from you (and at a lower cost of sales/higher margin, because you didn't have to pay anyone to convince them to buy from you).
They convince other new customers to buy from you (and these new customers also come at a lower cost/higher margin, because you didn't have to pay that salesperson to convince those "referred" customers, either.)

As companies begin to truly understand this value, and the postive financial impact of customer loyalty, they'll begin to invest heavily in customer loyalty initiatives - customer experience projects that excite customers enough to WANT to share their experience with other people they know - also know as Word-of-Mouth.

Social media, and the Internet have given customer word of mouth a far more powerful reach than the most potent internally-managed sales force could ever hope to have.

In order to harness this power to its advantage, companies will WANT to invest in building a better customer experience, instead of a better sales force, and the loyalty caluculates will support these decisions.

With the greater customer experience in place, your customers will do the selling for you. Those customers already have the sales tools (Twitter accounts, etc.), and they know how to use them. You just need to give the customer a reason to do it.

As more companies begin to cash in on the customer loyalty concept, they're more likely to focus sales resources on experiential intiatives, rather than selling initiatives.

A loyal customer's Tweet will outsell any amount of feet on the street.

Posted at 08:50 AM in Customer Loyalty, Selling Skills | Permalink | Comments (1) | TrackBack (0)

08/08/2012

How Trust in the Customer Leads to Growth in Business

In the August 2012 Issue of CRM Magazine, "The Guiding Assumption" by Lior Arussy describes how many (too many, in fact) business create policies to prevent customers from ripping them off, or "abusing the system." Building business operations in response to those few bad apples can be a bad idea, because it unjustly punishes the masses, and over time, will limit the growth of business.

By my own experience as a customer, I've realized that the converse of this - extending the benefit of the doubt to all customers, despite the behavior of a few bad apples - can be a pretty powerful catalyst in growing a business.

When I moved to Maine 23 years ago, I began shopping at LL Bean regularly. I was very comfortable buying anything from them, because I knew they'd let me
return anything I bought, for any reason, at any time . You can say I have trusted them because they have trusted me. While a small percentage of
customers surely abused the policy, the vast majority did not. And LL Bean profited greatly, by extended trust to all.

The deepest, longest lasting and most mutually successful relationships - both business and personal - are built upon Trust. Openly exhibit trust in your customers. They'll more likely respond in kind.

Don't let that one bad apple determine how you run your business.

Posted at 12:58 PM in Best Practices, Customer Loyalty, Trust & Transparency | Permalink | Comments (0) | TrackBack (0)

08/02/2012

How International Delight Highlights "Personalization" to Build Stronger Customer Relationships

“Talk to someone about themselves and they'll listen for hours.”

Dale Carnegie said that in his best seller, “How to Win Friends and Influence People.” The point is that a person will engage with you longer, when the "conversation" is about that person.

If we're to re-state Mr. Carnegie's quote in the parlance of Customer Relationship Management, we might say,

"If you make your product (or service) about your customer, they'll buy from you for years."

In the Business Section of the August 1 New York Times, Andrew Newman described a new commercial in the article, "Coffee Creamer Brand Focuses on Simplicity and Identity."

International Delight, or "ID" has recognized that in addition to having a favorite flavor, coffee drinkers have their own personal ways of adding the creamer to their coffee to make it "just the way they like it." ID is using the commercials to highlight this personalization factor to build a stronger bond with their customers.