Posted by Mark Brousseau
Fearing your holiday vacation will be tainted with tiny tantrums from a needy boss?
"Fear is a big driver, and when bosses - and kids- don't have control, such as with matters of a vacation from work, a 'terrible office tyrant' or 'TOT' can emerge," says Lynn Taylor. "The inner child should, but doesn't 'stay there'," says the author of "Tame Your Terrible Office Tyrant."
Taylor, a nationally recognized workplace expert, explains that despite this relatively quiet time of year, many bosses can become needy, like toddlers who have trouble modulating their authority. "Senior management can't afford to take chances in this economic environment, and want to ensure there's a tether to…you."
In Taylor's book, she offers tips on "separation anxiety" in offices that appear to be more of a schoolyard running amok than a professional company. "A needy boss wants constant assurance that you will take care of all needs and deadlines, holiday or not. Some 'TOTs' at the helm may be taking shorter vacations themselves, particularly at smaller companies, which can exacerbate the sense that you're abandoning ship," she adds.
If your boss suffers from holiday separation anxiety, Taylor suggests these tips:
•Remain unapologetic when requesting or taking the allotted time off. Everyone needs a break.
•Reassure the boss that a little break now will translate into a happier, more productive new year.
•Make solid plans in writing for who covers what while you're on vacation. Provide a "to-do list" for your boss, which will reassure and suggest that your "TOT" can go skiing without thinking about you.
•Speaking of which, set clear limits; you don't want to be skiing after getting the 'big freeze' from the boss.
"Neediness may seem benign at first," says Taylor, "but it can quickly cascade into one of 19 other bad boss behaviors."
Do you have a needy boss? If so, how do you manage them?
Showing posts with label customer satisfaction. Show all posts
Showing posts with label customer satisfaction. Show all posts
Monday, December 13, 2010
Wednesday, December 8, 2010
7 principles that lead to social media success
Posted by Mark Brousseau
Let's face it: The business world is changing. Rapidly. While the object of the game is still to drive revenue, the methods have changed. Instead of a monolithic one-way interaction, business is now being conducted through constant and meaningful two-way conversations between organizations and constituents—at every stage of organizational development. And it's a good thing, too.
Not so long ago, the object of the game was to be cutthroat and dictatorial about business, and it helped if you could check your emotions and personality at the door. Deep down, did most of us really buy the old "nothing personal—it's just business" line? Of course not! After all, building a thriving business is all about making lasting, personal, reliable connections inside and outside of your company, points out Barry Libert. And these days, there's no better way to do that than through social media—in essence, by building your company's own Social Nation.
Libert knows what he's talking about. He is the chairman and CEO of Mzinga, a company that provides social software to businesses. Quite literally, it's his job to be social media savvy. And he's adamant that building your own Social Nation is increasingly necessary in the business world.
"It's true. Your employees and your customers want to be engaged on a very personal level, and not just through a survey or an annual conference," confirms Libert, author of the new book Social Nation: How to Harness the Power of Social Media to Attract Customers, Motivate Employees, and Grow Your Business (Wiley, 2010, ISBN: 978-0-470-59926-6, $24.95, www.socialnationbook.com). "And here's the clincher: If you choose not to engage with these folks, they'll do it without you—and you definitely don't want that."
Examples of Social Nations are everywhere. Today, customers want to rely on what other diners have to say to help make decisions about where they should eat next, rather than relying on traditional restaurant advertising. Open Table has brought together a nation of diners who connect online. Amazon has brought together a nation of readers for those who want to share their feedback about books and help influence the choices of other readers. A community of travelers help us select hotels that meet our personal preferences thanks to Trip Advisor. TheStreet.com steers us toward the stocks we should buy.
And it does not stop there. These and many other companies are all beginning to understand the power of creating friends, fans, and followers to build their businesses.
"Building your Social Nation means changing what you think it means to build a company," Libert explains. "This emerging social era is about engaging everyone around you to redefine what you do and how you do it—including sales, marketing, R&D, customer support, and product development."
Still skeptical? Then take a look at the hard numbers. A 2009 study by the Nielsen Company revealed that employees, partners, and customers spent 17 percent of their online time social networking or blogging—and 83 percent more time in online social networks than the year prior. What's more, these constituencies are driving advertisers to spend an expected $2.6 billion on these social sites by 2012.
Essentially, these statistics tell us that companies need to embrace and capture the voices of their employees and customers if they want to innovate and thrive. And at the same time, customers and employees want to impact all aspects of business by sharing their opinions, criticisms, and praise with companies—and with each other.
"It's becoming increasingly clear that building communities for customers, employees, partners, and investors is critical to the future vitality of business," confirms Libert. "In this new era, you can't underestimate how important emotional and social connections are, and how crucial it is to fulfill the needs of others and the desires of customers. When you embrace the Social Nation revolution, you'll create a better, more profitable, and more viable company or organization."
Excited to learn more? Then read on to learn about Libert's seven rules for implementing a successful social media strategy in your organization and learn how real-world companies have put them into action:
Rule 1: Develop Your Social Skills. Leaders in this new Social Nation are expected to follow as much as they lead, collaborating with their colleagues while still providing structure and support. In boardrooms and offices around the world, leaders are starting to become more interconnected, to put others' needs first, and to find motivation in helping others succeed. They facilitate rather than control.
Rule 2: Let Culture Lead Your Way. When building your social organization, remember that the DNA of the company is very important, so let an open and honest culture be a guiding principle. After all, culture defines your company because it tells employees what to expect and lets customers know who you are and what you stand for.
Rule 3: Mind Your Online and Offline Manners. How you say something—be it online or off—is as important as what you say, and can help make the difference in gaining fans, friends, and followers. And remember that technology connects people in faster and more transparent ways than ever!
Rule 4: Listen, Learn, Adapt. Social intelligence enables your company to benefit from all that is happening around you—including the conversations of your constituents—so you can adapt what you do and how you do it to better meet the needs of your customers, employees, and market demands. After all, it's a good thing to understand what your customers need and want and how they interact with your products and services.
Rule 5: Include Others in Everything You Do. As an organization that is seeking to benefit from membership in the Social Nation, relying on others in every part of your company is the only way to alter what you do and how you do it to generate new revenues and increase profits.
Rule 6: Rely on Others for Growth and Innovation. Friends, fans, and followers are instrumental in achieving growth in today's connected world. Instead of the "old" method of relying on focus groups that meet behind two-way mirrors, it's time to engage customers in a two-way conversation to innovate new products and services that matter.
Rule 7: Reward Others and You Will Be Rewarded Too. As organizations focus more and more on connections and relationships, customers want to be rewarded emotionally as well as financially. Successful businesses have to meet both needs.
What do you think?
Let's face it: The business world is changing. Rapidly. While the object of the game is still to drive revenue, the methods have changed. Instead of a monolithic one-way interaction, business is now being conducted through constant and meaningful two-way conversations between organizations and constituents—at every stage of organizational development. And it's a good thing, too.
Not so long ago, the object of the game was to be cutthroat and dictatorial about business, and it helped if you could check your emotions and personality at the door. Deep down, did most of us really buy the old "nothing personal—it's just business" line? Of course not! After all, building a thriving business is all about making lasting, personal, reliable connections inside and outside of your company, points out Barry Libert. And these days, there's no better way to do that than through social media—in essence, by building your company's own Social Nation.
Libert knows what he's talking about. He is the chairman and CEO of Mzinga, a company that provides social software to businesses. Quite literally, it's his job to be social media savvy. And he's adamant that building your own Social Nation is increasingly necessary in the business world.
"It's true. Your employees and your customers want to be engaged on a very personal level, and not just through a survey or an annual conference," confirms Libert, author of the new book Social Nation: How to Harness the Power of Social Media to Attract Customers, Motivate Employees, and Grow Your Business (Wiley, 2010, ISBN: 978-0-470-59926-6, $24.95, www.socialnationbook.com). "And here's the clincher: If you choose not to engage with these folks, they'll do it without you—and you definitely don't want that."
Examples of Social Nations are everywhere. Today, customers want to rely on what other diners have to say to help make decisions about where they should eat next, rather than relying on traditional restaurant advertising. Open Table has brought together a nation of diners who connect online. Amazon has brought together a nation of readers for those who want to share their feedback about books and help influence the choices of other readers. A community of travelers help us select hotels that meet our personal preferences thanks to Trip Advisor. TheStreet.com steers us toward the stocks we should buy.
And it does not stop there. These and many other companies are all beginning to understand the power of creating friends, fans, and followers to build their businesses.
"Building your Social Nation means changing what you think it means to build a company," Libert explains. "This emerging social era is about engaging everyone around you to redefine what you do and how you do it—including sales, marketing, R&D, customer support, and product development."
Still skeptical? Then take a look at the hard numbers. A 2009 study by the Nielsen Company revealed that employees, partners, and customers spent 17 percent of their online time social networking or blogging—and 83 percent more time in online social networks than the year prior. What's more, these constituencies are driving advertisers to spend an expected $2.6 billion on these social sites by 2012.
Essentially, these statistics tell us that companies need to embrace and capture the voices of their employees and customers if they want to innovate and thrive. And at the same time, customers and employees want to impact all aspects of business by sharing their opinions, criticisms, and praise with companies—and with each other.
"It's becoming increasingly clear that building communities for customers, employees, partners, and investors is critical to the future vitality of business," confirms Libert. "In this new era, you can't underestimate how important emotional and social connections are, and how crucial it is to fulfill the needs of others and the desires of customers. When you embrace the Social Nation revolution, you'll create a better, more profitable, and more viable company or organization."
Excited to learn more? Then read on to learn about Libert's seven rules for implementing a successful social media strategy in your organization and learn how real-world companies have put them into action:
Rule 1: Develop Your Social Skills. Leaders in this new Social Nation are expected to follow as much as they lead, collaborating with their colleagues while still providing structure and support. In boardrooms and offices around the world, leaders are starting to become more interconnected, to put others' needs first, and to find motivation in helping others succeed. They facilitate rather than control.
