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.

You can connect with me on twitter, linkedin, facebook or email.

You can also subscribe to my weekly newsletter here.

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

 

Lessons in Great Customer Service from Richard Branson:

Customer Engagement during Moments of Truth

Last week, I was flying on a Jet Airways flight from Delhi to Bangalore. This was an evening flight and they serve food (dinner) in the flight.

The service staff completed serving food to all the passengers and started to come back to collect the used plates.

Meanwhile, I tasted the food and did not particularly like the food and so had left most of the food untouched.

The staff came back, collected my un-touched food plate and went back without a word.

I think, this was a moment of truth for me as a customer. If someone from the service staff had noticed that I had not eaten anything from the food served and came back to ask me the reason or to offer something else that they had, I would have been truly surprised and happy.

This does not take any specialized training to do. This is something that any member of the service team would have done, if I were a guest at their homes.

So, why do they not care when I am guest on board an aircraft that they are serving?

It is such moments of truth when the true engagement of the employees and the organization is tested and opinions formed.

It doesn’t matter how many times the service staff announce during take off or landing about how they value our business and would like to serve us again, I know that these are only said as they are required to say them and that there is no true emotion or truth behind these statements.

How many such moments of truth does your support team encounter in a day? How do they deal with them? How do you deal with your employees who do well in these moments? How do you identify and train employees who falter in such moments so that they learn and do not repeat their mistakes? Therein lies the crux of true customer engagement and delight.

Do you agree with my thoughts? Do let me know your thoughts by commenting below or by tweeting them to me at @rmukeshgupta.

PS: An interesting video that talks about the “Moments of Truth”.

 

Do Your Customers Feel Being Bullied?

Winning in the marketplace comes with a lot of hard work and sustained effort.

It is easy to fall into the habit of winning. Though it is a great feeling, one should be very cautious about a few things.

This winning habit could make your sales teams feel unbeatable, which could lead them to slowly become arrogant in their dealings with your customers.

This change is so slow and subtle, that it becomes very difficult to notice unless you actively look for it.

This could slowly lead to your customers starting to feel that doing business with your team is not easy or smooth. This is early indication that you are getting in the danger zone.

If unchecked, this could slowly lead your customers to feel being bullied, resulting in them dropping thier business with you at the first possible instance.

Some early signs that should warn you of this could be

• Customers complain that doing business with you is getting more and more difficult. 
• Winning in the market becomes the single most important thing for your sales team that they want to do it at any cost.
• Customer satisfaction starts going down for no obvious reason.
• Your sales continue to grow despite a slowing economy. This could either be due to the great value proposition that you have for your customers or due to your sales teams squeezing business from your customers. You need to be able to see the reality and adjust instead of believing one to be true than the other.
• You start losing customers for no obvious reasons to hitherto unknown competitors.

No customer will come forward and tell you how they feel about doing business, unless you start noticing these little things.

Nothing can be as damaging as finding this out late, as by then, there is nothing you could do to correct it.

The more successful you are in your market category, the more prone you are to this challenge.

Do take time to notice and react.. Do you agree with my observation? Share your thoughts on this post by commenting below or by tweeting to me at @rmukeshgupta.

Future of customer service in a social world

In the good old days, if we had to contact our bank or for that matter any business, we used to reach out to our phones and give them a call.

The call would then be routed to a call center (usually, after about 10-15 minutes of listening to some music that would be played while we waited for an agent to get free and take our call).

This, of course would be after having had to find our way through the maze of options (which used to be so complicated that it required us to be entirely focused on the options, blacking out everything else in life).

Then the times changed. Emails got ubiquitous and we could write an email to contact with the business. However, we still used the phone as the primary means for contacting someone at the business who could help us solve whatever it was that we were trying to solve.

The businesses still continued to invest in the contact center (some continued to have this in-house, while most of them out-sourced this to some organization in India or Phillipines or wherever they could get the lowest cost labor).

