Smart Customers versus Dumb Policies (the customer will always win)

Why is it that some companies seem to go out of their way to frustrate their customers? A friend of mine related the following story about his experience with a fast-growing regional wireless company, we’ll call them Wireless North (WN for short).

My friend has four phones, unlimited texting, two data plans, and who knows how many other features in his plan. He also has two children in college. One of those children, David (not his real name, lest WN figures this out), lives in another state this semester at his co-op job. My friend got an email from WN saying David has used over half his calling minutes (400) outside the calling area. So, like any good Baby Boomer, Dad calls WN customer service to get more details. He’s told that the calling plan prohibits a customer from having more that 50% of their minutes “roaming.” He’s then told his two options are: 1) stop using the phone until David gets back into the calling area, or 2) find another provider.

Now, is it just me, or does this not make sense? WN wants a long time customer to STOP using the service or go to a competitor? Do they not realize it costs at least 5 times more to get a new customer than to keep an existing one?

Meanwhile, David, in true Millennial fashion, has a solution. “Don’t worry, Dad,” he said. “When I come home this weekend, I’ll call you before I go to bed. Leave the phone call going over night, and by morning I will have more than half my minutes in my calling area.” Problem solved.

So what can we learn?
• First, don’t underestimate the intelligence of your customers. If you come up with a policy, rule, or process that is not in their best interest, they will find a way around it.
• Second, make it easy for existing customers to find solutions when the way they use your product conflicts with a company policy. Don’t suggest they go away….they probably will.
• Third, get rid of company policies that don’t make sense (see #2).

The customer service rep was following the rules. Your customers, however, won’t. Recognize that up front and find ways to make it easy for your customers to deal with you. They are always smarter than you when it comes to spending THEIR money.

Oh, You're From New Orleans? Do You Know Drew Brees?

Feeling connected to others is a basic human need. And in these tough economic times, we are even more motivated to build or strengthen bonds we have to family, friends, co-workers, and acquaintances. Witness the remarkable growth of Facebook and LinkedIn.

That connectedness is important in customer relationships as well. A recent article in the Journal of Consumer Research describes research where pairs of participants were given brochures for a “personal trainer” and asked for feedback. The resume of one of the trainers in each paring was altered to include their birth date, which just happened to match that of the participant. The participant who saw the altered bio was more inclined to enroll than the participant who viewed the bio without the birth date.

The implication for marketers is that anything we can do to find commonality with a customer or prospect will increase our success. Not an earth-shattering finding; in fact we’ve probably known this intuitively for quite some time. But now we have proof that finding common ground is good for business.

So, the next time your server comes to your table, look at her name tag and don't be surprised if it lists her hometown. It's a way for the restaurant to connect with you. And get you to order the pie for dessert.

What Classic Rock Can Teach Us about Marketing in a Down Economy (Part Two)

This week we continue looking at what those sages from years ago (specifically the ‘60’s and ‘70’s) can teach us about getting through and thriving in this dismal economy.

#6 Tiny Dancer (Elton John) – Think small. Find and deliver small, high value projects for clients. In the baseball world, this would translate to “singles and stolen bases.” Our clients are very now focused, so find pain points that you can solve today. This cuts down the sales cycle, gives your client immediate value, and positions you either for another small project or a bigger engagement as we pull out of this recession.

#7 Light My Fire (The Doors) – Go on the offensive and make something happen for your clients. Customers are looking for creative ways to solve their problems or get what they need. Look for problems they might have overlooked and suggest a remedy. By staying connected with your customers (remember idea #2 from last week – Reach Out and Touch Somebody’s Hand?) you’re better able to uncover meaningful solutions to their problems.

#8 Different Drum (Linda Ronstadt) – Try a marketing channel you haven’t tried before. These are once in a lifetime (hopefully) days. Many of the economic theories and assumptions have been shaken to the core. So it is with marketing. Maybe now is the time to begin that newsletter you have been putting off. What about a sponsorship? Trade show? Perhaps volunteering to speak at different professional organizations will jumpstart your marketing efforts. Business as usual went out the door sometime last year. Now is the time to do the unusual.