Rule 2: Let Culture Lead Your Way. When building your social organization, remember that the DNA of the company is very important, so let an open and honest culture be a guiding principle. After all, culture defines your company because it tells employees what to expect and lets customers know who you are and what you stand for.
Rule 3: Mind Your Online and Offline Manners. How you say something—be it online or off—is as important as what you say, and can help make the difference in gaining fans, friends, and followers. And remember that technology connects people in faster and more transparent ways than ever!
Rule 4: Listen, Learn, Adapt. Social intelligence enables your company to benefit from all that is happening around you—including the conversations of your constituents—so you can adapt what you do and how you do it to better meet the needs of your customers, employees, and market demands. After all, it's a good thing to understand what your customers need and want and how they interact with your products and services.
Rule 5: Include Others in Everything You Do. As an organization that is seeking to benefit from membership in the Social Nation, relying on others in every part of your company is the only way to alter what you do and how you do it to generate new revenues and increase profits.
Rule 6: Rely on Others for Growth and Innovation. Friends, fans, and followers are instrumental in achieving growth in today's connected world. Instead of the "old" method of relying on focus groups that meet behind two-way mirrors, it's time to engage customers in a two-way conversation to innovate new products and services that matter.
Rule 7: Reward Others and You Will Be Rewarded Too. As organizations focus more and more on connections and relationships, customers want to be rewarded emotionally as well as financially. Successful businesses have to meet both needs.
What do you think?
Wednesday, December 1, 2010
7 Tips for Turning Your Customers into Fans for Life
Posted by Mark Brousseau
No matter what industry or profession you’re in, there are tons of ways to win over your customers and create brand loyalists who keep coming back. Below are a few easy-to-implement ideas that will help you turn any customer into a fan for life. And though these tips address specific professions and businesses, keep in mind that great customer service translates across industries. Carefully consider each of them and think about how you can modify them to improve the service you provide your customers:
1. Offer flexible office hours. If you’re an attorney, financial advisor, or other professional whose clients are small business owners or any other busy business-type, you might consider offering to meet with them on evenings or Saturdays rather than during regular business hours. In doing so, you show them that you understand the time they spend with their business is essential and make it easier for them to do business with you.
2. Handle problems quickly. This is especially important for hotels and other hospitality services. Understand that your guests don’t need you when everything is going as planned. It’s when something goes wrong that they need great customer service to right their proverbial ship. When you’re presented with a guest’s problem, provide solutions on the spot.
“For example, if a busy guest’s luggage zipper breaks, what can you do to help?” says Kuzmeski. “Well, you might offer a coupon for a new piece of luggage from the hotel’s store. Keep spare luggage on hand for guests with a problem. Or simply offer to tape the luggage shut to ensure it makes it home safely. Figure out what you can do to get it right when something is going wrong for your guests, and they will keep coming back.”
3. Show them what you’ve got…before the big day. If you are a caterer, baker, florist, wedding planner, or any other professional who helps plan the most important or special days of your clients’ lives, always give them an unexpected taste of what you have to offer before the big day. For example, a wedding caterer might show up at the bride’s house a week before the wedding with a sampling of hors d’oeuvres. Or a florist might send the happy couple a bouquet of flowers two weeks in advance. By doing so, you show your clients that you care about them and also give them a preview of the great service you’ll provide on the big day.
4. Offer friendlier skies (and waiting rooms). Many people today view airports, and flying in general, as the places where all great customer service goes to die. In fact, often you can walk up to a ticket counter or onto a plane and never even have the airline employee make eye contact. If you work for an airline, know that many travelers today would just like to be acknowledged. Show your customers you’re happy they chose to fly with you. The same holds true, of course, for any business in any industry.
“Medical office reception areas can also sometimes be low on great customer service,” says Kuzmeski. “Their busy employees usually have to look at a computer most of the day, and they are trying to cycle patients through as quickly as possible. But by doing something as easy as making eye contact and smiling, you can begin to alleviate a sick patient’s stress—or in the case of the airline, a passenger’s travel worries.”
5. Fix it first. This one goes out to anyone who has ever gotten their freshly dry-cleaned clothes back only to find that a button has broken off of their favorite blouse or dress shirt. Or who has gotten their car back from the repair shop only to have another problem a week later. If you are a dry cleaner, fix the button—at no charge—before your customers pick up their clothing items. By doing so, you eliminate what could become a huge inconvenience for them and ensure they won’t have any qualms about bringing their next round of dry cleaning to your business.
6. Provide worth-the-wait service, without the wait. For doctors, hospitals, veterinarians, or other medical service providers, a wonderful way to win the love of your patients is to ensure short wait times and flexible appointment times. For example, one hospital ER in Florida sponsors a billboard that shows its wait time in LCD real-time—as well as the ER wait times at other local hospitals. The sponsoring hospital has significantly lower times. By doing so, they show their patients that they understand wait time is a huge concern, and that most people fear they’ll end up spending hours and hours sitting in the waiting room if they ever have to go to the ER.
This tactic could easily be modified by other businesses where long waits are often a customer deterrent—for example, “big box” chains and popular grocery stores, phone companies like Verizon and AT&T (where the transactions take a long time), or at coffee shops that want to show they have short waits during the morning rush. Or you can do this on a smaller scale in your own medical office or small business by having your staff let clients/patients know exactly how long it will be before they can be seen.
“Obviously, the shorter the wait time the better, but by providing patients or clients with the wait length, you can show that you haven’t simply accepted that long wait times come with the territory at hospitals, medical offices, and some businesses,” says Kuzmeski. “Show them that you don’t think it’s okay if they have to wait a while to be seen, and that you understand that people want and deserve better.”
7. Give it away for free. Vistaprint, a global printing company, made jaw-dropping value their hallmark. They did so by offering 250 business cards for free, with a nominal $5.67 shipping and processing charge, to appeal to their target market: cost-conscious small businesses. Today, 66 percent of Vistaprint’s business comes from returning customers. In the first quarter of 2010 alone, they acquired 1.4 million new customers—many who started with a free order.
“Offering freebies might also be a great way to get customers into a new restaurant or boutique,” suggests Kuzmeski. “Give first-time customers a free appetizer or special discount—along with great service, of course!—and they will be happy to recommend more first-timers and to come back for more themselves.”
What do you think?
No matter what industry or profession you’re in, there are tons of ways to win over your customers and create brand loyalists who keep coming back. Below are a few easy-to-implement ideas that will help you turn any customer into a fan for life. And though these tips address specific professions and businesses, keep in mind that great customer service translates across industries. Carefully consider each of them and think about how you can modify them to improve the service you provide your customers:
1. Offer flexible office hours. If you’re an attorney, financial advisor, or other professional whose clients are small business owners or any other busy business-type, you might consider offering to meet with them on evenings or Saturdays rather than during regular business hours. In doing so, you show them that you understand the time they spend with their business is essential and make it easier for them to do business with you.
2. Handle problems quickly. This is especially important for hotels and other hospitality services. Understand that your guests don’t need you when everything is going as planned. It’s when something goes wrong that they need great customer service to right their proverbial ship. When you’re presented with a guest’s problem, provide solutions on the spot.
“For example, if a busy guest’s luggage zipper breaks, what can you do to help?” says Kuzmeski. “Well, you might offer a coupon for a new piece of luggage from the hotel’s store. Keep spare luggage on hand for guests with a problem. Or simply offer to tape the luggage shut to ensure it makes it home safely. Figure out what you can do to get it right when something is going wrong for your guests, and they will keep coming back.”
3. Show them what you’ve got…before the big day. If you are a caterer, baker, florist, wedding planner, or any other professional who helps plan the most important or special days of your clients’ lives, always give them an unexpected taste of what you have to offer before the big day. For example, a wedding caterer might show up at the bride’s house a week before the wedding with a sampling of hors d’oeuvres. Or a florist might send the happy couple a bouquet of flowers two weeks in advance. By doing so, you show your clients that you care about them and also give them a preview of the great service you’ll provide on the big day.
4. Offer friendlier skies (and waiting rooms). Many people today view airports, and flying in general, as the places where all great customer service goes to die. In fact, often you can walk up to a ticket counter or onto a plane and never even have the airline employee make eye contact. If you work for an airline, know that many travelers today would just like to be acknowledged. Show your customers you’re happy they chose to fly with you. The same holds true, of course, for any business in any industry.
“Medical office reception areas can also sometimes be low on great customer service,” says Kuzmeski. “Their busy employees usually have to look at a computer most of the day, and they are trying to cycle patients through as quickly as possible. But by doing something as easy as making eye contact and smiling, you can begin to alleviate a sick patient’s stress—or in the case of the airline, a passenger’s travel worries.”
5. Fix it first. This one goes out to anyone who has ever gotten their freshly dry-cleaned clothes back only to find that a button has broken off of their favorite blouse or dress shirt. Or who has gotten their car back from the repair shop only to have another problem a week later. If you are a dry cleaner, fix the button—at no charge—before your customers pick up their clothing items. By doing so, you eliminate what could become a huge inconvenience for them and ensure they won’t have any qualms about bringing their next round of dry cleaning to your business.
6. Provide worth-the-wait service, without the wait. For doctors, hospitals, veterinarians, or other medical service providers, a wonderful way to win the love of your patients is to ensure short wait times and flexible appointment times. For example, one hospital ER in Florida sponsors a billboard that shows its wait time in LCD real-time—as well as the ER wait times at other local hospitals. The sponsoring hospital has significantly lower times. By doing so, they show their patients that they understand wait time is a huge concern, and that most people fear they’ll end up spending hours and hours sitting in the waiting room if they ever have to go to the ER.
This tactic could easily be modified by other businesses where long waits are often a customer deterrent—for example, “big box” chains and popular grocery stores, phone companies like Verizon and AT&T (where the transactions take a long time), or at coffee shops that want to show they have short waits during the morning rush. Or you can do this on a smaller scale in your own medical office or small business by having your staff let clients/patients know exactly how long it will be before they can be seen.
