Archive for the ‘orthodoxies’ Category
I was a Sprint customer for a while. I hated every minute of it. The coverage was spotty and their ability to screw up the billing month after month was unprecedented. Every month, I would call their support line, wait on hold for 30-40 minutes, and then have to explain the problem (usually se same problem as the previous month). Once the contract was up, I fired them. Today, Gizmodo is reporting that Sprint is firing some of their customers for, are you ready for this, making too many customer service calls regarding billing and other account info.
I’m not kidding! Here it is:
As outlined in letters to certain customers, Sprint is giving them 30 days notice and then they are shuuing off their phones. In a rare moment of weakness for cell phone carriers, Sprint is going to let these customers go without having to pay early termination fees of the last month’s bill.
I am amazed by the arrogance of this action. I’m sure these customers have nothing better to do than to use up Sprint’s valuable customer support resources day in and day out with their silly questions. I smell an orthodoxy here. Something along the lines of “these customers are bad because they cost us more than they generate.”
Sprint deserves some seriously bad press over this incredibly stupid approach.
Here’s my suggestion to Sprint: Before you start firing your customers, you should take the time to understand the source of the problem. It’s probably staring back at you when you look in the mirror.
Great post on Buzzmachine about Dell’s blog Ideastorm. It’s a great story about how being open, honest and responsive to a problem has helped to earn back the trust of its user base. If any company needs to do that, Dell is a poster boy.
The customer in question, Jeff Jarvis, was very unhappy, very loud and unfortunately for Dell a very influential blogger. They ignored his complaint, he blogged about it and thousands piled on after him. Dell is under new management, well actually old new management, as Michael Dell is back in charge. Part of the turnaround seems to be a mission to reconnect with their customers.
This post tells the story about how they are using their blog to do it. It’s also a story about overturning orthodoxies (blogs really do matter; the customer now has a very loud voice and you better listen), the need to be adaptive (Sense & Respond), and most importantly, the benefits of listening to and collaborating directly with your customers.
It’s a long post, but well worth the read. Here is the moneyquote:
So what fascinates me so much about Dell is that it can rise from worst to first. Precisely because it got hammered by customers now empowered to talk back to the wall, it had to get smarter faster. Whether Dell can fix the rest of its problems, I don’t know. But if it keeps on the road it’s now on, it could well end up being the smartest company in the age of customer control. That would be one helluva turnaround.
<via Three Minds>
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.
The gang over at The Perfect Customer Experience have been on a roll this week with some really great posts. Yesterday, Dale Wolf made the case for diverting some of your push marketing dollars into Customer Experience Management. It’s such an obvious thing to me, yet so many organizations fail to see the opportunity. Perhaps its an orthodoxy that keeps the money pouring into processes that have a low ROI. In his post, Wolf provides a simple mathematical demonstration and a prescription:
“Let’s say the ad campaign had a cost of $10,000. It got 2% of the people into the store. That means 98% of the ad audience did not come to the store and 80% of the people that came to the store walked out of the store without buying. He spent $10,000 but only $1960 actually drove customers to a purchase. What a collosal waste!” (note: I’ve asked Wolf to explain how he got to $1960. I calculated the figure to be $40, but what do I know).
“Now instead if he had spent more of his budget in learning what his customers actually wanted, he could build an experience that delivered on their needs, wants and aspirations. Then spend another part of his budget on building a customer database and use relatively inexpensive personalized email to tell them individually (or at least in small clusters) about the experience they will have in his store. He will begin pulling metrics that are in the +50% response rate. Better yet, if he has invested in a truly differentiated, valued and consistently delivered experience that gets people talking, his investment will spread far and wide at virtually no cost.”
I think the biggest opportunity for organizations, and retailers in particular, to differentiate, is to focus significant resources on the delivering exceptional customer experiences. That starts with asking customers what they want. It also requires you to address those elements in the experience that are sources of dissatisfaction. In fact, you will have limited success until you do this. Word of mouth is a powerful thing and customers will tell others about great experiences. They will also tell others about bad experiences and what’s worse, those friends will tell others. For retailers who routinely misses customer expectations, spending money on push marketing is like trying fill a bucket that has a big whole in the bottom. The best you can hope to do is keep some water in the bucket.
Diverting that money to improving the experience of those who do come to your store will result in a higher close rate and higher loyalty and that’s where the real ROI is.
It was bad enough that ,when given the first opportunity to be the exclusive carrier for Apple’s new iPhone, Verizon turned it down. Now, Verizon’s President and COO Denny Strigl has gone on record as saying,
“The iPhone product is something we are happy we aren’t the first to market with.”
Yeah, that makes a lot of sense. Wouldn’t want to be first to market with what will be the hottest product of 2007, now would we? The back story, according to The Register, is as follows:
The problem seems to have been Apple’s insistence in sharing the call revenue as well as controlling distribution channels and customer service.
Verizon vice president Jim Gerace (one of many veeps at the company) said: “We said no. We have nothing bad to say about the Apple iPhone. We just couldn’t reach a deal that was mutually beneficial.”
