Authors: Leonardo Inghilleri,Micah Solomon,Horst Schulze
Tags: #Business
Exceptional Service, Exceptional Profit: The Secrets of Building a Five-Star Customer Service Organization (17 page)
Therefore, in product and service design, it helps to focus on the personal benefit you provide for customers in return for the price you charge. In fact, the closer you get to your customer, the more you can minimize price as a consideration—unless, in fact, high price
is
part of the benefit you are providing. (If Tiffany had a ‘‘crazy markdown sale’’ every weekend, would their blue boxes have the same cachet? At Tiffany, the famously high prices themselves confer a benefit to the customer purchasing a gift.)
A loyal customer is the least price-sensitive customer of all. But almost all customers are at least somewhat sensitive to pricing. To unsophisticated customers, a high price is generally a sign of quality.
(Homer Simpson never stoops to choosing the
cheapest
wine on the menu; connoisseur that he is, he always picks the
second
cheapest wine on the menu.) But price doesn’t always equal quality, and a sophisticated customer often understands this. For example, Costco, a discount chain whose customers skew to well-above-average per capita incomes, has changed the meaning of low prices to ‘‘We work hard all the time to find you better value.’’ They stick so consistently with this message that they have elevated it to the level of high the-ater. On a recent trip there, Micah saw
stamps
discounted at the checkout counter. Costco was apparently happy to lose five cents a roll (not even Costco is able to negotiate with the U.S. Postal Service) to ensure that the very last impression their customers get leaving the store is one of value.
What’s Worth It, and What’s Not?
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Don’t Charge a Customer for Performing the Heimlich
A touchstone in pricing is that your charges should demonstrate that you care about the customer. Goal 1, therefore, is to avoid making customers feel misused—for example, by overcharging them at vulnerable moments. There’s a
New Yorker
cartoon we love with two friends walking out of a restaurant. One turns to the other after looking at the check and says, ‘‘You’re right—they
did
charge you for the Heimlich maneuver.’’ The fact that he
expected
that line item tells you what he thought of the establishment.
Avoid nickel and diming customers by using the rule of thumb that Texas car dealer Carl Sewell made famous long ago: Is this something a friend would charge for? ‘‘If you locked yourself out of your car and you called a friend, would he charge you for running a key over?’’ asked Sewell. ‘‘No. Well, we won’t either.’’
1
Ignore Sewell’s rule (the way hotels do that not only charge you for long distance calls and bottles of water but do so at rapacious rates) and you’ll be tripping yourself up on the path to customer loyalty. Go the extra mile, for free and with a smile, and you’ll be helping yourself out as well.
Lots of companies, of course, begin their lives treating customers like friends and avoiding nickel-and-dime insults. But as they evolve, they shift to a different model: They attract customers with a base product that is fairly priced, and then they alienate them with a slew of hidden charges for necessary features. To the extent that you can get away from this model, you will have more loyal customers in the long run. For example, a consultant will do well to look at a project from the viewpoint of the client. A project for an East Coast consulting company quoted as costing $120,000—but requiring that most of the work be done in Seattle—will actually cost significantly more. If the consultant doesn’t include the additional, say, $30,000 travel charge in the estimate, the customer is going to feel short-changed when it comes up later. No amount of friendliness will keep them from feeling that you pulled a quick one. You hosed them with a smile—but you still hosed them.
If your pricing policies are not transparent, you also put your work-
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ers in a very tight spot defending them. You risk creating angry, distrust-ful customers
and
a disenchanted work force.
Money Isn’t Everything, But Money Issues
Matter—Especially How You Present Them
Pricing is a major issue because pricing, like service, is one of the elements of value. It needs to be delivered correctly: Pricing must be presented appropriately, with sensitive language, without surprises, in a way that engenders trust. In this manner, you maintain and grow the value of your service, the trust you have been building with your service, and, ultimately, the loyalty toward which you have been working so hard.
Using the Internet’s Power to Serve Your Customers and Your Goals
The Internet is the revolutionary structure of our time, not least in its potential to supercharge customer service. This is true for small businesses as well as large now that, as Chris Anderson, editor of
Wired
says, bandwidth, storage, and processing are becoming too cheap to meter
.1
But don’t imagine that the Internet is your guaranteed ally. Many otherwise superb customer-oriented enterprises have marred their reputations by letting the Internet ride
them
instead of saddling its power.
How do you harness the power of the Internet to benefit your customers and your business?
We recommend focusing on two issues. First, use the Internet correctly and robustly, as expected by your customers. Some of them, after all, are ‘‘digital natives,’’ never having known a world without the Web.
Such Web-savvy customers expect you to understand the Internet’s 115
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power and perils just as well as their other favorite companies do. Second, use the Internet’s power in a way that celebrates each customer’s individuality. Like Luke Skywalker in the presence of the Force, or Bilbo Baggins and his ring, the hidden risk of the Internet’s unprece-dented capacities is that so much power can pull you toward anti-customer behavior. When the Internet pulls you toward the Dark Side, it will take the discipline and preparation of a Jedi entrepreneur to resist it.
Managing Public Feedback Online
The speed that information travels on the Internet can turn even your ‘‘least important’’ customer into an instant public relations land mine—or gold mine. The phenomenon is different in speed and scope from how brand reputations are made and unmade offline. Online, things can change significantly for your company—positively or negatively—much faster.
Shoe merchant Zappos has benefited from this Internet wild-fire. When Zappos offered special return shipping assistance, beyond their company policies, to a woman who couldn’t figure out how to handle their standard return shipping procedures in the aftermath of her mother’s death, the good word about the company spread quickly throughout the blogosphere.