“Obviously, the shorter the wait time the better, but by providing patients or clients with the wait length, you can show that you haven’t simply accepted that long wait times come with the territory at hospitals, medical offices, and some businesses,” says Kuzmeski. “Show them that you don’t think it’s okay if they have to wait a while to be seen, and that you understand that people want and deserve better.”
7. Give it away for free. Vistaprint, a global printing company, made jaw-dropping value their hallmark. They did so by offering 250 business cards for free, with a nominal $5.67 shipping and processing charge, to appeal to their target market: cost-conscious small businesses. Today, 66 percent of Vistaprint’s business comes from returning customers. In the first quarter of 2010 alone, they acquired 1.4 million new customers—many who started with a free order.
“Offering freebies might also be a great way to get customers into a new restaurant or boutique,” suggests Kuzmeski. “Give first-time customers a free appetizer or special discount—along with great service, of course!—and they will be happy to recommend more first-timers and to come back for more themselves.”
What do you think?
4 Steps to Creating FAN-atical Clients
Posted by Mark Brousseau
You wear their team colors and refuse to wear those of their greatest rival. You cheer for them win or lose but are always full of advice on how they could improve (just in case the coach ever gives you a call!). You’ll do what it takes to watch them play whether that means braving icy weather or missing yet another Sunday lunch with the family. These are the makings of a true sports fan and the factors that connect you to tens of thousands of like-minded strangers.
Yes, sports fans are loyal and passionate—so much so that, for many, their team seems like a close friend or family member. Marketing expert Maribeth Kuzmeski says this intense emotional connection to what is essentially just another brand begs the question: What can today’s business owners do to make their customers as passionate and loyal to their products as sports fans are to their favorite teams?
“I am a huge Green Bay Packers fan,” says Kuzmeski, author of the new book …And the Clients Went Wild! How Savvy Professionals Win All the Business They Want (Wiley, 2010, ISBN: 978-0-470-60176-1, $24.95, www.AndTheClientsWentWild.com). “I learned about football, the Packers, and what it means to be a fan from my football-loving grandmother. We cheered for our team when they were terrible and basked in the glow of the wins when they were better. But we never considered moving to another.”
While Kuzmeski now lives in a different football town where another big NFL franchise gets all the attention, she insists that the Packers are still “my team.” And it’s that level of loyalty that she strives to help her clients create in their customers.
“Fan loyalty is an emotional connection that’s often stronger than any other loyalty, frequently due to generational or family-based connections—or, for those who fiercely cheer for their college, or even high school, alma maters, connections based on nostalgia,” she adds. “Many business owners today might assume that there is no way they can elicit such passion from their customers, but with the right strategies, it is possible.”
In her new book, Kuzmeski explains that in order to truly get clients to “go wild” about your business, there must be an overriding and strong emotional connection—similar to the one you might feel for your favorite sports team.
“Success is all in what you offer and how you offer it,” she says. “You can get others to connect to your company, product, or service by passionately delivering whatever you have to offer. This is a true differentiator, because so few people and businesses actually act with this kind of enthusiasm. Thus, when you exhibit it, your customers and potential customers will take notice.”
If you want to learn how to create a die-hard-sports-fan level of loyalty among your customers, read on for Kuzmeski’s four absolutes for inspiring that kind of passion:
1. Offer something unique. Whatever you’re offering your customers can’t just be better; it has to be different. In order to gain exposure, it helps to be or to offer something unique—or do something that no one else dares.
A great example of a company that understands the “different is better” mantra is Buc-ee’s gas stations. They have focused their number-one offering on what people dread most about stopping at a gas station: the bathrooms! Each of the thirty locations has incredibly clean, substantially sized bathrooms, along with full-time attendants to keep them in tip-top shape. And happy customers regularly post testimonials on the company’s blog. Buc-ee’s built their entire business around the bathrooms—a feature they knew they could use to differentiate their business.
“This is a great example of how looking at things from a different perspective can really pay off,” Kuzmeski says. “Instead of focusing on what clients liked about their industry, they chose to plan their strategy around what customers liked the least and improve upon it. Think about what people dislike most about your industry, service, or product offering. What solutions can you offer? It’s a great way to differentiate yourself from your competition and to create some buzz in the process!”
2. Create something valuable (and viral!). This strategy is two-fold. First, you must have something valuable to say—a message your customers will want to pass on to others. Then, you have to make it easy for them to pass that message on. When it is really easy for customers to pass along information about your brand, they will.
“You might kick off this strategy by creating a simple, repeatable message,” suggests Kuzmeski. “People have an average attention span of only seventeen seconds, so you have to get their attention quickly. A short, clear message will certainly do the trick. Think about Google. For the most part, the company does not advertise, and certainly did not advertise its initial offering of its web search site.
“Do you remember how you found out about the search engine?” she adds. “People were just passing along the straightforward message that you can ‘search for anything and everything on the internet for free at www.google.com.’ The message became viral, and the company’s growth notoriously exploded. It’s truly a great example of a simple, repeatable statement of value that was so easy to pass on that it spread like, well, a virus!”
3. Understand the difference between features and benefits. Too many businesses accentuate the features of their products or services rather than the benefits—which are what your clients really care about. Benefits are value statements about the features of a product or service, with an emphasis on what the customer gets. For example, “Open 24 Hours” is a feature. The benefit is that the business will be open whenever the customer needs it. Or say you’ve been in financial services for twenty years. That is a feature. The benefit for your clients is the experience, working knowledge, and years of training that result from your length of time in the business.
“Too many companies leave it up to their prospects to figure out the benefits of their products or services,” notes Kuzmeski. “Remember, you may be steeped in information about your products and services, but they aren’t. When you try to sell them on features alone, you’re asking the customer to do all the work—and she probably won’t. Bottom line: It’s in your best interest to draw a crystal clear picture of a product’s or service’s benefits for a prospective buyer.”
4. Don’t just say it. Do it! Often, the things you can do to turn your customers into die-hard fans are right under your nose. They’re the things you do every day, or those things you do simply because you want to provide your customers with the service they deserve. Kuzmeski tells a story about one of her financial advisor clients who didn’t have to proclaim that he provided excellent service—he lived it. And going the extra mile ended up paying off in a big way.
“One day this financial advisor got a call from a pastor explaining that an elderly woman at his church was completely lost,” relates Kuzmeski. “Her husband had recently passed away, and she didn’t know where any of the important papers regarding her estate were located. The advisor ended up going to her home to help her find her insurance policies and other important files. He ended up helping her uncover documents indicating $700,000 in assets! And he didn’t charge her a penny.
“Based on what he did for her, he created a survivorship program and quickly started receiving referrals from all over his community,” she adds. “Rather than ask to be trusted, he had shown he was trustworthy. Instead of asking her to trust him, he had shown his client she could trust him.”
“Making screaming, loyal fans out of your customers won’t be easy, but it is absolutely possible,” says Kuzmeski. “You simply have to give them a product or service worth going wild about. Hit on all of the absolutes I’ve provided, and before you know it, you’ll have clients who stick with you through thick and thin and cheer you on every chance they get.”
What do you think?
You wear their team colors and refuse to wear those of their greatest rival. You cheer for them win or lose but are always full of advice on how they could improve (just in case the coach ever gives you a call!). You’ll do what it takes to watch them play whether that means braving icy weather or missing yet another Sunday lunch with the family. These are the makings of a true sports fan and the factors that connect you to tens of thousands of like-minded strangers.
Yes, sports fans are loyal and passionate—so much so that, for many, their team seems like a close friend or family member. Marketing expert Maribeth Kuzmeski says this intense emotional connection to what is essentially just another brand begs the question: What can today’s business owners do to make their customers as passionate and loyal to their products as sports fans are to their favorite teams?
“I am a huge Green Bay Packers fan,” says Kuzmeski, author of the new book …And the Clients Went Wild! How Savvy Professionals Win All the Business They Want (Wiley, 2010, ISBN: 978-0-470-60176-1, $24.95, www.AndTheClientsWentWild.com). “I learned about football, the Packers, and what it means to be a fan from my football-loving grandmother. We cheered for our team when they were terrible and basked in the glow of the wins when they were better. But we never considered moving to another.”
While Kuzmeski now lives in a different football town where another big NFL franchise gets all the attention, she insists that the Packers are still “my team.” And it’s that level of loyalty that she strives to help her clients create in their customers.
“Fan loyalty is an emotional connection that’s often stronger than any other loyalty, frequently due to generational or family-based connections—or, for those who fiercely cheer for their college, or even high school, alma maters, connections based on nostalgia,” she adds. “Many business owners today might assume that there is no way they can elicit such passion from their customers, but with the right strategies, it is possible.”
In her new book, Kuzmeski explains that in order to truly get clients to “go wild” about your business, there must be an overriding and strong emotional connection—similar to the one you might feel for your favorite sports team.
“Success is all in what you offer and how you offer it,” she says. “You can get others to connect to your company, product, or service by passionately delivering whatever you have to offer. This is a true differentiator, because so few people and businesses actually act with this kind of enthusiasm. Thus, when you exhibit it, your customers and potential customers will take notice.”
If you want to learn how to create a die-hard-sports-fan level of loyalty among your customers, read on for Kuzmeski’s four absolutes for inspiring that kind of passion:
1. Offer something unique. Whatever you’re offering your customers can’t just be better; it has to be different. In order to gain exposure, it helps to be or to offer something unique—or do something that no one else dares.
A great example of a company that understands the “different is better” mantra is Buc-ee’s gas stations. They have focused their number-one offering on what people dread most about stopping at a gas station: the bathrooms! Each of the thirty locations has incredibly clean, substantially sized bathrooms, along with full-time attendants to keep them in tip-top shape. And happy customers regularly post testimonials on the company’s blog. Buc-ee’s built their entire business around the bathrooms—a feature they knew they could use to differentiate their business.
