Archive for the ‘Loyalty’ Category
Most consumer products come with some sort of limited warranty. Once the warranty runs out, the customer has the burden of paying for repairs. If the product is not designed and built well, then you are probably in for a repair bill; usually soon after the warranty runs out. Otherwise, you should get many years of service out of it before this becomes an issue.
I had a great experience last week with United States Thermoamp, a small company that manufactures a special heat pump for pools and spas. I bought one of their products six years ago. Last week, the fan motor went bad. I had failed to lubricate it as specified in the owner’s manual and the bearings seized up. I called the company to inquire about how to get service. Sue, the technical support person replied by telling me that she would send me a new motor free of charge that I could easily install myself or contract a local service technician. and the two year warranty .
Free? Really? The warranty on that component expired four years ago, but you are just going to give me a new one??? Wow, that’s what I call standing behind your product.
If you build a great product that typically lasts much longer than the warranty period, is there any value to be gained in solving your customers’ problems on your dime after the warranty is up? You bet there is. A great experience helps drive customer retention and a great experience shared leads to new customers.
I’ve been computer-free for the last week spending time with the family at Walt Disney World, hence the absence of new posts. I was Twittering throughout the trip, much to the dismay of my wife and daughter, and even raised the ire of our waitress at the Prime Time Cafe (more on that later). You can go to my Twitter page (see link in the sidebar) if you want to relive my vacation tweet by tweet.
Disney is one of the world’s greatest marketers and their parks and resorts make great case studies in a number of areas including engagement and customer experience design, marketing and new media. Over the next couple of days, I’m going to discuss some of my recent experiences, both good and bad.
Surprise & Delight
Every year, Disney selects a theme and aligns all of their park and resort operations around it. This year, is”The Year of A Million Dreams” and to help “make your dreams come true”, Disney is having their cast members randomly give out over a million “dreams” including chances to spend the night in Cinderella’s castle, “Dream Fastpass” badges which gives you unlimited access to all major attractions bypassing the waiting line and a Grand Marshall Tour of Disney parks around the world.
There are no contests to enter, or disclosing of contact information. Someone just walks up to you and makes you a winner. You just need to be in the right place at the right time and even the cast members don’t know the when, where or what of the giveaway until just before it happens. I met several people who were given dream Fastpass badges and they were ecstatic about it. The really enjoyed telling their stories to anyone who would listen. And consider how much fun it is for the cast members to be able to execute the giveaways. That has to help with cast member engagement. Surprising & Delighting your customers is an important ingredient in the creating great experiences that your customers will tell others about.
Make Individuals Feel Special
Speaking of engagement, Disney cast members are almost universally programmed to react to badges that special guests wear, My daughter had her 13th birthday while we were there and so we went to the City hall in the Magic Kingdom to get a birthday badge. From that moment on, virtually every cast member that we encountered made it a point to wish her a happy birthday. Every table service restaurant that we went to, brought out a birthday cupcake without us having to ask. Of course, my daughter loved the attention so much that she continued to wear the badge long after her birthday. This is a great example of how to make a customer feel special without having to spend a lot of financial capital.
Reward Me For My Patronage
At Disney, different levels of commitment come with different perks. For example, purchasing an annual pass (which is roughly the cost of 8 days in the parks), gets you some serious discounts on Disney Resort hotels. Staying at Disney resort hotels comes with their own set of rewards, not the least of which is convenience. A couple of years ago, Disney started offering Extra Magic Hours at the parks for guests staying at Disney hotels. The program gets you into the parks an hour earlier and allows you to stay up to 2 hours after closing. Disney gets 3 additional hours of access to your wallet and you get a couple of extra rides on your favorite attraction. To the uninitiated, this is a pretty good reason to stay on Disney property. If you are a regular guest like I am, you know the real secret is to stay away from the park that has early entry because that’s where the crowds are going to be. With this program, Disney rewards their Resort guests with a tangible benefit.
