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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

Customer service is marketing

May 20, 2011 by verygoodservice

Many businesses have rigidly defined the respective roles and responsibilities of their customer service and marketing departments. This is often the source of frustrations as, on one hand, the marketing guys do not have the opportunity to interact with the customers and, on the other hand, the customer service team has only a limited opportunity to influence product design and communication.

Small businesses have much more room for manoeuvre, as they can chop and change, test and experiment without affecting a large volume of customers. Very frequently, small companies manage their customers through a single channel, handling social interactions, marketing efforts, customer service and many other activities in one place. They use mishaps as a marketing opportunity and dispatch little gifts and samples to “compensate” customers. Customer service is clearly being used as a marketing tool.

Whilst larger operators are busy leveraging their social media reach by pushing multitudes of promotions, special offers, coupons, vouchers and deals, small businesses can build a long-term advantage by establishing close-knit communities of customers. Positioning customer service at the heart of the marketing strategy contributes to the exchange of ideas and the resolution of problems whilst creating a platform for future recommendations.

All this contributes to the development of a very strong sense of loyalty.

The challenge comes when the business grows and someone makes the suggestion that life would be much easier if dedicated marketing and customer service teams were established…it will be hard but just make sure you resist the temptation.

 

Guest blog by Very Good Service.

Read more in our dedicated section about customer service.

Dear shopping fairy...

April 15, 2011 by Lynn Allison

If there is a fairy godmother in charge of shopping I hope she is listening.

I hope she takes online and high street retailers to one side and says, “Look, your brain does something funny when you go to work, don't you realise what the world is like for customers?”.

I hope she sprinkles them with her fairy dust so they listen when we tell them about the hundreds of little opportunities to sell that they miss every single trading day.

I need to understand what you’re telling me

Show people where to go as soon as they start to shop. When they get to your products make the descriptions, sizes and prices easy to read. Remember that customers have criteria — if you understand how customers are deciding what to buy, then you have more chance of selling to them.

I need to find a product I want

Test out a customer's “journey” around your store — or ecommerce website — and look at how their needs and criteria change. Clearly signpost changing rooms and cash registers from different directions so that the customer knows where to go. If you use mannequins to highlight outfits, put the products right by them, clearly marked. Make sure packaging clearly and easily communicates what’s inside.

I need to buy at a time that suits me

If customers have a need now, why not satisfy it? If your processes are fixed to a strict schedule of seasonal buying, you’re at the mercy of the weather making your customers want to buy something that you don’t have. Don’t apply fashion season rules to non-fashion basics; if this happens in your store, ask your customers if it suits them — if it doesn’t, change it.

I need to avoid stuff I cannot buy

Don’t spend any time or money offering things to customers who cannot buy them. Don’t put any barriers in front of customers with money. Arrange sale clothing by size, not price — during a sale we always need to know what size a garment is and never how much it costs (it’s already in the sale).

I don’t want to repeat myself

If customers have given their contact details to you once, it should be possible to buy from you without having to give them again. When customers do make an enquiry, make it easy for them to progress this to a purchase. Follow up enquiries that haven’t led to a sale and find out why. Knowing why someone hasn’t bought from you is just as important as knowing why they have.

Don’t confuse information with knowledge — having broad market research to hand isn’t the same as understanding the people who buy from you. Think like a customer not a manager, you can't afford to ignore any incremental benefits to your bottom line.

Lynn Allison FCIM, Chartered Marketer is the author of Catching the Chameleon, published by Ecademy Press.

Competition winners

Thank you for all your great retail tips and comments on Lynn's blog. And congratulations to Craig Dearden, Tim Shapcott and Bronwyn Durand who all win a copy of Lynn's book, Catching the Chameleon.

Giving your customers reasons to love you

April 08, 2011 by Jonathan Clark

I have been thinking about the brands we love and how to improve customer retention. Let me tell you a couple of stories.

Three years ago, I took delivery of a car and on the way home it literally died. I did not see the car again for four months. However, the gentleman who looked after my “case” was exceptional. He updated me regularly, kept me totally informed on progress and made a bad situation OK. The car firm also sent me a range of well thought-out sorry gifts that were actually appropriate and of suitable value. I am now very loyal to this brand and I have a good opinion of them.