“This is a great example of how looking at things from a different perspective can really pay off,” Kuzmeski says. “Instead of focusing on what clients liked about their industry, they chose to plan their strategy around what customers liked the least and improve upon it. Think about what people dislike most about your industry, service, or product offering. What solutions can you offer? It’s a great way to differentiate yourself from your competition and to create some buzz in the process!”
2. Create something valuable (and viral!). This strategy is two-fold. First, you must have something valuable to say—a message your customers will want to pass on to others. Then, you have to make it easy for them to pass that message on. When it is really easy for customers to pass along information about your brand, they will.
“You might kick off this strategy by creating a simple, repeatable message,” suggests Kuzmeski. “People have an average attention span of only seventeen seconds, so you have to get their attention quickly. A short, clear message will certainly do the trick. Think about Google. For the most part, the company does not advertise, and certainly did not advertise its initial offering of its web search site.
“Do you remember how you found out about the search engine?” she adds. “People were just passing along the straightforward message that you can ‘search for anything and everything on the internet for free at www.google.com.’ The message became viral, and the company’s growth notoriously exploded. It’s truly a great example of a simple, repeatable statement of value that was so easy to pass on that it spread like, well, a virus!”
3. Understand the difference between features and benefits. Too many businesses accentuate the features of their products or services rather than the benefits—which are what your clients really care about. Benefits are value statements about the features of a product or service, with an emphasis on what the customer gets. For example, “Open 24 Hours” is a feature. The benefit is that the business will be open whenever the customer needs it. Or say you’ve been in financial services for twenty years. That is a feature. The benefit for your clients is the experience, working knowledge, and years of training that result from your length of time in the business.
“Too many companies leave it up to their prospects to figure out the benefits of their products or services,” notes Kuzmeski. “Remember, you may be steeped in information about your products and services, but they aren’t. When you try to sell them on features alone, you’re asking the customer to do all the work—and she probably won’t. Bottom line: It’s in your best interest to draw a crystal clear picture of a product’s or service’s benefits for a prospective buyer.”
4. Don’t just say it. Do it! Often, the things you can do to turn your customers into die-hard fans are right under your nose. They’re the things you do every day, or those things you do simply because you want to provide your customers with the service they deserve. Kuzmeski tells a story about one of her financial advisor clients who didn’t have to proclaim that he provided excellent service—he lived it. And going the extra mile ended up paying off in a big way.
“One day this financial advisor got a call from a pastor explaining that an elderly woman at his church was completely lost,” relates Kuzmeski. “Her husband had recently passed away, and she didn’t know where any of the important papers regarding her estate were located. The advisor ended up going to her home to help her find her insurance policies and other important files. He ended up helping her uncover documents indicating $700,000 in assets! And he didn’t charge her a penny.
“Based on what he did for her, he created a survivorship program and quickly started receiving referrals from all over his community,” she adds. “Rather than ask to be trusted, he had shown he was trustworthy. Instead of asking her to trust him, he had shown his client she could trust him.”
“Making screaming, loyal fans out of your customers won’t be easy, but it is absolutely possible,” says Kuzmeski. “You simply have to give them a product or service worth going wild about. Hit on all of the absolutes I’ve provided, and before you know it, you’ll have clients who stick with you through thick and thin and cheer you on every chance they get.”
What do you think?
Friday, September 24, 2010
10 Pitfalls to Avoid When Going Social
If you were to make a list of up-and-coming business trends, social media strategies would probably be near the top. Actually, scratch that "up-and-coming" part—social media is already here. However, thousands of companies are rushing headlong into the profile-creating, news-tweeting, blog-posting frenzy...only to find that their valiant efforts are not getting the results they had hoped. If you're looking for fans, followers, and friends to build a Social Nation around your business, don't panic, says Barry Libert. There is simple advice that will help businesses avoid the pitfalls and make a strong online impact.
"It's true: there are countless benefits to joining what I call the Social Nation revolution—but just like any strategy for growth, social media isn't foolproof," points out Libert, author of the new book Social Nation: How to Harness the Power of Social Media to Attract Customers, Motivate Employees, and Grow Your Business. "If you don't want your company's social strategy to fall flat, there are some guidelines you'll need to follow."
Libert knows what he's talking about. After all, he's the Chairman and CEO of Mzinga, a company that provides social software to businesses. Quite literally, it's his job to be social media savvy. And he's adamant that before you start building your own Social Nation, you need to have a well-researched game plan.
"When it comes to building a successful social network for your company, you need to understand that there's a lot of prep work to be done," he explains. "You can't just set up a Facebook profile for your company, tweet once or twice a day, and expect public interest in your company to shoot through the roof. Far from it, actually."
Think about it this way: if you were in charge of your company's booth at a trade show or conference, you wouldn't just slap your company's logo onto a piece of poster board, place your business cards on the table, and hope for the best, would you? Of course not. Yet that's exactly how some companies approach social media—and that's why so many of these initiatives fail.
"If you want to become a meaningful part of social conversations and interactions," explains Libert, "you've got to know who your target 'fan base' is, where they spend their time online, and what sorts of content and programming is valuable and relevant to them, and will foster their continued interest and participation. You also need to make sure you have the wherewithal to commit to growing and sustaining your Social Nation, and you've got to make sure that you have buy-in from within your company. And that's just for starters."
Sure, it may sound intimidating, but don't give up yet. Half the battle is knowing which mistakes not to make, and Libert, in the book Social Nation, is eager to share the top 10 social media pitfalls he's seen organizations fall victim to in the past. Read on to discover what they are:
Pitfall #1: Running a Social Nation like a traditional business. If you want to run a social company, you first need to understand that almost everything you do is a two-way street. That is to say, you're not going to prosper if your products and services are designed solely by folks on the inside. You need to embrace the perspectives and contributions of your employees, as well as those of customers and partners.
Pitfall #2: Underinvesting in social initiatives and abandoning them too soon. Understand that a Social Nation is organic—it won't materialize with a proverbial snap of the fingers. Early on, you'll need to invest a good deal of time, thought, and money in attracting fans and followers—and your efforts will need to be sustained. Only after you've built a firm foundation will your social network begin to sustain itself through participant contribution and recommendation.
Pitfall #3: Neglecting to find ways to encourage and inspire your Social Nation's followers and fans. When you stop to think about it, you'll realize that your fans and followers are essentially volunteering their time and energy to serve as developers, sounding boards, and advertisements for your company. So for goodness' sake, respect what they have to say and take their input to heart!
Pitfall #4: Relying on a "build-it-and-they-will-come" mentality. Ummm...you don't really think that launching a new website and firing off posts at various online networking hotspots will bring fans and followers flocking, do you? Of course not! To some extent—usually a large one—you'll need to purposefully reach out to potential community members and make it worth their while to accept your invitation.
Pitfall #5: Delaying the process of going social. Contrary to what you may wish, your company doesn't have the luxury of waiting until it's "convenient" to go social. Why? Well, you have competitors, right? And if you don't start gathering loyal followers and fans now, there's a good chance that some other company will woo them first.
Pitfall #6: Underestimating the power of a Social Nation. If you believe that social networking is just a window dressing that your company "needs" (but not really), then think again. Social media and community collaboration bring many benefits, including brand-building, customer loyalty and retention, cost reductions, improved productivity, and revenue growth.
Pitfall #7: Neglecting employees, partners, investors, or customers when building your Social Nation. Yes, set up a "focus group" of employees to serve as community leaders who will shepherd your company into the social networking world, but don't put all of the power in their hands. Social Nations are organic organizations, so the more people who are empowered to influence yours, the better.
Pitfall #8: Relying on traditional approaches when designing your Social Nation. A decade ago, you probably would have been horrified at the thought of releasing ideas and products into the hands of your customers before they were as complete as you could get them. With social networking, that monolithic approach is now becoming obsolete.
Pitfall #9: Developing your own social software and analytics solutions. You wouldn't dream of placing "remodeling the office" or "handling legal issues" in the Do It Yourself category, would you? Not too many would. Instead, you'd hire someone skilled in those areas. Do yourself a favor and use the same strategy when it comes to building your own Social Nation.
Pitfall #10: Getting caught without partners to help you succeed. Libert has alluded to this one before, but it bears specific emphasis: make sure that you truly treat your community members as partners, not just as fans or numbers. Yes, integrating into the social web (Facebook, Twitter, and other social networks) is key to your company's future success, but being connected to the social web is only a part of what you need to do. Shifting your business strategically, culturally, and operationally are key components to the equation.
What do you think?
"It's true: there are countless benefits to joining what I call the Social Nation revolution—but just like any strategy for growth, social media isn't foolproof," points out Libert, author of the new book Social Nation: How to Harness the Power of Social Media to Attract Customers, Motivate Employees, and Grow Your Business. "If you don't want your company's social strategy to fall flat, there are some guidelines you'll need to follow."
Libert knows what he's talking about. After all, he's the Chairman and CEO of Mzinga, a company that provides social software to businesses. Quite literally, it's his job to be social media savvy. And he's adamant that before you start building your own Social Nation, you need to have a well-researched game plan.
"When it comes to building a successful social network for your company, you need to understand that there's a lot of prep work to be done," he explains. "You can't just set up a Facebook profile for your company, tweet once or twice a day, and expect public interest in your company to shoot through the roof. Far from it, actually."
Think about it this way: if you were in charge of your company's booth at a trade show or conference, you wouldn't just slap your company's logo onto a piece of poster board, place your business cards on the table, and hope for the best, would you? Of course not. Yet that's exactly how some companies approach social media—and that's why so many of these initiatives fail.
"If you want to become a meaningful part of social conversations and interactions," explains Libert, "you've got to know who your target 'fan base' is, where they spend their time online, and what sorts of content and programming is valuable and relevant to them, and will foster their continued interest and participation. You also need to make sure you have the wherewithal to commit to growing and sustaining your Social Nation, and you've got to make sure that you have buy-in from within your company. And that's just for starters."