Tomorrow, I’ll get into some other topics like how Disney is involving the customer in co-creating the experience. In the meantime, think about the experiences you create for your customers. Do you Surprise & Delight? Do you make your customers feel special? Do you reward them for their patronage? If you do, great. If you don’t, perhaps you should take a trip to Disney World and learn a few lessons from Walt and Mickey.
Part 2 of this series is here.
On the heels of their problems in Connecticut, Best Buy is now facing another scandal that could cost them tens of millions of dollars, and more importantly, further damage their credibility in the eyes of the consumer. The problem stems from a lawsuit, filed in 2003, which accused Best Buy of signing up at least 100,000 customers for trial subscriptions to Microsoft Corp.’s MSN Internet service from 1999 to 2003, in many cases without their knowledge. Once the trial period ended, the customers began incurring credit card charges they had not approved.
Today, it was reported that a lawyer for Best Buy Co. has acknowledged that he falsified e-mails and a memo before turning them over to plaintiffs in the nationwide class-action lawsuit.
Trust is a key ingredient in Loyalty. If you act against the best interest of your customer for you own internal gain, you run the risk of losing both.
I was pleased to see that Wharton’s Jay H. Baker Retail Initiative along with Canadian consulting firm, the Verde Group, had conducted the second of what is now an annual study of retail customer dissatisfaction. If you are a regular reader, you know I have written about this before. The big takeaway from this year’s study is that the most impactful area of dissatisfaction comes from interactions with the sales associate.
The study found that disinterested, ill-prepared and unwelcoming salespeople lead to more lost business and bad word-of-mouth than any other management challenge in retailing.
Of the 1000 shoppers surveyed about their most recent shopping experience, 58% indicated that they had either been unable to find an associate to help them or were outright ignored by the sales associate. The survey identified a number of other sources of dissatisfaction including inadequate parking and out of stock product, but shoppers were much more likely to forgive these problems than they would bad sales help.
As identified in last year’s Consumer Dissatisfaction Study , customers are much more likely to share a bad experience than a good one. Half of all shoppers have chosen not to visit a particular store because of someone else’s bad experiences. According to Wharton marketing professor Stephen J. Hoch, director of the Baker Initiative:
“The importance of consumer dissatisfaction, rather than satisfaction, is the fact that a negative experience leads people to want to go and talk it. They are less apt to talk about it when things go well.”
The study also revealed differences in attitudes based on age with the coveted 18-29-year-old demographic reporting the highest number of bad experiences. The key reasons: Lack of authenticity, lack of knowledge and inability to find things due to a disorganized store.
The study also gathered information regarding the types of characteristics that would be found in an ideal sales associate. The top two were “engager” (willing to stop whatever they are doing to help) and “educator” (someone who can explain products, make recommendations, etc).
Both last year’s and this year’s studies should be required reading for anyone in retail today. After you read what shoppers are saying, give some serious thought to how your sales associates are interacting with your customers.
For the last year, I have been a regular Panera Bread customer. With my wife and I having increasingly busy schedules we, like many Americans usually don’t have time to cook dinner. Panera has a nice selection of soups and salads that work well for a quick evening meal. Panera rotates their soup selection daily, but provides a link on their website showing the soups of the day. That should make it easy, but only if the local restaurant consistently executes. As you may have guessed where I’m going with this, my local restaurant is only consistent at being inconsistent.
Tonight, my wife checked the Panera menu, saw they had a soup she likes and asked me to pick it up for her. I’m a nice guy and even though I’ll be up all night working on a presentation, I hopped in the car and went up to the local Panera. Walking in, I spied the soup menu. Conspicuously absent was the very soup that I wanted; a soup listed on their national website menu as being featured today. This is not the first time this has happened. In fact, my experience has been that the available soups in my local store frequently don’t match the website. Of course, there was only one cashier working at 6:00pm and there were 4 people in front of me. Being an optimistic person, I waited in line to confirm what I already knew.
NO SOUP FOR YOU!
When I asked the cashier, an innocent enough young man with the personality of a stump, if they had the soup, his answer was simply “No”. That’s it. So I got back in the car and drove 5 miles to the next closest Panera. Fortunately, they had the soup I wanted, but did not have all of Tuesday’s advertised soups.
