Tag Archives: Customer lifetime value

The Razzie Goes To…

I went to see a movie Saturday afternoon and ended up seeing a lot more than I had intended. It became a great learning experience about trying to solve one problem and creating a much more severe issue in the process.

The movie itself was fine (“Darkest Hour,” a little long but great performances). It was what I saw going on several times in the lobby which provided the learning experience. Apparently, this theater has a policy that kids under age 17 cannot attend a movie Friday-Sunday after 4pm without an accompanying adult. That’s right – any movie, even a G-rated one. It’s a relatively new policy too since there were several people there who had thought they’d go into one theater while their teen-aged kids went to see something else. They were engaged with the person taking tickets as well as with the customer service desk and someone I assume was a manager. The exchanges weren’t going well.

A few things from which we all can learn. First, this policy is nowhere to be found on the theater’s website or Facebook page. From the comments on the Facebook page, some parents had even dropped off their 15-year-old kids only to be called to come back since they weren’t being admitted to a PG-13 movie. If you’re going to make a change in your policies, make them loudly and often. Obviously, people do check movie times before showing up – how about making sure that every time your theater displays that your new policy does as well? BY the way, there is still no official announcement of this on their Facebook page despite numerous (negative) comments about it.

Second. This theater could not care less about customer service. How do I know? Two ways for starters. The person at the customer service desk was doing anything but serving the customer. They had a “take it or leave it” attitude and when I heard someone say “we won’t be back to this theater” his dismissed it with a “that’s fine.” He also said the policy was a safety issue and when one mom pointed to her three 13-year-old girls, asking if they looked dangerous, his response was “yes.” Really?

The other thing that this theater does it to respond to every Facebook comment, good or bad, with exactly the same cut and paste copy. There is no acknowledgment of the specific issue nor anything beyond a link to their corporate customer service page (they’re part of a chain) which is basically kicking a local issue into a much larger, less likely to be served bin. The funny thing is the copy: We strive to give you the best experience and would like the opportunity to give you a 5-star experience, next time. Not so much, and why would anyone with an issue come back?

I do understand why this policy is in place. The theater has had trouble on Friday and Saturday nights with teenagers acting up: making noise, throwing food, using their phones to take pictures, etc. As with most things, it’s a very small group that causes the problem and the theater’s management has chosen to paint with an extremely wide brush in an attempt to solve it. In the process, they’ve alienated many customers. There is another multiplex showing most of the same movies not very far away. Which would you choose as a parent?

I wonder if they did a cost/benefit analysis? What would it cost to hire extra security on weekends? How about a few more ushers? How many admissions and concession sales are lost to the new policy? Moreover, what is the value of the goodwill seeing the extra security vs. the negative effect of this? What 16-year old wants to be told they need to have Mommy go with them to the movies?

They give out The Razzies to films or acting performances in films considered to be the worst of the year. I’d give this theater one for their “problem-solving” and customer service performances. You?


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Engaged With Engagement

Many of us who hang around in marketing circles often mention the word “engagement.”  It’s a term that expresses a connection between a consumer and a brand and is a highly sought after end result of our marketing activities.  There isn’t any question that we need it to happen but there does seem to be some question with respect to how it should be measured.  That was the topic covered but a survey from the CMO Council and reported by eMarketer

The survey asked marketers about the primary metric they used to measure engagement.  As you might expect, many of the marketers (more than a third) focused on revenue metrics.  That’s not a bad idea since there is not a heck of a lot of interpretation needed.  Either someone bought, and revenue went up, or they didn’t. Customer lifetime value, revenues per customer and overall revenue increases were the primary type of metric they used.  Then there were those who focused on things such as clicks, conversions, shares, traffic and web analytics.  These are campaign metrics, and another  30% of respondents said that these were the primary type of metrics they used.  Lead generation metrics, finance metrics, and service metrics had far fewer choices as a primary metric for measuring engagement.

Here is the thing.  As the eMarketer piece said:

Though not the most popular way to gauge successful engagement, customer service is important—and many consumers feel that good service makes them feel more positive about brands. In fact, nine in 10 internet users worldwide said so.

That gets me asking if we are trying to grow our businesses by aligning ourselves with our customers’ concerns and needs, should we not be measuring success using metrics that reflect those concerns and needs?  The above data suggests that many of us aren’t.  Sure, I get that if revenues are growing we’re probably doing something right, but maybe that’s a short-term gain based on a promotional offer or a single new product.  Have revenues grown because you’re keeping customers happy or despite the fact that they’re unhappy?  Today’s food for thought!

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Dumb and Dumber?

I did something kind of dumb the other day. I’m hoping that my bank doesn’t compound my stupidity, but I’m not hopeful. Let me give you the details since they’re a good example of how any business gets opportunities to build customer loyalty and how they often whiff on the chances.