Sure, it may sound intimidating, but don't give up yet. Half the battle is knowing which mistakes not to make, and Libert, in the book Social Nation, is eager to share the top 10 social media pitfalls he's seen organizations fall victim to in the past. Read on to discover what they are:
Pitfall #1: Running a Social Nation like a traditional business. If you want to run a social company, you first need to understand that almost everything you do is a two-way street. That is to say, you're not going to prosper if your products and services are designed solely by folks on the inside. You need to embrace the perspectives and contributions of your employees, as well as those of customers and partners.
Pitfall #2: Underinvesting in social initiatives and abandoning them too soon. Understand that a Social Nation is organic—it won't materialize with a proverbial snap of the fingers. Early on, you'll need to invest a good deal of time, thought, and money in attracting fans and followers—and your efforts will need to be sustained. Only after you've built a firm foundation will your social network begin to sustain itself through participant contribution and recommendation.
Pitfall #3: Neglecting to find ways to encourage and inspire your Social Nation's followers and fans. When you stop to think about it, you'll realize that your fans and followers are essentially volunteering their time and energy to serve as developers, sounding boards, and advertisements for your company. So for goodness' sake, respect what they have to say and take their input to heart!
Pitfall #4: Relying on a "build-it-and-they-will-come" mentality. Ummm...you don't really think that launching a new website and firing off posts at various online networking hotspots will bring fans and followers flocking, do you? Of course not! To some extent—usually a large one—you'll need to purposefully reach out to potential community members and make it worth their while to accept your invitation.
Pitfall #5: Delaying the process of going social. Contrary to what you may wish, your company doesn't have the luxury of waiting until it's "convenient" to go social. Why? Well, you have competitors, right? And if you don't start gathering loyal followers and fans now, there's a good chance that some other company will woo them first.
Pitfall #6: Underestimating the power of a Social Nation. If you believe that social networking is just a window dressing that your company "needs" (but not really), then think again. Social media and community collaboration bring many benefits, including brand-building, customer loyalty and retention, cost reductions, improved productivity, and revenue growth.
Pitfall #7: Neglecting employees, partners, investors, or customers when building your Social Nation. Yes, set up a "focus group" of employees to serve as community leaders who will shepherd your company into the social networking world, but don't put all of the power in their hands. Social Nations are organic organizations, so the more people who are empowered to influence yours, the better.
Pitfall #8: Relying on traditional approaches when designing your Social Nation. A decade ago, you probably would have been horrified at the thought of releasing ideas and products into the hands of your customers before they were as complete as you could get them. With social networking, that monolithic approach is now becoming obsolete.
Pitfall #9: Developing your own social software and analytics solutions. You wouldn't dream of placing "remodeling the office" or "handling legal issues" in the Do It Yourself category, would you? Not too many would. Instead, you'd hire someone skilled in those areas. Do yourself a favor and use the same strategy when it comes to building your own Social Nation.
Pitfall #10: Getting caught without partners to help you succeed. Libert has alluded to this one before, but it bears specific emphasis: make sure that you truly treat your community members as partners, not just as fans or numbers. Yes, integrating into the social web (Facebook, Twitter, and other social networks) is key to your company's future success, but being connected to the social web is only a part of what you need to do. Shifting your business strategically, culturally, and operationally are key components to the equation.
What do you think?
Friday, April 23, 2010
Customer loyalty to banks drops significantly
Posted by Mark Brousseau
While the U.S. economy may be showing signs of a modest recovery, retail banks continue to struggle with their most basic mission: satisfying customers. In fact, a recent consumer survey reveals that overall satisfaction of retail banking customers has decreased for a fourth consecutive year, to 748 on 1,000-point scale, primarily due to low marks in customer service, according to the J.D. Power and Associates 2010 U.S. Retail Banking Satisfaction Study.
To gauge consumer attitudes, J.D. Power recently surveyed nearly 48,000 retail bank customers across the United States. Respondents were asked to rate their bank on a variety of topics encompassing account activities; account information; bank facility; fees; problem resolution; and product offerings.
Results of the study show that poor customer service is the most common reason why customers switched banks in 2010. According to the study, 37 percent of customers who changed their primary banking relationship in 2010 did so because of poor customer service at their previous bank. This represents a real missed opportunity for banks, according to the study.
“As retail banking customers become considerably less loyal, banks need to focus on getting the fundamentals right,” said Michael Beird, director of the banking practice at J.D. Power and Associates. “Banks who get back to the basics—such as maintaining a clean branch and greeting customers as they enter the branch—may help to alleviate some of the distress customers are feeling and increase overall satisfaction.”
Performing simple service acts such as greeting customers as they enter the branch, offering additional assistance, and thanking them for their business may increase overall satisfaction by nearly 50 index points. However, less than one-half of customers reported experiencing those services.
Loyalty suffers
J.D. Power and Associates research indicates a clear connection between customer satisfaction and customer loyalty. Generally speaking, satisfied customers are loyal customers. On the flipside, customers who report lower levels of satisfaction are much more likely to switch service providers, no matter the industry.
According to the study, expressed loyalty to banks, which is measured by the percentage of customers saying they will “definitely not switch” in the next 12 months, has fallen significantly during the past three years. It was only 34 percent in 2010, compared with 46 percent in 2007. Further, the gap between larger and smaller banks is considerable, with 40 percent of customers at smaller banks reporting that they will definitely not switch, compared with 33 percent at larger banks.
High fees often cited as reason for switching
Fees continue to have a major impact on customer loyalty, as well. According to the study, 29 percent of customers who switched banks in 2010 cited high fees as their reason for leaving. The study also finds that customers can be highly satisfied even when paying fees, provided that they receive sufficient value for the price paid. Fee-paying customers with above-average fee satisfaction indicate better experiences with branch access and appearance, promptness of being served, and the bank’s Web site navigation and range of services.
“While fees have a significant impact on customer satisfaction, banks can mitigate this effect by giving the customer choices,” said Beird. “Customers tend to be considerably less dissatisfied when they have different overdraft options, such as transferring from a savings account or sending a balance alert.”
The way customers bank is changing
As technology continues to infiltrate every aspect of daily life, banks too need to adapt to changing customer preferences. According to the study, 51 percent of customers report a preference to bank online—an increase from 44 percent in 2008. In addition, 7 percent of customers report using a mobile device to check balances, transfer funds, and pay bills.
What do you think?
While the U.S. economy may be showing signs of a modest recovery, retail banks continue to struggle with their most basic mission: satisfying customers. In fact, a recent consumer survey reveals that overall satisfaction of retail banking customers has decreased for a fourth consecutive year, to 748 on 1,000-point scale, primarily due to low marks in customer service, according to the J.D. Power and Associates 2010 U.S. Retail Banking Satisfaction Study.
To gauge consumer attitudes, J.D. Power recently surveyed nearly 48,000 retail bank customers across the United States. Respondents were asked to rate their bank on a variety of topics encompassing account activities; account information; bank facility; fees; problem resolution; and product offerings.
Results of the study show that poor customer service is the most common reason why customers switched banks in 2010. According to the study, 37 percent of customers who changed their primary banking relationship in 2010 did so because of poor customer service at their previous bank. This represents a real missed opportunity for banks, according to the study.
“As retail banking customers become considerably less loyal, banks need to focus on getting the fundamentals right,” said Michael Beird, director of the banking practice at J.D. Power and Associates. “Banks who get back to the basics—such as maintaining a clean branch and greeting customers as they enter the branch—may help to alleviate some of the distress customers are feeling and increase overall satisfaction.”
Performing simple service acts such as greeting customers as they enter the branch, offering additional assistance, and thanking them for their business may increase overall satisfaction by nearly 50 index points. However, less than one-half of customers reported experiencing those services.
Loyalty suffers
J.D. Power and Associates research indicates a clear connection between customer satisfaction and customer loyalty. Generally speaking, satisfied customers are loyal customers. On the flipside, customers who report lower levels of satisfaction are much more likely to switch service providers, no matter the industry.
According to the study, expressed loyalty to banks, which is measured by the percentage of customers saying they will “definitely not switch” in the next 12 months, has fallen significantly during the past three years. It was only 34 percent in 2010, compared with 46 percent in 2007. Further, the gap between larger and smaller banks is considerable, with 40 percent of customers at smaller banks reporting that they will definitely not switch, compared with 33 percent at larger banks.
High fees often cited as reason for switching
Fees continue to have a major impact on customer loyalty, as well. According to the study, 29 percent of customers who switched banks in 2010 cited high fees as their reason for leaving. The study also finds that customers can be highly satisfied even when paying fees, provided that they receive sufficient value for the price paid. Fee-paying customers with above-average fee satisfaction indicate better experiences with branch access and appearance, promptness of being served, and the bank’s Web site navigation and range of services.
“While fees have a significant impact on customer satisfaction, banks can mitigate this effect by giving the customer choices,” said Beird. “Customers tend to be considerably less dissatisfied when they have different overdraft options, such as transferring from a savings account or sending a balance alert.”
The way customers bank is changing
As technology continues to infiltrate every aspect of daily life, banks too need to adapt to changing customer preferences. According to the study, 51 percent of customers report a preference to bank online—an increase from 44 percent in 2008. In addition, 7 percent of customers report using a mobile device to check balances, transfer funds, and pay bills.
What do you think?
Tuesday, March 16, 2010
The 6 Levels of Customer Engagement
Posted by Mark Brousseau
Is your company a great innovator? It's a tricky question. If you interrogate your sales team a couple of times a year, then bombard the marketplace with new "solutions" to customer problems, you might assume the answer is yes. After all, you are giving your company's product developers a real workout. But if you're merely practicing the R&D equivalent of what the military calls "spray and pray," you're wasting time and money. (Can you afford either right now?) According to product development guru Dan Adams, the true litmus test is customer engagement.
