Two Kinds of Loyalty Programs

There are two types loyalty programs that a brand can run:

1. Bought Loyalty: All loyalty programs that rely on points and freebies against the points are trying buy loyalty through these freebies and lock-ins. For example, flight operators want to lock people in with their Frequent Flier Plans. This is the reason, that you find customers of these organizations complain about the service provided but at the same time continue to use their services. These kinds of programs are in reality not creating loyalty. All they are doing is dangling the carrot in front of the customer and thereby encouraging repeat behavior.
2. Earned Loyalty: These are programs that are designed with the ultimate goal of making their customers relate to them emotionally. Most often, these encompass everything from product/service development, marketing and sales execution. Building this kind of loyalty is much more difficult, takes a lot of thought and time.

I would not argue that one is better than the other. However, it is important that as a brand we know what kind of loyalty programs we are running and act accordingly. In my opinion, the cost of running both kinds of programs work out to be similar in the long term.

If you are running a loyalty program of the 1st kind, it is important that you focus on the efficiency of the program and put in place processes that ensure flawless execution. The most important reason why a customer will move out of the program is if the execution starts to fall apart. That is when the lock-in seems to start hurting and customers start considering other options.

If you are running a loyalty program where you want to earn customer loyalty, you need to continuously work on improving employee engagement & empowerment, minute attention to details and flawless execution would be the areas to focus on.

If you want to develop customer loyalty as your competitive advantage, you need to be able to do both of these programs well. You will ensure that your customers are able to take the benefits of the freebies more often than any other similar programs offer; have products or services that they aspire for but do not generally buy by themselves in the freebies, etc. You have processes and systems in place that allow your employees (highly engaged employees) to delight your customers with their service levels. That is when, your customers will find that you are not only easy to do business with but are also a delight to do business with. This is when, you would have turned customer loyalty into a competitive advantage that your competitors will find very difficult to replicate/surpass.

Do understand your loyalty program and focus accordingly to make the maximum impact for your customers as well as your organization.

Do let me know your thoughts on this matter by commenting below.

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PS: A tale of a Cab driver told by Shep Hyken

 

Lessons in Great Customer Service from Richard Branson:

Creating Raving Fans for Your Brand

Is it possible to create raving fans for your brand and that too with not too much budget?

Of course. In fact, the more budget you have, the more difficult it becomes to create raving fans.

How does one go about building these raving fans?

“Create One Fan At a Time”.

In all our eagerness, we forget that this is the only way you can make fans out of your customers.

It helps to have a great product/service that adds value to your customers’ lives. As Seth Godin said, people do not buy a product or service. They buy into a promise – a promise you make to the customer.  It doesn’t matter if your product or service is competing in a space as a commodity. You can still make fans of your product.

We need to realize that people inherently want to be a fan. They want to talk about their experiences to their family, friends and their social circles. Now, the only thing that we need to do is to give them something to talk about.

So, some thoughts/ideas that you could consider are:

–       Pick one customer per day per employee to delight. This can be a totally random selection or a carefully thought out selection.

• For example, if you are a sales executive, you can decide to pick one of your customers (individuals) and do something unique and unexpected for them.
  • Send a hand-written note to them thanking for their continued support or
  • Send them a book that you found interesting or
  • Send them a bouquet of flowers or
  • send their boss a hand-written note highlighting something that your customer did that caught your fancy.
• If you are a customer service executive, go out of your way to service the 2^nd customer that contacts you.

–       Make it easy for that customer to share the excitement with his friends, family and social networks.

–       Make it easy for you to share the excitement within your social network. Take pictures, quote, shoot a video or simply record a conversation. Then share this with your network of other customers, suppliers and employees.  Make them look like a “HERO”.

Instill the discipline in every employee to do just this bit; every single day.

Now the question is how do you inspire your employees to do this. Just asking them would not help. Forcing them to do something by way of implementing a policy or a process might work for the short term, but will be difficult to sustain.

This is where you as a leader need to do the same with your customers (employees). Delight an employee every single day. Make it their while to be a part of this wonderful culture.

Send flowers, chocolates, hand-written notes, videos, posters and surprise one employee, every other day.

