26
Apr 13

Is your customer service proactive?

For many companies, customer service is a reactive service. Something your customers will contact when they are purchasing a product or maybe are done purchasing it. When a problem arises, after sales.

But customer service can become an integrated part of the overall purchasing experience. After all, that is what customer service is all about: Servicing the customers – preferably upfront in stead of waiting for something to go wrong and a reason for the customers to get in touch.

This may not be in sync with the objectives most customer service organisations operate with. Often, customer service is driven as a cost center, seeking to reduce customer contact costs and increase productivity, but that is not necessarily a good driver for profitability. In stead, a balanced model integrating customer satisfaction is needed.

Hertz used to be a text book example of great customer service..

15 years ago, Hertz was a text book example of great customer service, now Hertz customer service is ranked #361 out of the 622 companies that have a CustomerServiceScoreboard.com rating with an overall score of 32.83 out of a possible 200 based on 642 ratings. This score rates Hertz customer service and customer support as Disappointing. That’s a long way from the praise in Patricia B. Seybold’s Customers.com.

Service = sales
Customer service can be considered a sales channel in which satisfied customers are good ambassadors for the brand. This view is shared by 83 pct. of the e-commerce and e-business professionals surveyed by Econsultancy for their Reducing Customer Struggle report from 2012. A mere 3 pct. of them (all European) disagrees that the customers essentially are sales people being activated by great experiences.

As ClickFox has found in their annual benchmarking survey, Consumer Tipping Points, more than half of the customers that have a bad experience with customer service will talk about it to family and friends. More than 1 out of 3 of these will cease doing business with the company. And 16 pct. will write about their (bad) experience on social channels or review sites.

Retention and loyalty
By turning the whole approach to customer service on its head – from reactive problem solution to proactive customer nurturing – it is possible to increase the value of the customers’ interaction with the company – both the value they provide, and the value they receive. Because a better experience will contribute to the customers’ loyalty and retention.

This is most effectively done by identifying and addressing the customers’ needs before they turn into a cost at customer service. Among other things, this requires a profound understanding of the customers and their communication style. If done properly, suggestions for complementary products and cross sales now become possible. Forrester predicts growth for such personalised cross- and upselling – together with a general increase in the use of proactive, outbound communication, e.g. as service alerts.

Zappos customer service

Believe the hype! From my personal experience with the world famous Zappos customer service, I’ll say: Yes, it is truly magic. Incidently, Zappos customer service is ranked #2 out of the 622 companies that have a CustomerServiceScoreboard.com rating.

Growth in digital channels
Voice remains the preferred channel for customer service, but only 26 pct. think that call centres provide excellent service. This is bad news for many companies, and one reason use of self service and digital tools like chat and email are surging. According to Forrester, there has been a 12 pct. increase in customer service via self service on the web, 24 pct. for chat, and a 25 pct. increase in community based customer service over the past 3 years.

Omnichannel customer service
Just like many other digital initiatives, customer service should be agile. As customers, we expect to be able to initiate our contact with customer service in one channel and continue it in another. According to ClickFox this is actually the most frustrating experience many people have with customer service: Having to talk to different customer service agents and starting all over every time.

Hence, integration of customer service across all channels is a crucial element if genuine, customer-centric service is what you’re after. Profound customer history across all channels is a crucial part of this. The Reducing Customer Struggle report shows, that 59 pct. of the European companies has a regular communication between call center and the digital team. But 37 pct. only has occasional communication between the two.

Unfortunately, only few companies invest in integrating their various communication channels, but not doing so means de-coupling the people in customer service from the channels they are expected to support. This means a total lack of internal transparency regarding customers’ interactions, and thus failure to meet the customer with a personalised and contextualised dialogue. And that takes us right back to the conditions for a proactive customer service.

Proactivity can begin in the social networks
A Stanford University survey has revealed that 90 pct. of executive managers understands the effect of social media on their organisation. Nonetheless, only 32 pct. of them monitors the social media in order to receive early warnings about threats towards the business. And that is a shame, because the social channels are great for proactively identifying customer service related problems before they escalate out of control. Try a Twitter search on your own brand with the #fail hashtag. Or try #epicfail if you dare.