"Too many companies fail to factor the customer into their innovation efforts," says Dan Adams, the author of New Product Blueprinting: The Handbook for B2B Organic Growth. "Oh, they may half-heartedly solicit customer input—in a 'You do need this product, right?' kind of way—but they don't really listen to it. They don't let customers drive the process. And that's too bad, because if they don't engage customers directly, aggressively, and objectively, they're going to get sluggish results."
Adams cites a massive study, "The Global Innovation 1000," undertaken by Booz Allen Hamilton. Through it, they studied 84 percent of the planet's corporate R&D spending. The researchers identified several distinct innovation strategies, but uncovered one universal factor that led to success: "Companies that directly engage their customers had superior results regardless of innovation strategy."
And not just a little bit superior, notes Adams. A lot superior. Those companies that used direct customer engagement while innovating—vs. indirect customer insight—enjoyed the following financial gains:
1) Profit Growth: Operating income growth rate that was three times higher.
2) Shareholder Return: Total shareholder return that was 65 percent higher.
3) Return on Assets: Return on assets that was two times higher.
So what do you do with this information? For starters, says Adams, if you're in a conversation about your company's innovation and nobody's talking about the customer, realize something might be very wrong.
"To put it in terms of this study, your company might be practicing 'indirect customer insight' instead of 'direct customer engagement,'" he explains. "This is a kind way of saying, 'We've lost track of who our innovation is supposed to help.'"
Adams says he's spent the better part of a decade helping B2B suppliers engage their customers in the innovation process. During this time he's observed six distinct levels of customer engagement during product development:
Level 1: The Conference Roomers: If you're innovating at the lowest level, you decide what customers want around your conference room table. Internal opinions determine the design of your next new product. As you might guess, this isn't very effective.
Level 2: The Expert Askers: At the next level, you poll your sales force, tech service dept., and other internal experts to determine customer needs. This is better than Level 1—because more voices are heard—but still too "internal."
Level 3: The Customer Surveyors: Companies at this level use surveys and polls to ask customers what they want. This begins to shake out internal biases... but doesn't deliver much in the way of deep insight.
Level 4: The Qualitative VOC-ers: If you're at this level, you send out interview teams that meet with customers to learn what they want. This is a quantum leap from VOO (voice of ourselves) to VOC (voice of the customer).
Level 5: The Quantitative VOC-ers: The problem with just qualitative VOC is that people hear what they want to hear. Companies that move beyond it to Level 5 get far more objective customer input. Yes, quantitative feedback drives out assumptions, bias, and wishful thinking.
Level 6: The B2B VOC-ers: Companies at this level really, truly get it. They know that unlike end-consumers, B2B customers are knowledgeable, rational, and interested. B2B-optimized interview methodology fully engages them to take advantage of this reality.
What do you think?
Is your company a great innovator? It's a tricky question. If you interrogate your sales team a couple of times a year, then bombard the marketplace with new "solutions" to customer problems, you might assume the answer is yes. After all, you are giving your company's product developers a real workout. But if you're merely practicing the R&D equivalent of what the military calls "spray and pray," you're wasting time and money. (Can you afford either right now?) According to product development guru Dan Adams, the true litmus test is customer engagement.
"Too many companies fail to factor the customer into their innovation efforts," says Dan Adams, the author of New Product Blueprinting: The Handbook for B2B Organic Growth. "Oh, they may half-heartedly solicit customer input—in a 'You do need this product, right?' kind of way—but they don't really listen to it. They don't let customers drive the process. And that's too bad, because if they don't engage customers directly, aggressively, and objectively, they're going to get sluggish results."
Adams cites a massive study, "The Global Innovation 1000," undertaken by Booz Allen Hamilton. Through it, they studied 84 percent of the planet's corporate R&D spending. The researchers identified several distinct innovation strategies, but uncovered one universal factor that led to success: "Companies that directly engage their customers had superior results regardless of innovation strategy."
And not just a little bit superior, notes Adams. A lot superior. Those companies that used direct customer engagement while innovating—vs. indirect customer insight—enjoyed the following financial gains:
1) Profit Growth: Operating income growth rate that was three times higher.
2) Shareholder Return: Total shareholder return that was 65 percent higher.
3) Return on Assets: Return on assets that was two times higher.
So what do you do with this information? For starters, says Adams, if you're in a conversation about your company's innovation and nobody's talking about the customer, realize something might be very wrong.
"To put it in terms of this study, your company might be practicing 'indirect customer insight' instead of 'direct customer engagement,'" he explains. "This is a kind way of saying, 'We've lost track of who our innovation is supposed to help.'"
Adams says he's spent the better part of a decade helping B2B suppliers engage their customers in the innovation process. During this time he's observed six distinct levels of customer engagement during product development:
Level 1: The Conference Roomers: If you're innovating at the lowest level, you decide what customers want around your conference room table. Internal opinions determine the design of your next new product. As you might guess, this isn't very effective.
Level 2: The Expert Askers: At the next level, you poll your sales force, tech service dept., and other internal experts to determine customer needs. This is better than Level 1—because more voices are heard—but still too "internal."
Level 3: The Customer Surveyors: Companies at this level use surveys and polls to ask customers what they want. This begins to shake out internal biases... but doesn't deliver much in the way of deep insight.
Level 4: The Qualitative VOC-ers: If you're at this level, you send out interview teams that meet with customers to learn what they want. This is a quantum leap from VOO (voice of ourselves) to VOC (voice of the customer).
Level 5: The Quantitative VOC-ers: The problem with just qualitative VOC is that people hear what they want to hear. Companies that move beyond it to Level 5 get far more objective customer input. Yes, quantitative feedback drives out assumptions, bias, and wishful thinking.
Level 6: The B2B VOC-ers: Companies at this level really, truly get it. They know that unlike end-consumers, B2B customers are knowledgeable, rational, and interested. B2B-optimized interview methodology fully engages them to take advantage of this reality.
What do you think?
Wednesday, January 27, 2010
The Domino's Theory
Posted by Mark Brousseau
Recently, Domino's Pizza did something practically unheard of in the business world. First, it asked its customers for honest feedback. Second, it actually listened to the painful truth (according to its documentary ad, "The Pizza Turnaround," unflattering words like "cardboard" and "totally void of flavor" were tossed about with abandon). Finally—and here's the shocking part—the company reinvented its product "from the crust up."
Now, if you're the typical business leader, you might be protesting, "But we listen to our customers all the time!" Don't be too sure, says new product development expert Dan Adams. You might think you're giving your customers what they want—but there's a good chance you're actually giving them what you want them to want.
"Many companies are essentially saying to their customers, 'You do need this product, right? Right?'" laughs Adams. "They're starting with a product and trying to talk their customers into giving it their stamp of approval. What looks like soliciting feedback is really a bit of a dog and pony show."
Adams should know. He has spent his career helping some of the largest business-to-business companies in the world learn how to develop new "stuff" that customers want to buy. Through New Product Blueprinting (the process described in his book), his company helps clients bring clarity to the "fuzzy front end" of product development.
So with the Domino's ad campaign making headlines for its boldly honest approach, you might be wondering how your company can follow its lead. Adams offers several tips:
... Ask your customers what they want—in a way that lets them know you really hear them. A lot of companies pay lip service to this idea. As consumers we've all had survey cards slapped down in front of us or fielded post-purchase telemarketing calls. Reconsider how you are collecting customer feedback. Are you doing it in a way that really engages the customer so that you can get the truth?
"There's no substitute for respectful dialogue with customers," says Adams, whose own process helps B2B suppliers elicit idea-generating, peer-to-peer conversations with their customers. "When you can get people truly engaged in the feedback process—I mean really focused on what they need and want from you—you'll get their honest opinions. And that raw honesty is what you need to serve them the right way."
... Don't rely on sales reps alone to capture customer needs. A salesperson is unlikely to uncover a full set of market needs if he is a) rewarded for near-term selling, b) unable to reach true decision makers, or c) not calling on most of the customers in your target market segment. But put a good salesperson on a team with marketing and technical colleagues, train all in advanced interviewing methods, and you'll run circles around your competitors.
Be wary of VOC (voice-of-the-customer) consultants who want to exclude your sales force from interviews because "they can sell but not listen," warns Adams. In the long run, your company will fall behind competitors that have taken steps to develop a team of engaged and enlightened salespeople.
... Take action on what you're hearing. Many companies ask their customers for feedback with the best of intentions. But when they start hearing things they don't want to hear, they find a million reasons to explain it away. As a result, the feedback never gets translated into action.
"A lot of companies will say, 'Oh, they're a difficult client,' or, 'That's not really what they want; it's just what they think they want,'" says Adams. "Either they don't really want to change what they're doing or they don't trust the customer or they don't trust themselves to understand what the customer wants.
"A good interviewer knows how to dig deep and figure out the customer's hidden needs," he adds. "And a smart company will take action to meet those needs—no matter what."
... If you have to scrap your existing products and start from scratch, so be it. Here's the real truth, says Adams: Most suppliers start with their solution, "validate" it by showing it to some customers, and measure market needs by watching sales results... after the product launch! In other words, they're getting it exactly backwards.
"Companies should invert this process: Begin with customer needs and end with supplier solutions," asserts Adams. "While doing things in the wrong order may 'feel' better to you, it is far less likely to result in sales and customer satisfaction. Besides, intelligent customers can detect your 'validation' a mile away. They correctly sense you are more interested in your idea than in them... and that doesn't do much for the long-term relationships you need to build."
... Get everyone in your company connected to the customer's reality. If you watch Domino's new ad, you can see how ego crushing it was for the company's employees to hear customers speak their minds about the flavorless crust and ketchupy sauce. Yet, you can also see how necessary it was for them to hear the harsh truth—it energized them to revamp their product and make it much, much better.
"People inside companies tend to get defensive about their products and processes," admits Adams. "It's only human. But when you can cut through that defensiveness and show them 'Hey, this really isn't working for our customers'—well, that's where true service and value finally begin."
If you're thinking this is a message recession-strapped companies need to hear, you're right, says Adams. The quicker they get it, the more likely they are to survive.