It takes inspired employees to create raving fans. Do your bit and see them work their magic on your customers.

Do you agree with this approach? Do you think this will create raving fans for your product or service? Let us know your thoughts by responding to this post.

You can connect with me at Twitter, LinkedIn or Facebook

PS: Ken Blanchard talking about Creating Raving Fan

Your call is very important to us. Please stay on the call.

How many times have we heard this and felt the exact opposite. I hate listening to some automated machine telling me that the company thinks my call is important to them and yet they put me on hold for more than 5 mins.

Has the company’s senior management ever waited for 5 mins on a call to register a complaint or to seek more information or ask a question?

So, what can we do to totally avoid this situation.

1. Hire more agents. Train them well.
2. Provide an option to request for a call back before going on hold. Make sure this works. All the time.
3. As I have indicated in an earlier post, the most important people in a company are not its executives working out of their corner offices in the ivory towers. It’s the front-line employees, who interact, serve and sell to your customers. If they are taken care of, your customers will never be taken care of and soon enough you might not have a business to worry about. So, hire, train and retail quality people as your front-line staff.
4. Most of your inbound calls are about the same few things. Use this to identify these few things and find ways to eliminate the need for your customers to call you for them. If it’s a recurring complaint, find a way to fix it. Fast. If it is a request for information, make sure that it is available for all your customers easily. Make sure that it is shared with your customers pro-actively.
5. Change your on-hold music to the recording of Jerry Seinfeld entertaining people or something similar. Make sure that you have something that can bring a smile to the callers who are waiting for your team to respond to the call.
6. If you’re closed, clearly inform the hours that you are open and the relevant websites. Also, provide an option to request for a call back. Make sure the information is accurate.
7. Create an opportunity for the customer to provide instant feedback, while still being on the call. If you get a negative feedback, reach out to the customer immediately to identify and resolve the issue. Every single time.

Most of these are very simple policy and process changes that can be initiated quickly.

Once you implement these changes, you will find that your customers & employees are happier; your employee and customer retention rates are either increasing or is stable and the cost to service your customers is going down.

Do you think you can add to this list, ideas that could be implemented quickly and will have the desired effect – happier customers? Do share them by commenting below.

You can also connect with me on twitter, LinkedIn & Facebook.

PS: Something extra for you: An over the top funny short film titled “Your call is important to us”. Enjoy!

 

Engaging Your Customers Is Not Sufficient Anymore

We are in an era where we are grappling with too much choice.  Consumers today are facing a challenge in keeping up with the different choices they have.

Every product or service category has become crowded (maybe apart from some categories like online search, where Google still continues to have substantial market share). In this scenario, having a meaningful engagement with your customers has become table stakes for any business to survive and thrive.

So, the question that every marketer grapples with is “How can my Product/service stand out in this crowded marketplace?”.

Some marketers try to stand-out by providing exceptional products/service/engagement (Apple)

Some try to come up with stunning advertisements and marketing campaigns for their products/services (Coke).

Some try to use the new age media to engage with their customers and build communities (SAP).

Irrespective of what strategy we use as a marketer, we need to be able to “Surprise” and “Inspire” our customers. If we are able to do both, we would have their attention and affection.

Doing these alone is not sufficient for a product/service to stand out and be successful. The product/service needs to be good quality, address a specific need for a customer, engage the customers in meaningful ways. All these are table stakes without which you do not stand a chance.

But by themselves, you don’t stand a chance to win over your customers.

Find creative ways to both “Surprise” and “Inspire” your customers.

How does your organization go about doing this?

Share your experiences about when were you “surprised” or “inspired” as a customer/consumer.

PS: Some integrated campaigns which have both “Surprised” and “Inspired” me are below:

 

 

 

 

 

 

 

 

The State Of Social Media Marketing is Not So Depressing After All

I recently ready a blog post titled – “The Depressing State Of Social Media Marketing” by Mitch Joel (btw, I highly recommend both his podcast and the blog) lament about how brands are not realizing the true potential of Social Media.

In my opinion, the vision being proposed by Mitch or by Chris Brogan, Seth Godin or Nilofer Merchant is the extreme end of the spectrum of possibilities for social media.

