Tag Archives: Customer lifetime value

February 18, 2016 · 10:53 am

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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July 27, 2015 · 11:10 am

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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February 11, 2015 · 12:26 pm

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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