According to a Forrester Thought Leadership paper, the highest prioritised tactical initiatives for customer service are: Securing customers get an answer to their questions during the first contact; measuring how well customer service is provided and leveraging this knowledge to improve customer service; and providing the same information to customers regardless of the channel.

But do begin with defining what customer service should be for you. Reactive or proactive?


16
Mar 13

Data drives our shopping experience

Digital is gaining ground – we use it to enhance our buying experience both for online shopping and with traditional retail. And as the presentation below indicates: When sellers leverage more data from more digital touch points to create insights and act on these, the personalized shopping experience will finally become an achievable goal.

Omnichannel
The channels that lead us from awareness at the top of the funnel (if that term is still allowed in these times of the loyalty loop), to the purchase and after sales satisfaction, is not an easy task to manage. Digital channels are increasing in numbers, as is the number of channels being used per purchase.

I may begin my customer journey on a search engine, triggered by a brand mention on one of my social networks. I could use my smartphone for the search, move to the tablet, laptop or smart TV to do a thorough product investigation, use the phone to call a shop nearby and hear if they stock the product, visit the shop to see, touch and evaluate the product, do a price comparison right there in the shop, go home, do an online chat with a competitor and purchase the product at a competitor right there, and go home to wait for the delivery. God knows how many of those interactions in different channels go to the same brand?

Digital channels are becoming more and more important when we buy – especially for our decision process. According to a Valtech white paper, almost 1 in 4 uses three different channels along the customer journey towards a purchase. That’s the reason we see the customer’s experience receiving so much attention from companies seeking to sell online: The experience must be consistent and measured for all channels and touch points – from the first search to after the sales. That’s also why “multi-channel” is rapidly being replaced by “omni-channel”: It’s not about a multitude of channels, but about creating a pervasive experience across these.

Holistic experience, not channels
Digital consumers expect an integrated and consistant experience across channels, but more often than not, they just don’t get that. Many companies prioritize to be present in the digital channels, but are more reluctant when it comes to investment in the digital customer experience.

The infamous ‘seamless’ integration is proving a challenge. It demands a fundamental shift in perspective – from internal product focus, to customer-centricity across all channels. An approach seeking to integrate processes such as merchandising, order fulfillment and inventory management at a category level, rather than for individual channels.

Customers’ loyalty is not directed towards any single channel, but depends on the experience they get across the channels. And a bad experience in one channel, infects the experience with the others. Your customers just see your brand – not all your marketing channels.

Data is raw oil
People say data is the new oil. And just like oil, data must also be refined. There is a flood of data from digital touch points – and the tendency is that more is coming, it will be more varied, and it’s all moving towards real time. It is big data, and big data can be big business, e.g. if leveraged to provide extraordinary, personal experiences.

Personalised content is a fundamental element in the digital strategy of many companies, yet according to a conversion rate optimization report by Econsultancy, only 1 in 4 is actually employing website personalisation!

The most effective (i.e. ROI creating) is to use explicit preferences from users (e.g. interests), transaction history and the social graph. 2 in 3 consumers (shoppers) are interested in personalised purchasing experiences, but they expect to remain in control (opt-in/opt-out), and they don’t want personalisation based on social data and mobile use, states a study by Cisco. Users prefer personalisation based on transaction-type data (recency, frequency, spend).

Segmented experience
In order to provide personalized content, the stream of data coming in from every touchpoint must be transformed into insights – and a good starting point is segmentation. The most used segmentation parameters are geography, demography, behavior, and transaction history (when?, how often?, how much?).

Segmentation

Segmentation is one of the most effective means to increase conversion rate, but more parameters give better results. And when segmentation is combined with life cycle mapping and content marketing, we’ll have a frame for providing the personal experience across channels that is the answer to the customers’ intent.


03
Feb 13

Do you (really) know your customers?