However, what we don’t realize is, that in order to be able to realize that vision of enabling connections/conversations, the entire marketing strategy and execution (to a certain extent, of the entire organization) needs to change. Such a change is not only too complex but lacks an owner/sponsor within most organization, due to which is not even attempted.

In my opinion, every brand has its own set of challenges and priorities and I think it is ok for each brand to use Social Media as they want to use it, as long as it helps them in overcoming these challenges.

What does that mean? A brand might decide to go the full way and want to realize the vision proposed by these stalwarts, i.e., start creating connections and having conversations. What does that mean for a company like Coca Cola or Virgin Group or a Dell Computers or Walmart or Zappos or Louis Vuitton? Will coca-cola want to have a connection/conversation with all their customers? I don’t think this is even practical for such an organization.

However, Louis Vuitton might want to connect and engage with all their customers. Now the question is what do they do?

• In order to have a meaningful connection or conversation, the brand will need to know about the customer, his preferences, his past purchases, his interests (which are publicly shared on the various social sites) and
• This is only possible if you have the CRM system running at Loius Vuitton is able to identify a customer through their social profile and collect and organize these information and create different personas for their customers and
• Then create conversations around his/her interests.

This is no mean task if you have to do this even for a few hundred customers let along a few hundred thousand customers.

What Coca-Cola might want to do is to create an specific kind of association with their brand (Happiness). So, their content and social strategy would be very different. They would like to engage with communities instead of individual customers, which they have done very well in the past year using some amazingly integrated campaigns, which has led them to win the marketer of the year award at Cannes.

Some other brand might want to use social media as a channel for service and support. Their engagement with their customers is more in the real world than in the virtual world. That is fine as long as that is part of a deliberate strategy.

Expecting every brand to use social media from our own perspective is not being fair to these brands.

I think as long as the brands have taken a strategic decision (which supports their overall business strategy and goals) about how to leverage social media, they should be fine.

Though, I understand and totally agree with the vision that these experts have about social media and the impact it can have on businesses, I also think that the state of affairs is not so bad after all.

What do you think?

Two Awesome Campaigns: A Cancer Hospital and A Cola

What could be common between a hospital trying to treat kids with cancer and Coca Cola ? Simply amazing thought process leading to some of the most creative campaigns that I have seen lately.

Hospital Campaign:

A.C.Camargo Cancer Center treats children with cancer. The first and the most important in the treatment is the belief of the patient in the treatment they are being given. No amount of talking to these children could get them to believe in the treatment. So, in association with JWT, they came up with an awesome idea to get these children get totally involved in their therapy and start to believe in them.

The idea is explained in the video below:

 

Coca-Cola campaign:

Coca cola has been using “Happiness” as a theme for some time now. One of the things that makes people happy is the ability to share good things with our friends. The campaign managers wanted to help their customers fulfill this need to share things with friends to feel happiness. Result is the new design of a coke can which one can easily share with their loved ones and spread happiness.

 

What is common in both these campaigns is the fact that the designers have empathized with the end user and designed an experience around what they really want. Also, they created an entire experience for the customer.

I am really blown away by the creativity and the results of both the campaigns.

Have you seen any other examples of such designs? Do share by replying to the post or commenting below or tweeting it to me @rmukeshgupta.

Customer Loyalty is Not Just About Having Loyal Customers

Whenever someone talks about customer loyalty, the first thing that comes to mind is “Loyal Customers”.

However, people forget that this is just one side of the coin.

The other side is “being loyal to your customers”.

It is so surprising to see that almost all organizations forget this and just focus all their energies on trying to increase the loyalty of their customers.

Just as trust is a two-way street, so is Loyalty. In fact, more so than trust.

How many times have we seen organizations give freebies & excellent offers to lure customers away from their competitors and not offer any of these to their existing customers. To add salt to injury, we stop listening to our existing customers (when I say listening, I mean acting on their feedback).

Slowly, organizations (mostly B2C) have started offering “Existing customers only” deals, retailers have starting offering “Sneak peak for Priority Club members only” days and some more.

