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Wednesday, November 21, 2018

Keeping Good Customers; In Spite of Fraudulent Ones

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 drive.

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?

Some Customers Are Simply Not            Some Are Not Worth Keeping!

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 much 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.



8:53 am est          Comments

Wednesday, November 14, 2018

Customer Loyalty for Your Product or Service - the Emotional Side

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]”.

But, Customer 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.

A typical 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.

8:54 am est          Comments

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Customer Experience Partners, LLC
Measurement, Management, Optimization
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