Guest blogger Norma Huibregtse spoke with Jason Tripp, Sales Manager with Allegiance, Inc, while at NACCM 2009 to find out about their offerings and their views on the customer service industry.
As we end the North American Conference on Customer Management 2009, consider how we take the ‘what’ we learned and turn it into a strategic ‘how’. This thought was posed by Tom Atkinson, Director of Customer Research for the Forum Corporation.
Atkinson talked about developing ‘strategic speed’ because of the impact it has on sustaining our businesses. The 1980′s and 1990′s were about first-generation speed. It’s now time for second-generation speed which is about mindset and mobilizing people.
Strategic speed means delivering value to customers faster. The key to strategic speed is how your organization’s leaders think and act. They don’t aim for speed per se, but rather for increases in three people factors:
1) Clarity ‘ shared understanding of the situation and the direction you are heading. Employees should be able to answer the question ‘where are we going and why’?
2) Unity ‘ collaboration across departments, geographic boundaries, etc, is the main driver of unity in business. A culture of collaboration helps projects and strategies hold together.
3) Agility ‘ Encouraging people to find ways to meet strategic objectives in a constantly changing environment rather than sticking to a rigid plan. Companies which can quickly resolve customer issues win.
Atkinson stressed that strategic speed requires leadership and that leaders need 4 key abilities to succeed:
1) Affirming strategies
2) Driving initiatives
3) Managing climate
4) Cultivating experience (learning and sharing by all)
He challenged the audience to think about these concepts as they return home to develop new strategies. Visit Forum’s website at Forum.com to read more about this concept.
What does Oprah, ABC Nightline and 60 Minutes have in common? They all have featured the online retailer Zappos.com because of their customer service excellence. Maura Sullivan, Customer Loyalty Team Manager shared how Zappos.com leadership, under the direction of CEO Tony Hsieh, has built a solid foundation on customer and employee centricity.
Founded in 1999, Zappos.com has grown to a total of 1,400 employees, located in the Las Vegas headquarters and the Kentucky fulfillment center. They have over 10 million customers and on any given day, about 75% of purchases are from returning customers. Sales have grown from $1.6 million in 2001 to $1,014 million in 2008.
Zappos.com has focused their efforts on what the customer sees, what the customer experiences, and what the company does internally to help employees meet customer needs. The customer sees several value propositions on the Zappos.com website which include 24/7 customer service, 800 number on every page, free shipping, free return shipping, and a 365-day return policy. Returns average 35%, high for industry norms, but they factored that into their business model says Sullivan.
What the customer experiences is fast and accurate fulfillment, friendly above-and-beyond service, and occasional referrals to competitors for out-of-stock product. They see the value in these competitor referrals because of the ‘wow’ factor it produces. Also, they don’t limit handle times for customer calls or have sales-based performance goals for reps. The telephone is one of their best branding devices available, says Sullivan.
Their internal policies include hiring the best front liners. Interviews are 50% based on core values and culture fit. New employees receive 5 weeks of training on corporate culture, 10 core values, customer service, and warehouse training. They even offer to pay $2,000 to trainees in their second week to quit if they don’t want to work for Zappos.com after all. 98% of them stay. They even have their own Culture Book where employees can post their feelings and thoughts about working for Zappos.com. No surprise that they were rated #23 on Fortune Magazine’s 100 Best Companies to Work For.
Sullivan shared these 7 steps for building a brand that matters:
1) Decide. Decide sooner rather than later
2) Figure out values & culture. Originally there was not a core value list. A list of 37 values was created but they chose to pare it down to a list of 10.
3) Commit to transparency. Be real and you have nothing to fear. Twitter has opened up getting to know other employees. An ‘Ask Anything’ company newsletter allows employees to ask questions and get answers. Extranet allows vendors to check inventory levels and create purchase orders as needed. Tours and reporter visits are encouraged.
4) Vision- Chase the vision, not the money.
5) Build relationships. Be interested rather than trying to be interesting.
6) Build your team. They hire slowly and fire quickly, says Sullivan.
7) Think long-term.
