theIdeaStudio (Customer Crossroads)

How to survive in the shark tank: go for actual loyalty, not just inertia

If you feel like you are swimming in a shark tank of competitors, you are probably right.

Today's example: we are miffed at the service from our pharmacy. We use their automated call-in service, which is nice when it works. But if you have a new prescription on file, they won't refill the old one. Even though the IVR accepts the order.

Okay, fine. It's not a perfect system.

But the pharmacy staff know that they aren't going to fill this order. They could call to let you know. After all, isn't that why the automated service confirms your phone number? Why wait until you come in to tell you this?  [No kidding. When you put these things in words, the craziness is obvious.]

Other recent incidents: they were OUT of a drug I refill regularly (along with, my guess, about a thousand other women in a one mile radius). They told me to 'check back with them every week'. Are you kidding me? I transferred the prescription to another pharmacy. They had the same problem, but at least offered to call and let me know the situation.

Here's the thing. Within a 15 minute walk from my home, there are at least 5 major competitive outlets (some under the same banner, but with a different store operator). If I care to drive a little farther, there are many more options.

If there is a consolidation in this industry, (which seem likely due to other factors), who do you think will survive?  What about you -- if there is a shakeout in your industry, will you be on the steamroller or on the road?

I ask myself these questions all the time. And honestly, I often find areas to improve. That's the nature of service businesses -- they take constant management.

My take:

State your actual operating method in words, as if it were a service directive instead of just what you do. If this approach were the rule instead of just the habit, would it still make sense? What would your customers think if they saw it in writing?

Don't rely on inertia for loyalty. Try for actual loyalty. Then you have two kinds of glue in place, and a much stronger position.

Your take:

What's your view on this? Does service count for you? Could you easily replace your current providers? How do you keep your competitive edge in the shark tank?

The battle for your attention in social media

Markets for interesting ideas

I liked the title of Michael Bungay Stanier's latest e-book, Stop the busywork!, so I went to the download site. Which turns out to be ChangeThis, another creation of marketing maestro Seth Godin.

I knew about ChangeThis, but was curious to see what they are up to, so I browsed around a bit. Not only have they got some impressive design work happening here, but some impressive stats as well.

We know that 30,000 of you subscribe via email and RSS feed, and that you download around 500,000 to 700,000 manifestos a month

The site publishes four to six manifestos each month, based on reader voting on proposals. Submit a good proposal, get it voted up, and then you will be invited to submit the 2,000 to 4,000 word document. Manifestos remain up indefinitely, so can reach very high download numbers if popular.

The ChangeThis site is now managed by 800-CEO-Read, a site that sells and reviews business books. Many of the manifestos posted on ChangeThis are actually extracts or themes related to business books, so there's a bit of a fit there.

Their submission criteria are interesting, too:

Passion. Conviction. Knowledge. Education.
Thought. Persuasion. Freedom. Appeal. Change.
Point of View. Self-Betterment. Inspiration.

I believe one reason their e-books are so successful is that they control the presentation, and the e-book format they use is gorgeous and highly readable.

A point of view is the price of admission

Although ChangeThis is about disseminating ideas, those in the idea business find it a useful place to support their brand building efforts. For example, Tom Peters has seven manifestos published.

You can only get your manifesto published when you can take a point of view in a highly engaging way, and offer thoughtful and useful information to readers. This is a tough thing for a larger organization to do, and there isn't a lot there published by a large organization. Notable exception: Amnesty International has something called Stop Child Executions. 

This kind of point of view is very difficult for corporations to take, but is pretty much essential if you are going to attract readers. And not just on this site, but in most social media. 

To win attention you must be interesting

In our information-laden world, if you want people to pay attention to your message, you must be interesting.

• You can be interesting by having a point of view on an important topic. e.g. ChangeThis
• You can be interesting by being funny. e.g.YouTube
• You can be interesting by being informative. e.g.Instructables

I personally believe corporate messaging -- aka advertising -- can be interesting. But most of it simply is not.