Market communication is typically done through traditional channels like print, tv, and websites. These channels are often referred to as Paid media (e.g. print, outdoor, tv) and Owned media (e.g. shops, publications, websites, apps). But with the increasing saturation and use of social media, the uncontrollable communication that goes on in these channels (blogs, Facebook, word-of-mouth) become more and more of a sanity check for businesses. That’s the reason they’re dubbed Earned media – here, you get what you deserve and you earn your reputation.

Customer experience
So, the most important marketing question is not what half of your marketing budget that’s wasted, but how all your marketing efforts influence the communication you can only earn? Or in other words: How good are you at fulfilling your customers’ needs? And are you sufficiently market- and customer oriented? Because the earned communication is the communication you deserve. It is rooted in those actual experiences we have with the brand’s paid and owned media. Just like our expectations to the brands we interact with is increasingly influenced by the earned communication.

Paid-Owned-Earned

That’s why it’s crucial to meet your customers’ expectations whenever they choose to interact with you through paid and owned channels. This requires investigations into what those customers actually want. Demand. Need. And when you consistently meet expectations, you can – and should – begin to work on how to exceed those expectations.

New marketing disciplines aiming to create strong and fulfilling customer experience, are surfacing. Customer Experience Management secures that the brand consistently provides extraordinary positive customer experiences – i.e. gives the customer experiences that differentiates in the market, secures that he receives a positive, holistic experience throughout all touch points – rationally as well as emotionally.

On the return side, the long term results of such dedicated work with customer experience are increased differentiation and organic growth. Growth is based on increased profitable customer behavior – typically through higher customer loyalty, increased sales, and an expanding customer base due to positive mentions (i.e. earned media!), reduced price sensitivity and transaction cost (cf. CEM Index 2012).

Not surprising, earned media are social media, and we see a lot of initiatives with social media amongst the dominating communication trends, e.g. social media as a driver for ecommerce, social customer service, social banking. Other trends also point to the fulfillment of the personal experience, e.g. by real-time personalisation (“personal shopper”), the mobile channel, location-based commerce, user-driven product development, and commerce-through-content (see this Economist article for an elaboration on this trend).

Knowledge about customers, their wants and needs, are key marketing insights. But these insights should not be limited to the yearly satisfaction survey or irregular customer interviews. Instead, they  should be driven by a structured data collection effort that can inform the marketing decisions.

Cross-data marketing
When consumers make a purchase decision today, it’s an informed decision based on often multiple interactions with the lucky company through various (digital) channels at different times. In a multi-channel world the aim should be consistent engagement with costumers, made possible by the regular collection and analysis of the increasing volume and types of data, available from more and more touch points.

Big_Data

Data is coming at us with more variety, more volume, and at higher speed.

Your customers don’t see different channels, they simply interact with your brand. And they have clear expectations of the experience of it, that allows them to buy what they want – where, when and how they want it!

A fragmented insight into the various marketing channels will be a barrier for creating the wanted customer experience. It will also make it impossible to measure the aggregated ROI. Data must be collected across channels and touch points, to feed into the foundation for making marketing decisions.

At Valtech, we call this Cross-Data Marketing, because it makes it possible to identify the very click that leads to conversion in a multi-channel digital marketing system.

Because it makes it possible to set goals for every touch point and benchmark the users on-site behavior against these. Because it makes it possible to investigate which channels contribute with new members and customers. Because it makes it possible to combine analysis of customer journeys with transaction history, and thus reach a deeper understanding of your customers’ journey through channels and touch points, and their actions through all steps that leads to a purchase.

Cross-data marketing provides the proverbial 360° customer view, establishes a foundation for data-driven decisions, and provides the means for individual real-time marketing messages across channels. Get your own copy of Valtech’s Cross-Data Marketing white paper to dig deeper.

 


04
Jan 13

Airports (should) embrace social media

With the general surge in social media use, it’s no surprise that airports too have seen their fair share of the growth. As this infographics from SimpliFlying and ACI Europe suggests, the number of European social media users have increased 800 pct. from 2011 to 2012! On the other hand, it is a surprise (to me, at least) that 61 pct. of airports have a social media enhanced 24/7 customer service.