Seems petty to make such a big stink about a $4 cup of soup, but imagine for a minute if McDonald’s was consistently inconsistent in having french fries or Coke available. What if Hertz was consistently inconsistent in having midsize cars? What if whatever company was consistently inconsistent in delivering an advertised product or service?
It wouldn’t take too many occurrences of missed expectations before you would stop being a regular customer. The next time I need a quick bite to eat, Panera will not be on the top of my list.
Consistent retail execution is difficult, especially across 1100 locations (including franchises), but it’s really important. I don’t know if the failure to execute consistently in my local Panera is representative of the overall chain, but that really doesn’t matter to me as a customer. What is clear to me is that Panera is not managing this little problem at my store and as I recently wrote, ensuring that the little things are done right (like having the soups listed on your website) is critical to driving loyalty.
Logic + Emotion’s David Armano asks the following
What is this visual saying? You write it. If it makes sense, I’ll add it to the post with your name and a link. Have fun.
So go to his blog and weigh in. It’s ok if you comment here as well!
Back in Virginia after a chilly spring break in NYC. The bad weather yesterday morning cause the usual air traffic delays, so the family got to spend 4 hours in JetBlue’s JFK terminal. I wrote earlier this week about my JetBlue experience at the start of the vacation and the time spent waiting to come home provided additional fodder for a continued discussion (sorry Jet Blue).
At 1:30 pm, just prior to leaving the hotel, I checked JetBlue’s website to see if our 4:40 flight was delayed. The site said it was on-time, but upon arrival at JFK, I learned we were delayed until 6:00pm. No problem, other than the fact that I never received a notification of delay from JetBlue as promised in their “Customer Bill of Rights“. JetBlue is building a new terminal at JFK, but until then, they are in an older, temporary facility. Nevertheless, JetBlue needs to keep this area maintained. We experienced broken tables, poorly maintained restrooms, very limited seating, and there was apparently no heat at our gate.
Point 1: Your customer’s experience with you starts well before the actual service that you provide.
One of JetBlue’s “reasons why you’ll like us” is their free Wireless HotSpot service Unfortunately, it hardly ever works at JFK. You can see it as an available network, but your computer rarely connects. So there I sat along with hundreds of others, for 4 hours, trying to get my computer to connect to their network.
Point 2: When you advertise something and set an expectation with your customers, failure to deliver damages your brand.
This was our second spring break trip to NYC. We usually go to warmer, more Southern destinations for spring break as well as other vacations, and we are certified Walt Disney World junkies. As I was sitting at the Jet Blue gate following 5 days of chilly vacation, I thought a lot about how a Disney vacation would have been different.
If you have experienced Disney World, and especially if you have stayed in one of their better resorts, you know that they really focus on delivering a “magical experience”. For many years, the worst part about going to Disney was getting to and from the resort. You could take a group shuttle, which would cost our family about $60 round trip and, if you were the last stop, could take about 2 hours. Alternatively, you could hire a limo for $80-$100 plus tip. You still had to claim and lug your luggage both to and from the airport and if you were coming in before check-in time, you had to go to the hotel and arrange for your luggage to be stored before going to the parks.
Last year, Disney started a new service called Disney’s Magical Express. It gives guests staying at Disney resorts complimentary, round trip transportation and luggage handling. When the customer reserves a pass on the Magical Express, they are sent special tags to attach to their luggage. When you arrive at the Orlando airport, you bypass baggage claim and head straight for the Magical Express bus destined for your hotel. Most airlines participate in the program and they, along with Disney take care of getting you bags to your hotel room. You don’t have to lug you luggage, the buses are really nice touring-style vehicles and on the trip, the kids get to see Disney videos. Oh yeah, you also get a liberal dose of advertising for Disney’s Vacation Club. Using this service also allows you to get to the parks (where you will spend money) sooner.
Departure is just as easy as you check your bags in to your airline and also get your boarding passes at the hotel. The next time you see them is at your home airport. You just get on the bus with your carry-on bags and when you get to the airport, you go straight to the gate. This makes it easier to carry all those things you purchased while on vacation. With addition of this service, Disney has extended the beginning and endpoints of the Disney World experience all the way out to your home town!