Then the times changed again! The social media revolution started and we got Facebook, twitter and all the other social media tools. The marketing teams in all these businesses wanted to ride on this wave and created twitter handles for their organizations.

This was an important moment!  

People now could tweet their complaints to these businesses directly and openly! Most important aspect was that this was out in the open which could potentially damage the reputation of the business. So,  businesses would be forced to respond to ensure that the complaint doesn’t get out of hand.

This indicates a definite shift of customer behavior. Now, whenever, I have a complaint or want to contact a business, the first thing to do is to check if they have a twitter handle. If they do, then tweet my question or complaint to them directly instead of going through their call center.

This indicates that businesses are now required to monitor both the social media channels (twitter, Facebook, etc) and also maintain their call centers (for their customers who still would like to talk to someone who don’t have a social profile yet and would hence like to talk to someone at the business.

Now, there is a choice for the business:

–       Continue with the status quo and manage both the social and the call center channel

–       Re-look at the contact strategy

While most of the businesses so far have been taking the 1^st option, more and more businesses are now looking at the 2^nd option.

Some options that businesses have if they decide to re-look at their customer contact strategy  are:

–       Make the social channels the main channel for all customer contact and use the call center as the secondary channel (primarily used to escalate). There are some distinct advantages that this strategy offers:

• Improved customer service :
  • You are now forced to have an exceptional service (as the reputation of your business is at stake, and in the open), which in the long term will help the business.
  • When other customers see that you are providing a great service, this improves the brand value of your business and creates a positive spiral.
• Reduced cost:
  • You could use technology solutions for monitoring and responding the queries on social media.
  • You could re-deploy some of the call center agents in more productive roles and reduce the overall cost of managing the service team.
• Improved brand equity:
  • By making the social channels as the primary channel for contact with customers, you are now enabling or ensuring that your customers connect with you on these social channels. This will enable you to identify your customers, their influencers. You can now participate and engage them in productive dialogues.
  • This will also make your social foray sticky in your customers minds.
• Opportunity to re-design the way you do business:
  • There has been a  lot of talk about social businesses and how social channels have now provided an opportunity for businesses to re-design their work culture. Businesses can now become more agile and nimble on their foot to enable them to adjust to the changes in their environment.
  • This probably could have the biggest impact on both the topline and bottom-line of your business.

– Completely do away with the customer call centers.

• The only medium for customer support then becomes the social channels and email (if you still want some cushion).
• Businesses can have immense cost savings (due to moving away from call center operations and at the same time increase the engagement across the social channels.
• Having a separate channel for service and brand on the social channels can increase both stickiness and brand transparency.
• There is an element of risk involved here. If you don’t get this right the first time, every time, there lies an opportunity for a PR disaster. However, if done well, there is also the upside of tremendous positive word-of-mouth, which in my opinion is a big enough upside to take the plunge.

Though this approach has a lot of advantages if done well, it also has the potential for a PR disaster if not handled well. We have already seen many such social media provoked disasters (McDonald’s #McDStories, FedX story, etc).

So, it really is a difficult thing to manage. However, it is always such difficult things that when done well, set you apart from your competitors.

Do you think that businesses should adopt this strategy of completely moving away from the call centers?

Do let us your thoughts by sharing them as comments here..

PS: Some interesting point-of-views that I have come across on this topics are as below:

1. The Psychology of people using Twitter as a customer service channel
2. The power of social customer service by David Howell.
3. Delta airlines show that a separate customer service handle on Twitter can improve response time
4. How FedEx turned a disaster into a PR win
5. Are Twitter and Facebook changing the way we complain?
6. SAP’s primary support channel on Twitter
7. Bank of America showcase their Twitter customer service by following up on complaints.

New endangered species – salesmen

“What can be digitised, will be digitised” – unknown

The continuous growth of e-commerce and cloud solutions is creating a new problem of sorts – dwindling breed of salesman!

