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Divorcing your customers

August 02, 2011 by Jonathan Clark

Scrabble letters spelling divorceSorry, we are not prepared to serve you...

Not something you hear often at the moment. But it’s coming.

Several things struck me recently and they were all brought about by the magnificent example of the Massachusetts sisters, as reported by Helen Edwards at Passionbrand earlier this year. In essence, two sisters had returned an “incredible amount of items” through the store’s generous returns policy. The company, Value City Department Stores, simply could not afford to deal with them anymore, so the retailer drew the relationship to an end. “Given your history of excessive returns and chronic unhappiness with our service we have decided that this is the best way of avoiding any further problems with you.”

Now this is unusual, but for how much longer? 

When you consider most aspects of our lives, we need a lot of good behaviour to get by. If I misbehave on an aeroplane then the airlines share information on me and I won’t be able to fly. If I can’t get car insurance I can’t drive, as insurers share information. Want a mortgage? You’d better hope your credit score is good, they’ll look. Renting: well, landlords now have a site where “problem” tenants are logged. How long will it be before someone sets up an “individual human behavioural log monitor thing”? All of our past misdemeanours, late payments and broken promises, all in one place. Ouch.

But for the most part at the moment, the customer is still king. And when companies get things wrong, they find their failures will be plastered over social media sites. Not good.

So why would a brand want to divorce a customer? Some things are obvious. If the company was, frankly, being taken for a ride – such as in the case of the sisters – then it makes perfect sense to cut its losses.

But protecting brand value in the longer term is also a motivator. After all, look at what it has cost Burberry in time and money to reposition the brand and shake off the chavs and football hooligans who’d ruined its premium image. Right now Cyprus is attempting to reposition itself as an upmarket family resort, playing down the Ayia Napa image of a party capital. You could argue both Cyprus and Burberry have taken action to “divorce” customers who threaten future brand value. It has certainly paid off for Burberry.

So which customers will be refused service next? I believe it’s not a long way off when serial “unfair” complainers and bloggers will find themselves with fewer and fewer choices of product and service. And if they do find someone who will “take them and their custom” they will pay a big premium. Financial Services already has this one covered! Big APRs for customers with poor credit histories.

So that’s my point. Many companies really are offering great service and value, and are really on top of customer relationships. I think, as customers, we all need to start considering how we deal with our selected favourite suppliers and companies. We really do need to start to value them more.

It will not be long before our track record is scrutinised in huge detail, and yes, we may get the call that says our custom is not wanted. How’s that going to feel?

Jonathan Clark is an expert contributor to Marketing Donut and the executive chairman of Bright Blue Day.

Read more about problem customers in our article on An Awkward Customer.

Need to know more about dealing with complaints? Read Five ways to solve customer problems and Golden rules of complaints handling.

What is a negative online customer review going to cost your small business?

July 18, 2011 by Sarah Orchard

Fist hitting a computer mouseAccording to B2B Magazine (Feb 2011), a negative customer review on YouTube, Twitter and Facebook can cost a company 30 customers. That’s a pretty scary statistic isn’t it?

Social media is a great way to send your marketing messages to a wide audience. Until you fall foul of a negative opinion, that is – and then it feels like there’s no place to hide.

Making a complaint used to mean writing a Mr or Mrs Angry letter to a company’s customer service department or returning to a store to demand a refund. It was largely a private interaction between two parties, unless you told a few friends or had a slanging match with the store manager and attracted a large crowd.

But now, even the opinion of just one person can be shared with hundreds or even thousands of other customers.

The fear of bad customer experience

Such is the fear of negative online reviews that it’s probably one of the most common concerns that crop up when I discuss blogging and social media as part of a marketing plan with my clients. Nobody wants to risk their reputation or the possibility of losing or alienating customers because of a negative online review. But shying away from social media presents (potentially) an even greater risk — that of losing out on exposure to an audience that you may not otherwise reach.

It may feel like you don’t have full control of your brand — and it’s true, you don’t. Total control is history — the days of pushing out marketing messages and expecting your audience to simply listen and do what you want are long gone. What we have now is a two-way dialogue. And that’s priceless.

So when can a negative review be a good review?

Online reviews give you instant access to your customers’ thoughts and feelings. You can get a good understanding of how customers perceive your brand/service/products, and ALL feedback — good or bad — provides a way of measuring success and ensuring continual improvement of your business.

If someone does leave a negative comment, don’t feel humiliated or upset. That’s easy to say and you probably will feel hurt for a while. But pick yourself up and look on it as an opportunity. Yes, really.

A customer has brought something to your attention — you may even not have been aware of it, so this is your chance to make a positive change about that element of your service or product. Show that you’re prepared to listen — offer a refund, replace a faulty item, do whatever is necessary to give your customer a sense of satisfaction. Be considerate and sincere in your response.

