theIdeaStudio (Customer Crossroads)

Wish List, Continued: Fewer unpleasant surprises

Doing some research for a client a few weeks ago, one of the things people had to say about their service experience was approximately this: 'please make sure I know everything I need to know.'

Consumers often take responsibility for 'not knowing the right questions to ask' -- I've heard this sentiment many times in experience research. They blame themselves for not asking what they should have known to ask... crazy, isn't it? Because that's why you are talking to a representative of the company in the first place. Unless the reps are just order-takers.

It's the feeling that the company rep actually know the pitfalls, but they're not telling you unless you ask a direct question on that topic. It's like some weird game show.

I've had this experience in my business several times recently. There's a whole industry that supports qualitative marketing research, called "field." These are the people who own the facilities, make the phone calls to invite respondents, and manage all the details, like catering. No matter how carefully we try to manage the field costs, the final invoice always seems to have a little surprise. Sometimes several surprises. On a big project, by the end of the thing, it's enough to fund an upgrade in airfare, or a dirty weekend in a country inn.

And because I try not to surprise the clients with a bazillion little nickel and dime charges, these extras invariably come out of my pocket.

Even though I put up a few of the lyrics to one of the funniest songs you'll ever hear -- Master of the House -- I don't really think it's as bad as all that. But there is a reluctance to tell you everything you need to know. People want to win the bid with a low up-front cost. Then they add on everything else as you go along. 

But here's what you need to know: This kind of thing damages loyalty. Period. Full stop.

So tell your customers what they need to know. That's what the very best service operations do, when they provide advice. Full transparency. 

As for myself, one of these days I hope I'll know all the right questions to ask.

Resources:

Lyrics to "Master of the House" by Herbert Kretzmer , part of musical Les Miserables, found here.

Christmas wish list: fix the numbering on your PDF manuals, please!

A regular reader mentioned his frustration with the software manual he just downloaded. It's a 428 page manual, and all the page numbers are wrong.
We both know the problem here, right? The cover has no page number. The first few inside pages have gorpy numbers like i,ii,iii... These are conventions from the world'o'paper.

Most of these user manuals will not be published for users, however -- they are largely going to be used by people reading them online.

Wish #1: Santa, please ask them to number each page for the electronic age, so we can enter a page number in the Adobe reader nav bar, and go to the right spot the first time. Even better, how about navigational links?

Wish #2: Please, Santa, would it be asking too much to have these docs formatted landscape, so you can easily read them on your screen?

Global Alarming: the re-branding of an issue

We are having unseasonably mild weather here, a subject I discussed with a cab driver a few days ago. He told me about the cold conditions in Pakistan, where he still has family, and where the temperature now drops below zero on a regular basis -- something entirely new.
This triggered the usual blah, blah about "not sure if it's really global warming, it's not getting warm everywhere"...  followed by him saying he was calling it "global alarming".
Well, didn't that just make me sit up and take notice.

Imagine if this thing had been properly branded from the outset. You wouldn't need a science degree to get it, because we all get this when we hear the weird news about weather. We might have been a lot farther ahead.

Whatever you call it, expect it to be BIG in 2007. It might even displace innovation as the topic de jour.

Trendwatching: world of avatars

Make an avatar in your coffee break with SitePal

This is my new Sitepal avatar.  I can change the way she looks, what she's wearing, and add a short audio message. It's pretty easy to take the HTML and embed it in a web site.  And every time you change the original character, the link updates itself.

Sitepal is intended for supporting sales on your web site, however it clearly has a lot of other potential uses. When you click "play", the eyes blink and the mouth moves, and it gives a credible imitation of a real person's movements when speaking.

Let your avatar try on clothes

I got an avatar while shopping at LL Bean one day [pictured].   I don't think they have these anymore, as I haven't seen this option for a while. They have more shots of the clothes on a human model, which feels superior to me, actually -- because everything looked good on my avatar, which is a problem. But it was fun taking my measurements and building the avatar. [I tried gaining and losing weight to see what would happen -- amazingly, she still looked great in LL Bean jeans, even at 300 lbs.]