However, this is also only one small part of the equation. We also need to listen and be loyal to our customers.

Here are a few ways that I think we can become more loyal to our customers, which in turn will prod them to continue to stay loyal with us:

• Say “Thank You” at least once a year. Do it with style and surprise them with a gift. Be a little imaginative and creative in finding different ways to gift them. Make this a ritual. This needs to be separate from the regular gifting and thanking seasons like Christmas, Thanks Giving or New Year. Thereby, your appreciation will be noticed as it will get complete attention.  
• Use your customers products/services as much as possible, and if it makes business sense, explore bartering.
• Treat your customers with the same enthusiasm and flair that you treat your prospects. Do anything they ask for  and a bit more. Compete for their repeat business, new business intensely. You will ensure that your competition does not get any opportunity to get in.
• Connect them to your other customers and promote their business whenever possible.

These are just a few things that you could do to show your loyalty to your customers. This will most likely solicit their loyalty to you as well.

This will go a long way in fostering mutual loyalty and long term success for your and your customers’ organizations.

I would love to know your thoughts on this topic. Do share your thoughts by commenting below or by tweeting your thoughts to me at @rmukeshgupta.

PS: Interesting take on Rethinking Customer Loyalty 

An Example of True Customer Centricity – When Banking is No Longer Just About Banking

Fifth Third Bank and NextJob came together to address a challenge faced by most retail banks – Mortgage defaults.

According to the press release from the company, Steven Alonso, executive vice president and head of Fifth Third Bancorp says –

“Up to half of mortgage delinquencies are due to job loss. With NextJob, we immediately recognized an opportunity to go the extra mile to assist our customers. This is specific, one-on-one training that helps people identify their transferable skills and re-gain the financial stability of a new job.”

Mortgage defaults can eat up a banks profits very quickly, hence most banks look inwards and start putting in place stricter controls on loan disbursement to reduce the risk of default.

Instead of looking inwards, the bank went outside and decided to help such clients (who were jobless at least for 22 months) find a job, so that they could get one with their mortgage payments.

In the process, they have also turned their worst customers into their most loyal customers.

The ingenuity of the solution is that the bank can still continue to sell mortgages and at the same time worry a bit less on the risk of defaults.

A banking challenge (mortgage defaults), solved by a bank, by using a non-banking service idea, is innovative problem solving at its best..

Wishing Fifth Third Bank a resounding success with this initiative.

PS: The press release from the bank is @ https://www.53.com/mkg/press-releases/press-release-2013-02-06.html.

Customer engagement in a digital era

There have been reports that the overall customer engagement at banks for customers using one of the digital channels like Online banking, mobile banking, etc.

One of the most important aspect of customer engagement, is in fact engagement.

You need to continuously engage with your customers through out their journey with you.

This implies that you need to know what a customers journey is with your organisation:

– What are the touch points where you come in contact with your customer;
– What does the customer want to get done at each of these touch points & why?
– What could be the potential challenges at that point for your customer & how could you solve it?
– How easy is it for a customer to engage with your teams whenever they want?
– Are there enough reasons for you to reach out to your customers? Reaching out to sell your additional services doesn’t count.
– Do you provide reasons for your customers to talk about you to their friends and family (Random gifts to your customers)
– Do you provide such reasons regularly? (Surprising gifts)
– Do you listen to them when they talk about you to their networks? What do you do about them?

These are just some pointers for banks to think about how much do they know about their customers & if they provide or create opportunities for engagement.

True engagement can come once they know their customers well and have a strong intent (senior leadership focus) to engage with them.

Engagement is also a two-way street. It is not enough for you to be willing to engage with your customers; they should feel the same way too. If they do not want to engage, the banks have an even more serious task at their hands.

Digital can and should never replace physical in-person relationships. They work best if you could enhance & compliment the in-person relationships.

Short video that also talks about customer engagement in its entire journey.

Are large Indian retailers battle ready?

In their current state of operations, Indian organized retailers are in no way equipped to compete with the likes of Walmart, Tesco or Target.

Let me re-count to you my experience based on which I have come to this conclusion.