There’s a lot more information in the full report (available from ACI-Europe here).

SimpliFlying infographic


10
Nov 12

Banking: Service innovation is up!

Do you trust your bank? According to Capgemini’s 2012 World Retail Banking report, most people don’t: Twice as many customers around the globe (31%) say they have little or no trust in the banking system, compared to the 15.3% who say that they do. Yet, satisfaction is quite high – despite the fact that banks are struggling to cut cost and optimise earnings following the financial crisis.

Banks are rapidly cutting expenses. And, as The Economist points out, there’s a huge opportunity for this in closing branches. Renting, equipping and staffing branches can easily account for 40-60% of any big retail bank’s total operating costs, with computer systems making up most of the rest. So, we won’t be too surprised to witness the digital channels becoming more and more crowded as more and more banks seek to leverage the obvious operating savings.

In fact, Accenture’s 2011 report Boosting Relevance and Returns: Improving the Digital Channel in Banking quotes a Forrester forecast that predicts spending on the digital channel to rise from 12 percent in 2009 to 21 percent in 2014 (as a percentage of overall ad spending).

Branch revenues are falling, while online revenues are increasing and will continue to grow. So banks are increasingly pushing turnover through the digital channels because that’s where the customers are. Focus is on finding the optimal balance between (digital) channels with self-service capabilities for day-to-day financial transactions, and advisory-based channels (such as the branches) for more complex client needs.

Global Distribution of Sales Volume by Channels (%), 2000–2010E

Global Distribution of Sales Volume by Channels (%), 2000–2010E

Service innovation

For banks to pull forward, digital service innovation would seem like a plausible road to take? After all, their regular differentiation levers – low prices and innovative products have outplayed their roles: Prices are already challenging margins due to competition, regulation and new capital standards, and as banks increasingly market similar products, this commoditized market has limiting product innovation impact (cf. 2011 World Retail Banking Report).

As Forrester has pointed out, although uptake of money management tools is relatively low in Europe, one-third of online Europeans are interested in tools that will give them more insight into their spending.

Many Europeans are interested in money management tools, according to Forrester.

Many Europeans are interested in money management tools, according to Forrester.

Many of these services are already in the market. They’re just not offered by the traditional banks, but put to market by new, agile players with less resistance to innovation. Examples like Mint (organizing spending), Movenbank (social based CREDscore), and Fidor Bank (global-local, social, mobile banking concept) spring to mind.

Interestingly, in the 2011 World Retail Banking Report, Capgemini found that of the six most important factors affecting why customers leave a bank, only two were tied to economical considerations, the remaining four were all about customer experience. And the same goes for the reasons affecting why customers choose a bank.

The 6 top reasons that affect why customers leave a bank.

The 6 top reasons that affect why customers leave a bank.

This pattern has changed only slightly in the 12 months between the 2011 and the 2012 World Retail Banking report, with Fees and Interest rates moving up to 2nd and 3rd place respectively, but the overall picture remains the same: There is a huge upside for creating great customer experiences for banks!

“Positive customer experiences generate loyalty, but few banks consistently deliver them. Less than 50% of customers are having positive experiences through most channels today. Banks need to work harder to ‘wow’ customers as a way to strengthen relationships, as well as to improve loyalty and profitability.”

Digital channels are preferred for by customers for most banking activities: Information, service and day-to-day account history. But when complexity increases, branches are (still) preferred.

The branch is the preferred channel for purchasing complex financial products

The branch is the preferred channel for purchasing complex financial products

The key challenge for banks is to enhance the service in the digital channels. To lead customers towards the digital – not only for simple day-to-day transactions, but also for those high-profits interactions including advice and mortgages.

If traditional banks aren’t moving soon, other players will. They already have, and may well end up owning the relation to the customer.

What do you think? Can digital compete with branches? How can banks strengthen advice through the digital channels?


