Customer service: Are you a ninja or a nincompoop?

Having divorced and moved earlier this year, I’ve had quite a few occasions to interact with companies’ customer service functions. In most cases, I’ve merely been updating my personal information. In others, my request was a bit more complicated. I’ve also bought a fair amount of new stuff, so I’ve had to deal with delivery issues and the like.

Most requests have gone smoothly. A handful were remarkable. Others were noteworthy for their sheer incompetence.

Addressing customers’ problems can be the proverbial moment of truth for a brand. The commitment to owning the customer’s issue can truly illuminate the difference between those that view customer service as a necessary evil and those that understand it as a key competitive advantage. Reflecting on my recent experiences, I’ve come up with a few simple guidelines to separate the ninjas from the nincompoops.

Seek first to understand. Before you shoot off the canned response or solve a problem I’m not having, make sure you actually know what my desired outcome is. I’m still trying to get an account issue resolved with a major upscale home furnishings retailer–I won’t say their name, but it rhymes with Festoration Lardware–because their CSR’s keep suggesting fixes to a problem that’s different then the one I’m experiencing.

Start where we left off. If I’m already into my third conversation or umpteenth email, don’t make me start all over again with my story. Pay attention to the chain of interactions.

Respect my communication requests. If I say I prefer to be contacted by email, don’t call me. Seems simple, but two companies specifically asked for my preference and then promptly ignored it.

Do what you said you we’re going to do. The folks at Regus told me they’d get back to me in 1 or 2 business days. 3 weeks later I’m still waiting. And they haven’t responded to my follow-up requests.

Anticipate. You can merely do what the customer requested, or you can act as an advocate or trusted agent and look at the bigger picture. I asked Hilton to update my account information and reset my password. They handled that request very efficiently but also noticed that I had not gotten credit for a recent stay. So they went ahead and took care of that without my asking. Nice.

Add a dose of wow. Offer to waive a delivery charge because I’ve made multiple purchases? Upgrade my shipment to next day delivery? Expedite my order because I’ve had a problem? Yes, please.

Avoid ironic messages. “Your call is really important to us.” Really?  Then why am I in a 10 minute queue?

Treat different customers differently. Yes, every customer deserves good and respectful service, but some needs must be prioritized above others. If you know–or can reasonably surmise–that some customers have greater lifetime value and/or significant brand influence potential–you might want to show a bit more care and attention.

It’s worth remembering that every customer interaction with your organization is an opportunity to enhance or detract from your brand’s value. Every interaction has the potential to increase the odds of positive word-of-mouth or turn someone into a detractor–and, worst case, a vocal and influential one.

You don’t have to call your customer service staff ninjas to get this right, though maybe that helps. Mostly, you just have to care.

Rewarding stupid

The brand that incentivizes lowering the cost of its customer service function, when faster response time–and assuring the customer’s problem gets resolved the first time–is what drives customer value.

The retailer that slavishly measures–and provides bonuses for silo leaders based upon–individual channel performance, when the majority of its consumers research and shop across channels.

The credit card company that relentlessly increases late fees and other nuisance charges to maximize “other” income, while card-holder retention and usage rates are dropping.

The marketer that continually increases the frequency of promotional e-mails because they are cheap and reach a lot of people, when opt-out and conversion rates of its very best customers continue to decline.

It shouldn’t surprise anyone that when we reward stupid, we get stupid.

But apparently, sometimes, it still does.

Retail’s zero-sum game

I’ve got some bad news for you if you are in retail in North America or Western Europe.

In just about every sector–if you strip out inflation–the size of the pie is not growing. Moreover, you would be hard pressed to argue that this will change any time soon. With few exceptions, the brutal reality is that the capacity and willingness of most of your customers’ to increase their category spending is stuck in neutral. Get used to it.

Sure, the high-end is doing a little bit better (for now), but that’s largely driven by relatively price inelastic demand and an influx of foreign shoppers. Chances are that’s not your situation.

And, yes, there is continued strong growth in e-commerce, but most of that is either channel shift or leakage to unprofitable pure-plays. Of course if you are Amazon it’s a totally different story. But you are not Amazon.

Perhaps you work at a handful of brands that offer something truly differentiated and highly relevant to a sizable part of the market. If so, you are grabbing a greater share of that pie. For the rest of us, that just means our share of the pie is shrinking. Unaddressed, that is almost certain to end badly.

More and more, the vast majority of retailers are playing in a zero-sum game. More and more, the opportunity to drive top-line through store openings has evaporated. In fact, most retailers will be closing stores and shrinking the square footage of the one’s that they keep. Shrinking to prosperity is rarely a sustainable strategy.

Simply stated, driving real growth only happens by stealing market share, by growing share of wallet. And that means being more relevant and more remarkable than the competition.

It demands developing actionable customer insight as a basis for competitive advantage. It requires abandoning much of what you got you to where you are and embracing strategies and tactics that will get you to where you need to be. It means taking on more risk than you are used to.

Sure it can be scary. But quite frankly you have no alternative.