#9 Good Vibrations (The Beach Boys) – Emphasize benefits over features…those things that “tingle” your customers. We know intuitively that customers buy benefits, not features, but these days highlighting benefits is even more critical. I know a company that took pride in discussing the fact that it had seven acres of raised floor space in their data centers. Cool factoid, but so what? How does that help the customer? Take a day to review your messaging, your collateral, and your website. Are you promoting “speeds and feeds” or are you talking about what’s in it for your customer?

#10 Thank God and Greyhound You’re Gone (Roy Clark) – Ok, so this is a country song, but it’s good advice. Some customers just have to go. You know the ones: you can count on them to return the product, tie up your customer service reps, pay late, and so on. Now is a great time to look at each customer and their profitability. If they’re costing you money (and time), fire them. And you can do so diplomatically, by raising prices, changing terms, unbundling your services, pricing for things that were free, etc. As hard as it is to lose a customer these days, losing an unprofitable customer is a win.

Make no mistake, we are in extremely challenging times. As I write this, the Dow is hovering around 6,800, the national jobless rate is now 8.1%, and 12% of home mortgages are under water. But solid, aggressive companies will survive. I’m optimistic about our future, so I leave you with advice from the (formerly) hardest working man in show business.

#11 Got Ants in My Pants and I Need to Dance (James Brown) – If we take care of our customers and bring value (in their eyes, not ours) to everything we do, our companies will be poised to lap the competition when the economy turns around.

What Classic Rock Can Teach Us about Marketing in a Down Economy

At our house, everything can be related to a classic rock song. For example, my son was getting ready to pick up his date for the homecoming dance and came out in his suit, tie, polished shoes, and somewhat combed hair. My wife and I immediately broke out the line from ZZ Top, “Every girl’s crazy ‘bout a sharp dressed man.” He rolled his eyes, but appreciated the compliment.
As bad as our present economic situation is, classic rock can give us direction for not just surviving, but thriving. Below is part one of my Top Ten list of what we marketers can learn and apply from the songs of our youth. Part two will follow next week.

1. Love the One You’re With (Crosby, Stills, and Nash) – Focus on your current customers. We all know the statistic: it’s three to seven times more expensive to get a new customer than to keep an existing one. Now is the time to make sure we’re meeting their needs, keeping them satisfied, and making it easy for them to stay with us. I recently called American Express about a billing question. After resolving the question, the representative said that since I’ve been a cardholder since 1980, he’d like to upgrade me to another card for less than what I was paying currently but one with more benefits. He didn’t have to do it, but it was a nice gesture. What made it even more appealing, is that two days earlier Discover notified me that my interest rate was increasing by a third. And, oh by the way, the increase was retroactive to the previous month. Guess which card is now my card of choice?
   


2. Reach Out and Touch Somebody’s Hand (Diana Ross) – In the down times, what do most organizations cut first (after training)? Marketing and communications. Yet, we need to reach out to current customers now more than ever. Not trying to sell them something necessarily, but to engage them. What would happen if you asked them what your company could do to help them? Short of giving your product or service away, probably nothing. But what if your customer had a problem and you knew another organization that could solve it? How do you think your customer would view you if they felt you were looking out for their success?
   


3. R-E-S-P-E-C-T (Aretha Franklin) – As you’re reaching out to them, make sure you’re abiding by the permissions they’ve given you. For example, are you honoring their opt-out preferences to your e-newsletter? What about respecting their sensibilities? The makers of Motrin found out the hard way that appearing condescending has some significant results. Customers are on edge. We need to respect them and the pain they’re going through.
   


4. Heard it Through the Grapevine (Marvin Gaye) – Lots of companies (and people, for that matter) are tempted to hunker down in bad times. They just want to get through. Successful companies take this opportunity to build networks, establish new relationships, and expand their circles of influence. They use social media such as LinkedIn and Twitter to make new contacts and reconnect with old ones. They understand how word spreads, and that take advantage of it.
   


5. Me and Bobby McGee (Janis Joplin) – As they are building networks, companies are discovering something amazing: there are partnership opportunities all over the place. I’ve found this in my practice. Firms I approached a year ago about a partnership are now contacting me. Why? Good companies want to differentiate themselves and find that edge. Take this chance to broaden your offerings by hooking up with another aggressive firm that complements what you do.
   

In part two next week, we’ll hear great advice from other songs from my college days. Stay tuned!