23
Oct 09

Tuning Authenticity, part 1

I wrote this as a chapter some years back for the book Creative Destruction (2004) about the impact of “new technology” on the music industry. As is clear today, music has changed from being a high-brow practice with little regards for commercial aspects, to being an essential part of the marketing message in the experience economy.

The chapter (I chopped it up into 5 digestible parts) investigates the development of the musical stake in advertising which seems to be profoundly connected with values of authenticity. So, basically it’s about authenticity in youth culture: A commando-raid through music and advertising, and lessons learned by marketing.

*
When Mitsubishi Motors launched its 2003 Eclipse in the USA, it hit the American homes with a TV commercial showing a group of people cruising a night lit downtown area in the car. All in good spirit and with the girl in the passenger seat throwing some happy dance moves in a pop-locking style to the irresistible groove of the music accompanying the spot. The track was “Days Go By”, produced by UK three piece Dirty Vegas. The year before “Days Go By” had been pushed into no. 27 on the UK singles chart by DJs like Pete Tong who played it on his Radio One show for 12 weeks running. But in America, Dirty Vegas were virtually unknown when a marketing man from Mitsubishi spotted the original video for “Days Go By” in rotation at MTV in Holland.

The video showed an older businessman transformed into his younger self by break-dancing outside a retro diner in what gathering pedestrians tell us is an annual dance performed in honor of his lost love. A single shot of the man (then and now) makes up most of the video, with occasional footage of the band inside the diner.

The car commercial that followed was a smash and had people calling into radio stations to request “that song from the Mitsubishi ad.” The lush commercial struck a chord, in other words. It created a buzz, or – as phrased by Rolling Stone magazine – it had “the cumulative power of vibe.”

In fact, this vibe was exactly what Dirty Vegas themselves liked most about the video when they saw the final result. Vocalist Steve Smith told Yahoo!’s Launch that the video “didn’t seem to be about a car, it was about a vibe, you know. There’s the gang of people in the car and they’re popping, you know, and it’s inspired from our video, you know, which we see as a compliment. And we just thought, ‘It’s cool,’ you know? ”

Vegas’s Paul Harris seconds that with his remark, that adverts are “not as dull as they used to be, and what they’re trying to sell isn’t the most important thing. In the Mitsubishi ad, you don’t even know what it is until the very last second.”

Vinny Picardi, Vice President and associate creative director of Deutsch LA, the agency responsible for developing the advertising concept for Mitsubishi, remembers when they began thinking of ideas that would take Mitsubishi’s marketing in a new direction. He knew they didn’t want to make just another car commercial. Instead, Deutsch came up with a simple concept: Show people, especially young people, doing things that drivers and passengers actually do in their cars – such as singing along with songs on the radio.

“People hate commercials,” he explains. “We wanted to make little pieces of entertainment.”

Mitsubishi Motors have used a string of tracks for the various manifestations of the concept since its inception in 1998. Besides Dirty Vegas, the roster includes artists such as Propellerheads, Gus Gus, Groove Armada, and The Wiseguys. Mitsubishi have also used tracks from bigger artists, such as Iggy Pop, Ozzy Ozborne, and Curtis Mayfield, but – in Picardi’s words – “the idea is to have a tune relatively unknown to American audiences become associated with Mitsubishi, rather than have Mitsubishi become associated with an established hit.”

This is in direct opposition to the strategies recently deployed by e.g. Jaguar and the Chrysler Group, featuring mega stars Sting and Celine Dion respectively appearing in person in commercials for their products. By advertising standards, the Mitsubishi campaign is relatively innocent. The 2003 Eclipse looks more like a music video than a traditional ad. The cutting and editing is extremely tight, there’s no product commentary, and the song itself is used to set the scene more than to pitch the product.


Strategies for credibility

Such corporate lock-in with credibility is by no means a new phenomenon. In the eighties, a version of the Beach Boys’ “Good Vibrations” made up the track for a Sunkist commercial, and in 1967 Jefferson Airplane agreed to sing a Levi’s radio spot for Stretch Levi’s. But the real landmark in the partnership between music and advertising was shaped when the UK agency Bartle Bogle Hegarty began creating innovative television commercials in Europe for Levi’s 501.