When you hear/see/read a lot of hand-wringing about the challenge of winning eyeballs, this is what it really comes down to. You win eyeballs by being interesting.

Boring only works in the interruption model

Last night I was watching 24 on tape. I confess, I fast-forwarded through most of the advertising. Not because I hate advertising. Just because nothing caught my attention. And boring only works if you are forced to watch.

Social media takes the attention stakes up -- way, way up. Even though a lot of social media is drivel, it is often funny drivel. Which beats boring.

Twitterati vs the banks

Twitter is one more thing that somebody said of it: "this changes everything". [656 hits for that exact phrase on Google, and probably bigger now]

One of my favorite reads is Bankervision, and author James Gardner had the audacity to go public with a Twitter-is-a-stunt-for-banks stance, releasing a firestorm in a teacup as Twitter defenders and bank bashers both rose to the challenge of commenting.

Some of the points made are interesting, though, so let me see if I can distill the main arguments.

From James:

• Banks that hang with the cool kids want to be first on everything. They like getting attention from social media mavens and marketing gurus
• Unpaid media is a compelling value proposition, but you have to be first to get any benefit
• Twitter is not economic for reaching thousands of customers with relevant messaging, because you'd need a roomful of people tweeting to do it
• It's a lot like virtual worlds -- looked important, but off the radar at the moment
• To invest real development time, banks need to see a real money business case
• Twitter experiences a lot of user churn - a lot of people go dormant after a few weeks
• Bank innovators should focus on mobile

Commenters:

• Twitter is more about listening than talking, if you are an institution. Case in point here.
• Twitter may not have reached critical mass, but it's way too soon to write it off
• Twitter is part of social media, and if you are going to be relevant to your customers, you need to find a way to be relevant in social media
• Twitter opens a channel to pass on good stuff, and limit the damage from bad stuff (Remember the Domino's viral video situation)
• Twitter has more utility when you add a bunch of other tools like Tweetdeck, Twhirl, Twitscoop, Monittor, etc
• Bankers just don't get it
• Virtual worlds that require a huge software download and big investment of time are not comparable to razor-thin Twitter apps that take almost no time and are totally mobile

Okay, I think you get the picture.
Among the more interesting remarks made on both sides is the challenge of scaling up such a system to communicate with customers.

Let's consider customer wants

The part that I think is getting short shrift here is the underlying desire, need or want. [I know, I do go on about that, don't I?]

Yes, banks and others need to monitor Twitter. But if that ever became a primary communication channel, something is seriously wrong. I do think that the banks running a help line on Twitter are probably doing a good thing. I monitor a few of these, and I don't see them getting that much traffic, and what they are doing is redirecting the enquiries, for the most part.

Long before the internet, a disgruntled customer could call their local newspaper columnist or local TV consumer reporter with their gripe. And the company would get right on the problem and fix it. This did not mean it was a primary communication channel.

Since that time, banks have made many changes. They have standards of customer service, much better quality control and quality tracking, faster decision turn-around, and many other service improvements at banks. And ombudspeople as a last resort.

Social media have a democratizing effect: it means small voices can more easily be heard. They help balance out the power imbalance of one customer versus a big institution.

The scaling thing is still a big issue

Regardless of what the communication channel is, people want more access to institutions. They want it fast, and they want it convenient. They don't want to be on hold for half an hour. Call centres were certainly scaled up to provide more convenient access. And a few institutions do a good job with e-mail, which has got to be a demanding operation, and fraught with potential problems.

Twitter seems to offer possibilities for alerts

Relatively few banks offer customers feed services for things like rates. This would appear to be a good application for Twitter. What about campaigns and promotions, announcements of new locations, all that sort of stuff.

Or maybe an automated system should tweet me about the status of my application.

Lots of other innovations are possible using these new channels.

[Note that what I am suggesting here would also work well or better on mobile. And probably be more secure]

Most consumers expect banks to innovate first in helping them stay on top of transactions and money. They expect a lot less in the 'cool' department than they do of brands like Virgin Atlantic or Pepsi.