Last week, I went grocery shopping with my wife to a large format retail store in Bangalore. I was appalled at the thoughtless design of the store and the lack of the willingness to serve the customers in the entire staff.

In my opinion, there are 2 key performance areas which are critical for a retailer to succeed in a market like India:

1. Supply chain efficiencies
2. Customer’s shopping experience

This retailer failed on both counts (to provide the goods at the cheapest price or to provide a high class immersive retail experience).

Before we move ahead with this line of thought, let me share my impressions  from my visit:

Customer Experience perspective: 

1. Store design: This store was spread across 2 floors. The layout of the store was such, that you need to go to the 1st floor (non-grocery items, a.k.a, high margin items), walk all the way across to the other end of the floor, then come down to the ground floor for groceries. What this meant was that, even if I only wanted to buy groceries, I am still forced to walk through the non-grocery floor, hoping that I shall be tempted to pick something based on the promotions offered. Though this helps the retailer try and maximize the revenue per shopper, this leaves the shopper in a bad taste.

• Cart design: The only shopping cart that they have for usage is a large size cart. There was no option of a handbag or a smaller cart. Though not bad by itself, this was a problem with the way the store was laid out. I had at least a dozen customers bump into me and me bumping into another half a dozen customers, as the space between ailes was so narrow.
• Motivated and trained employees: The store had minimal support staff. There was no one to help. I had a few questions on the placement of a product of a particular brand. There was no one present to help. The staff whom I did find, were not able to help as they were as clueless as me.
• Check-out experience: Now that I had collected everything that I wanted to buy in my cart, I went to the billing counters. There were about 16 billing counters. However, there were about 6 – 7 customers already waiting for billing in each of these counters. What this meant was that I had to wait for another 45 minutes to get my items billed and get out of the store. The billing clerk tried on his part to be as quick as possible, but to the dismay of the customers, he was not able to scan the bar-codes of 1 out of every 9 or 10 articles. This meant that he had to manually type these codes (I think about 16 numeric characters each) in order to complete the billing. Also, there was no separate counter for fast track billing (maybe for 5 items or less or cash billing). So, even if you only had to pick one item, you still had to go through the entire grill.

After such an experience, I doubt if I shall think of going shopping in the store  again, as I have a myriad of options for where I can go (including online stores) shopping for grocery and these options will only increase with FDI in Retail cleared.

Supply chain efficiency perspective:

• Stock-outs: From my list of groceries, there were 3 items (cooking oil, a specific brand of Jam & a specific kind of spice) which were in a stock-out position. This was on a Saturday evening at around 6PM. Now, it is very well known that the biggest lost opportunities for retailers is lost sale due to stock-outs.
• Price: I happen to go a mom & pop store near my home to buy these 3 items that were not available at this store. I also saw the retailer selling a couple of items (a specific brand of whole wheat atta) to a customer at a price that was lower than the price i bought at the store earlier in the evening. So, not sure if they will be able to compete on price either.

This is not just the state of this one retailer in India. Most so called organized retail stores (multi-brand, multi category stores) have more or less similar problems. Some more serious than others.

Now, the question is,  if and when players like Walmart, Target or 24×7 arrive in India, will these retailers be able to compete with them? I am not suggesting that these retailers will get all of this right. However, if i were an Indian retailer, I would not bet my survival on the assumption that they will also face similar problems. I would be ready with a strategy to compete/co-opt with these retailers before they can hurt me.

What next? 

So, the next question that beckons is the following – what can retailers do to counter this threat?

Strategically, they need to pick a field where they want to be the best. Whether it is  competing on

• Cost (low cost or luxury or premium)
• Customer experience
• Speed (how fast or slow do i get new products lines on the shelf)
• Niche (define and win the niche)

It doesn’t matter, what strategy they adopt; they will need to improve on both the supply chain efficiency and the customer experience part, as these will be the necessary battle conditions, without which, you will no longer be in the competition.

These are my thoughts on the state of organized retail in India. Do you agree with my assessments?

Please do post your thoughts as comments below or tweet your thoughts to me on twitter (@rmukeshgupta).

PS: Something extra for all you people. Watch this prank by the Improv  team at a Best buy store