What’s the cost of NOT listening to customers?

monkey A company goes through a change at the top.  The new CEO comes from a financial background.  The new CEO institutes cost-cutting measures (after all, it’s what they know).  One item cut, all the customer feedback mechanisms – that means print surveys, point-of-sales surveys, and online feedback.  The company saves some money on cutting those items, but at what expense?

Is it a real loss after all?

I’m sure most readers will say that if they stop listening to customers then how will they know what customers want, or what customers think about their products and services, and what behaviors customers are exhibiting?  All valid points and probably true.  But the company could use other measures to track customer behavior such as revenue, purchases by segment, calls to customer support, and sales staff feedback.

What is the hidden price paid?

Think about the message the CEO is sending to the staff.  “We used to gather feedback, now we don’t, so maybe we don’t really care about our customers?”  It just seems natural to most employees to listen to customers.  For those not on the front-lines how else will they know that state of customer relationships?  For those on the front-lines how will they know if their experience is consistent with other front-line employees?  I have seen employee morale at companies like this really take a hit.  This change in policy, and how the void will be filled needs a good explanation from the new CEO to keep everyone on-board.

I’m all for cost-cutting measures if they make sense.  A real business leader needs to be able to balance cost-cutting with customer-caring.  I’ve yet to see a business only cut it’s way to growth…

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What counts in customer satisfaction?

survey1.jpg  According to the 2007 Retailer Customer Satisfaction Survey what customers look for in a retailer comes down to three things – value, service, and shopping experience. The study breaks these down into cost, employee helpfulness, quality of the merchandise sold, return policies, cleanliness and ease of finding merchandise (“the six qualities”).

The survey indicates that customers value the shopping experience (“employee helpfulness,” “store cleanliness” and “ease of finding merchandise”) above all else with a key contributor to that being “employee helpfulness.” The study also attempted to correlate ACSI satisfaction scores with Net Promoter scores (NPS). There has been a lot of discussion about the usefulness of these two measures. You can see an excellent post on this topic on Ron Shevlin’s blog.

I would expect a different and much higher level of “employee helpfulness” when I shop at Nordstrom when compared to Macy’s. Interestingly, they had the same ACSI score, but Nordstrom’s NPS was 81 while Macy’s was 18! A quick look at the data showed the greatest gap in the six qualities listed above for these two stores to be in “employee helpfulness.” This affirms two of my beliefs. First, that having a “satisfied” customer doesn’t mean that they will return or recommend you to others. Second, that no single measure really predicts the health of your customer relationships. It’s better to understand the drivers of customer satisfaction, and what will cause a customer to recommend you (and actually do it) than just a single question to measure either of these.

Let Customers Co-Create Your Cause Marketing

cause_marketing.jpg  According to the 2007 Cone Cause Evolution Survey, 87% of us “are likely to switch from one brand to another (price and quality being about equal) if the other brand is associated with a good cause, an increase of more than 31 percent (from 66%) since 1993.”  The study also found that 89% of employees familiar with their company’s cause program feel a strong sense of loyalty to their company.  Cone’s chairman and CEO also stated that “When companies inspire their workforces in this way, employees will be proud and loyal and will carry forward positive messages about their companies to their families and friends.”  And let’s not forget about that positive message getting to customers as well.

The study found that:

“Many companies are choosing which issues to support based on where they can deliver the most meaningful business and social results to their stakeholders. Nine in 10 Americans say companies should support causes that are consistent with their responsible business practices. Eighty-seven percent say they want a company to support issues based on where its business can have the most social and/or environmental impacts.”

For companies that do support causes – who chooses the cause to support?  Does the quote above mean that the CEO, or Board of Directors, or investors, or employees choose?  Hey, what about having the customers choose where your corporate support goes?  After all, if you didn’t have customers buying your products and services you wouldn’t have resources to donate.  Maybe try something along the lines of Amex’s The Member Project , where members vote who will receive the funds from Amex.

You can support more than one cause, or more than one organzation as well.  Let’s say your customers want you to support local schools.  If you have multiple divisions or locations, you could donate funds to each of the schools in the same community as each of your locations.  Find a way to co-create your cause marketing strategy with your employees and your customers, so that “your” cause becomes “our” cause.

You Can’t Spell Customer ‘Success’ Without the S’s

success.jpg I’ve been working on a big “measuring the customer experience” project and it got me thinking. What is it that makes one customer initiative a success and another, well, not so successful? I didn’t want to say “failure” because I believe there is no such thing as failure, there’s only feedback. As I visited the recesses of my brain (yikes!), and researched best practices, I came up with 3 things you must consider when your company decides to focus on customers. They are the 3 S’s critical for success, and they are not mutually exclusive:

  1. Strategy
  2. Silos
  3. Staff

1. Strategy – The value of strategy should be pretty clear, and it needs to come from the top. What is your customer strategy? How are customers treated? How far will you go? Does cash flow come from products or from customers? (answer = customers). Have you taken the next step to customer advocacy? Do you want to “bump the lamp” like Disney? It needs to be defined, it needs to be clear, and it needs to be measurable. Remember, this just might be your biggest competitive advantage.