We are all trying to figure this stuff out, for ourselves and our clients. Thanks James for putting on a nice show over there.

Do companies actually like their customers? David Lazarus suspects not...

A columnist for the LA Times, David Lazarus, has a video about product non-support and asks why we continue to shop at places that don't give us any support.

I loved these holy-state-the-obvious quotes.

"Automated switchboards -- a whole technology designed to keep you from actually talking to anybody who can help you resolve a problem."

"A lot of companies, it seems they don't even like their customers, they hold them in contempt. What's the deal with that?"

The thing is, even though Lazarus is right from the customer point of view, the challenge in service businesses is that human services get more expensive every year, while manufactured goods and technology gets cheaper every year. Outsourcing has only shifted the challenge, and not always solved it.

We don't seem to be willing, as customers, to pay for much in the way of product support, either directly or indirectly. But it's done to keep purchase prices low.

What the heck is the answer to this conflict?

I can tell you one thing that can help. Insist that your executives use the same support services the customers get, instead of the gold-plate support they are probably getting now. It'll be an eye opener.

Resources:

Mercury News story about Dell Customer Support

Responding to customers with a sense of humor: Creating good or bad publicity

I saw a good story illustrating the power of an unusual situation to create either good news or bad news. A fellow by the name of Ron Borgna in Binghamton N.Y. was frustrated by the size of increases in the water rate. So he made up his cheque for $2,509.66 on three squares of toilet paper and presented it at the water office. The office refused to accept it.

Mr. Borgna has been in dispute with the municipality since 2006, and was trying to settle the whole outstanding amount, including fees and late penalties. Clearly, the man was trying to save face. But the municipality would not let him. This is sometimes called a moral victory.

Now there is no way that you could process a cheque like that in the normal manner. It would probably be called a "special item," and would be manually handled by every bank that touched it. (With a bunch of manual handling charges to match.) But, if it had all the correct information on it, I think it would be legal.

The water authority had two options, and it chose the worst one. If they had accepted the payment, they would have demonstrated a sense of humor. By continuing to fight with the man, think of the hours of management time being wasted. Much more than the value of this unpaid bill, I would wager.

In the photo above, found here, you can see two senior people from the municipality on the left.

A better way

Instead of creating all this bad press, good press could have been created. The banks involved could have been asked to co-operate, and the city could have said, in effect, "hey, we know people hate paying bills, and we don't want to encourage this, but we have a sense of humor and we are glad to see Mr. Borgna meeting his legal obligations."

This way, they look like a bunch of heavy-handed jerks. Plus, they're not yet done with this thing!

Here are a few of the news-type references I found:
How I first heard about it: from Finextra, a financial newsletter: Man tries to pay water bill with toilet paper cheque

The American spelling, toilet paper check, generated over 500,000 entries. Associated Press covered it, so it was picked up over a wide area by networks like MSNBC and papers like the Denver Post.

Even the Canadian/British spelling toilet paper cheque yielded results: CNews, Citynews are two examples of Canadian news outlets that picked the story up.

The injustice of new customer incentives

I posted a few days ago about social justice research among primates. Jack added this provocative comment to the post:

"A thought at a customer level: Should an offer to renew a service be equitable with the offers being made to new customers? How many times do you see an offer that is available only to new subscribers?"

I have to agree. This is so one sided, it hurts. Instead of being repaid, our loyalty gets taken for granted. While these kinds of incentives are totally understandable from the company side, and they work, existing customers often do feel hurt by the lack of parity. New customers get a cool widget of some kind, and current customers get a piece of cake on customer day. Makes us feel like we would switch ourselves, if it wasn't so darn much work!

It's a sticky problem, because we know that an incentive to try out a new organization is often important to overcome the inherent change/risk avoidance of most people. How do you do that and still make current customers feel valued?

One thing I've seen is programs based on volume of business. A good example is Staples/Business Depot, which sends out coupons every quarter for bonuses and discounts based on how much business you did with them.