Get it right and you will actually build greater customer loyalty and trust. Others will see that you actually care about keeping your customers happy. And that negative will become a positive.

Speed is of the essence

This morning I came across a negative review of a lettings agent in a particularly attractive part of London. It was left on Google Maps by a very disgruntled tenant in September 2010. The agent had written an excellent and well-considered response and I would have held it up as a textbook reply had it not been for the fact that it was written in April 2011 – seven months later! And so they committed the ultimate sin of not monitoring their reviews and not nipping problems in the bud.

Think about their business for a moment. If someone is looking to move into an area, the odds are they are going to Google local estate agents, so that one review will have been on display (in all its glory and unanswered) to all who were looking for rental property in that leafy corner of London. I’d lay bets on how many were completely turned off by that tenant’s opinion of the agent’s service – or lack of. For seven months!

This example demonstrates just how important it is to manage your reputation online. Always monitor the reviews you receive and act immediately on any that are negative. Post a reply and then take it offline to continue the dialogue and fully resolve the issue. If you’re lucky, that customer will then feel compelled to write a new review about the excellent customer service they have just received.

And finally…

However bad it may be, do resist the urge to remove a negative online review. Customers will be suspicious of reviews that are nothing less than glowing. Follow my advice and even negative reviews will end up working in your favour.

Sarah Orchard is an expert contributor to Marketing Donut and a consultant at Orchard Marketing Associates.

The customer is king!

July 01, 2011 by Robert Craven

Golden crownProfessional advisers still need to learn that customer is king.

Some accountants, lawyers, architects, bankers and financial advisers can let opportunities and profits slip through their fingers because they don't understand the basics of customer care.

They see themselves as technicians and just don’t get the basics of running a business.

First, I want my adviser to understand me. I am a person and I have very specific issues. Show an interest in me.

Second, I want my adviser to understand business.

Third, I want my adviser to understand my business. I have specific problems – problems that are specific to my industry, to my market and to the way that I run my business.

Fourth, I want swift action. The systems used by most competing advisers appear to be relatively similar, so I will accept whatever calculations or recommendations are made.

I want swift actions or, at a minimum, I want the answers to be there when promised… or to be offered a date when work will be completed.  A little courtesy is all that I ask.

Fifth, I want to understand what I am paying for and I want to know how much I am going to pay, and when. Even better, let’s go for payment by results.

If an accountant or lawyer charges by the hour, then there's no incentive to work quickly.

Other professional service firms (architects, dentists, doctors) work to a price, so what’s the problem? Surely fixed price agreements would incentivise them to work more efficiently!

All I want is an adviser that understands me, understands my business, gives me decisions when promised and explains how they charge. Not much to ask, surely!

 

Robert Craven is an expert contributor to Marketing Donut. He runs The Directors' Centre and is the author of business best-sellers Kick-Start Your Business and Bright Marketing.

Read more in our dedicated section on customer service.

Posted in Customer care | 1 comment

Cashier number three please - why queue systems can improve customer service

June 29, 2011 by Terry Green

Customer waiting time and queues are an arithmetic certainty of service delivery. In the real world, even when you have extra staff available just in case demand builds up, queues will occur. It’s normal for shoppers to arrive in bunches and not in a steady flow.

Well-planned and well-managed queues are a healthy thing. They indicate a vibrant business that is successfully controlling the cost of delivering service to its customers and at the same time managing shoppers’ perceptions of their wait.

Whether there are only two people waiting or 42, the right mathematical methodology has to be used to determine how to serve customers as efficiently as possible and how to allocate service fairly.

You can see the impact of a well-managed queue on the faces of the customers and servers. They are relaxed, unstressed. Waiting customers look around them and take an interest in merchandise. The store receives fewer complaints and suffers lower staff absenteeism. A business without queues is either overmanned or lacking customers – or worse, both.

Every store has a strategic decision to make. Is operating cost more important than customer service? Cutting costs can mean that customers wait longer.  On the other hand, if stores decide that service times are more important to their brand proposition than cost or if they know that because of the nature of their business customers will be less tolerant of waiting times, they will ensure that fewer customers have to wait, but they will also increase the cost of their operation and risk more times when staff are standing idle.

This dilemma can be resolved through lean queue management. By making wait times more acceptable, and by organising service allocation systems they can help to lower costs and reduce waste in the process.