Start a secret life with the avatar of your dreams

I have a Second Life avatar as well, called Trif Sixgallery. My Second Life avatar has very ordinary clothes, and a body shape that is reasonably close to my real self. I wear a leather jacket and an orange t-shirt with brown jeans. [not pictured]

Most Second Lifers appear to be going the cosmetic enhancement route, however, and my ordinary appearance has clearly marked me as a newbie. A lot of Second Life is clearly adult-only -- the clothing you can buy in boutiques would more than challenge anything you can envision from Frederick's of Hollywood. In fact, Frederick's should probably have their own Second Life boutique, since clothing design was among the first things to be monetized.

In my newbie-ness, I thought that the Second Life environment might be an interesting place to conduct research. Turns out that at least one organization is already doing it.

It's Time to Experiment

If you don't have anything happening in Second Life, you should probably start. And get someone exploring a few other ideas along those lines as well.

You will likely hear a bunch of dismissive stuff about this. And here's what you need to say: "It's not about making money in Second Life. It's about learning how the virtual world is evolving, so we can keep up". Think of Second Life, and other applications of this type, as a university where you can experiment and learn.

Second Life is not the pinnacle, any more than Pac-Man was the pinnacle of electronic gaming. It's clunky and hard to learn. Like, if you want to build a house, you have to learn a bunch of scripting stuff. If I want to design my own clothes, it's definitely harder than it was to do it for my Barbie doll when I was 10 years old. Second Life is not the pinnacle -- it's the beginning!

When we gave the world automated transactions, we made things easier, faster, cheaper. Now we are going to make the virtual world please our sense of aesthetics, and feel more like the real world. Or at least the real fantasy world.

The green-screen is gone for good, and we're heading toward something that looks more like the metaverse envisioned by Neal Stephenson. The Diamond Age is coming.

Solving the Commoditization Problem

Marshall Sponder at WebMetricsGuru picked up the discussion on loyalty, and added some great examples of whole industries suffering the commoditization problem:

"If you look at the PC Industry - it hardly matters which brand you buy (most PCs and monitors come from the same factories in China - anyway (you did not know that?) .... only the designs are slightly different) - it's all about price and processor performance now.   

"So we might come to the concept that it's important NOT TO COMMODITIZE your service if you want it to survive - long term ...or at least - move the "goodies" up the value chain ...."

Sponder goes on to provide additional examples, such as architects who sell house plans online. They want him to raise their search engine rankings, apparently without really adding anything new or better for their customers. Customers look at the plans and see a lot of the same thing. i.e. an undifferentiated product and an undifferentiated experience.

The problem, as Sponder says, "is everywhere."  Very true.

We know the problem, what's the solution?

The solution is to segment the market based on customer attributes, desires and unmet needs, and start finding ways to serve the segments better. A commodity product or service treats everyone as if their needs were the same. How can this possibly be true for a house?

Let's look at flour, clearly a commodity. But...there is all-purpose flour, pastry flour, easy-blending flour. I pay a premium for a little can of flour that has a shaker top. It's great for making roux. Is the flour different? No idea. It's the package that is meeting my needs. And I appreciate the company more because they make that effort.

A house, for most people, is the largest purchase they will ever make. Surely there are opportunities, even for those buying their home plans on line, to add more value to your customers. [And we stand ready to do the research that would uncover these unmet needs, these opportunities to stand out from the pack, operators are standing by....]

Branding works because it meets our need to feel special and different than others. We have a self-identity, and we want to use brands that match it. Branded experiences combine the best that product and service innovation can create with the best that marketing can offer. It's real value, not fake value. And people pay for real value.

Customer Loyalty and Sacrifice: are your customers just settling for you?

The December issue of Banking Strategies (link below) has an interesting piece on customer loyalty, and introduces an interesting concept: customer sacrifice.

Commoditization dissolves loyalty

The backdrop to this story is that the whole retail banking industry is characterized by increasing commoditization. Product and price innovations are quickly matched. Reasonably fast, accurate and responsive service levels are thought to be table-stakes to compete at all.