Imagine the following scenarios:

• I can buy any books that I want to on Amazon.com without any talking to anyone at amazon.
• I can buy clothes or shoes or accessories from Zappos without talking to anyone.
• I can buy an insurance from ICICI Lombard General Insurance without talking to anyone.
• I can re-charge my mobile phone online without talking to anyone from the phone company.
• I can buy any consumer durable (TV, Fridge, mobile, AC, etc) from any online store like flipkart.com without talking to anyone.
• I can buy stocks online without talking to anyone.
• I can buy order food online without talking to anyone.
• I can sign-up for a project management module from 37Signals.com without talking to anyone.
• I can buy office productivity software from Zoho without talking to anyone.
• I can buy furniture, groceries and almost everything online.

You get the point right! And as the internet spreads, this is only bound to increase. Everyday, more and more goods are being offered online which people could try and buy themselves.

So, what happens to the people with whom you would have interacted (sales people) to buy these stuff earlier?

• One obvious answer is that they will need to re-skill themselves to take up other roles, most obvious could be in customer service or call centers which will still have to do some selling when there is a customer calling them.
• The other option is for them to up-skill themselves to sell more and more complex stuff which is completely personalized and cant be offered online. This requires a completely different mental make-up and skill sets than selling pre-packaged, generic stuff requires. The demand for generic sales people will start declining and that for specialized sales people will start to rise (if not already happening).
• Another option for them is to become designers and design the sales processes for the online shops to help them sell more. In my opinion, this is far less likely than the other two options. However, this is the option that will provide the most lucrative, interesting work for the salesmen.

Do you agree that this phenomenon will play out in this decade?

 

Dear Facebook: Please Give Us A ‘Sympathize’ Button

Vinay Iyer recently wrote a very interesting post about the importance of Capturing the real 360 degree ‘Voice of the Customer.

You can read the post here: Dear Facebook: Please Give Us A ‘Sympathize’ Button.

There are some very interesting things that he talks about:

Find smart ways to “mobilize the promoters” and “recover the detractors.

He also explains why context is key in any form of survey done with the customers.

Though, I agree with all of his suggestions, I still think that this is a reactive way to engage with your customers and could work for simple transactional situations. For example, this process works really well if you are selling books on the web (like amazon.com or selling a consumer durable products.

In situations which are more complex, like for example, selling enterprise software to large corporates, the execution of the process breaks down. There are many reasons to this, most important being

• Long sales cycles involving multiple engagements between the buyer and seller organizations involving many different people. In this situation, everyone has a different view of the elephant, so to say, and hence, no one able to provide the right context, in which case, the entire premise of the net promoter score and the contextual feedback is lost.

So, how does one get this contextual information in this situation?

In my opinion, we should then change the question a bit, in order to gain the insight:

• Instead of asking if “Would you recommend the product/service to your friend”, we could ask “Would you recommend this engagement to your peers in the industry?” and then add the contextual question – why?

What this does is the following:

• Collect the feedback relevant to the most recent engagement with the buyer and provide the contect to it (good or bad)
• This infomation is clearly insightful and actionable for the team that did the engagement with the buyer and provides them an opportunity to improve their engagement model.
• This also helps the seller to identify and fix any process or engagement that is broken so that he can continuously improve their sales process.

This can then prove to be the foundation on which the 360 degree customer engagement model can then be built.

PS: He also provided some interesting ideas for Facebook to work on (creating a dislike, sympathise, want or a Jealous (ok, this was my addition to the list) buttons apart from the Like button that they already have.

You can follow me on twitter: @rmukeshgupta

 

Ideas for Big bazaar to improve their check-out situation..

I am one of the many people who dread the thought of going to Big Bazaar for shopping but do so due to other social compulsions.

The reason I dread going there for shopping is the time it takes to check out once you have completed your shopping. There have been instances when it has taken me more than 60 minutes to check out. There have been times when I’ve dropped the articles I had selected after seing the que at the check-out counter and left for home as I thought it is not worth standing in a que for an hour or even more for the articles that I have picked up.

