Brand Management vs. Experience Management

I have been reading “Clued In” by author Lewis Carbone.

There is plenty of attention today on “brand building,” that is, what you project to affect customers’ impression of your business.

Carbone stresses a reverse approach, literally “customer-back.” It starts by identifying the emotions customers want to feel as a result of the experience.

“You can put  bug-ridden software in a pretty box, put shabby clothes on a big-name model, or spend millions of dollars hyping a movie before it debuts at the multi-plex.  But as soon as customer have their experiences, their word-of-mouth reviews will define your future and fortunes. Significantly, those reviews are more credible than any brand polishing efforts you can commission precisely because they reflect how customers felt during real experiences.  Experience truly is the best teacher.”

Carbone cites Starbucks, Disney and even Roto-Roter as examples of the progression from a customer commodity to a product to a service and ultimately to an experience.

As Carone puts it, “”when businesses place more emphasis on how the customer creates value for the company instead of the company creating value for the customer, customers become free agents, disappointed, disgruntled and ultimately disloyal.” (back to the customer retention issue, again.)

What do you say, can you think of another company that truly provides its customers with the emotional experience that sets it apart from its competition?

 

October 16: National Boss’s Day

What do people do on National Boss’s Day?

Boss’s Day is dedicated to all employers and provides a prospect of improving the workplace relationships between employers and their staff.  This observance also gives employees a chance to recognize those in supervisory positions.

Some people give their bosses cards, gift certificates, or flowers on Boss’s Day. This observance is becoming increasingly popular in various workplaces.

Background

The concept of National Boss Day began in 1958 when Patricia Bays Haroski, then an employee at State Farm Insurance Company in Deerfield, Illinois, registered the holiday with the United States Chamber of Commerce. She designated October 16 as the special day because it was her father’s birthday. Haroski’s purpose was to designate a day to show appreciation for her boss and other bosses. She also hoped to improve the relationship between employees and supervisors.

Four years later in 1962, Illinois Governor Otto Kerner backed Haroski’s registration and officially proclaimed the day. The event’s popularity is growing outside the United States and is now also observed in countries such as Australia, India, and South Africa.

This is a great day to express appreciation to that mentor, supervisor or boss helping you with your career.

Here’s a way to send him or her a Thank You greeting card.

It’s free – as my thanks to you, a reader of my blog.

Here’s what to do: click on this link.  You will be brought to a web page where you can watch a short video, select a real card, add a photo if you wish, personalize the message, and add the recipient’s name and address.  Tell us when to put it in the mail; we’ll add the postage and deliver this to your employer in time for October 16 National Boss’s Day.

Please Tell Us Why We Should Like or Follow Your Business.

Like us on Facebook.
Follow us on Twitter.
+1 us on Google Plus.
Help us get to 500 followers..
Sound familiar?

Millions of consumers who suffer from “Social Media Fatigue” may ask “why should I?”

These consumers are long time listeners to WII-FM (What’s In It for Me?)

Ask yourself, why do you connect online with certain businesses, causes or people? Do you look forward to posts from those that you’re not interested in, passionate about or don’t deliver value? Of course not. Entrepreneurs with a successful social media community can answer the question “why would consumers connect with us and stay connected over time?”

For me, value isn’t always a discount or special offer. A social media connection that delivers access to information not available elsewhere, or as quickly, is reason enough to remain connected. A social media connection with a retailer or service provider could include exclusive previews or offers not yet available to the general public. If the social media connection is just another avenue to sell me, I tune out.  And “unfriend.” (Is that a verb?)

As with any database or relationship marketing effort, your customers will tell you what they want, if you ask. And our job, as entrepreneurs, is to tell them exactly what benefit to expect from connecting with and doing business with us.

And yes, please visit me on Facebook, Scoop-It and Twitter. I find and share ideas and links to articles that can help you connect with and retain your loyal customers.

Watch Brian Solis, NBC’s Scott McGrew, Jon Swartz of USA Today and Dr. Moira Gunn of NPR discuss this subject at greater length:

Groupon and Your Customer Base

A recent article interviewing some Groupon merchants was interesting.
Several merchants have reported a “too much of a good thing” experience; that is, they had more new customers than they were prepared to handle. That can do a business long term harm for prospects may no longer even consider doing business with a company that gets overwhelmed by a wave of new customers. Groupon says, yes, merchants can setup a promotion with an upper limit. Gradually increase your limit until your business is prepared and ready to handle the surge.

After reading the article, I wondered what the merchants did to make the new Groupon customers feel welcome and appreciated. Groupon merchants spend heavy promotional dollars to attract many, in some cases too many, customers.
Those merchants who don’t connect with the individual risk losing an opportunity to establish a lifetime relationship with that customer. A postcard, email, video greeting or some genuineexpression of appreciation would go a long way towards turning a Groupon discount buyer into a customer for life.
Stay Connected with your Customers

Please feel free to share this with your friends by clicking on the Facebook or Twitter button, leave a comment, or considering subscribing to the feed.

Until next time,
Dan Alcorn

BlogTalk Radio: 01/17/11 Customer Retention w Lisbeth Calandrino

“Where everybody knows your name, and they’re always glad you came” Click here and listen to the full 15 minute interview In this 15 minute episode, Dan and his guest Lisbeth Calandrino, author of “Red Hot Customer Service” discuss how businesses can improve profits by retaining more customers. When 2/3 of customer defections are attributed to “perceived indifference,” it’s good business to pay more attention to your customer. Remember, your best customer is your competitor’s top prospect. Link to Lisbeth Calandrino: http://www.lisbethcalandrino.com or call (518) 495-5380

Did Skype pass the Service Recovery Test?

