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Two Kinds of Loyalty Programs

September 10, 2013 1 comment

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:

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Customer Engagement during Moments of Truth

July 8, 2013 5 comments

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?

April 15, 2013 4 comments

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

October 9, 2012 1 comment

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 1st option, more and more businesses are now looking at the 2nd 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

August 15, 2012 1 comment

“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..

May 31, 2012 2 comments

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..