"Figuring out what people really want from your company, and giving it to them, is the whole point of being in business," he notes. "When money is flowing, you can stand some trial and error, some experimentation. When it's not, you'd better get it right now—and 'right' means whatever the customer says it does."
What do you think?
Recently, Domino's Pizza did something practically unheard of in the business world. First, it asked its customers for honest feedback. Second, it actually listened to the painful truth (according to its documentary ad, "The Pizza Turnaround," unflattering words like "cardboard" and "totally void of flavor" were tossed about with abandon). Finally—and here's the shocking part—the company reinvented its product "from the crust up."
Now, if you're the typical business leader, you might be protesting, "But we listen to our customers all the time!" Don't be too sure, says new product development expert Dan Adams. You might think you're giving your customers what they want—but there's a good chance you're actually giving them what you want them to want.
"Many companies are essentially saying to their customers, 'You do need this product, right? Right?'" laughs Adams. "They're starting with a product and trying to talk their customers into giving it their stamp of approval. What looks like soliciting feedback is really a bit of a dog and pony show."
Adams should know. He has spent his career helping some of the largest business-to-business companies in the world learn how to develop new "stuff" that customers want to buy. Through New Product Blueprinting (the process described in his book), his company helps clients bring clarity to the "fuzzy front end" of product development.
So with the Domino's ad campaign making headlines for its boldly honest approach, you might be wondering how your company can follow its lead. Adams offers several tips:
... Ask your customers what they want—in a way that lets them know you really hear them. A lot of companies pay lip service to this idea. As consumers we've all had survey cards slapped down in front of us or fielded post-purchase telemarketing calls. Reconsider how you are collecting customer feedback. Are you doing it in a way that really engages the customer so that you can get the truth?
"There's no substitute for respectful dialogue with customers," says Adams, whose own process helps B2B suppliers elicit idea-generating, peer-to-peer conversations with their customers. "When you can get people truly engaged in the feedback process—I mean really focused on what they need and want from you—you'll get their honest opinions. And that raw honesty is what you need to serve them the right way."
... Don't rely on sales reps alone to capture customer needs. A salesperson is unlikely to uncover a full set of market needs if he is a) rewarded for near-term selling, b) unable to reach true decision makers, or c) not calling on most of the customers in your target market segment. But put a good salesperson on a team with marketing and technical colleagues, train all in advanced interviewing methods, and you'll run circles around your competitors.
Be wary of VOC (voice-of-the-customer) consultants who want to exclude your sales force from interviews because "they can sell but not listen," warns Adams. In the long run, your company will fall behind competitors that have taken steps to develop a team of engaged and enlightened salespeople.
... Take action on what you're hearing. Many companies ask their customers for feedback with the best of intentions. But when they start hearing things they don't want to hear, they find a million reasons to explain it away. As a result, the feedback never gets translated into action.
"A lot of companies will say, 'Oh, they're a difficult client,' or, 'That's not really what they want; it's just what they think they want,'" says Adams. "Either they don't really want to change what they're doing or they don't trust the customer or they don't trust themselves to understand what the customer wants.
"A good interviewer knows how to dig deep and figure out the customer's hidden needs," he adds. "And a smart company will take action to meet those needs—no matter what."
... If you have to scrap your existing products and start from scratch, so be it. Here's the real truth, says Adams: Most suppliers start with their solution, "validate" it by showing it to some customers, and measure market needs by watching sales results... after the product launch! In other words, they're getting it exactly backwards.
"Companies should invert this process: Begin with customer needs and end with supplier solutions," asserts Adams. "While doing things in the wrong order may 'feel' better to you, it is far less likely to result in sales and customer satisfaction. Besides, intelligent customers can detect your 'validation' a mile away. They correctly sense you are more interested in your idea than in them... and that doesn't do much for the long-term relationships you need to build."
... Get everyone in your company connected to the customer's reality. If you watch Domino's new ad, you can see how ego crushing it was for the company's employees to hear customers speak their minds about the flavorless crust and ketchupy sauce. Yet, you can also see how necessary it was for them to hear the harsh truth—it energized them to revamp their product and make it much, much better.
"People inside companies tend to get defensive about their products and processes," admits Adams. "It's only human. But when you can cut through that defensiveness and show them 'Hey, this really isn't working for our customers'—well, that's where true service and value finally begin."
If you're thinking this is a message recession-strapped companies need to hear, you're right, says Adams. The quicker they get it, the more likely they are to survive.
"Figuring out what people really want from your company, and giving it to them, is the whole point of being in business," he notes. "When money is flowing, you can stand some trial and error, some experimentation. When it's not, you'd better get it right now—and 'right' means whatever the customer says it does."
What do you think?
Friday, January 22, 2010
7 Deadly Sins that Stunt Corporate Organic Growth
Posted by Mark Brousseau
You already know that organic growth makes for a stronger company. In today's tough economy it just makes sense to grow from within by developing outstanding products and services that win over new customers and keep current ones coming back. (The alternatives are to grow via debt financing or an army of flush-with-cash buyers on a spending spree—and clearly, neither is easy to come by these days!) Problem is, your competitors are playing by the same rules. But according to Dan Adams, you can outwit them...simply by putting a halt to the mistakes you (and they) are making right now.
"Unless your company has smarter employees, some inherent unassailable advantage, or a markedly different approach to satisfying customers, those competitors always seem to throttle your growth," notes Adams. "But what if you and your competitors were committing some serious mistakes that stunt organic growth—and you corrected them? Wouldn't that be enough to propel you to the front of the line?"
It makes sense. And Adams should know: He has spent his career helping some of the largest business-to-business companies in the world overcome the obstacles that clog up their organic growth engines—the ability to develop new "stuff" that customers want to buy. Through New Product Blueprinting (the process described in his book), his company helps clients bring clarity to the "fuzzy front end" of product development.
"In 20 years the common mistakes B2B companies make will be as glaring as trying to improve quality with inspectors rather than statistics," he says. "Correct them now and you'll enjoy a substantial head start on years of healthy organic growth."
Adams identifies the seven deadly sins that too many B2B companies commit:
Sin #1. Imagining customers' needs in your conference rooms. Does your new product process begin with the word "idea," perhaps with a light bulb next to it? So whose idea is it: yours or your customers? Unfortunately, says Adams, most suppliers start with their solution, "validate" it by showing it to some customers, and measure market needs by watching sales results...after the product launch!
"Companies should invert this process: Begin with customer needs and end with supplier solutions," asserts Adams. "While doing things in the wrong order may 'feel' better to you, it is far less likely to result in sales and customer satisfaction. Besides, intelligent B2B customers can detect your 'validation' a mile away. They correctly sense you are more interested in your idea than in them...and that doesn't do much for the long-term relationships you need to build."
Sin #2. Relying on sales reps to capture customer needs. A salesperson is unlikely to uncover a full set of market needs if he is a) rewarded for near-term selling, b) unable to reach true decision makers, or c) not calling on most of the customers in your target market segment. But put a good salesperson on a team with marketing and technical colleagues, train all in advanced B2B interviewing methods, and you'll run circles around your competitors.
Be wary of VOC (voice-of-the-customer) consultants who want to exclude your sales force from interviews because "they can sell but not listen," warns Adams. In the long run, your company will fall behind competitors that have taken steps to develop a team of engaged and enlightened salespeople.
Sin #3. Counting on just a few VOC experts. Some companies rely on a handful of internal VOC experts to interview customers. You'll do far better training a critical mass of employees—who routinely interact with customers—to gather customer needs. Keep your VOC experts as coaches and trainers, but implement "VOC for the masses." You'll overwhelm competitors by turning a trickle of customer feedback into a torrent.
Sin #4. Using hand-me-down consumer goods methods. "Traditional VOC methods rely on questionnaires, tape recorders, and post-interview analyses," says Adams. "That's fine for consumer goods, but your B2B customers are insightful, rational, interested, and fewer in number. They're smart and will make you smarter if you engage them in a peer- to-peer dialogue. Use a digital projector, let them lead you to their areas of interest, probe with skill, and you'll be shocked at how much you'll learn you never knew."
Sin #5. Gathering only qualitative customer feedback. "I once had a new client who came to me extremely frustrated," recalls Adams. "He had spent months interviewing customers, only to hear his boss say, 'Nah, I don't think they want that; they want this.' Unfortunately, interviewers often hear want they want to hear... and then parade some customer quotes for support."
What you need, adds Adams, is quantitative data, which measure customer importance and satisfaction on key outcomes. Skip quantification and your new product will be based on assumptions, bias, and wishful thinking.
Sin #6. Listening only to immediate customers. Unlike B2C producers, your product might be part of your customers' products, your customers' customers' products, and so on. It's a mistake to interview only your direct customers, because they are usually unable or unwilling to disclose downstream customers' deepest needs. Also, B2C producers assign "one vote" per consumer...while you need to weight the buying power and value chain position of downstream customers.
Sin #7. Ignoring competitors when you design your product. "I find most product development processes are far too casual—and late—in assessing competitive offerings," says Adams. "Your new product makes a lot of money only if two conditions are satisfied: a) it offers significant value to customers, and b) customers cannot get this value elsewhere. Interviews tell you only about Condition A. You need side-by-side testing to learn about Condition B. This allows you to attack competitive weak spots, avoid getting blind-sided, and optimize pricing."
So why is it so important to focus so intensely upon customer needs? Consider three points, says Adams: First, the average new product success rate is only one in four. Over 30 years of research says the number one reason is inadequate market understanding.
Second, the "how" continues to get easier than the "what." You have twin goals of understanding what your customers want, and then how to satisfy them with your solutions. In these days of open innovation and global access to technology, the "how" is easier than it's ever been...if you have a solid grasp of the "what."
Finally, you reap benefits beyond good product design when you use respectful peer-to-peer interviews. You engage customers in the design process, which primes them to buy your product later.