Dumb and Dumber

(Photo credit: Wikipedia)

First, my dumb thing.  I paid a bunch of bills via my bank’s website.  I had plenty of money in one account but had failed to transfer it into the bill paying account.  Fortunately, I realized this when many of us remember stuff: just as I was going to bed.  However, since there had usually been a lag time in between when I “paid” the bills and when the bank actually transferred the money, I figured I’d do it first thing in the morning.  I got up and my bank account showed it was overdrawn.  I transferred the money from another account (in the same bank) to cover the bills and figured I was ok since I hadn’t received the email from the bank that they had paid the bills.  This is now when the bank’s opportunity began.

Just to be on the safe side, I called customer service.  The person who helped me looked at the account history and said “oh, you’re going to get hit with overdraft charges.  The good news is that even though you paid 10 bills, you max at out 5 charges at a time.”  At $37 each, that’s not such good news, actually.  She said that since the charges had not hit yet she couldn’t remove them but asked me to call back after 2 when they should be on the account and someone else would help me.  Apparently, the bank debits the money immediately even though they don’t notify you that they’ve paid the bill.

When I called back and asked to speak with a supervisor, I was told that there was nothing she could do since it was my mistake.  Let me now put this chance into context.  The supervisor saw that there was plenty of money in another account.  She saw that we have multiple checking, savings, health care, IRA, brokerage accounts and a safe deposit box with the bank.  I have a bank-issued credit card as well.  Oh – we’ve also been customers since 1981.

How was this loyalty reciprocated?  With $185 in fees.  After a few minutes, the supervisor credited back 2 of them, saying she wasn’t supposed to do this.  She suggested I call my branch and maybe someone there could help.  By now it was late on Friday and while I did speak with someone at the branch, they suggested we chat today since the managers had left.

So how did my dumb mistake lead to the bank being dumb?  First, how can a customer service supervisor not have the authority to do what she believes is best for the customer?  Either she hadn’t been empowered or she was lying to me – neither is acceptable.  Second – one thing for which my town doesn’t lack is banks.  If the $111 in fees is worth more to them than my business over 35 years, so be it.  Maybe the 3 banks literally across the street feel differently.  Ignoring the fact that banking has become commoditized to a large extent and not providing a service edge is dumb.

Great customer service means great customer retention.  Over-delivering on customer expectations and rewarding loyalty are tow of the most basic tenets of that.  I was dumb – they’re being dumber, so far.  We’ll see how I fare at the branch.

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Aligning The Wifi

Suppose you were staying the night at a hotel and got hungry. Let’s say there is a lovely restaurant down the block and you wander out to sate your hunger pangs. As you walk over you realize a game you wanted to watch comes on in 20 minutes so you get the order to go figuring you’ll eat in the room.  You turn on the game and unwrap your food when there’s a knock on the door. It’s hotel security who confiscates your food. “We have room service here, and if you want to eat you’ll use our service.” Ridiculous?

Substitute “high-speed wi-fi” for “food” and it’s true. There is an ongoing battle in the lodging world over charging guests for wi-fi and forcing them to use it by blocking guests’ access to the guests’ own hotspots. No, I’m not kidding.  You might have read about the FCC fining Marriott $600,000 for blocking guests’ hotspots in their convention centers.  I can tell you from personal experience with clients that hotels force you to use their service (and it’s not cheap and not good) in their convention halls even when you have your own.  We can argue the merits of the hotels’ case (it’s expensive to provide, they’re not running a charity, etc) but there is a broader business point.

This is yet another case where a company’s interest and a customer’s interests are not aligned.  That has to impact the value proposition to the customer.  Contrast the hotels’ thinking with Amazon’s.  This from a shareholder letter:

 I think long-term thinking squares the circle. Proactively delighting customers earns trust, which earns more business from those customers, even in new business arenas. Take a long-term view, and the interests of customers and shareholders align.

We need to take every opportunity to align our interests and those of our customers.  The $10 “resort fee” (since when is mid-town DC a resort?) we charge today may be the last revenues we ever take in from the disgruntled customer.  Foregoing it is an investment in my book.  Yours?

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The Devil You Know

The folks at Forrester issued a study on marketing and customer experience the other day and it makes a number of interesting points.

Image representing Forrester Research as depic...

Image via CrunchBase

Maybe “interesting” isn’t the right word; maybe it could be more like “disappointing” or “confusing.”  Entitled The Convergence Of Brand, Customer Experience And Marketingthe study deals with the intersection of brand, marketing, and customer experience.  One might expect those three areas to be operating in sync.  One would be wrong.

Forrester found that 63% of Chief Marketing Officers consider customer acquisition their number one priority, while only 22% give precedence to retention. Kind of a silly choice, because there is a lot of  evidence that shows that generating loyalty and holding onto existing customers is better for a brand financially  than spending resources to bring in new customers.  In fact, the 22% statistic represents a decline in the focus on retention.  In 2011, the number was 30%.

What’s a little strange is that many of the CMO‘s do believe that they are, in fact, highly customer-focused.  The research found, however, that they are highly transaction-focused and are trying to foster conversions, not conversations.  Lifetime value is only a concern to a little over a third of these folks while two-thirds focus on segmentation studies to pursue new customers.