It's tough to build loyalty in commoditized products and services. Mostly what you have is habit, not real loyalty. So customer experience is now on the radar as the way to differentiate and gather more loyal customers.

Loyalty pays - d'oh

And there is pretty significant proof that loyalty pays: this research showed that loyal custmers bring 24% more deposit business and 14% more consumer loan business to their primary bank, as well as being three times more likely to recommend their bank. These stats are not new, and many researchers have found similar data. [and dear reader, I'm sure you know this, even if you didn't know the stats!]

Defining sacrifice instead of satisfaction

The sacrifice concept is interesting. Sacrifice occurs when customers have a high desire to receive services, but do not feel that their bank [substitute your category here] is providing them. In the research discussed in the article, they identified eight experience attributes where customers are experiencing significant sacrifice, such as:

• branches open evenings and weekends
• being rewarded for the size and length of my business

"I'm getting rewards from many of the other companies I deal with, why not my bank?"

• staff at the branch have been there a long time

"It's too much trouble to get to know people at the branch. They are different every time I go in there."

• branch staff knowledgeable so don't have to refer me to specialists

"I waited in line to talk to someone and then I had to wait again to talk to the person I really needed to see."

The attributes where there is low sacrifice are areas that are either unimportant, or the level of delivery is acceptable, or both, such as:

• having a childrens' play area
• staff take time to chat with me
• offering product bundles addressing comprehensive needs, (such as home buying)

Sacrifice is measured differently from satisfaction, and this difference is important, because it potentially shows how to break through the wall of "satisfied" to "loyal."

Customer Satisfaction = what customer expects to get LESS what customer perceives they get

Customer Sacrifice = what customer wants exactly LESS what customer settles for

Are your customers settling?

An analogy is drawn to the airline industry, where the last few years of horrible service have lowered expectations. So satisfaction scores are not as low as one might expect. Sacrifice scores, on the other hand, show that few of us are getting what we'd like to get, and we're all settling. Settling equals no desire to build a loyal relationship.

Paul McAdam and B. Joseph Pine, who wrote the article, Customer Experiences Rule, say that you have to choose whether you are going to live at the commodity end of your market, or the experience end. If you choose commodity, then you need to focus on cost and prices. If you choose experience, then you will need to focus all your resources on putting the customer at the centre.

Abbott's corollary: if you aren't an 800 pound gorilla that can push unit costs waaaay down, you don't really have a choice, you need to focus on customer experience or get caught in the horrible middle, neither cheapest nor best.

References:
Customer Experiences Rule, by Paul McAdam and B. Joseph Pine II, Banking Strategies, Novenber-December 2006.

Pine was co-author, with James H. Gilmore of The Experience Economy: Work is Theatre and Every Business a Stage , 1999.   

Fun with Finishes: making personal statements with functional objects

I noticed this display of jungle-themed mice recently. I don't think there's any cachet anymore in bragging about your mouse, unless you have something exceptionally cool. So if you don't have a drawing tablet, or something like that, then maybe you want something colorful and fun.

Mostly, we define ourselves by our stuff. That's what it means to be a consumer culture. 

Check out this image below of colorful briefcases. This is a high-end stationery store that sells mostly pens, planners and portfolios. Their displays used to have nothing more radical than oxblood in the midst of a black and brown sea. Two years ago, when I bought my last briefcase, I searched high and low to find one in a nice color. This year, they are everywhere, even in Staples.

I don't think this is just about color. This is about defining your personal style in things that used to be uniform. In particular, women don't want to look like imitation business-MEN any more. They are a lot more comfortable being feminine, regardless of the role.

My take: consider how you can give your consumers/customers room to define their style within the confines of your brand. Your brand doesn't just have to stand for a color. You can give people a choice of colors, and still be distinctive.

Chanel, Nike, Volkswagen all use distinctive colors and looks, within a well defined brand.  A large percentage of the Mini-Coopers are customized, but you'd still never mistake one for something else. Customers love it when it's all about THEM, not all about YOU.

Just as much as the customer defines the brand, the brand also defines the customer.
Great brands are great because they help consumers reach for something they want. It's all about them. Is your brand saying that?