We can only assume that Cingular did agree to such a deal, and guess to what heights that will drive the cost of the two year contract it is demanding from iPhone purchasers.
Cingular said it inked the deal with Apple more than two years ago, when the iPhone was no more than a couple of sketches and concepts; such was its belief in the Apple brand and abilities.
It never ceases to amaze me how shortsighted companies can be and Verizon appears to be shining example. They are a victim of their Orthodoxies. Cingular, on the other hand apparently saw opportunities in doing business Apple’s way. Apple has mastered the art of delivering a great Customer Experience; from the user interface on the device, to the human interaction in their stores. Cingular knows that customers are going to want this thing and sees opportunity in increasing their subscriber base even if Apple gets most of the ROI on the phone. Cingular has been good at Sensing what the next hot device will be and Responding by getting exclusive access to it early in the product cycle when the highest margins can be demanded. They did it with the Motorola RAZR (Verizon was the last major US carrier to get it) and the iPhone looks to be an encore performance.
One of my deeply held beliefs regarding Customer Experience and Loyalty is that if you act as an advocate for your customers, they will reward you, not only with their business, but by advocating for you to their network of friends and family. There are many ways to be an advocate for your customers (and potential customers). One of them is to find ways to keep them from becoming overwhelmed with choice.
American society has become all about choice and most of us believe that all this choice is good. After all, it seems reasonable that we live better lives than we did 20 or 50 years ago, when the American economy was less advanced. Thanks to the ever-increasing pace of business, enabled by PCs and the internet; along with changes in business models, social values & government policies, choices now dominate the activity of our every day lives. We should get satisfaction from all of this choice, but the fact is, it is making us unhappy. It’s what the folks at Blackfriars Communications call “The Tyranny of Too Much“.
Think about how it feels when you open a restaurant menu and see dozens or even hundreds of items from which to choose. Almost makes you lose your appetite, doesn’t it? There’s a reason why all of the big fast-food chains now feature a handful of combo meals on their menu—they’re more profitable for them, to be sure, but they also make their customers’ lives just a little bit simpler.
This approach has been a part of Costco’s success for years. They have a small but high quality selection of just about everything. Their buyers do the work of selection a handful of high quality items across several pricepoints so I don’t have to decide between 18 different toasters (for example).
According to a story at BusinessWeekOnline, WalMart(WMT), which has not historically been known as a great customer advocate beyond offering low prices, is currently running a radio commercial in which boasts about how small its selection of HDTVs is. The spot wasn’t apologizing for Wal-Mart’s lack of selection, nor was it saying the fact that Wal-Mart carried fewer options than the competition didn’t matter. The commercial actually touted the fact that Wal-Mart had improved the HDTV buying process by limiting its selection to only the most popular models. That perked the author’s attention:
“I have been pondering the purchase of an HDTV for some time now, but dreading the long hours of research I was going to have to put into the process. I’ve read a few articles that explain the differences between plasma screens and LCDs, between $3,000 starter models and $10,000 big dogs. And I’m more confused than ever.”
“What Wal-Mart did was counterintuitive, but like AOL’s strategy during the early days of the Internet, it’s right on the mark. Conventional wisdom suggests that having more HDTV options under one roof is better for consumers. After all, if a retailer carries all of the options, it’s more likely to be able to meet the needs of every customer who walks through the door.”
“What Wal-Mart has recognized, however, is that most people’s purchasing needs aren’t merely tied to product features. Early adopters aside, most people don’t need or want to not spend hour after hour sorting through product reviews and comparison charts to find out which model is best. Most need to know that when they plunk down two, three, or four thousand dollars (or more), they’re going to be happy with their purchase. And they need to know that in two years they won’t be stuck with obsolete technology. (Betamax, anyone?) If they can go to Wal-Mart and choose from a handful models that will do the job just fine for the average person, they will be happier than if they are required to sort through 40 or 50 models at Best Buy (BBY) or Circuit City (CC).”
Wow, that’s powerful stuff and I think they may be on to something. More isn’t always better. Too many choices are often too confusing, and too much selection can become a burden, not a benefit. Whatever industry you’re in, if you can avoid the Tyranny of Too Much, you are acting as an advocate for your customer. That will drive loyalty, and simplify your own life as well.
Last year, I had the opportunity to work on business strategy development for a major retailer. We leveraged the work of innovation guru, Gary Hamel, and his company, Strategos, to complete the process. One of Hamel’s prescriptions is to challenge your orthodoxies; the things you believe to be true about your industry or business. In doing so, you can begin to see new opportunities.
I am a big fan of David Armano’s blog, Logic+Emotion and this week he posted a link to a fantastic video example of the power of this concept. It runs about two minutes. Be sure to stay with it until the end. The twist is well worth the wait. As you watch, think about your own orthodoxies. What opportunities are you not seeing because of them?
To give credit where credit is due, David first saw this on Drew McLellan’s blog, DrewsMarketingMinute.com.