The way Disney approaches the customer experience problem is a great example for other companies to follow. They don’t see the experience happening just on their property. They look at the entire vacation from the customer’s perspective and find ways to integrate the Disney brand into as many touchpoints as possible. Then, they ensure that the experience delivered consistently exceeds expectations. These are two elements for my prescription for building loyalty and Disney delivers these at every turn. Companies like JetBlue should take note.
Recent well-publicized screw-ups put Jet Blue in the hot seat. The airline that that bills itself as “a customer service company that happens to fly airplanes”, had to explain and apologize for some really poor customer service problems. In anticipation of possible government legislation to address industry-wide problems, Jet Blue announced and heavily publicized it “Bill of Rights”. That’s a great response but unfortunately, doesn’t necessarily fix problems that continue to diminish the brand.
About a year ago, Jet Blue began running service Richmond, VA to New York and
Boston. As a native Richmonder, having a new low-cost carrier meant that I no longer had to pay outrageous fares or travel to larger airports. Since that time, I have traveled many times to Boston & NY and always take Jet Blue. Not only do they offer a fantastic deal (fares as low as $29), but I value the extras they offer (DirecTV, XM, more legroom). These are in fact key components of their value proposition and are promoted heavily in their marketing. Up to this point, I have loved every Jet Blue flight I’ve been on and have been a real advocate for them; often recommending them to other travelers.
Two weeks ago, I flew to NYC for the Virtual Worlds conference. When I got to the airport, I discovered that my seat was changed and that I was not flying on a Jet Blue plane. Instead, I was being carried by the relatively unknown “ExpressJet”. The pilot identified it as a Jet Blue flight, but nothing about it was Jet Blue. The plane was small and dirty. The extra legroom touted by Jet Blue – not there. Neither was the in-flight entertainment. I understand that equipment problems happen and got over it. I got to NY just fine, but I wanted the Jet Blue experience. A little digging revealed that Jet Blue is systematically taking all of its E190s offline for 1-2 days to get a software upgrade and has contracted ExpressJets to take up the slack.
My wife does not like to fly and prefers to use an airline she is familiar with. When my family decided to spend spring break in NYC, I convinced them to fly on Jet Blue. After my recent experience, I was a little nervous, but since the software upgrade was to take only 1-2 days, I assumed that all of my cheerleading for Jet Blue would pay off. Easter Sunday, I went to check in on-line and encountered a problem. I was able to check my wife and I in, but the system wouldn’t let my check my daughter in. We went to the airport and the check-in kiosk gave us a similar problem. After several minutes with a desk attendant, we discovered the cause of the problem. Once again, Jet Blue was substituting ExpressJet for our plane and my daughter had been reassigned a seat in a different part of the plane.
We were told that the flight was full but that the gate attendant could check with other passengers to facilitate a seat swap. We arrived at the gate at 7:30am and there was not attendant at the gate. The plane was to leave at 8:20 am. Finally, at 8:10 we were told that we would be leaving out of another gate because another ExpressJet plane had mistakenly parked at out gate. More over, we would be delayed because our luggage had been loaded on that plane and now had to be unloaded so the wrong plane could be moved out. Only then could our plane come in.
Needless to say, the morning was a wreck and I received significant grief from the family for “making them fly on Jet Blue”
The bottom line is that this was not an unplanned equipment outage. I was told by the attendant that I would get a $25 credit for a future flight. Thanks, Jet Blue, but what you should have notified travelers as soon as you knew the subsitution was going to happen so that you could set expectations in advance.
That would have allowed people like me to decide whether we wanted to change our plans.
This story reminds me of my recent post about outsourcing key part of your business. Granted, this is a temporary issue, but the recent ExpressJets substitutions have further diminished Jet Blue’s brand and I will not be an advocate for them again until they have proved themselves worthy.
Lots of day job stuff keeping me from being able to get the creative juices flowing, so I’ll pass on to you some good stuff from Becky Carroll’s Customers Rock! blog.