"Our clients often enjoy benefits well before product launch," says Adams. "Their interviews cast them as caring, competent suppliers, so they have a better shot at other near-term business.
"Never forget that relationship building is everything," he adds. "We're living in an age where anyone, anywhere on the globe, at any time can start a business that competes with yours. By engaging customers in a respectful peer-to-peer dialogue and genuinely soliciting their ideas, you position yourself as a valuable partner and not just a vendor—and that in and of itself is a reason to stick with you."
What do you think? Post your comments below.
You already know that organic growth makes for a stronger company. In today's tough economy it just makes sense to grow from within by developing outstanding products and services that win over new customers and keep current ones coming back. (The alternatives are to grow via debt financing or an army of flush-with-cash buyers on a spending spree—and clearly, neither is easy to come by these days!) Problem is, your competitors are playing by the same rules. But according to Dan Adams, you can outwit them...simply by putting a halt to the mistakes you (and they) are making right now.
"Unless your company has smarter employees, some inherent unassailable advantage, or a markedly different approach to satisfying customers, those competitors always seem to throttle your growth," notes Adams. "But what if you and your competitors were committing some serious mistakes that stunt organic growth—and you corrected them? Wouldn't that be enough to propel you to the front of the line?"
It makes sense. And Adams should know: He has spent his career helping some of the largest business-to-business companies in the world overcome the obstacles that clog up their organic growth engines—the ability to develop new "stuff" that customers want to buy. Through New Product Blueprinting (the process described in his book), his company helps clients bring clarity to the "fuzzy front end" of product development.
"In 20 years the common mistakes B2B companies make will be as glaring as trying to improve quality with inspectors rather than statistics," he says. "Correct them now and you'll enjoy a substantial head start on years of healthy organic growth."
Adams identifies the seven deadly sins that too many B2B companies commit:
Sin #1. Imagining customers' needs in your conference rooms. Does your new product process begin with the word "idea," perhaps with a light bulb next to it? So whose idea is it: yours or your customers? Unfortunately, says Adams, most suppliers start with their solution, "validate" it by showing it to some customers, and measure market needs by watching sales results...after the product launch!
"Companies should invert this process: Begin with customer needs and end with supplier solutions," asserts Adams. "While doing things in the wrong order may 'feel' better to you, it is far less likely to result in sales and customer satisfaction. Besides, intelligent B2B customers can detect your 'validation' a mile away. They correctly sense you are more interested in your idea than in them...and that doesn't do much for the long-term relationships you need to build."
Sin #2. Relying on sales reps to capture customer needs. A salesperson is unlikely to uncover a full set of market needs if he is a) rewarded for near-term selling, b) unable to reach true decision makers, or c) not calling on most of the customers in your target market segment. But put a good salesperson on a team with marketing and technical colleagues, train all in advanced B2B interviewing methods, and you'll run circles around your competitors.
Be wary of VOC (voice-of-the-customer) consultants who want to exclude your sales force from interviews because "they can sell but not listen," warns Adams. In the long run, your company will fall behind competitors that have taken steps to develop a team of engaged and enlightened salespeople.
Sin #3. Counting on just a few VOC experts. Some companies rely on a handful of internal VOC experts to interview customers. You'll do far better training a critical mass of employees—who routinely interact with customers—to gather customer needs. Keep your VOC experts as coaches and trainers, but implement "VOC for the masses." You'll overwhelm competitors by turning a trickle of customer feedback into a torrent.
Sin #4. Using hand-me-down consumer goods methods. "Traditional VOC methods rely on questionnaires, tape recorders, and post-interview analyses," says Adams. "That's fine for consumer goods, but your B2B customers are insightful, rational, interested, and fewer in number. They're smart and will make you smarter if you engage them in a peer- to-peer dialogue. Use a digital projector, let them lead you to their areas of interest, probe with skill, and you'll be shocked at how much you'll learn you never knew."
Sin #5. Gathering only qualitative customer feedback. "I once had a new client who came to me extremely frustrated," recalls Adams. "He had spent months interviewing customers, only to hear his boss say, 'Nah, I don't think they want that; they want this.' Unfortunately, interviewers often hear want they want to hear... and then parade some customer quotes for support."
What you need, adds Adams, is quantitative data, which measure customer importance and satisfaction on key outcomes. Skip quantification and your new product will be based on assumptions, bias, and wishful thinking.
Sin #6. Listening only to immediate customers. Unlike B2C producers, your product might be part of your customers' products, your customers' customers' products, and so on. It's a mistake to interview only your direct customers, because they are usually unable or unwilling to disclose downstream customers' deepest needs. Also, B2C producers assign "one vote" per consumer...while you need to weight the buying power and value chain position of downstream customers.
Sin #7. Ignoring competitors when you design your product. "I find most product development processes are far too casual—and late—in assessing competitive offerings," says Adams. "Your new product makes a lot of money only if two conditions are satisfied: a) it offers significant value to customers, and b) customers cannot get this value elsewhere. Interviews tell you only about Condition A. You need side-by-side testing to learn about Condition B. This allows you to attack competitive weak spots, avoid getting blind-sided, and optimize pricing."
So why is it so important to focus so intensely upon customer needs? Consider three points, says Adams: First, the average new product success rate is only one in four. Over 30 years of research says the number one reason is inadequate market understanding.
Second, the "how" continues to get easier than the "what." You have twin goals of understanding what your customers want, and then how to satisfy them with your solutions. In these days of open innovation and global access to technology, the "how" is easier than it's ever been...if you have a solid grasp of the "what."
Finally, you reap benefits beyond good product design when you use respectful peer-to-peer interviews. You engage customers in the design process, which primes them to buy your product later.
"Our clients often enjoy benefits well before product launch," says Adams. "Their interviews cast them as caring, competent suppliers, so they have a better shot at other near-term business.
"Never forget that relationship building is everything," he adds. "We're living in an age where anyone, anywhere on the globe, at any time can start a business that competes with yours. By engaging customers in a respectful peer-to-peer dialogue and genuinely soliciting their ideas, you position yourself as a valuable partner and not just a vendor—and that in and of itself is a reason to stick with you."
What do you think? Post your comments below.
Monday, June 2, 2008
Banks Frustrating Customers
Posted by Mark Brousseau
An interesting article from Reuters:
Customers grow dissatisfied with retail banks
Wed May 28, 2008 12:07pm EDT
NEW YORK (Reuters) - A rise in fees has led to growing dissatisfaction with retail banks, J.D. Power and Associates said in a study released on Wednesday, adding that banks may be sacrificing long term growth in favor of short-term gains.
Customer satisfaction with retail banks dropped 26 points on a 1,000-point scale to 737 from the year before, according to the survey of nearly 20,000 households, conducted by the consumer study arm of McGraw-Hill Cos Inc.
While the current financial crisis has bruised the image of retail banks, it is cost-cutting and increased fees that have largely contributed to falling consumer sentiment, the study found.
"Some of the key drivers of customer satisfaction, such as the percent of transaction problems, fees, and wait time for tellers and phone service are going the wrong direction," Rockwell Clancy, executive director of financial services at J.D. Power and Associates, said in an interview.
Faced with the collapse of home values and the credit crisis, banks have cut personnel and increased transaction charges to meet shareholder demands.
"Typically when financial institutions are under a crunch, with loan volumes going down and charge-offs going up, banks raise fees and reduce staff to make their numbers," Clancy said.
Among the highest rated retail bankers, Commerce Bank received the top spot in the Mid-Atlantic and Midwest regions, while BancorpSouth Inc was rated highest in the Southeast.
Wachovia Bank was ranked first in the Southwest, and Bank of the West led the Western region of the country.
Banks that resist the urge to cut costs and retain a high level of customer service could reap financial rewards in the future, J.D. Power said.
According to the study, a bank that increased the number of highly committed customers -- people with a strong emotional attachment to the brand -- by 5 percent saw overall deposits grow as much as 3 percent annually.
"The focus on customer satisfaction can sometimes be considered as a discretionary expense when in fact it's the real differentiator in financial performance," Clancy said.
(Reporting by Steven Bertoni, editing by Dave Zimmerman)
An interesting article from Reuters:
Customers grow dissatisfied with retail banks
Wed May 28, 2008 12:07pm EDT
NEW YORK (Reuters) - A rise in fees has led to growing dissatisfaction with retail banks, J.D. Power and Associates said in a study released on Wednesday, adding that banks may be sacrificing long term growth in favor of short-term gains.
Customer satisfaction with retail banks dropped 26 points on a 1,000-point scale to 737 from the year before, according to the survey of nearly 20,000 households, conducted by the consumer study arm of McGraw-Hill Cos Inc.
While the current financial crisis has bruised the image of retail banks, it is cost-cutting and increased fees that have largely contributed to falling consumer sentiment, the study found.
"Some of the key drivers of customer satisfaction, such as the percent of transaction problems, fees, and wait time for tellers and phone service are going the wrong direction," Rockwell Clancy, executive director of financial services at J.D. Power and Associates, said in an interview.
Faced with the collapse of home values and the credit crisis, banks have cut personnel and increased transaction charges to meet shareholder demands.
"Typically when financial institutions are under a crunch, with loan volumes going down and charge-offs going up, banks raise fees and reduce staff to make their numbers," Clancy said.
Among the highest rated retail bankers, Commerce Bank received the top spot in the Mid-Atlantic and Midwest regions, while BancorpSouth Inc was rated highest in the Southeast.
Wachovia Bank was ranked first in the Southwest, and Bank of the West led the Western region of the country.
Banks that resist the urge to cut costs and retain a high level of customer service could reap financial rewards in the future, J.D. Power said.
According to the study, a bank that increased the number of highly committed customers -- people with a strong emotional attachment to the brand -- by 5 percent saw overall deposits grow as much as 3 percent annually.
"The focus on customer satisfaction can sometimes be considered as a discretionary expense when in fact it's the real differentiator in financial performance," Clancy said.
(Reporting by Steven Bertoni, editing by Dave Zimmerman)
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