The art of upselling a customer (or many customers)

Lots of companies are tuning-in to very specific consumer buying patterns, and taking steps to increase their volume just slightly, according to a story in today’s New York Times.  Click here to see the story.

  

Implications:    Watching your customer’s behavior, and then nudging them to buy more—of products you know they typically buy—is just very smart marketing.

Are you researching, packaging and presenting your products or services in a way that recognizes a customer’s usual buying habit… and then encourages them to purchase more without taking them out of their comfort zone?

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Whose loyalty is it, anyway?

An interesting story in today’s Marketing Daily suggests that many customers are less than impressed by some of the customer rewards programs out there. Click here to read the full story.

Implications: Do you see your company’s reward program first as a direct marketing tool that lets you advertise to current and past customers… or is its primary function to foster loyalty among those consumers?

Don’t get me wrong: A good rewards program could and should do both. But if you’re focused too heavily on the advertising aspect of this tactic, and too little on the customer service component… the company/consumer relationship could be at risk. A great loyalty program doesn’t just reward the consumer for being loyal to you; it should demonstrate that your company is loyal to the consumer.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

A more perfect union: Looking at the world through the other side's eyes

Colleague Kim Willoughby shared an article that she had read in the New York Times last week. It had to do with an agreement between General Motors and the United Auto Workers union that included significant wage cuts for a part of the workforce that will help build a new compact/sub-compact car in the U.S. Click here to read the story.

Implications: I’m going to express this as an opinion, but bear with me: Both unions and companies have long thought that for one to win, the other must lose. At times, this prevailing attitude has resulted in harm to the company, the union, or both.

In light of another challenging month for the jobs market (click here to see the Bureau of Labor Statistics report, also from last week), it is not surprising to see unions and companies—finally—look at the world from each others’ point-of-view, and realize that they are mutually dependent entities… not archrivals.

Think about the participants in your own business cycle. Whether product vendors, service suppliers, customers or workers, have you ever looked at a person or company as if they were adversaries to be defeated, rather than partnerships waiting to happen? Review your negotiation/transaction process, and the answer will probably reveal itself to you.

Mike Anderson

So are you happy with your bank, or just not currently angry?

An interesting bit of research about bank customers was published in Marketing Daily this week. (Click here to read the story.) According to the Market Force Information survey, up to 40% of bank customers say they’d consider switching; that includes 9.4% of customers who claim to be satisfied or very satisfied with their current bank.

Implications: It seems you have to ask whether those satisfied customers are indeed really “happy” with their current bank, or simply were not currently angry at the moment the survey was taken.

How about your customers? Are they “happy” with you? And if so, are you happy with that? Or should the questions you ask your customers include…

• If current levels of service, quality and pricing continue, do you see yourself being our customer five years from now?
  
• Would you recommend us to your friends, if the opportunity arose?
  
• Among the services we offer, where do you see the greatest room for improvement?
  
• What’s the single most important thing we do (or don’t do) that keeps you coming back to us?

What other questions should you be asking, to make sure your customers are delighted, and not just tolerant?

Mike Anderson

Mercedes taking extra steps to determine whether websites are meeting customer needs

Because consumers increasingly rely on websites to inform their purchase decisions, another article in this morning’s Marketing Daily is a worthwhile read. While some companies are content to look at time-spent or pages-viewed to determine the success of their website, Mercedes is taking the additional step of inviting feedback from customers.

Implications: Remarks made in the story by Eric Jillard of Mercedes Benz sum this up well: “…bad experiences cost money. Customers who don't have good experiences with us are less likely to recommend us to others; a clunky or inefficient or bad experience on a Web site may signal to people that other things about the company will be difficult, or frustrating, including the vehicles and dealership experience."

Great approach, Eric. You remind us that we often judge the effectiveness of a website by its stickiness (how long people stay), clickiness (how many pages they see), and how well it serves the objectives of the company. The more prudent analytic is to determine whether it serves the objectives of the consumer.

Mike Anderson

Your table (or salesman or colonoscopy) is ready for you now

I’ve spent much of the past few weeks on the road, and I’m catching up on a few of the trend newsletters I subscribe to. I found a pretty cool story in Springwise, for example.

You know that little plastic buzzer thingy a restaurant gives you to hold while you’re waiting? The one that lights-up and vibrates when a table is available and it’s your turn to be seated. Turns out that almost all of us own one of those things… in the form of a mobile phone.
Using a tool most of their customers already have—a mobile phone—a clinic in Quebec has made a very simple innovation. If it looks like your wait will be longer than anticipated, they encourage you to wander away (for shopping, refreshments, whatever). When your appointment time is known to be imminent, they give you a call, email or text message. (No more frustrated patients losing their patience.) Click here to read more.