At the end of the 1970s and in the early 1980s, the jeans market had become saturated. Levi’s were losing market share, and the advertising brief handed over to BBH was strategic; to reposition Levi’s against its competitors by foregrounding the authentic value of the product.

Levi’s brand values are – and have most appropriately always been – “the real deal” – to be authentic, original, and dependable. BBH wanted to achieve a general sense of a mythical America with the advertising, but an America open for contemporary associations. John Hegarty of BBH explains: “I thought it would be more interesting to do the ad with a period look. The 1950s idea wasn’t in the brief. It just happened, and out of that we established a mythical period for Levi’s. Grapevine, the music that backed the ad, was a 60s not a 50s song – it came to me simultaneously and there was no real logic to it. The aim was to portray the US without the US being boring – a US no-one could object to.”

When the ad was aired on Boxing Day 1985, it had model Nick Kamen stepping out of his 501s in a 1950ish set, to treat them to a stone wash in a small launderette, while Marvin Gaye’s soulful 1968 Motown hit “I Heard It Through the Grapevine” made up the sound frame, enhancing the atmosphere of authenticity.

A lot has been said and written about this ad. For advertising, it has been argued that it marked a turn in how it displayed a fracturing and sexualization of the male body, through the product. For Levi-Strauss, sales of its 501s shot up by 800 per cent in the wake of the ad. And by 1987 sales of Levi’s jeans were reported to be 20 times what they had been three years earlier. The ad also meant a re-entry into the charts for Marvin Gaye’s song. In fact, “I Heard It Through the Grapevine” was the first of four Levi’s-related songs to all make the Top Ten. And for the Clash who provided the song “Should I Stay or Should I Go” to the Levi’s 501 campaign in the early nineties, it was the band’s first number one hit – six years after they split up.

Hence, the launderette ad was also instrumental in developing the integrated marketing package: a commercial on the television, a single in the chart, as well as the ‘501’ logo alongside the artist’s name on the record in all the record shops. This may be defined as the turning point for music and advertising; the point that made advertisers realize the importance of selecting the right music. Music, on the other hand, has taken a long time to realize the importance of being chosen.

As that “great divide”, as Andreas Huyssen calls the incongruence and opposition between high modernism and mass culture, closed itself permanently and thus also in the academic sense brought highbrow and mass culture on the same formula, it became legitimate for artists to associate themselves with mass culture. Before that, artists were wary to be associated with mass consumption, possibly seeing the niche as the sign of true art as opposed to pop, and fearing accusations of selling-out. But post-modernity changed that.

Post-modern times have served as a unifying factor in bringing fine arts together with pop culture, a development spearheaded by the likes of Andy Warhol’s silk screens and the electronic folk of Düsseldorf four piece Kraftwerk. As the 1990s came to an end, it had become increasingly difficult for artists – musicians and producers – to sell out. In fact, when producer of electronic music Richard Melville Hall, aka Moby, actually did, media reported in awe about how he had managed to license every single track of his album “Play”.

When it first came out in the summer of 1999, the album’s compelling mixture of electronic beats and visceral blues and gospel samples drew great reviews, but catered little for radio and MTV. So, instead Moby decided to license his tracks to commercials, movies and television shows, and before long, his music was everywhere: on sitcoms and movie trailers, and on ads for Bailey’s Irish Cream, Nordstrom and American Express.


[I know, In My Heart is not on “Play”, but is featured on the later “18” (2002)]

V2, Moby’s label, signed a license for every track on the album, and allegedly more than 100 licenses in North America alone, for which Moby’s cut reached an estimated USD 1 million. But more important, the exposure opened doors at radio and MTV, who now helped to promote the album, pushing sales of the album up to a total of around 10 million copies worldwide, or around 50 times as many as the 200,000 copies Moby initially had thought “Play” might sell.