I also know that this is not just true in my case but also in a number of my friends case as well.

Now, is Big Bazaar (or for that matter any other large format retail store) not aware of this problem? That can’t be the case as they are smart and would know that this is a problem.

So, what is stopping them from solving this problem? Inertia? Maybe they do not realize the magnitude of the problem.

I wanted to think about this from their perspective and to try and find a solution that not only fixes this problem, but does so in a manner to increase the total sale per customer as well.

I could come up with the following ideas:

1. Implement the teller system used by banks. All customers who have less than 6 articles can get on the que and get their wares billed and leave. All others will get a token for their carts. These customers are then free to roam about in the store or wait at a lounge (where coffee or tea can be served).  Just like the teller at a bank announces the token number and the customer can then go and get attended, the check-out counter announces the cart number and the customer can then join the counter, get his wares billed, make their payments and leave. No long ques and killing time (the most precious commodity of all).
2. Implement the ATM concept: Introduce billing machines that the customers can use themselves to bill their wares, pay and check-out. These machines have been available for some time now. Though this involves a lot of investment, it also improves customer satisfaction. Also, the next generation of consumers are a generation which will grow up in a DIY (do-it-yourself) world and would rather prefer this than waiting in a que to be served.
3. Order online, collect at the store: This model is already working at many stores. For example, “Groupe Casino“, a french departmental store has already deployed this model with great success. Their customers can place their orders online, make the payment and collect their goods in 2 hours from the store on their way back.
4. Flip the billed to the biller: With the proliferation of smart phones and appification of our lives, they can think of developing an app which could recognize the bar-codes and can be used to scan all the items, generate a bill, collect payment from the stored credit card and generate a bar-code which can be verified at the gate to ensure there is no theft.

These are just 3 ideas that I could come up which would not only make it easier for the customers and improve customer satisfaction, but will also increase impulse purchase and last-minute drop-outs at the counter when the consumers have time to think and rationalize their purchases and some of the impulse purchases get dropped just before billing. This will increase the average bill size of the customers.

If given a good thought, we can come up with many more such creative solutions for many such problems.

Makes life easier for people like me!

Question is “Do they want to make our lifes easier?”

How has your experience been with the different departmental stores? Have you come across any interesting solution to solve the problem of the wait time at the check-out? If yes, please share the same with us..

Let’s stop being a jerk

Today, I was flying from Bangalore to Mumbai in a 6Am flight operated by Indigo. There was a delay of 5 mins to start the boarding due to multiple reasons:

• There were not enough coaches to ferry the passengers to the aircrafts. The airline was boarding 3 flights simultaneously and looks like the capacity was only to board 2 flights.
• The security guard was late in arriving at the boarding gate.

Though this was something that the airline needed to get right everytime to ensure customer satisfaction, I think a delay of 5 minutes was something we could make up.

I was the first person in the que at the boarding gate and the person behind me was a part of the industry as he know a lot about the time it takes to board a flight, how the airline industry works. He was getting very impatient with the delay and started fussing about the delay. He started to continuously question the attendant about the delay. After a couple of minutes, he started questioning the competence of the attendants.

I shall appreciate the fact that the attendant for she was patient for all the time and did respond back to him respectfully.

Once we were through the boarding gate, we had to wait for a few minutes for the coaches to come to ferry us to the aircraft. The passenger i was referring to, again started fussing about the delay and started to question the competence of the airline staff and even got a bit personal.

Now, the flight took off about 10 mins late and arrived about 5 mins late at the destination.

Though it is important for all organizations to shore up their customer service, processes to ensure customer satisfaction, i think it is also our responsibility as a consumer to stop being a jerk and harassing the employees trying to help us.

As they say,

• if you have a negative feedback to share, do so individually. Write to the organization or tweet about this, but with dignity and not get personal.
• if you have a positive feedback, do share it openly with everyone. This will only increasingly reinforce this behavior and you will continue to get great service.

