Wednesday, November 21, 2018
Keeping Good Customers; In Spite of Fraudulent Ones
8:53 am est
A traditional way to show customers that an organization values them and appreciates
their loyalty is through a loud and clear money-back guarantee policy – “If you don’t love a product you
buy from us, simply return it and we’ll give you your money back.” Some companies have endeavored to
be even more customer-committed by promising to allow for the return of any product, any time, for any reason.
That’s certainly the kind of policy that has been employed by two companies
that have enjoyed great business success and high levels of customer loyalty: LL Bean and Costco.
No Good Deed Goes Unpunished!
But unfortunately, in today’s less-principled
world, some unethical consumers see such policies as opportunities to take advantage of the sponsoring companies.
They test the commitment and fraudulently abuse the implied promise by asking for money back on items that have been worn
well beyond normal ‘try-in periods’, items damaged by abuse, even items purchased at yard sales! For LL
Bean the breaking point is said to have come last year when a senior executive with the company found among the company’s
returned items (for which LL Bean had returned money) his own old monogrammed shirt that he had given away in a clothing
For Costco the essence of the company has always been to “strive to ensure members have an
easy, efficient and pleasant shopping experience… [with a] generous return policy and 100% satisfaction guarantee [allowing us]
to provide excellent member service”. But again, immoral customers have been known to abuse the policy asking
for (and receiving) money back for items such as soiled mattresses, decade-old boomboxes, empty bottles of wine (the customer
returning the bottle, apparently complaining that the wine had given him/her a headache), half-eaten cake, a bare Christmas
tree in mid-January, and a ten-year-old pair of Kirkland (Costco’s house brand) sneakers. And, in each case store
personnel stood behind the policy,
Is it a necessary ‘cost of doing business’ to tolerate such
abuses by fraudulent customers to try to do right by one’s honest and reasonable customers?
Customers Are Simply Not Some Are Not Worth
We strongly advocate treating good customers properly, not only because it’s the right thing to do,
but because retaining high-value customers is profitable and makes good business sense. But we also advise clients
that while valuable customers should be recognized and given the highest level of care and service, those customers who
offer little potential, should be treated much differently. Sometimes the best thing to do with low-potential/unprofitable
customers is to find a way to “escort” them to a competitor. (We are reluctant to advise “firing”
customers. Sometimes customers can change significantly, becoming much more profitable. Rude treatment will
prevent them from ever returning. And, “firing” can create a bad confrontation, generating plenty of
negative word of mouth).
So, What to Do?
as it must have pained senior management to walk away from the return policy that played an important role in its company
growth since it was initiated by its founder back in 1912, L.L. Bean announced earlier this year that it has changed its
famous return policy. From now on, items will only be guaranteed for one-year, unless proven defective. (Items
that were bought before the change-over will still be able to be returned after one-year, as long as customers can produce
a proof of purchase.)
An Even Better Option from Costco
When a Costco customer recently tried returning
a printer purchased in 2010, the return was declined. The customer objected, but the store manager took the position that
this return was an abuse and that it wasn’t the first time this particular customer had taken advantage of the return
policy. After a bit of back and forth between this customer and Costco’s corporate offices, the company did return
the customer’s money.
But Costco has an advantage that LL Bean doesn’t. Yes, Costco did
return the customer’s money but at the same time they also applied another part of their policy which states that
“memberships may be canceled due to abuse of the Member Privileges and Conditions.” The individual’s
Costco membership was revoked so the company is rid of that costly customer.
Good return policies and good
customer care are critically important to a business, but the belief that a company must strive to retain every customer
is both misguided and wrong. Businesses are not democracies. Low-value and abusive customers damage employee morale, lower
the bar on treatment of high-value customers, and cost a company on the bottom line.
Wednesday, November 14, 2018
Customer Loyalty for Your Product or Service - the Emotional Side
8:54 am est
An AdWeek article (by Patrick
Kulp) recently discussed work by Spark Neuro in
which the firm sought to understand consumer feelings for a client’s beer by measuring physical attributes such as consumers’
brain activity, heart rate, and palm sweat. With test subjects viewing commercials in development, they established
that content including: game-day excitement, nightclub cachet, and good times with friends all stirred positive emotions.
However, disappointing for their client, they discovered that video of these social situations wasn’t, on its own, sufficient
to generate a demand/craving for beer.
As they tested various options
for driving consumers to the desired need-state, they added an exaggerated fizzing sound of a beer being poured into a glass
from a tap onto the sound track. (“Exaggerated” because, as any beer drinker would agree, any pour of a good beer
would hardly make a sound as loud as that added to the TV spot.)
And, It Worked!
According to Spark Neuro the pouring sound produced
a subconscious impact that resulted in a “massive emotional response” and the research subjects’ attention
was “snapped back to the product [-category]”.
Experience Measurement Appears to Forget All of This
While such discoveries are exciting steps forward in
communications research, these findings probably come as little surprise to most of us. We have five senses and yes
they each do have an impact on how we react to a product or service experience. But, having agreed to that logic, how
do we, as marketers, think we can somehow possibly understand a customer’s satisfaction and loyalty with only a simple
set of objective, cognitive (non-emotional) questions? How can we possibly hope to accurately identify why certain interactions
bring a customer back to buy again; cause them to recommend a given product or service; or score their satisfaction as ‘delighted’,
without assessing more of the multiple senses that comprise each of those interactions.
hotel satisfaction study, for example, probably asks for a rating of: the check-in experience, the guest room, the housekeeping
staff, the hotel restaurant, etc., but it never drills down to the “experiential components” of a guest’s
interactions and never considers the multi-sensory components of each. The check-in experience alone could involve: the lighting
of the front desk area, how the staff is dressed, the smell – a piped-in fragrance or the off-putting aroma of a staff
member snacking on their favorite Chinese takeout, the height of the counter on which the guest needs to sign-in, and much
more. Upon entry to their guest room the feeling can be welcoming and comfortable (lights on, temperature at a comfortable
level, no unpleasant smell of cleaning liquids) or the guest room can appear dark and be too hot or too
cold. The sheets on the bed could feel crisp to the touch and smell fresh, and so on. Yet the traditional customer
satisfaction research questionnaire that we all receive focuses on only the ‘high level ratings’.
Our Solution to the Multi-Sensory Challenge
Accepting the multi-sensory components of the products and services we all sell, our needs to accurately assess customers’
reactions become exceptionally challenging. We’re not in favor of excessively long questionnaires. But,
we’re even more opposed to superficial studies upon which critical decisions and costs are based. Our solution
has been to rely on the advantages of current technology. With the majority of today's research studies being conducted
online we have the option of using pre-programmed skips in a questionnaire to allow multi-sensory probes to be built into
a survey. We work it this way. The first time a customer gives a low score on one of the over-arching (driver)
questions, the appropriate multi-sensory battery of questions (what they saw, smelled, touched, tasted or heard) can be administered.
To avoid abusing the customer’s time with too many questions, a maximum questionnaire length can be established preventing
every customer from being asked every driver question. Of course, the programmed questionnaire can also rotate the order
in which the driver questions are presented to even out the number of responses to each.
Accepting that a full understanding of reactions to our products and services requires accepting the multitude of sensory
items surrounding each suggests that we must rethink and aggressively change the current overly-simplified way in which satisfaction
and experience questioning occurs.