Implications: I can think of many ways to use this concept. If a customer leaves their car with you to be serviced, why not give them a call on their cell phone about the time the car is ready to be picked up? If a customer must wait for your staff to grab their goods in a warehouse after paying... why not invite them to wander a while longer in your store, and let them know you'll call when it's ready. Same thing for you, Target Pharmacy: Why should I have to check-back five times after placing my prescription order? You should just call me once it has been filled!

If you're already doing this, are you promoting it?

Mike Anderson

Dealership experience a critical link in the auto buying equation

For years, manufacturers have tried to differentiate vehicles, financing plans and incentive programs. But when innovation happens, it doesn’t take long for the rest of the industry to follow suit (i.e, “Keep America Rolling” after 9/11, various “Employee Discount for Everyone” gimmicks, and so on).

Well, a recent study but Foresight Research suggests that the dealership experience—at the local level—can be an important distinction in the process of buying a car.

Implications: At our house, the purchase (or shopping) experience has long influenced a final decision about the vehicles we buy… and has certainly influenced whether we return to a dealership after buying one vehicle. Turns out we’re not alone.

This is good news for anyone who competes in a “flattened” industry: When products and prices sometimes offer little help in the way of differentiation, you can still rely on the purchase experience—the quality engagement your company has with its customers—to help distinguish your company, products and services.

Mike Anderson

Are you running a sticky business?

Cleaning off my desk this morning, I came across a Campaign Spotlight from a couple weeks ago (it was in the April 5 New York Times). It focused on a product we’re all familiar with: Elmer’s Glue. It’s a great day to be Elmer’s, since so many folks are trying to repair instead of replace.

Anyway… the writer used this quote to describe one mindset created by the recent recession: “Use it up, wear it out, make it do or do without.”

Implications: Sometimes, the simple things matter most. It’s a good time to reflect on these kind of questions…

Do you have a service department? Is it getting its fair share of your marketing effort?
Is your product durable? Can that durability be proven, and is it being touted as an important attribute?

Beyond its “primary purpose,” does your product or service satisfy any secondary needs? (People are used to multi-tasking, and appreciate products that serve more than one function, too.)

Sometimes, the simple things are the easiest to overlook. If people are trying to re-use, re-fill, retain and re-purpose many of the products they own. Is that causing your company sales problems.. or service opportunities? Helping folks get more value from the products or services you offer is one way of making sure they come back.

Mike Anderson

Mastercard Marketplace: Part commerce, part research

In the digital age, it has become easy for companies to track the behaviors and preferences of their customers. Every swipe of the debit or credit card leaves a record of the purchase, and every keystroke of online shopping leaves your digital fingerprint on the visit.

Learning to mine that information for actionable data is one of the motives behind a new retail “store” being launched by Mastercard, according to this recent story from the New York Times.

Implications: This story was worth the read, not just to gain a better understanding of the kind of data that might be available through your various retail partners, but also because it provokes thought about the degree of monitoring consumers might tolerate… or not.

If sharing my information will help a company serve me better, I’m generally open to it. But if that information is not held securely, or if it is abused by the very company I’ve shared it with, or if it results in my being disqualified from purchase opportunities I would feel entitled to… my opinion could change in a big hurry.

What kinds of consumer intelligence might be available to you through various business alliances? Have you asked those allies? Are they protecting your customers’ information and interests adequately? (You know who will suffer if the customer is angered.) How could you gain more insights from the customers you serve… with their consent, and in the hopes of serving them better?

Mike Anderson

Opting-out... of privacy

My thanks to Seattle trend-watcher (and friend) JoAnne Naganawa… for pointing-out this story from USA Today on the use of “private” consumer data to solve an important public health problem.

It seems the Centers for Disease Control used loyalty-card data from consenting supermarket customers to help track-down the source of a salmonella outbreak.

Implications: There are a lot of people who are fixated on protecting our Civil Rights or our right to privacy in the digital age. But this example demonstrates a willingness by the consumer to share that personal information, when it can be harnessed to serve the greater good.

I thought the matter was worth noting.

Mike Anderson

[Update] I'm telling on you, II

Recently, I’ve posted a couple of articles at this blog which illustrated the increasing ease in which consumers can review, recommend, reprimand, or otherwise advertise for a company they’ve done business with, and that some companies are starting to monitor blogs and social media as a way of obtaining consumer insights. (“I’m telling on you!” posted 9/2/09, and “Objective analysis of subjective content,” posted 8/31/09.)

As a matter of coincidence, Phil Lempert offered another outlook on the topic just this morning at his “Supermarket Guru” web site. It pointed out a YouTube video that has received a tremendous number of views (more than 5.3 million at this writing), which contains a country music video about the singer-songwriter’s alleged experience with United Airlines. You can watch it here:


On the other hand, I came across another story this morning—this one from Marketing Daily—which suggests that few executives believe social media has achieved enough “critical mass” to be used as a valid tool in obtaining consumer feedback. (See the story “Social media not yet core feedback tool,” published today.)