Have you seen similar behavior and what do you think about such behavior?

 

Why don’t credit card companies understand customer service ?

I got an SMS from my credit card provider (IndusInd Bank) indicating that I am eligible for an increase in my credit limit. The SMS also informed me that I should send an SMS with a specific text to a specific number.

I did exactly that.

Guess what happens next?

Nothing ;-(

No response from the service provider whether my SMS was received or not!

No response from the bank if the credit limit is increased or not!

What can be worse? I get the same SMS again 10 days later and when I send the SMS again, nothing!!!

Why can’t the bank put in place a simple process that informs the customer if the SMS was received and if the credit limit is increased or not?

These are simple things that really put off customers.

I think the time is ripe for the credit card business to be completely disrupted. Sometime in the next couple of years we shall find that the plastic will disappear and  the entire credit/debit card will go virtual with the biometrics as the unique identification.

The bank that takes this leap of faith first will stand to gain a lot of market share as virtualization of credit cards can eliminate a lot of hassles of using credit cards and has the potential to exponentially grow the credit business.

 

My adventures in buying a dining table and lessons for retailers

Recently, me and my wife decided that it was time to buy a dining table.

My wife always wanted to buy a 6 seater wooden dining table. I wanted chairs without any cushions. We had a budget in mind (INR 20K).

Now, if you have bought a dining table in Bangalore anytime in the recent past, you would know that it is near to impossible to get a dining table which met all the three conditions above.

Still, we visited a lot of stores just like other married couples. After having seen what’s on offer almost in all the shops that we could find, we finally had to compromise and decide on a 4 seater dining table that met our expectations all but in the number of seats. We debated but decided to go for it.

The salesman saw what we were doing and came over. He explained a bit more about this particular piece of furniture. He said that the table and chair were made of solid Sheesham wood and went on to explain the properties of Sheesham wood and how long the piece of furniture would last. The price – INR19999/- (You see, the piece was on a discount sale. Original price was at least about 40% more).

We finally decided to buy the piece. As a global citizen of the 21st century, I took out my Platinum Credit Card and got it swiped for the said amount. We felt really happy! We were excited! We were told that the furniture will be delivered in the next few days as they need to get it from the warehouse.

So, we came back home (after having a pizza party at Pizza Hut).

Next day, my wife wanted me to go out and check out the accessories that we will need to go with the dining table. So, I went to a shop which also sells furniture accessories.

As soon as I entered this shop, I was in for a surprise. The dining table that I had bought (same brand, same piece) just a day before, was here available for the same price (but with 6 chairs). When I spoke to the sales man, he also mentioned that the wood is not Sheesham but was Mango. The life of the furniture doesn’t change drastically due to this simple fact. This store was the primary manufacturer and it had a shop-in-shop at the store where I had bought the furniture from.

Now, I was really upset about this. I felt cheated! However, I wanted to know this was a mistake. I hoped this was a mistake. So, I went to the store and told them that the same piece of furniture was available at the other store at the same price with 2 additional chairs and that the case of the kind of wood used.

I had hoped that the store would check this out with their supplier (which owns the other store) and deliver the furniture with 6 chairs and the matter would end there.

Again, I was in for a surprise. Firstly, the salesman got really defensive. He straight ahead came out and said that if I am getting a better price at a different store, then I should go ahead and buy it from there instead. He denied having given the wrong information about the wood.

I decided that it was time to speak to someone senior at the store. I asked to speak to the store manager.

I was then introduced to the head of the furniture section. Let’s call him Shyam (name changed). He was not willing to accept that there could be a difference in the price between their store and the other store. Finally, I convinced him to talk to his supplier and check if there was any difference in price and if they could give me the same price. He said that he will check with the supplier and call me back the next day.

I waited for the call till evening. I finally went to the store on my way back. I was told that Shyam was on his weekly off and that he will be in office the next day. I got the folks from the customer service desk to call him and check on the status. He said that he was unable to check as it was his weekly off and that he will call me the next day for sure.