The post from last week was actually written by another great Customer Experience blogger – C.B.Wittemore.
Here’s a sample and a link so you can read the rest….
What’s the difference between companies where customers rock and those where they don’t?
Where customers don’t rock, companies tend to focus on product, on price, on their own internal systems, and not on adding value, creating a memorable experience and building loyalty. We’ve all been in those places… They’re uninspired, grim places that drive you out as quickly as possible. Employees tend to be surly, resentful and unhelpful.
In places where customers rock, the opposite happens. Rocking retail environments practically sing out to consumers inviting them in to explore and imagine the possibilities within. For example, an Anthropologie or Urban Outfitters store disavows direct selling [i.e., NO HARD SELL!] because that conflicts with a customer rocking attitude. Talk about an experience! These stores are magical in how they have been designed to engage the senses – beautiful juxtapositions in product displays, unusual materials [e.g., old bricks wide, sun bleached planks] used in-store to create a wall or a shelf, intriguing scents – and welcome all those interested and not so interested [they offer comfortable seating]. Essentially, customer rocking companies design the whole experience – their processes, their communications, their product assortment and display, their follow up, their interactions – from the customer’s perspective rather than their own.
A customer rocking retailer exudes passion and enthusiasm for the product, the category and how it adds value to a customer’s life. Everyone working within feels energized, empowered, and focused on how to provide customers with meaningful value.
Customers inevitably react with delight and curiosity, appreciation, and heightened expectations. And once that customer has fully experienced what that company has to offer, she leaves feeling good about the transaction and more than willing to engage in a series of transactions – otherwise known as a relationship – for additional purchases. She also tells everyone she knows about this amazing customer-centric or customer-focused organization she just encountered. In other words, it generates intense loyalty.
Wow, that really pulls it all together doesn’t it. C.B.s post goes on to discuss some of her favorite “rocking” organizations. I like to think about retailers who are not on the top of their game through this lense. I haven’t found one that you could say is a place where customers rock. If you say that doesn’t prove anything, then think about those retailers who design every aspect of the experience from the customer’s perspective. Can you name any who are struggling? If you work for a retailer, which category do you fall in?
Last October, I wrote about the decisions customers must make regarding emerging technology such as the new HDMI 1.3. Since then, this post has consistently been one of the most active on NextUp getting an average of 8 reads a day. Those stats tell me that technology customers are looking to really understand the landscape before purchasing and I thought that was a great insight that my company could use. You see, Circuit City has a pretty good website with lots of educational material, user ratings and forums to help customers with their technology decisions. But if you search the site for “HDMI 1.3” you won’t find anything.
With my statistics in hand, I went to the website’s content managers and suggested that we should provide educational info about HDMI 1.3 (pros and cons), even though we don’t sell any HDMI 1.3 equipped hardware at this time (except for the PS3). My rationale went like this:
- Generally, people are researching their technology purchases more than ever before. Many customers are better educated on the particular technology than the average salesperson. Researching HDMI 1.3 is no exception.
- Putting the info on our site allows us to help them with their decision.
- If we don’t put it on the site, we lose credibility with some customers.
- If they decide that HDMI 1.3 is not for them, great, we might make a sale.
- If they decide to go with HDMI 1.3 after learning about it on our site, that’s great too because we were able to help them. That provided something of value and earns us credibility.
Unfortunately, that argument didn’t win out over the one that says:
“We don’t sell and HDMI 1.3 stuff. If we tell them about it, we may lose a sale.”
Hmmmm. Is that putting the customer first????
I know there will be a fair number of you reading this post. If you live in the US, I would really appreciate it if you would comment on this:
Should Circuit City put educational info about new technologies (like HDMI 1.3) on their website even if they don’t carry the product. It would be great if you explain your answer. I will post the results in a week.
Best Buy, the nation’s biggest consumer electronics retailer, Best Buy has a big problem. They appear to have been caught with their hands in the cookie jar. Like many retailers (including my employer, Circuit City), BestBuy provides access to their website from within their physical stores. The problem is that the prices shown in-store are higher than the prices shown on their website when accessed from outside the store.