Put a little Zappos in your day. You can email email@example.com to get a copy of the presentation or a copy of their Culture Book (include your mailing address). To receive a tour of their Las Vegas headquarters, you can contact them at firstname.lastname@example.org. They will even pick you up at the airport!
One final quote: ‘People may not remember exactly what you did or what you said, but they will always remember how you made them feel.’
The presentation began with the audience listening to heartfelt, recorded messages from Regence BlueCrossBlueShield customers. Here are a few of the comments they shared:
‘So appreciative of the work everyone is doing on my behalf’
‘I am so very grateful to you’
‘You guys are wonderful’
‘You are awesome’
‘I’ve never had an insurance company like this before’
Joanne Gholtston Vice President, Customer Service and Bonnie Hass, Director, Customer Service at Regence BlueCross BlueShield shared one way they analyze customer feedback – by randomly reviewing customer service calls.
How easy do you make it for customers to do business with you? asked Gholston. Complicated phone trees, impersonal messages, and legal disclaimers can drive your customers away. In fact, Gholston and Hass have done away with the recorded-message disclaimer. This doesn’t work for all companies in all states they commented. Know your market and do what you can to keep it personal.
‘Hard to hear’, ‘doesn’t sound happy’, ‘monotone voice’, and ‘no sympathy’ were some of the comments made by the audience in reviewing a recorded employee conversation. Gholston and Hass regularly share these calls with several departments within the organization. When listening to calls, Hass believes that 95% of multiple service calls for an individual customer occur as a result of poor follow-up.
Looking at the pros and cons of customer service calls was insightful. In listening to the last call, audience members commented that the employee was ‘personable’, ‘had energy, ‘gave information’ and ‘was engaged’. Isn’t this what we want from all of our customer reps? Gholston and Hass challenged the audience to go back and listen to customer service calls and find ways to add more value for their customers. Simple advice, BIG results.
‘Oh no you didn’t!’ Have you said this to yourself after having an unbelievably disrespectful or frustrating experience on a customer service call? Emily Yellin, author of Your Call is (Not That) Important to Us, shared with us that we should focus on the little things that have the biggest impact on service.
Yellin is a Journalist who has traveled the globe covering 4 continents to talk to CEOs and customer service experts. What drew her into the customer service conversation was that she sat on hold for what seemed forever on a customer service call with a home warranty company. Not happy with the experience, she decided to investigate why customer service folks keep missing the mark.
Yellin reports that Americans make 43 million customer service calls a year. About 70% of businesses use call centers today as the main way to interact with customers. In studying the call center industry, she uncovered several things they are doing right and several things that can be improved. Yellin states that ‘this is a time in customer service that is really exciting’.
She talked about an experience she had with a call center employee by the name of ‘Pablo’. After several frustrating attempts to get a product delivered, she was ultimately able to speak to Pablo who was able to take care of the problem. Pablo worked as a supervisor for a call center in South America. She contacted the company and arranged a visit where she met with management. And there sitting at the end of the table was Pablo. He told Yellin he had never met a customer before.
Her research led her to discover three themes that companies who have ‘got it right’ have been following. These are:
1) Design for it
2) Follow through
3) Provide value
Design of a customer service system is important. Getting feedback from front liners can be critical to creating good customer service systems. Putting yourself in your customers ‘shoes’ or observing your customers as they experience your service are some of the best ways to evaluate your design.
Follow-through will make or break the perception of your service experience. In her research, she discovered that what call center employees say and what customers interpret are often two different things. For example, when a call center employee says ‘I’m not authorized to do that’, it really means ‘I’m not going to help you’ to the customer.
Yellin suggests we watch the words we use to describe our roles. For her, Customer Relationship Management has a negative connotation. She doesn’t want to be managed. Words are an agreement between us, she says. Be sure you are speaking your customers’ language.
One thing the customer wants to hear from you is ‘Yes’. Anything you do to get in the way of ‘yes’ is a problem. She identified typical call center mistakes:
1) No information
2) They don’t have authority
3) They don’t care
The final theme is that successful companies provide value. We cannot lose our humanity, says Yellin. It starts from the top down. When you’ve had your very worst experience, what emotions did you feel? asks Yellin. Feelings include frustration, disappointment, and anger which spread easily. According to a Customer Rage study, 70% of angry customers felt rage, 28% raised their voices to an employee, 8% cursed, and 57% of customers took their business elsewhere.