The next day passed. I did not get the call. I called the store but was unable to get through to Shyam via their store phone number. Again, I visited the store on my way back home. He said that he had checked with his supplier and they had assured him that there was no price differential. By then, I was loosing patience and decided to cancel my order. I asked them to cancel my order. I was told that the order will be cancelled and they will issue me a cheque for the amount. I will need to come back to collect the cheque the next day as the finance team had already left.

I did not want to go back to the store again and waste a few more hours in the process. So, I instead asked them to cancel the credit card transaction and I would not have to go back to their store. They checked internally and agreed to do so the next day.

I got an email from the accounts team addressed to their bank asking them to cancel that particular transaction.

I went to the furniture manufacturers store and found that the same piece was still available for the same price. I decided to wait for the re-fund before placing an order with them.

The same evening, I got a call from Shyam. He said that they are now willing to offer me the same price that the manufacturer was quoting and wanted to know if I would like to still take delivery. Since, I had invested so much time and effort with Shyam, I said that it was ok and that he could deliver. He asked me if I would like to pay fresh or would like to cancel the request to the bank. I said that I would pay fresh.

The same evening, I was in for another surprise. I got an email from their finance team asking the bank to stop the cancellation. I thought that we should let this go.

So, we waited for the furniture to be delivered. Three days passed with no news about when the furniture was going to be delivered. Now, I got really angry at the way the store was treating me.

I called Shyam and he said that he will ask the manufacturer to call me and confirm when he will deliver the furniture. I got a call the next day that they will deliver the furniture next day.

The furniture was delivered the next day evening. When I got home, I found that one of the chair was damaged. As it was already late in the evening, I sent an SMS to Shyam indicating so. I got an response saying that he shall get the same replaced as soon as possible.

Then, I did not hear back from Shyam for the next couple of days. I really got angry and visited the store on my way back home. I demanded to see the store manager and was introduced to him.

I narrated the entire story to him and asked him if this is how his store treates their customers. He tried to pacify me. Took me for a cup of coffee and spent sometime with me talking about different things. He said that he will take care of the replacement.

Since then, I got calls from the store continously keeping me updated on when the replacement will be made. Once it was done, I got another call asking if everything was well.

Finally, we had our dining table complete with all 6 chairs.

Now, there are a lot of things that the store did should have been avoided:

• The salesman needs to be trained better so that they know about their products and do not give out wrong information.
• The situation could have been handled as soon as it was brought to their notice. Instead of haggling with their supplier and the customer back and forth, they could have sent someone over to the store that I was referring to validate my claim. If true, they should have simply offered me the same price, close the sale and then deal with their supplier. Do not let the customer wait or suffer.
• Shyam knew that the next day was his off. He should not have committed to get back the next day. Clear communication was the key. It was missing in the entire interaction.
• Mistakes happen. One needs to own up to it, apologize and figure out a way to correct the mistake quickly. In such cases, speed matters.
• Also, when you’ve put your customer through such a process, go beyond what is expected. Replace the damaged chair and more. They could have provided a gift voucher to be used against my next purchase at the store. This would also increase the chance that I will shop there again and give them an opportunity to improve my shopping experience.
• The store had an opportunity to convert a bad experience into a wow experience multiple times in the entire interaction but missed it every time.
• The store could have thanked me (or rewarded me ;-)) for bringing the anomaly to their notice. There could have been other customers that the store would have lost due to this differential pricing. Also, this brought out the weakness in their supply chain which need to be corrected immediately to avoid any further issues.

The manufacturer made a mistake by having differential pricing at his store and other stores. This only leads to confusion and in this case, resulted in their customer (store) losing trust.

PS: I bought the furniture from Home Stop. The manufacturer was Mother Earth (Future Group)

And here we talk about the Future of retail –

This only goes on to tell how far this future is in India.