On the flip side, when a hotel in the Southwest denied Tom Farmer and Shane Atchison hotel rooms at 2 a.m. that they had been guaranteed, they presented their complaint to the hotel as a bitterly funny PowerPoint presentation—and also emailed copies of the presentation to a couple of friends, who then emailed it to a couple of
their
friends, and on and on it spread. Within weeks, the hotel had a public relations fiasco on its hands.
Simple misunderstandings and reasonable differences in
viewpoints with customers can become public so quickly on the Internet that you must take measures to anticipate the possibility.
We recommend five components to your strategy:
Building Customer Loyalty Online
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1.
Make yourself unusually easy to reach.
You want your customers to reach out to
you
, not to their blog’s readers or their Twitter followers.
You
are who can help them best, and if you help them quickly enough, their frustration is unlikely to be im-mortalized online.
2.
Respond to public complaints personally, as a human being
would.
You’ll be amazed how a personal response changes the tenor of an online discussion. After a much publicized, brutally hilarious online skewering of Virgin Atlantic food by a passenger, Richard Branson responded by inviting that passenger to be involved in future menu choices for the airline. Public sentiment turned in Virgin’s favor at that point.
We recommend you—or an executive at your company who
is terrific at such things—get in there online and let your complainant know that you care, you’re paying attention, and you’re glad to clarify and assist. (Set up a Google Alert
[www.google
.com/alerts]
for your company and for your product name, including any likely misspellings, so you will be notified immediately upon such postings.) The complainant may alter the original posting if convinced by you that it’s unfair—if this is done quickly enough, there’s a chance the original version of the posting won’t even get indexed. If not, we still recommend you get into the discussion. Place contrite, explanatory comments on the site if it accepts comments. Come across as a real person—a very, very nice one—and most discussion participants will treat you like one.
3.
Control who in your company responds—and who doesn’t.
When an Internet PR crisis emerges, you need a lockdown mentality, so that one ‘‘designated driver’’ can handle it. The first employee who notices the crisis should alert the designated driver, and nobody else should respond unless so instructed, to avoid unauthorized and potentially inflammatory or contradictory responses.
4.
Be careful not to be too ‘‘clever’’ online—it may not turn out
how you’d like.
There is a specific cyber term for disguised online 118
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cleverness, like posing as someone you’re not in order to goad the competition:
trolling
. Avoid being branded as a troll.
5.
Use your evangelists—but with care.
If you have loyal customers, then you have at least a few precious
evangelists
: people who want to stick up for you and spread the word. If you feel comfortable imposing on some of them, you can ask them to stick up for you online with a few well-placed
‘‘I’m sorry you experienced that; I’ve never had anything like that happen to me. Perhaps it was a misunderstanding.’’
You don’t want to pile it on and, again, these need to be sincere, credible postings by real customers who are willing to identify themselves online—not staffers posing as customers. (See trolls, above.)
Opinions: Everybody Has One. Evangelists: Every
Last year on a short-lived reality television show, the great British restaurateur Marco Pierre White tricked his apprentices into single-mindedly sucking up to a mystery ‘‘food critic’’—and then scolded them for doing so. In fact, there was no single critic at the restaurant.
Chef White had given
each
of the customers that night a Zagat-style rating card to fill out. Our opinion? He was preparing his apprentices for the Internet age by doing so. While even a few years ago, people might find their best hope of generating buzz in gaining the ear of one well-placed critic, someone like a
New York Times
reviewer, a
Today
Show
correspondent, or a talk show host, nowadays, in most markets, the road to success is to strive to please
every
critic—which is to say, every customer—rather than one elite keeper of the key. And to do so before the winds shift against you online.
On the other hand, building evangelists for your company is as important as ever. ‘‘[Your article] did a disservice to composers and players,’’ began a response recently in one of the largest forums covering the sector of the entertainment
industry2
in which Micah’s company, Oasis, operates. What was the ‘‘disservice’’? The article had dared to Building Customer Loyalty Online
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positively mention one of Oasis’ competitors—while neglecting to mention Oasis in the article. This unsolicited letter was the kind of publicity that every company yearns for, so Micah looked back to see how they had created such an evangelist. The source? A veteran saleswoman at Oasis, in no fewer than 20 back-and-forth online exchanges over a period of weeks, had taken it upon herself to patiently answer each question this gentleman had posed, having no idea the dividend it would ultimately pay.
The Internet Can Promote Commoditization. Avoid This
Use the incredible distributed power of the Internet, but balance it with individualization. For a simple example, consider the standard way that online FAQs (Frequently Asked Question lists) conclude by asking,
‘‘Did this answer your question?’’
For the most part, this approach works: You’ve served many customers with a single response, your customers have avoided waiting in a queue, and you get to ask each of these customers whether your answer was effective, so you can refine it for the future.
What’s not to like? Nothing—
if
you go the extra step of individualizing this feature of your website. You need to have a way to identify and reach out to the frustrated customers who answered ‘‘No’’ to the concluding question. (Remember, ‘‘
No
’’ here means the question wasn’t answered, so it should be read as meaning ‘‘
Heck no!—Help!’’).
That way you can get back to them in some fast, effective, individualized way that says, ‘‘We care that this didn’t work for you!’’
To build loyalty, build this kind of individualized content into each online service feature.
One way the Internet helps address your customers’ individuality is by allowing them to choose between ‘‘long copy’’ (in which you spell out all the fascinating/grueling details) and ‘‘short copy’’ (the short, snappy 120
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advertisement-like summary version). Since you can’t know which version a particular customer wants, provide both and let them choose.