Research by Professor Edward Anderson, “A Note on Managing Waiting Lines,” has shown that queue times are affected by many factors:

  • If all servers are constantly busy, the queue quickly exceeds acceptable levels.
  • The “lumpier” the arrival rate, the longer the queue. So in smaller stores with lighter traffic – where arrival rate is less predictable – the waits are likely to be longer.
  • The more the staff keep their service times consistent, the shorter the wait for customers.
  • There is a limit to the number of servers it makes sense to have in a store, as at some point the cost of an additional server will not be repaid by shorter wait times for customers.

The voice of “cashier number three please”, Terry Green is heard over 30 million times every month in post offices, shops and banks throughout the UK.  His voice and ideas have transformed the way the world queues.

Terry Green - You're NextCompetition results

We asked, what percentage of our lives do we spend waiting? The answer is 17 per cent. Congratulations to Tim Latham and Clare Evans (who got the answer spot on) who both win a copy of Terry Green's book.

Small business owner? What you need to know about online reviews and why they’re so important

June 21, 2011 by Paul Stamp

It’s time to book a holiday. You know where you’d like to go, when you can spare the time and the type of place you’d like to stay at.

So what’s the next step? If only you could get a bit more of an insight into the array of hotels on offer — find out what real people have had to say about the location, the facilities and exactly which sort of holidaymakers it could suit — before making your choice.

Of course, reviews of things like hotels, as well as bars and restaurants, are readily available online from a range of websites. But because consumers are now more than happy to include browsing through reviews before picking a business as part of the overall buying process, other sites have grown in popularity too.

It’s fair to say that, increasingly, businesses of all shapes and sizes — such as plumbers, double glazing installers and driving instructors — are being reviewed online. It’s becoming the norm.

Think of it as transporting your testimonials from behind the counter, where only people already through the door can see them, and making them visible to everyone.

So what do I need to know about reviews?

In a nutshell, they are happening, people trust them and they can have a big impact on your business. But with a little understanding of just how good they can be for you, they can be overwhelmingly positive.

Why are they so important?

Time for some stats:

  • 79 per cent of online UK retailers reported that the main benefit of consumer-generated rating and reviews was that they improved site conversion rates. (eMarketer, 2007)
  • Consumer reviews are 12 times more trusted than product or service descriptions. (eMarketer EXPO Purchaser Influence Survey, 2010)
  • 70 per cent of UK internet users trust recommendations from strangers when looking for information about goods and services online. (Neilsen Global Online Consumer Survey, 2009)

So I should be asking customers to review my business?

Yes! Encourage your satisfied customers to post reviews on websites because it will differentiate you from your competitors, help build trust and show that you are a real business doing real trade. Reviews are your positive word-of-mouth amplified.

Any business listed on Yell can be reviewed – take a look at Yell.com/reviews. To find out more, and to get some free promo materials to encourage people to rate you on the site, visit the reviews section of marketing.yell.com.

This post is the first of three on online reviews — stay tuned for the next update on managing negative reviews and how they can even be good for your business.

Paul Stamp is the community manager at Yell. For small business video guides, advice and information, follow @yellbusiness on Twitter.

Loyalty schemes — the elephant in the room?

June 17, 2011 by

ElephantNow and again at SellerDeck we get asked whether our ecommerce software includes functionality to support a loyalty scheme. The answer is no, and there are very good reasons why we have not developed it. I thought the rationale would be worth sharing more widely. If you’re considering developing a loyalty for your own site, it might just persuade you otherwise.

Firstly, loyalty schemes don’t produce loyalty. Most people have multiple loyalty cards, and use them promiscuously. The level of reward — usually about one per cent — is pretty minimal. One special offer can save more money than the loyalty points on your entire weekly shop. So people take advantage of the schemes because they are free and painless to use. But they don’t influence where people shop on any given occasion.

Consequently, the term loyalty is a really misnomer. If loyalty is what you’re looking for, a loyalty scheme won’t deliver that.

The main advantage of loyalty schemes to the large chains is in the data they make available. Every time you present a reward card you identify yourself personally at the checkout. This enables the company to track a huge range of data, both for individuals, and for particular demographics. Your supermarket knows how often you shop, and where. It knows your average weekly spend. It knows your family diet, what items you purchase regularly, and how often. In consumables and FMCG, this enables large companies to follow market trends very closely, react to changes quickly, and target their merchandising according to local and temporal preferences and trends.

That’s great if you are a large chain with multiple branches, a website and maybe a mail order channel as well. If all you have is a website, it’s pointless. You can already identify regular customers from your orders database, and mine the same kind of data directly from that.

So given that a loyalty scheme doesn’t deliver loyalty, costs time and money to operate and doesn’t give you anything that you don’t already have – doesn’t it start to look like one huge white elephant in the room?

Bruce Townsend is an expert contributor to Marketing Donut and online marketing specialist at SellerDeck.

Read more in our dedicated section on customer loyalty.

Posted in Customer care | 1 comment

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