Yesterday I received an apology from Skype.  And a credit to my account. I’m okay with that.

You may have read that Skype, the low-cost VOIP communications giant, had “super node” problems resulting in a 30 hour shutdown before the Christmas holiday. I use Skype in my business and was disappointed when it couldn’t arrange a conference call last week.

However, the company has apologized, claims to have resolved the “super node” problem (whatever that means) and went an extra step and credited my account.

What do you think? Does Skype pass the Service Recovery Test?

Research has shown the customers who have a service problem resolved quickly and properly are actually more loyal to that company than are customers who have never had a service failure – quite a bit more loyal.

Think about your own experiences.  When you have had a quick acknowledgment, speedy resolution or some compensation for the troubles caused by a service failure, aren’t you more likely to buy from that company again?  In business, “complaint handling” sounds negative. “Service recovery” can deliver a positive result: improving the customer relationship and boosting customer retention.

Service Recovery – when the problem is acknowledged quickly,  resolved and perhaps compensated also creates positive word of mouth.   Come to think of it, someone at Skype is surely pleased that this post is focused on their positive Service Recovery and less about those “supernodes.”

ps I love Skype. My ID is DGAlcorn, let’s chat.

Even kids know…

What does this Ally Bank television ad have to do with customer retention?

“Can I have some ice cream, please?  No, it’s just for new people. ….

Yeah, but I’m new, too.  Umm, he’s new……er than you.

Even kids know it’s wrong to treat new friends better than old friends. “

In CRM Guru’s survey of customers who had defected, 83 percent of the respondents said an event “triggered” their decision to go to the competition.  Often, the customers had been with a company for a long time when they stopped doing business.  Even so, the “last straw” from the customer’s perspective isn’t always obvious to the business.  But the customers’ defections may have gone unnoticed by the business.  Why?  91 percent of the customers never heard anything from the business about the defection.

In a recent presentation to business leaders about , I addressed 7 Steps To Retain the Right Customers.  In the Ally Bank video,  the ice cream vendor offering sweet incentives to attract new customers may have bungled two of the 7 Steps in keeping your best customers:

• Treat Valuable Customers Well -  When planning your program to retain customers, you also want to determine which customers to focus on, namely:  which ones are the most valuable for your business and would be the most costly to lose? (We will assume that the boy not getting an ice cream cone was also a profitable customer)
• Be Fair, Even When You Don’t Have To – A mobile phone company discovered that when the company offered to switch customers to their best available plan, retention among high-value customers increased dramatically; even if the customer didn’t take advantage of the better plan.  How do you feel when a company you do business with suggests a better product and saves you money?

How does this apply for your business?

Recently, I had a conversation with an account executive of Rewards Network.  Restaurants that participate in this company’s program pay into a fund which rewards members for dining within the network.   Some owners question ongoing rewards for individuals who are already a customer.   Just like that ice cream vendor, many business owners are so focused on acquiring new customers that it’s almost as if they have a sign outside their shop announcing “Welcome New Customers Only.”

When the average American business loses 10% of its customer base each year, business owners soon recognize that the greatest assets in a business are not on the books, they are intangible. Every customer, every contact, every relationship, every sales channel, every employee.   It costs five to eight times more to generate the same amount of revenue from a prospect than an existing customer.  Your current profitable customers cost less to service, buy more frequently and are more likely to make referrals. Treat them well, treat them fair (give him that ice cream cone!) and watch how an improved retention rate will boost  your bottom line profits.

Visit www.showappreciation.net or call (800) 503-1972 to discuss a customer connection, appreciation and retention plan for your business.

Customer Retention – Plug a leaky bucket and boost profit

The bucket below is your business. Customers come to you from two sources, those new to the market and those not crazy about your competition. Customers die or move, but most of your customers leave your bucket because of connection and service issues. Your success is determined by the relationship of your faucets’ intensity and the size of the hole in your bucket. Your promotional marketing regulates your faucet flow while your hole size is defined by your customers’ experience.

Your customer database is the bucket that you’re trying to fill with more customers, repeat sales and relationship based referrals.    Your promotional marketing budget (including yellow page ads, coupons)  is designed to add new customers to the bucket.  (And you know the cost of each new customer; it’s the amount you spent on marketing last year divided by how many new customers were added to your bucket.)

After adding new customers, sales may be sluggish and customer traffic static or declining.  What’s happening?  While some customers “evaporate”  from the bucket because they are no longer in the market for what you sell, more often it is a case of the bucket leaking – your customers defecting to a competitor.

Why? “Most Customers leave a company because they feel they’re not treated well,” according to Arthur Hughes, author of The Customer Loyalty Solution. “They feel that, for some reason, they have been ignored or not treated properly. Business Managers often blame price as the reason for customer defection and, of course, that’s true in some cases. But it’s usually because they feel that they’ve been neglected or somehow abused,” Hughes said. A November 2004 survey bears that out. Of the customers who said they had stopped using a product or service, 74 percent blamed customer service as a major factor in their decision.

On average, American businesses are losing 20% of their customers per year – resulting in a complete turnover of their customer base every 5 years. Based on a study by American Society for Quality, Perception of Indifference on the part of the company, or its employees, is the reason that 68% of those customers leave.

Earlier in this post, we mentioned how much it costs your company to attract each new customer.  What is your company’s program to retain your existing customers, to plug the bucket from leaking more customers?

Daniel G. Alcorn helps business professionals implement a Client Appreciation & Retention Marketing program. We start by building a customer file with names, mailing addresses, telephone numbers and birthdays. If you already have a customer list but are not using it to stay in touch with your customers, we can help with “getting it done.”  And, we have a web based system that provides an efficient and cost effective way to stay in touch with your customers. www.showappreciation.net
Facebook