The opposite feeling is when the experience is good. ‘Shouldn’t that be our goal’? asks Yellin. Let’s spread the good and create those good feelings. Minor indignities are the seeds to horrible things says Yellin. When we talk about the carbon footprint, we refer to the little things we can do to make our earth better. Yellin suggests that those of us in customer service should be encouraged to make a ‘karma’ footprint. What does your service footprint say about you?
Experience and service are two different aspects of our businesses. We can’t create experiences, they happen based on multiple variables. Experiences are co-created says Ryan Armbruster, recent SVP, Chief Experience Officer for Oncure. The best we can do is to deliver great service, and Armbruster believes that should be our focus.
Oncure Medical Corp. is a nationwide network of free-standing radiation oncology centers. The CEO of Oncure was himself a cancer survivor and had first-hand knowledge of the challenges facing cancer patients. Oncure wanted to improve their services and began conducting research at their clinics. They included focus groups, staff interviews, and patient input. They knew they had to look at their cancer patients’ experiences and needs from both inside and outside the walls of their treatment centers.
Where do businesses start in creating a new value-laden service? Armbruster states that businesses typically follow one of the following approaches:
1) Use personal business experience
2) Borrow solutions from other companies in industries
3) Borrow solutions from companies in other industries
4) Use personal experience as a customer
5) Ask customers what they want
6) Understand unmet needs of your customers
There is a definite challenge with the fifth approach, says Armbruster, as it doesn’t always lead to innovation. He quoted Henry Ford to illustrate the concept of customer wants. ‘If I asked my customers what they wanted, I would have built faster horses’ said Ford. If your job is to change context, you can’t have your customers tell you how says Armbruster.
Oncure designed a method to help them develop their services. The first step is to identify the spectrum of customers needs. The second step is to design and optimize services around HIGH VALUE needs. He identified three methods used to identify unmet customer needs:
1) Explicit ‘ asking the customers what they need
2) Tacit ‘ observing and gathering information by getting out and spending time with customers
3) Latent – uncovering needs that customers have that they don’t even know they have
The secret to competitive differentiation says Armbruster is the ability to
‘connect with your customers at a deeper level than the competition’.
He discussed five ways to make these deeper connections. They included:
1) Going beyond asking customers
2) Discovering service prototyping with your customers ‘ get them involved
3) Engaging employees in the process and have them part of the design
4) Encouraging business analysis early in the process
5) Committing to it even if you have only a dime to invest
Keeping your focus on improving your services is an important goal. It all begins with knowing the deep needs of your customers from their perspective. Ryan Armbruster can be contacted at Ryan.Armbruster@gmail.com.
We’ve all heard it said that we should put our customers first. Southwest Airlines doesn’t think so. Their philosophy is to put employees first. In fact, the company believes that happy employees = happy customers = happy shareholders, says Teresa Laraba, Vice President of Ground Operations for Southwest Airlines.
Southwest began in 1971 with 3 aircrafts serving 3 cities. Today, under the leadership of CEO Gary Kelly, it is one of the nation’s largest domestic airlines in terms of daily departures and customers carried. They have the safest record, best on-time performance, consistently low fares and the best flight schedules, reports Laraba.
The secret of their success is in the fact that they hire the best front liners. They hire based on attitude and look for people who ‘live the Southwest way’ says Laraba. It takes a servant’s heart willing to follow the Golden Rule, a warrior spirit to do what it takes, and a fun loving attitude that encourages employees to take the work seriously, but not themselves. Needless to say, Southwest experiences high employee retention. Laraba herself has been with Southwest for 25 years.
Empowering employees to do the right thing is key says Laraba. They do this by having employees follow these principles:
Guidelines rather than rules
Golden Rule overrides what few rules we have
Lean toward the Customer and you’ll never get in trouble
Our employees take pride in finding solutions
Southwest has an entire department, Internal Customer Care, responsible for recognizing employee birthdays and anniversaries and giving gifts and care packages. They believe in treating each other like family and being there for their employees in good times and tough times.