The vast majority of CE customers research their purchased on the web before buying. They often decide on what and where to buy based on features and price, and then go to the selected store for a final look and to complete the transaction. For many Best Buy customers, the price went up when they walked in the door. In some cases, they may not have even realized it. Now, at least one state government is conducting investigations and you can count on more to follow. I expect proposals for a Class Action suit have already been put together by some eager legal team.
Best Buy has invested millions on programs designed to drive customer loyalty, especially among preferred customer groups. I don’t know whether their success can be attributed to those programs, but I do know this:
Loyalty is a customer’s response to advocacy and earned trust.
It doesn’t matter whether BestBuy’s “problem” is the result of planned deception or simply a bad design, the appearance of impropriety is going to cost them some of that trust and loyalty.
Has your organization reviewed its customer touchpoints to ensure that you don’t have systems or procedures that could damage the trust your customers have in you?
You’ve worked hard to create a great customer experience that defines your brand. You’ve been a leader in differentiating your offering from the competition and have made significant investments to maintain that advantage. You have maintained your focus on your core business by partnering with others to deliver the services that they have expertise in. But do they share your passion for delivering the great experience? Is ensuring that your customers have the best possible experience their top priority?
Working in retail, I can site any number of cases where the partner doesn’t deliver on the brand and I am personally in the middle of one of those cases right now.
Two weekends ago, I decided to purchase a device to allow all the computers in the house to share our new laser printer. I found what I wanted at Amazon and the price was right. During the checkout process, Amazon asks if I would like to save $30 on the purchase by opening an Amazon Visa account. $30 off a $65 item??? Heck yeah! I LOVE AMAZON. So I click the button. I am magically transported to a Chase Bank page where I fill out all the important info. I click Submit and proceed to the checkout where I expect to see my new Amazon account listed as an option.
OK, here’s where things start to fall apart. I see Amazon Visa as an option, but it wants my account number. Hmm, OK… I know how these things work. There will be an e-mail congratulating me on my new account, so off I go to my mailbox. That’s odd, no e-mail. Shouldn’t there at least be be something that says “thanks for your application, were looking at”? If the internet is indeed just a series of pipes, then perhaps the pipes are clogged. I decide to turn my attention somewhere else and come back to this later. This is the internet equivalent of getting fed up with a ridiculously slow line and walking out the door of a real store.
ATTENTION AMAZON: I have now left your store without making a purchase!!!!!
I tried to call the Amazon Credit Card Customer Service number, but apparently they only work weekdays buring “normal business hours”. Obviously, no one shops on the internet at night or on weekends.
On Monday morning, I reach the Customer Service department, which I suspect is outsourced by Chase to some third party provider. They see where I have an application pending, but cannot provide any additional information other than to say that the approval process can take up to 30 days. WHAT??????? 30 DAYS to approve a credit card??? Isn’t this the same Chase Bank that sends me offers for new credit cards every week?. Is this not the 21st century? Aren’t credit applications processed by computers?
At this point, I could simply purchase the item from anywhere else, but I am so amazed at how poorly Amazon and Chase have handled this experience so far, that I decide to stick it out to see how (if) it gets resolved. I check back periodically during the week and it is now Sunday night, and I still have not received any notice one way or the other from either Amazon or Chase. The item is still in my cart, but the price has increased by $4.oo since I first selected it (another annoyance). I’ll provide updates to this post as the story develops.
Why do companies let these little annoyances happen to their customers? Dissatisfaction is the big Loyalty Killer. Sure, I’ll probably still purchase from Amazon, but I am not likely to click on any of their added value services because I don’t trust them (or should I say their partners) to be able to execute. In retailing, those added services are where the margin lies. In my world, that’s the extended warranty, the credit and the installation services. Ironically, it’s the delivery of those services that are most frequently outsourced to third parties; organizations whose priorities ae frequeently not aligned with mine.
Is your organization using partners to deliver on your brand’s experience? How well are they living up to your customer’s expectations?