Some credit cards have preferred-access packages available to customers. I'm taking in the film festival later this year because VISA cardholders can buy a three-film package where festival staff pick the films for you at times you specify. Kind of a concierge approach that is really nice. It's available to all VISA customers.

Special events for customers can be a nice way to show you aren't taking them for granted. I went to a retirement seminar sponsored by my investment company some months ago. This kind of thing works great to attract new prospects, but it was offered to me as an existing customer, which I really appreciated. I know of another company that is hosting a concert series for loyal customers later this year. My lawyer sends me ball tickets every now and again, which make me feel very special, since I know I'm a very small account for him.

Pricing is an area where loyal customers are often punished for not shopping around. While we understand the mechanics of this, this too feels really unfair.

The thing is, you know what your loyal customers do for you -- you can measure it. Your costs of acquisition are long gone. You can afford to invest a little. Don't take them for granted -- do something special for them, too.

Innovation and Customer Focus at Telus: no more porn

Telus recently started offering porn on their cell-phones. [I wrote about it in a post that went up only this morning. I confess, I did write the post a few days ago, knowing this was a busy week. Sigh... ]

Telus expected some push-back from customers about the announcement, but thought it would go away. They clearly intended to ride it out. It didn't go away.

After enduring a few weeks of customer complaints on the topic, as well as a church-led boycott threat, the company has now said that it will back away from this revenue stream.

"Faced with snowballing complaints from both consumers and corporate subscribers, along with a very public rebuke from the Roman Catholic archbishop of Vancouver, Telus chief executive officer Darren Entwistle bowed to the pressure on Monday. In an hour-long call, a handful of Telus executives, including Ms. Yale and Mr. Entwistle, discussed the logistics, including timing and a communications plan." (Globe & Mail, see references)

Not everyone thinks backing away was a good idea. Russell Smith, for example, a columnist for the Globe & Mail, said

"So Telus caved. It chickened out. It succumbed to the dumbest kind of knee-jerk provincial sanctimony about the transmission of sexual images on cellphones, a piety that was ill-informed at best. On Tuesday it announced that it was backing down from its plan to sell tame soft-core pictures and movies through its cellphones. I have no idea what the fuss was about to start with."

Smith makes the point that there is lots of porn on the web already (and already available by cellphone with a web browser), on TV, on satellite, and in hotels. In fact, it appears that Telus saw the opportunity to be a content provider because they could see the trend of their customers downloading porn to the cell-phones from other content providers. So why not Telus as well, right?

Nevertheless, the company backed off because of customer concerns.

My take:

Telus understood this a business decision that was not about brand. That was a mistake. They have a brand people care about and LIKE. People like the cuddly animals, they like the advertising, they like the slogan "The future is friendly".  [Note, they are not my client, this is my opinion only]

I believe people felt this action was inconsistent with the brand, as well as being less than what they expect from a major national corporation.  The porn thing also seems to be at odds with their corporate social responsibility vision statement, assuming that the difference they want to make is a positive one:

"We are committed to becoming Canada's premier corporate citizen by making a difference in the communities where we live, work and serve."

What IS really surprising is that they got caught by surprise. Janet Yale, EVP of Corporate Affairs was  quoted in the Globe saying the reaction was unexpected.

"It was a business decision that was taken in an informed and careful way," she said, conceding that it was "the nature of the reaction that we didn't anticipate." (Globe, see reference below)

This was an innovation that did not work. I'm impressed that they responded to the problem pretty quickly. I'm a bit surprised that they didn't conduct brand-impact research -- or if they did, surprised that it did not generate a response of concern among their customers.

Doing innovative things does mean taking risks. You can reduce these risks if you are careful. But you can't really eliminate the possibility that things may go wrong. They did well to recognize that they'd goofed, and to quickly respond.

References:

"Why Telus ditched its plans to profit from porn" by Catherine McLean, Globe & Mail, Feb 22, 2007 (free for 7 days only)

"No porn on cells? Talk about hypocrisy" by Russell Smith, Globe & Mail, Feb 22, 2007 (not accessible online without a subscription)