What do they get by investing in their employees? Their customers see the difference. This is brought home in a quote from President Emeritus Colleen Barrett, ‘We are in the Customer Service Business. We just happen to fly airplanes.’
Southwest understands the power of saying ‘we’re sorry’. A Customer Communication department focuses on contacting customers within 72 hours of an issue and apologizes when Southwest does something wrong. They create customer evangelists by going above and beyond, doing whatever it takes, with proactive communication. They choose to make regular deposits in the ‘Goodwill Bank’ says Laraba.
Southwest’s influence goes beyond the airport and into the community. Employees are encouraged to embrace causes and they do. For example, Southwest has raised approximately $11 million dollars for Ronald McDonald House.
The company is always looking for ways to improve the customer experience. Some of these improvements have included self-service kiosks, online and mobile check-in, power stations, redesigned gate areas, wireless access, and cashless cabins.
Southwest Airlines is a true example of leadership in action with an unwavering commitment to employees. This commitment has fueled their success and will continue to put them on the map as a company to model.
Leadership takes guts! Alan Deutschman, author of Walk the Walk, shares how putting customers first sometimes starts with putting something else first. His book delves into the concept of what it takes to put customers first. If you put customers first, then someone else is second, i.e., vendors, executives, employees, Wall Street stock analysts, etc. Leadership means making the tough choices over these competing constituencies.
Deutschman shares the example of Starbucks and its CEO, Howard Schultz. Schultz was responsible for Starbucks incredible growth over the years, building from 400 stores in 1994 to 14,000 stores today, reaching a 75% market share. He came to realize that in their pursuit of market domination and growth, Starbucks had lost their vision. Schultz believe that they had strayed away from what made them popular over the years – caf??-like experience, aroma of fresh ground coffee beans, and personal interaction with the barista, to name a few. Schultz realized that he had to lead his company back to the basics and ‘walk the walk’.
A company that built a truly customer-centric focus is Amazon. CEO Jeff Bezos made leadership decisions that were unheard of in the industry. For example, he allowed customers to post negative reviews about books, allowed third-party merchants to come in and offer lower prices, and gave away free shipping. Wall Street analysts asked Amazon’s board to remove Bezos because of his radical marketing tactics. Bezos understood that these strategies would ultimately create long-term customer loyalty and it did. Amazon succeeded at putting customers first says Deutschman.
Some companies have chosen to put customers first by putting other things first. An example of this is Southwest Airlines which has chosen to put employees first. During bad times, Southwest took a different approach than other airlines. In over 35 years, they have never laid off a single employee during a downturn reports Deutschman. Their high retention allows them to train employees in more creative way. By putting employees first, they have put customers first.
You can also serve customers first by putting a group of employees first. For example, Sony’s mission was to create a company for brilliant engineers. When color televisions came on the market, Sony held back from entering the market because they wanted to create a superior product driven by their engineers. Because of their investment in technology, they came out with the best color television in 1968 that had a superior picture quality called the Sony Triniton. Their CEO ‘walked the walk’ because he chose to put their engineers first.
In another example, Deutschman points out that putting ‘cleanliness’ first allowed McDonalds to grow exponentially. Ray Kroc was a clean freak and made cleanliness their #1 virtue. Fast food restaurants at the time were originally a hangout for teenage boys. Families stayed away. Kroc wanted to create a family restaurant that was clean and could offer value. Cleanliness, transparency, uniformed staffed, etc., helped to create this value. To date, cleanliness continues to be the #1 concern people have in choosing a fast food restaurant.
Charles Schwab wanted to create a stock broker business that put ethics first. They chose not to do investment banking, removed conflicts of interest, worked with individual investors and did not give purchase advice. Brokers were on straight salary so that they could provide service with no hidden agenda. One day, Schwab fired his own son for giving purchase advice to clients. Sometimes ‘walking the walk’ requires us to make difficult choices.
To walk the walk and be a leader, you don’t need a mission statement or post your value proposition for all to see says Deutschman. Your customers should know you by your actions. It is rare in corporate America. In all of his research, he has found few leaders who truly ‘walk the walk’.
