Loyalty Isn’t a Program
August 9, 2010 by Ed McLaughlin
I went into the bookstore of a major chain the other day. As I was checking out, the clerk asked, “Are you a member of our loyalty rewards program?”
“No…” I smiled, wondering if she would persist.
“Would you like to become one?”
“Not really.” Then, of course, I got curious. “How many people say yes?”
“Almost no one,” she said. “But I’m supposed to ask.”
No surprise there. Loyalty programs, once something of a novelty, don’t actually work. Consumers are smart enough to know that they’ll wind up with too much SPAM and a weekly newsletter they don’t want to read. Yet companies love to push them.
Here’s the tip: real customer loyalty has nothing to do with a program. If the experience or product is great (think The Apple Store), then we’re in. That’s it – no discounts, freebies or plastic cards necessary.
Improve Your Follow-Up
February 10, 2010 by Ed McLaughlin
Most businesses look at follow-up as something that’s easy. Wait until someone shows interest in your product, then call or email in an effort to push the sales cycle along. But that’s a call about you, not them.
There is another kind of follow-up that seems hard, but really isn’t. And since it takes place in moments other than when a sale is on the line, it’s much more powerful.
I’m not talking about generic thank you emails or satisfaction surveys. They’re boring, and do nothing to create customer loyalty or referrals. What I mean is someone from the company connects with the customer in meaningful way.
Let’s use an easy example: high-end restaurants. People aren’t dining out as much these days, and those that do are typically buying cheaper wine and ordering fewer courses. To lure customers in, many restaurants now offer value menus or run promotions. Fine. But the only time they follow-up with a customer is when confirming a reservation.
What if they decided to follow-up with patrons in a simple but unconventional* way? Someone from the restaurant could call to ask how dinner was the night before. Or the wait staff could send handwritten thank you cards to their customers. And if those doing the follow-up are empowered to resolve problems, than you’re much closer to establishing an emotional connection with your customers than you were before.
This small act is inexpensive, and chances are it will do more to generate repeat business and referrals than advertising ever will.
*This is unconventional for a restaurant, which is why it might work. The point here is that you need to figure out what is unconventional for your business and act on that.
How to Lose Customers (and Employees)
November 13, 2009 by Ed McLaughlin
How many people work for your company? If more than a handful, chances are that you have a few policies. And the odds are just as good that one or more of these policies have irked a customer or two.
I run into these policies all of the time. So do you. But yesterday, one annoyed me so much I felt compelled to write about it.
For the record, I’m on my honeymoon. Which means that if a merchant wants to upset me, they have to work very, very hard to do it.
National Car Rental pulled it off.
The experience went smoothly at first. The night before, I reserved a car. When I got the agency the next day, a car was waiting. I provided the National agent with my driver license, as did my new bride. Fine. Then I handed her my VISA debit card for payment, and it all went downhill from there.
She looked at the card as though I had just given her foreign currency. “Um, you need a major credit card to pay for this car today.”
Here’s the thing – my new bride and I have a few policies of our own. For instance, we don’t use credit cards anymore. When it comes to paying for goods and services, the first thing out of our wallet is a debit card. The second is cash. There is no third option – if we can’t pay with the first two, we don’t make the purchase.
So I politely told the representative that I wanted to pay using the debit card.
“You’re both visiting here?” We nodded yes. “Well, then I can accept a debit card if you provide me with the confirmation number of your return flight.”
This, of course, made no sense. So I asked for an explanation.
“It’s company policy.”
“I don’t understand,” I replied. “If I pay you in advance for all charges, it shouldn’t matter if I use a credit card or not.”
She looked at us for a moment, and then just said, “I’m sorry, but that’s our policy.”
“Why don’t you explain the policy to me so that I understand it?”
The problem was, she couldn’t. And that’s the point of this post.
Let’s go back to the “no credit card” policy that my wife and I have. Why do we do this? Simple – we want to take care of our money, and that process starts with spending less than we earn. Eliminating credit card usage helps to ensure that we do exactly that. In short, our policy is easy to understand, and we can communicate it to anyone that asks us about it.
Not so with the National representative. Which was hardly her fault. After additional probing, I found out that the owner of that particular location instituted the policy with no explanation. She was just the messenger, and was frustrated with her inability to communicate the mandated rule.
So here’s the obvious idea. It’s fine if you have a policy, provided that you:
- Stop and actually think about what the policy means to you and your customers (in other words, it must be fair)
- Make certain that you and your employees can explain it to customers
Otherwise, the only thing the policy will result in is lost customers. That is, if you’re lucky. Because bad or poorly communicated policies might cause you to lose employees as well. After all, in all likelihood they are just as frustrated as the customer. I saw proof of this the other day. At one point during the discussion, my wife turned to me and said, “you know, I really don’t like this company.”
Not missing a beat, the National agent said, “Neither do I.”
Life or Death, Part II
August 17, 2009 by Ed McLaughlin
Customers have expectations. And the reality is this: meeting expectations isn’t good enough. At best, this keeps customers satisfied, and satisfied customers will leave you (fast) for a better experience or lower price.
Falling short of expectations is another problem altogether.
DHL screwed up the first time I used them for overnight delivery. For some reason, the package never left the distribution center. The customer service rep told me he would try to complete delivery that same day, but couldn’t promise anything. Worst-case scenario was that it would go out the following day – 24 hours late. That wasn’t good enough, and I told him so. His response? “Sir, it’s just an express letter. I’m sure it’s not a matter of life or death.”
Shortly after that, the company announced it would cease express deliveries in the U.S. DHL closed 18 distribution hubs, eliminated 9,500 jobs, and ultimately lost $10 billion in the U.S. in five years. Coincidence? I don’t think so.
Life or Death
August 16, 2009 by Ed McLaughlin
I recently called the police to report suspicious activity. Just to clarify: when on the highway, should you ever notice another driver sitting on plastic-covered seats while wearing surgical gloves, that’s suspicious. If the driver notices you looking at him and then drops his hands out of site, that’s very suspicious.
On the phone, I gave precise information so that the police could act quickly. In 60 seconds, I outlined the situation and provided them with a description of the car, license plate number, and location. From my standpoint, they had the information they needed to act. Send someone now!
Instead, time stopped. The dispatcher repeatedly asked the same questions over and over. I patiently repeated myself, but it quickly became obvious that she was unclear how to move forward. After 10 minutes on the phone, she finally said that they would “kansas” the area.
None of this was what I expected. The problems here are obvious:
- She didn’t listen.
- She wasn’t a knowledgeable resource.
- She didn’t act in a meaningful way.
Any citizen (or customer) wants someone to listen to them. They want to talk to a knowledgeable person. And most importantly, they want that person to act on their behalf. If any one of these are absent, the interaction falls short of expectations.
Many companies insist that they not only get this, but that they deliver on it as well. In my experience, that’s hardly the reality. The consequences of this ignorance could be horrific.
Sounds like an opportunity to me.
Competing On Service
August 3, 2009 by Ed McLaughlin
A lot of companies claim that they’re in the service business. But are they? Not really – if they were, we wouldn’t hear things like:
“Due to heavy call volume…”
“I’m sorry, but that’s our policy.”
“I’m just doing my job.”
Of course, what they actually mean is:
“Due to budget constraints, we have less people available to help you.”
“I don’t know why we do it this way. We just do.”
“I don’t care.”
If your company claims to compete on service, then by all means, please do so. But talking about it and doing it are two completely different things
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