Oh, and I’d hurry if I were you.

 

 

This is not for you

Maybe it’s somehow coded in our genes.

Or maybe society conditions us to mindlessly think that bigger is definitely better; that more is always more.

Perhaps our fear of failure drives us to cover every imaginable base?

Yet the brutal reality is that the list of organizations that require scale to succeed AND can actually pull it off is undeniably short. And friends, I’m here to tell you, chances are neither you nor your organization is on that list.

Alas the pull of mass is undeniable. Let’s reach more people. Let’s gain more subscribers. Let’s try to sell more stuff, regardless of customer relevance or potential for profit.

As media choices explode, and the world becomes ever noisier, our default tendencies seem rooted in casting a wider net and shouting louder. That’s just stupid. It’s also expensive.

The best marketing plans are crystal clear about who the product or service is for and what it takes to become highly relevant and remarkable for that precise audience. By extension, the other thing a great marketing plan does is to declare who the brand is NOT for. As most brands are at the end of the life cycle of mass-driven strategies–or never should have been there in the first place–this is a critical distinction.

Confident brands don’t chase their tail or get sucked into a race to the bottom by reflexively pursuing volume for volume’s sake. They spend their time in search of depth and meaningfulness with their core, not trying to rope some generic somebody into engagement with gimmicks or endless discounts.

More and more, there is great power in knowing who your brand is for and who it most clearly is not.

More and more, there is great freedom in declaring simply and confidently: this is not for you.

 

 

 

 

 

A lot of oysters, but no pearls

It’s worth remembering that “big data” in and of itself does not automatically lead to useful nuggets of actionable insight.

It’s worth remembering that having a lot of customers doesn’t mean you have a core group of profitable and loyal ones willing to advocate for your brand.

It’s worth remembering that generating lots of ideas doesn’t guarantee a good one will magically emerge.

It’s worth remembering that you can be plenty busy and not necessarily be working on the few things that truly make a difference.

Sure, sometimes you need a lot of oysters to be certain you will find a pearl. And maybe that kissing a lot of frogs thing helps some folks find their prince.

Most of the time, however, if we constantly remind ourselves that our goal is more pearls not more oysters, we can save ourselves a lot of time, energy and distraction.

 

HT to Counting Crows for the title inspiration.

Timid transformation

Funny how many companies speak of the fundamental shifts affecting their industries but haven’t gotten around to changing much about they way they go to market.

And isn’t it peculiar how most brands talk about putting the customer at the center of everything they do yet–with few exceptions–they are still organized by channel and cling to a heavy reliance on mass marketing techniques?

As disruptive new business models emerge and gobble up market share in just about every sector of our economy, you would think that more industry incumbents would be motivated to change and to change profoundly. Alas, mostly we get rhetoric, empty promises and tepid experiments.

The transformative forces shaping consumer behavior–the connection economy, all things digital and so on–fray traditional loyalties, make many historically strong business models obsolete and only serve to accelerate the shift in power away from brands toward the customer.

So you would think that companies would realize the need to change as fast as their consumers. But evidence suggests that this rarely happens.

It’s far from obvious that timid transformations work.  So why then is that the path you’ve chosen?

 

 

 

Different, not dead: The future of brick & mortar retail

“Reports of my death have been greatly exaggerated.” 

- Mark Twain*

Media reports highlight the dramatic shift of spending from traditional stores to e-commerce. Industry analysts and pundits predict the demise of brands with substantial investments in retail real estate. We live in an increasingly virtual world, they say, and those with deep roots in the physical realm are starting to look more and more like dinosaurs.

The transformation of shopping fueled by all things digital is profound with no signs of deceleration. The crazy little thing called the internet is changing virtually (pun intended) everything. But anyone who thinks that brick and mortar stores are going away has it wrong. Here’s why.

Brick and mortar retail can enhance the value proposition. Physical retail offers many important advantages–the ability to see and try on products, instant gratification, face-to-face customer service, social interaction and so on–that digital selling cannot readily replicate.

Purchase events matter. There is a reason that e-commerce penetration in many product categories remains low. Where the risk of buying online is perceived as high (apparel, many big ticket items), direct-to-consumer shares remain in the single digits. Brands like Zappo’s have innovated in customer service to overcome some of e-commerce’s limitations, but long-term growth potential is modest. In fact, e-commerce darlings like Bonobos, Nasty Gal and Warby Parker have begun to broaden their reach–and address flattening growth–by opening physical stores. Plenty of products–particularly perishables and low-priced items–also have underlying economic reasons why direct selling volume will remain constrained.

Consumer segments matter. Great customer intimate brands embrace the notion of treating different customers differently. When you do this, you understand the different needs, wants and behaviors of varied customer types. Depending on the product and the particular consumer, the purchase journey may begin and end at a physical store. For others, they will never set foot in a brick & mortar location. Others will research online and buy in store. You get the idea. Your mission is to understand the role your physical locations play in being intensely relevant and remarkable for the customers you need to attract, retain and grow. Then build out and customize the experience accordingly.