We’re live this week in sunny Phoenix for the NACCM: Customer 1st 2009 conference. Our guest-blogger, Norma Huibregtse covered a session yesterday on social media and customer service. Follow along with us via our Customer 1st Blog as we continue our coverage from this year’s event.
Below is her entry.
NACCM 2009: Answering the Social Phone ‘ Listening, Measuring, and Engaging in Social Media.
What should we be listening for? Alston says that he listens for ideas, compliments, memes, crisis, complaints, competition, crowds, campaign buzz, and needs. Treat the conversations as if you are at a cocktail party. Don’t just jump in but look for the point of need from a customer. Listening first and then engage has been the common theme throughout many of the NACCM presentations today.
Alston shared the 5 C’s for engaging in social media. They include:
Content ‘ give content because people don’t want your promotions.
Community ‘ you want to create a place where your fans, customers and even critics can live together.
Conversation ‘ they build the relationships that build your business.
Collaboration ‘ because the consumer is more and more in control, it’s best to collaborate with your community than try to control it.
Connections ‘ you can’t be a hermit. You must actively and consistently connect with your community.
What do you do if there are no conversations about you? Find people who share your passion and join their conversations. Eventually these relationships will evolve and bring you more exposure. The ultimate is to have customers share their positive testimonials about your business using tools like Twitter. Alston shared how he files positive tweets about Radian6 as ‘favorites’ which he calls ‘twestimonials’.
Alston listed several reasons why some companies hold back from using social media to engage customers. They include restrictive policies, culture, bureaucracy, lack of momentum, concerns over window dressing, lack of top level support and lack of resources. When it comes to your culture, Alston says ‘if you suck in real life, you will suck on social media.’ Make sure it’s right first.
In his Social Media Maturity Model, Alton talks about the various levels of engagement. We all should begin at the bottom and work our way up. That way you build credibility with each step.
Contributing - Contributing value through content and helping customers achieve goals
Sharing – Tell your own story. Share your brand’s passion & personality
Participating – Adding on and sharing your knowledge
Responding – Answering the ‘social phone’
Listening – Monitoring and analysis
For those still hesitant about getting engaged in social media, Alston says ‘find your path, and get started NOW!’ Consumers want to connect with your brand. You’ll make mistakes but you will survive. Alston’s advice is to ‘have fun’. With over 11,000 followers on Twitter, you can bet that he is having tons of fun!
Rudy Vidal, Vidal Consulting GroupPanelists:
Jill Noblett (JN), recent Senior Vice President, Loyalty & Direct Marketing, Wyndham Hotel GroupDan Wiersma (DW), recent SVP, Service Platforms, Sony Electronics
Megan Crowley (MC), Director Market Research, Norwegian Cruise LinesChris Moloney (CM), Chief Marketing Officer, ScottradeConcept of the panel:The idea of loyalty is changing. What are we doing differently that’s working.Definition of Customer Loyalty:A personal commitment to re-purchase and recommend, that resists normal competitive market pressuresIs loyalty more difficult to attain now than it used to be?JN ‘ Yes. People are more price sensitive. So we have to consider price, but figure out how to add as much value as we can ‘ now we have to blend the two.CM ‘ One measure of loyalty is resistance to price sensitivity, but I’m not sure I agree with that anymore. The drivers are changing more dramatically.There’s a difference between attitudes and behaviors. The marriage of these two are difficult.DW ‘ The fundamentals haven’t changed. Things like commoditization, the ability to replicate another company’s product or service has changed dramatically in our lifetime. That makes it more difficult to do what we have to do. I’m a huge Southwest Airlines fan. A few weeks ago, I got stuck in Phoenix due to weather in San Diego. Southwest was very responsive, took great care of us, even though it wasn’t their fault. I will fly them forever. They treated me as a person. That fundamental hasn’t changed.MC ‘ For us, the cruise industry, the experience is very long-lasting. For us, the experience is much more important than the price. We’re focusing on the experiences that are critical to our customers. With less money, we have to focus even more on those things that are most important to our customer.AUDIENCE ‘ Visibility & availability. Easy to get instant gratification now.Speak to the empowerment of the consumer:CM ‘ It may be harder to overcome the price barrier. It