A Case Study On How Bad Profits Can Destroy Your Business

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Business is about profits. Yes, we all agree on this. Yet what we won’t all agree on is that some profits are really bad. To see the truth of this you just have to look at how some companies go about their business — and the way they treat their customers, how they make them feel and the negative word of mouth generated.

To put this into context I have put together a mini case study. I was inspired by the pain, frustration and anger I saw my wife go through with ADT Security and my absolute pleasure in dealing with Amazon.

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Customer Experience: The Psychological Shortcut

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Everyday we face hundreds of choices. It gets complicated. And this is why we create habitual behaviour — whether it is to take the same route to work, whether we put on our underwear before our sock everyday, or simply the same breakfast. It makes our life easier and we can go onto autopilot.

Consumer Decision Making Shortcuts

When there is no autopilot system, these choice get a bit to hectic. We look for the mental shortcuts that will make our decision making process easier. Its why we use the peer review system so often. For example,

  • If a hundred people say its good, we will try it.
  • If a blogger has a 100 000 RSS readers we follow them.
  • If some one we respect loves that product or service, we will give it a try. [Read more...]

Why Your Competition Is Your Customer’s Expectations

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We tend to think of our competition as the person who is selling the closest product and services. Banks look at other banks, cell operators look at other cell operators. You know how this work but things have changed.

You are no longer just selling a product or services.

Let me use an example to put this into context.

I live in South Africa and if I order a Kindle from Amazon.com in the States I will get it (at my front door) within three working days. Brilliant. Mind blowing and superb service and customer care.

Yet when my Blackberry breaks and I take it to a MTN service centre in Northgate for repairs. Here is what happens. I wait close to an hour (or two) to see a consultant, it then takes over two weeks to swop the hand set and get it back to the service centre. And when it gets back to you its still broken. [Read more...]

The Golden Rule of Customer Service. Use It

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Customer service often comes across as patronising; arrogant; disinterested; rude; indifferent; bored; and a general lack of care. This creates a really bad customer experience and damages customer loyalty.

In South Africa the chances are this is how you are treated when phoning a large company. Their customer service message is simple:

We have so many clients that you don’t count. And yes, we can afford to lose you.

You have no loyalty to this company (and their customer loyalty score sucks) and your motive now becomes destructive – you will tell everyone you know how bad the company is. You will also move to a new service provider when it suits you.

Yet we are all customers of someone. Ironically the same staff get the same treatment they dish out. Perhaps the easiest way to solve poor customer service is to ask those staff:

How would you like to be treated?

I can guarantee no-one wants a patronising; arrogant; disinterested; rude; indifferent; bored; and a general lack of care customer service person dealing with their problem.

When we say business is about relationships maybe it’s time to be human again. To really focus on the relationship and ask a very simple question:

Treat others as you want to be treated.

Make this your golden rule when it comes to creating customer loyalty and you can’t go wrong. I am sure that this may have a spin off effect of appealing to your staffs deeper desires and aspirations. You may just be very surprised to see what happens.

Ok, I have Your Money, Now Customer *F* Off …

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I suppose I could complain about the really bad customer experience and customer service (and indifference) of Blackberry South Africa and MTN’sinability to look after me as a client, and actually phone back a week ago when promised.

But this type of customer service is so typical of a large organisation. I don’t think it’s limited to South Africa, but I think it’s a worldwide issue. Certainly my experience shows this. I could list a list so long that will become boring.

The greatest problem is that most organisations have structured their business processes and systems to others impossible to provide customer service. They are designed to screw up the customer experience.

So what’s the problem? We have your money, now bugger off!

Let me put this into context here and expand on my Blackberry / MTN:

  • My Blackberry Bold got stolen and I went through the insurance process and got a new Blackberry Bold.
  • I collected the new phone from MTN’s “customer services” centre (they really are customer irritation centres)
  • The service consultant service consultant told me not to worry if there were any problems I could bring back within seven days.
  • There was a problem. Ironically, the B on the Blackberry keypad works intermittently. And when I took my phone back to get a new one MTN refused to take it.
  • The problem: I did not have the original box and the Blackberry phone came in. I had the barcode, and all the correct numbers, but not the physical cardboard box.
  • The MTN consultant spoke to Blackberry and they would not Blackberry budge.
  • The Blackberry Problem: Their warehousing department cannot accept anything back unless is comes back in the original box
  • The MTN consultant said they would chase this and promised to phone me later that day to see what he could do.
  • My current situation: Nothing a week later — or rather a very load but F*&K You from Blackberry and MTN. We have your business so stop complaining and bugger off.

The common customer service issue

There is no doubt that there is a large degree of indifference shown by MTN here. There is no doubt that their staff are not delivering.

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Here’s Why You Need to Know These 3 Customer Types

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Customer Loyalty Profiling for Business Growth

Not all customers are equal. Some customers will be a lot more loyal and lot more profitable than others and have a far bigger impact on your business growth.

The key for any business is to turn the few into many by understanding and managing your customer loyalty profile. By using loyalty as the benchmark that breaks down your customer profile, you can place your customers down into three categories:

  • Promoter
  • Passive
  • Detractors

Let me outline why this is so important for you to know:

Promoters

Promoters define customer loyalty. They love your brand and what it does for them in their life. It becomes an expression of their personal identity and is very important to them.

You create this type of customers loyalty when you exceed their expectations and keep on impressing them. You listen to them and take action on what they need from you. You grow and evolve through them, their needs and desires.

They love you for this and is why they account for 80 to 90% of your positive word-of-mouth.

Promoters are a lot more profitable. They buy more products from you; they stay around longer; and are a lot more forgiving when you make a mistake than other the customer types.

They form a community around you and your brands. They tell their friends about you; they resolve your problem when another customer has a problem; and they stand up for you when you’re being criticised.

The only problem with this type of customer is that they are in the minority amongst your customer base. The easiest way to get more of this type of customers is to convert your passive and hecklers customer into raving fans.

Detractors

As the name so aptly describes, this type of customers spread any to 90% of your negative word-of-mouth. There is very little customer loyalty and they have the potential to destroy your business.

A detractor is created when the buying experience did not meet up to their expectations. They are unhappy and frustrated with how they are treated; the customer service levels; or your product did not meet expectations.

This unhappiness about is a direct reflection of how you’re doing business. You have the ability to manage a Heckler’s expectations. Often all that is required is your ability to listen and take the correct action.

But as you know this easier said than done and that’s why we have built our customer loyalty model.

Detractors

Indifferent customers are just satisfied. They are not happy nor are they sad. All they are doing is waiting until something better comes along and then they’ll jump ship.

Being satisfied in today’s market environment is not enough. You need to excite your customers. It is the most cost-effective way of building your business. You just need to know what buttons to press.

What is your customer loyalty profile?

Research shows that promoters are twice as profitable as detractors.  That means without increasing your customer base you can increase your profitability by understanding your customer loyalty profile.

The best way to do this is to use the Net Promoter Model®.