2. Silos – Is your CEO in charge of your customer strategy? Do you have a Chief Customer Officer who is charged with all things customer and can get all department heads on-board? Or is you Marketing VP expected to handle customer strategy? If it’s the latter, you may have some difficulties ahead. Customers touch every part of the business and unless you have someone with the authority to get things done, it won’t happen. You’ll need a team of senior executives from each area of the company who are responsible and rewarded for crafting and implementing your customer strategy.

3. Staff – Does the rest of your organization fully understand your customer strategy? Remember, everyone is directly serving customers, or serving someone who does. Have they been included in the design of your strategy? Does your front-line staff get it? Are they trained, supported, and rewarded based on customer success? Do they have the ability and desire to serve customers, to be empathetic, and to solve problems?

Having a wonderful CRM system and a visually rich customer dashboard doesn’t mean that customer success is a given. These three S’s often de-rail the best laid plans. If your just starting out, it’s best to acknowledge them up-front and include them in your implementation plan. If you down the road already and things are not working as expectated then take a step back and assess if these areas need some work. So, here’s to all your customer successes (wait, that’s 4 S’s …)

Do customers care if you are going “green?”

green_field.jpg  At last week’s monthly ACG meeting here in San Diego, the presentation title “Greening the Bottom Line” was delivered by Irene Stillings, Executive Director of the California Center for Sustainable Energy.  The disucssion focused on what companies are doing to make their facilities more energy efficient and the cost savings that they experience.  Along with her presentation, Ms. Stillings moderated a panel discussion with representatives for Johnson & Johnson, Qualcomm, and X-nth.

The message from Ms. Stillings is that there is a cost of indifference to going green, and to help companies get over their indifference, her organization offers both financial and educational support.  There are some really wonderful things these organizations are doing to lessen their impact and to be good corporate citizens in their communities.  I asked how they are sharing all this great stuff with their customers.  The only answer, which I expected, came from the Johnson & Johnson guy.  He said they have a Sustainability Report that is available that discusses the performance of their programs in this area.

So I wondered if that is all they are doing, do customers care if companies are going green?  Some will and some won’t.  All things being equal, some customers will purchase products from greener companies.  While others will go out of their way to purchase products from greener companies.   I was really happy to know what Qualcomm is doing since they have one of the biggest footprints of office space in San Diego.  But I couldn’t see them advertising that to those who buy their cell phone chips.

For some companies it will make sense to tell their customers what they are doing to go green.  For others the benefit may not be clear yet.  I think the biggest impact on customers for all these companies is through their employees.  Going “green” is here to stay, and employees of these companies should feel proud to work at companies that take it seriously.  That employee pride and satisfaction will spill over to customers.  Because to have satisfied customers you first need satisfied employees.  Yes, the cost of indifference is significant, and in more ways than most of us realize.

Do you have the right employees for your customer strategy?

man_smile_1.jpgWhen I make my monthly visit to my neighborhood PetCo I often stop at the near-by Jack In The Box drive-thru for a quick meal.  Up until a month ago this Jack In The Box was closed for several weeks to do some remodeling.  It just so happens that I have been there three times in the last month, which for me is a lot.  It’s also a lot of trips to the pet store, but that’s another story.

So once the Jack in the Box re-opened I was curious what improvments they made.  My answer came during my third visit of the month where I was pleasantly surprised to be greeted at the window by a very friendly and engaging young woman.  As she handed me my receipt she pointed out the invitation at the bottom of it inviting me to take their “Voice of the Customer” survey (wow, these folks all really current with their buzz words).  Little did she know that those words were like magic to my ears 🙂  I played coy and said “survey?” She then went on to tell me that I should take the survey to tell them what I thought of the remodel.  I told her I noticed they had been closed for a while and wondered why.  She very happily went on to tell me about the new interior, that I could now get lattes, new desserts, and watch TV on their new flat panel screens, etc.  She said I really should stop in and check it out. 

Now I don’t know if my next latte will be at Jack In The Box, but as I drove away I was really impressed with how excited that woman was about all the new changes.  I also wondered why I was only handed a receipt on my last two visits with no similar personal invitation to take their survey.

The critical element for all of us that work in the world of “Customers” is to not forget about the people we rely on to implement and execute our customer relationship strategy and tactics.  Be sure you have the right people in “customer facing” positions.  Will they be able to implement the strategy? Do they have the right skills, or will new staff be required? Are they engaging, are they good listeners, do they enjoy providing good service, do they want to take the time to do what is right for the customer, and do they enjoy their job?   Let’s also keep in mind we have to do a great job of communicating the strategy, why it’s important, how to make it come to life, and reward those who get it and live it.

A side note about their survey.  I recently wrote about feedback incentives.  The Jack In The Box incentive was to be entered into a sweepstakes where I could win $10,000.  Now I know that is a lot of money, but I have never found sweepstakes to be a great incentive for survey responses.  The odds are typically poor, and most people won’t be excited to respond.  But if I do win the $10K, I’ll be sure get my dog some wonderful new toys!