The blended channel is the only channel. Stop thinking channels and start thinking about a consistent, integrated customer experience for your brand. Other than products and experiences that can be delivered completely digitally, the majority of retail purchases are influenced by both the digital and physical realms. More and more data is emerging to confirm this. Your mileage will vary, but silo-ed thinking, organizations, incentives and metrics confuse, rather than illuminate.

Frictionless commerce is essential. Let’s be blunt: there’s more heat than light in the discussion of omni-channel capabilities. Strategically, the key is to hone in on how to be differentiated, relevant and remarkable for the customers you wish to serve. And then you must root out the sources of friction in your customer experience. With more consumers going back and forth between digital and physical channels in their decision journey, if you don’t make it easy to do business with you chances are there is a competitor who is ready to pounce.

Mobile adds value to physical retail. When e-commerce was either sitting at your home or office surfing the web, the distinction between digital and brick & mortar really meant something. Now with consumers untethered and having increasingly powerful devices with them 24/7, mobile becomes the great integrator–and makes the distinction between e-commerce and brick & mortar less relevant all the time.

Seismic changes ARE impacting retail. With the exception of companies in the early stages of maturity, most retailers need fewer stores and many of the stores they have will need to be smaller. But assuming that physical retail is going away any time soon is just plain wrong. The tendency to isolate e-commerce and brick & mortar performance is equally misguided.

Amazon and a handful of best-in-class e-commerce companies will continue to thrive. And new pure play digital models will undoubtedly emerge to captivate consumers and gobble up share.

But there is plenty of business to be done in physical stores. Less, but still plenty. And most of the growth in what is counted as e-commerce is not a shift to online-only brands, but rather to brands that have cohesive omni-channel strategies. Think Nordstrom and Macy’s so far. For them, stores are assets, not liabilities. But the way brick and mortar retail drives consumer engagement and loyalty is morphing quickly.

These emerging winners follow a simple but compelling formula:

More focused.

More differentiated.

More relevant.

More remarkable.

More personalized.

More integrated.

See you in the blur.

 

* This isn’t, apparently, the actual quotation, but one that has become part of his folklore.

Push “blend”

It wasn’t very long ago that engaging with most brands meant dealing with their disparate pieces. One 800 number for order status, a different one for delivery. Websites and physical stores that often bore only a passing resemblance to each other. Getting bounced from one department to the next to resolve a customer service issue or get a question answered. And then needing to start over again with each person with whom we spoke.

Then–slowly at first–some companies began to realize that customers didn’t care how we were organized. Customers didn’t want to hear about the limitations of our “legacy systems.”  We may talk about channels, but customers don’t even know what that means. And they don’t care.

Upstart brands challenged the incumbents by attacking the friction in consumers’ path to purchase. Companies as diverse as Nordstrom, Amazon, Bonobos and Warby Parker made it their job to integrate the critical pieces of the shopping experience on behalf of the customer. They challenged the traditional verticality in retail and embraced the notion that brands are horizontal.

They assembled great ingredients and then they pushed “blend.”

As retailers we may be organized by the parts and the pieces. We may make decisions on discrete components. We may measure and tweak each variable in the equation.

But at the moment of truth, when the customer decides to enter our store, click on an ad, put another item in their cart or recommend us to a friend, she’s thinking about the whole blended concoction.

 

 

Your customers don’t care

Your customers don’t care….

…that your e-commerce operation and physical stores division are run separately…

…or that your systems don’t “talk” to each other…

…or that you say “your call is very important to us” over and over again.

Your customers care that every aspect of the shopping experience–and that includes returns–is as close to frictionless as possible.

They care that they don’t have to re-start at the beginning every time they interact with someone from your organization–and that they don’t get a different answer based upon who they happen to speak with.

They care that if say “your call is very important to us” that you hire enough people to answer the phone quickly and that the person on the other line can actually resolve their problem the first time, every time.

Customer-centricity is rooted in an outside-in perspective and starts where the customer is, not where your brand happens to be.

Customer-centricity means a commitment to really knowing what customers want, showing that you know them and showing them that you truly value them. Through actions, not words.

When your customers stop caring about what you say, or they see a disconnect between what you say and what you do, it won’t be long before they stop caring to spend any time or money with you.

So what do you care to do now?

 

 

 

 

 

We may not be right for you

Bessemer Trust, a leading private wealth management firm, ran an ad in today’s Wall Street Journal with the headline “we may not be right for you.”

In the copy below, they briefly state that they are not trying to be the biggest but, for the right type of customer, they strive to be the best.

Think about how few brands have the confidence to not only make such a statement, but to act on it.

Think about how few brands even have a clear understanding of who their core customers really are, what their profitability is and how to best engender their loyalty.

Without a clear customer-centric growth strategy and the willingness to treat different customers differently, all too often brands find themselves supremely unfocused in a desperate and often frantic quest for top-line growth.

Embracing the notion that “we may not be right for you” seems risky when, for many, it is precisely what they need.