Implications: As someone who travels quite a bit, I found the music video at least a little entertaining. As a marketer, I found it at least a little unnerving. I cannot know whether the singer-songwriter had a legitimate claim, because the tune does not explain details of his experience--although a story at his web site does--nor does it offer a rebuttal with the airline’s point of view. But in the artist’s perspective, at least, this virtual retaliation was justified.

That is the point: There is little United Airlines can do to respond to the allegations of this video/viral campaign. The opportunity to reconsider (or remediate) the issue has passed, as they cannot put the proverbial toothpaste back in the tube; the song has made 5.3 million impressions.

Perhaps some marketing execs have yet to monitor blogs and social media to see what consumers are saying about their company. But I’m wondering if, someday soon, those same folks will feel as if they’ve arrived late to the gate… to learn that plane has already departed.

Mike Anderson

I'm telling on you!

[Editor's note: See also, "Objective analysis of subjective content," posted 8/31/09.]

I don’t make it a habit of citing Trendwatcher.com at this site, because people who are fanatic about trends probably already read it. But the most recent e-newsletter (available on their web site by clicking here) offered some deep and valuable perspective on the consumer’s increasing ability to review your business, and share their opinion with the masses.

Why is that important? Because that same consumer trusts 90% of the reviews and recommendations that come from people they know… and even 70% of reviews that come from people they DON’T know! (That’s according to a Nielsen study quoted in the newsletter.)

Implications: The Trendwatcher story suggests that, “Reviewing is the new advertising.” In other words, making a customer wildly satisfied (or horribly disappointed) can lead to a free viral campaign… with a trust-factor built right into it!

So, ask how you might maximize the “Review Revolution?” And no, I’m not talking about embedding fake, inauthentic reviews of your own store, product or service. I’m talking about things like…

- How can you identify the “virtual critics,” and bend-over backwards to give them a great experience (just as a restaurateur might cater to a food critic from Food and Wine or the NY Times)?

- If you can’t identify those virtual critics, do you assume every customer could be one? And do you strive to super-satisfy every consumer with whom you have contact? (Remember that satisfaction is not a matter of good company policy; satisfaction lives and breathes in the experience of your customer, in response to the execution of your customer service policy.)

- What could you do to help contain disappointment, and broadcast delight? (For example, “If you have a bad experience, please tell us (we want to make it better)! If you’ve had a great experience, please tell your friends.”) Any hot-headed customer that is allowed to vent in the store is less likely to blow-up when they leave.

- What “dirty little secrets” or flaws might exist in your customer service strategy? Today, facing those issues—and either mending them or making them totally transparent—is the safest approach. Eventually, someone will discover even a discreet flaw in your customer service pattern… and post it on their blog.

- When was the last time you used a secret shopper? Who do you know that might walk your store, "incognito" for you? (Make it someone you trust, someone who will give you useful, constructive feedback, and who can be nearly invisible, relative to other customers.)

- Remember that satisfaction is built on expectation. Scrutinize your marketing to make sure it makes no promises you can’t keep. (Sometimes, disappointment comes more from a customer that over-expects... than from a company that under-delivers.)

It’s almost impossible to please every customer, every day. But considering the influence that consumer has in the digital age… total satisfaction is a goal worth shooting for.

PS: Trendwatching.com is one of the best trend sites on the planet... along side their companion site for business, Springwise.com. But then, that's just a review of my personal opinion.

Mike Anderson

When the value of a customer falls from gold to silver

Since shoppers started receiving “S&H Green Stamps” for qualifying purchases, or “depression glass” for buying Quaker Oats, loyalty rewards have been popular with consumers. The science of loyalty marketing was elevated even further when Braniff Airways introduced the first frequent-flyer program in 1980… and the strategy has become easier and more efficient as technology and the Internet have made it easy to measure and manage customer loyalty.

But what happens when an “A” client drops to “B” status? One recent study suggests that when a customer is demoted, the harm caused by the demotion can outweigh the original goodwill that was generated by the rewards program in the first place.

You can read a briefing about the study at the ANA Journal of Marketing web site; the story contains a link to the actual report.

Implications: At a time when many consumers are cutting back… companies might see many customers fall from “gold” status to merely “silver” (or from platinum to gold, from first- to second-class, five-star to four, et al). So the questions become:

• If these people are still some of your most important customers, should you really send them any kind of signal that might indicate they’re now “second class?”
• If they’re not earning platinum status, can you afford to give them platinum rewards?
• Can you afford not to?
• What kind of incentives might make the customer eager to resume (or re-earn) their elite status?
• If you had it to do over again… how would you modify the terms of your rewards program?

If you grant someone “important status” for their patronage, taking that status away is likely to be interpreted by some consumers as a signal that your company considers them “un-important.” Of course, the best time to consider and mitigate the consequence of customer demotion is before a loyalty program is ever launched. But when recession might be causing many of your loyal customers to spend less… you may have no choice but to consider those consequences right now.

Mike Anderson