The other day, my wife and I were chatting about Clark Plc expenditure. We had decided to tighten the belt in a few areas and Sky TV was first on the list. With three kids of different ages, all of us have different viewing requirements ranging from football, Disney and South Park to Grey’s Anatomy. We currently have the full Sky package. It was going to be challenging to cut back.

In fact, my wife had a very, very good experience with Sky TV. The man on the phone listened and came up with a superb idea that was appropriate to the situation and our request. It was surprising and well delivered. To be frank I think we were expecting a bit of a challenge. It was the opposite. So now I have a great opinion of Sky, Clark Plc has the viewing requirements sorted and I will tell people about the positive experience.

So this got me thinking about two things: why we become loyal to certain brands and how businesses can improve customer retention.

Rewarding loyalty

In order to establish a loyalty scheme of any kind we need to establish who it is we actually want to reward and what it is we want to reward them for. If our most valuable customers are 100 per cent loyal to us then do we give them rewards just for being there, or do we concentrate on making the less valuable customers more valuable? We must ensure that we are adding value to our business and not simply creating a discount scheme.

Defining our objectives needs to be the first step – are we looking to reward behaviours that are good for our business, such as a customer spending more within a certain time frame, for instance?

We then need to understand our audience segments. Customers are all different and treating them as one entity means that we may be missing the main motivational factors for some of them.

After we have segmented the audience we need to look at who is the most valuable to us and why – is it the segment that makes up the highest proportion of our base? Those who spend the most? Those who are the least hassle? Or those who we feel we might be in danger of losing soon? How do these customers stack up against our objectives?

Having understood who our customers are, we need to understand their motivations – this allows us to be relevant. What do they value most?

We are a business, so we also need to understand our own motivations – what would we like our customers to do? Spend more? Stay with us long-term? Again, we need to look at this against our objectives.

Adding all this up we can see who we should be targeting, what we want to encourage them to do and what is going to motivate them. Our aim is to identify positive behaviours we want to reward and habits we can seek to change in order to make our business more profitable.

In an environment where winning new customers will get harder, it is more vital then ever before that we cherish our current customers. Some are happy, some are apathetic and some may be disappointed. As spring approaches it would be wise to look over your customer base and reward them, tackling any issues with empathy and understanding. We do long for loyalty from them; let’s give them some reasons to love us and importantly to tell their friends and associates about the great experience they have had with you.

 

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

 

For more ideas on how to make your customers happy, read our guides to customer service, customer loyalty and how to deal with customer complaints.

Some only need it. Others really want it.

February 08, 2011 by Derek Williams

Losing weight, giving up smoking, getting a better education, getting a better job.  Some people only need it. Others really want it.

And so it is with customer service. Some organisations really need to give better service. Their customers are telling them so, their employees are telling them so and their profits are probably telling them so. But for whatever reason, they don’t want to give better service.

And then there are those who really want it. Those organisations that recognise the importance of listening to their customers, creating a culture with high levels of employee engagement and building their bottom line and their goodwill.

If you want to experience great service, go to an organisation that wants to serve you, where the people are empowered and encouraged to delight you. Very often these organisations don’t need big budgets for advertising or recruitment or training. I’ve never seen a single advertisement for Pret A Manger yet their service is outstanding and their business has grown rapidly from humble beginnings in 1986.

It starts with leadership, with a vision, the ability to communicate that vision and the strength to look for long term growth rather than short term profits. You can feel the leadership running through the organisation like the word Blackpool in a stick of rock. I feel Julian Richer’s influence at Richer Sounds, John and James Timpson at Timpson shoe bars, Richard Branson at Virgin Atlantic and Charles Dunstone at Carphone Warehouse.

You don’t have to be big. You don’t have to be small. But remember that a big business is just a small business that did the right things.

Think lifetime value. When a customer comes in for a USB stick, for instance, think what their lifetime value might be — a computer every two years, plus printers, and cables and inks and paper and servicing and broadband, for them, for their family, for their business. Cock up on the £10 sale and you lose that lifetime value for your lifetime.

 

Derek Williams is an expert contributor to Marketing Donut and the founder and chief executive of The WOW! Awards.

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