It’s almost as if there are two completely different experiences – one for prospects and one for existing customers – while it seems obvious that those experiences should be united into a vision that derives from the brand itself.  Otherwise, as the study found, there is customer confusion, dissatisfaction and departure.

No one likes to be treated like royalty when they’re being wooed only to be given short shrift once the deal is sealed.  Even worse, if a brand is a promise to the customer, no one likes to be confused about what that promise is or how it is to be kept.  Heck, even accounting recognizes that and puts something called “goodwill” on the balance sheet.  The disconnect cited in this study is disturbing and the trends it recognizes are even more so.

I’m a believer in “the devil you know” and the value of doing everything I can for existing customers.  I’m a believer in making the brand the source of strategic thinking about customers, current and future and expressing that thinking in a cohesive way.  Are you?

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No More Megaphones

We’re discussed customer-centric marketing a lot here on the screed over the years. This morning there’s a piece of research out that reinforces many of the points we’ve brought up in those discussions. The good folks at MyBuys have released a study which is…

primary research across more than 1,100 consumers that examined how personalized marketing across channels impacts shopper attitudes and buying behavior. Survey results reveal that customer-centric marketing—the ability for retailers to engage consumers in one-to-one conversations across the customer life cycle and all touch points—increases buyer readiness, engagement and sales activity, with a record 40% of respondents now stating that they buy more from retailers who comprehensively personalize the shopping experience across channels.

What I like about this is the recognition that purchasing is a process.  People have to be ready before they’re going to ring the cash register and part of the marketing process (a big part as it turns out) is fostering that readiness.  In fact, one thing the study show is that it can detrimental (at the very least to your conversion rates) if you get people to your website in an attempt to buy before they’re ready. When people leave websites without purchasing it is most often because they were “still in the research process” (44%).  So much for the “hard sell.”  It speaks to the notion of an ongoing conversation as well as to the abandonment of a “one size fits all” marketing plan.  More complicated?  For sure.  Better payoff?  You tell me:

When customer-centric marketing is implemented across channels, retailers typically realize a full 100% increase in purchase frequency, a 50% increase in average order value and a 25% increase in conversion of cart abandoners to buyers. These and other improvements stemming from customer-centric marketing equate to delivering a 25% increase in total online sales and a 300% improvement in customer lifetime value.

So how does one go about this?  Well,  “readiness” requires finding the right product (67%) at the right price (55%). In addition, personalized promotional emails (57%) and personalized online advertising (35%) were shown to be the top vehicles to prompt consumers to purchase.  Not surprisingly, Amazon was the site to which people turned after quitting other sites while shopping.  Amazon is textbook customer-centric marketing.  My experience on the site and yours will be totally different, as will the marketing materials we receive.  Any wonder they’re the biggest?

Throw away your marketing megaphones – they might be doing more harm than good.  I suspect this behavior is going on offline as well but that’s another post.  Does that make sense?  Does the research?

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A Great Service Experience

I’ve spent a fair amount of time in this space complaining about shoddy customer service.

LAS VEGAS - MARCH 24:  Signs at the AT&T booth...

(Image credit: Getty Images via @daylife)

I’m continually surprised by how few companies emphasize the human touch in a time when technology is making commerce less human in many ways.  However, in the last couple of days I’ve had a couple of really good customer service experiences and I thought that in the interest of balance I’d spend a post or two writing about them.  I think there are some lessons to be learned from each.

The first good experience came from the folks at AT&T.  I’ve been pretty vocal about them when they pushed the phone insurance scam and I had some issues with them selling me a Blackberry over the last couple of years.  I recently took a business trip to Canada and upon landing in the Great White North I got a text telling me that I was on another network and would be incurring data roaming charges.  I read it quickly and was under the impression that the charge would be about $30 if I used under 15Mb.  Not a problem.

Imagine my surprise when I received my bill and the data roaming charges were close to $300, even though my data usage was under 15Mb.  As it turns out, the text was more about an available international data plan to which I needed to subscribe than what was going on.  My fault, I misunderstood (easy to do when you’re reading a text while rushing off a plane to make a connection).  I immediately called AT&T and after a few minutes on hold I spoke to someone in international data (which is where I was routed for some reason).  Getting to this human was not easy – from a business point of view I know why they bury the “human” option but it’s difficult to defend from a service point of view.  This person transferred me to billing, where I spent a minute explaining the issue.  Without me asking, the rep asked me to hold a minute, came back on and said I’d be credited with the full amount of the data charges and explained the international data plans to me (which I will sign up for).  No hassle, no begging, no treating me like an idiot.  What a breath of fresh air!

I’m hoping that the rep had access to see that I’d been a customer practically since cell phones were invented (like 1993?) and we have multiple phones.  That should have made it an easier refund.  If they didn’t know that, I give them even more credit for treating a customer like we all should: the reason we’re in business and someone who is given every benefit of the doubt even when they might be dead wrong.

It’s a good lesson for all of us who deal with customers (and who doesn’t!).  Despite my occasional issues with them, AT&T will continue to be my service of choice.

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