changes the spectrum on how you have to overcome the price barrier. There’s only one price leader in any category. Everyone else has to differentiate another way.What Southwest does so well is service recovery. Maybe right now somebody in your company is delivering bad service. How you resolve that is key!JN ‘ How do you add value to the price point? In Wyndham brand, we allowed customers to get some personal preferences if they fill out a profile for us. Even though we may cost $20 more, some of these people feel that the personalization is worth it. Sometimes the equity people build with your brand they don’t want to lose.What creates loyalty?MC ‘ For us, it’s about the experience. We don’t have a very good loyalty program (from a traditional standpoint). We do understand what’s important to our customers and we try to deliver that. Our next step is to build a more robust loyalty program.AUDIENCE ‘ Anytime you have a touchpoint, you have to make sure the culture of service comes through.DW ‘ I agree completely. There are a multiplicity of things that drive loyalty, but the touchpoints of your company, both directly and indirectly are important. I asked different departments: legal, accounting, etc. if they knew how they impacted the end customer. Many of them didn’t know. At Southwest, every single person knows how they affect the end user. So what drives loyalty, as I found at Sony, is getting the linkages with everyone in the organization so they understand that what they do impacts the end customer (even the legal department ‘ think about the legal speak they make customers read).What is the role of the organization to creating loyalty?CM ‘ If people don’t identify themselves as part of the company ‘ like saying ‘we’ when referring to themselves in the company ‘ the service level might not be what it should be. They won’t seem as empowered as they should be.I will throw a wrench in it, though. Most of my friends are loyal to Apple. They’re off the charts for loyalty right now. Harley Davidson has like an 85% net promoter score. People want to be loyal, they want to be impressed, they want to have a good time. They want us to overdeliver. It’s not a situation that’s going to go away. People want to talk about your company.The drives are probably different for each company, but it starts with overdelivering on the product.JN ‘ You can have great service, but if the product is flawed, you’re going to have problems. You may be loyal to a certain hotel, but if you find bedbugs, you’re probably not going to go back, or you’ll wait a long time before going back.AUDIENCE ‘ The opposite is true, too. What I want to know is that everytime I check into a Wyndham hotel anywhere, I want to have a consistent experience. People want good service and good product to be consistent.JN ‘ A lot of people talk about Zappos, but they’re all in one location. The culture and values can be easier to manage. It’s harder with a company that has many locations.CM ‘ I’m behaviorally loyal to my airline because of the loyalty program ‘ I’m platinum. I expect a certain level of service for that. When I travel on another airline, I kind of expect to be kicked around.You cannot deliver an extreme level of service to everybody. Southwest has finally joined the bandwagon and created a tiered level. We all know we have to treat our best customers special, but that can’t hurt the others.DW ‘ Back to the hotel example, I really like to be greeted at the front desk. My co-workers don’t care about that. We went to a hotel with an express check-in. My co-workers liked that. I felt dissatisfied because I like the interaction.If you’re used to an environment being a certain way and it turns out different, that can be very disappointing. You have to look at how different people want things.There’s a vicious circle of delivering what we can deliver, which attracts a certain customer. What about the others that want something different?AUDIENCE ‘ Let’s use the power of analytics to adapt our loyalty programs and our service models so you can tailor it to what each customer wants it to be.JN ‘ It depends on your product. It comes back to the drivers. What is that you know about the customer that makes them loyal?CM ‘ The next step would be to create a service differentiator. Can we group people into buckets? Some companies do ‘personas’ that help understand what the customer wants.JN ‘ Wyndham creates personas. It was about how we presented the marketing to them. If you wanted points, we could talk to you about points. If you’re a leisure traveler, we’d talk to you a very different way.DW ‘ Some companies are doing exactly that. They’re having a conversation with you, then you can go somewhere else in the world and they can pull up the information on you (i.e., Ritz Carlton).AUDIENCE QUESTION ‘ If people fit different slots (ABC), what can you do to move people up the chain? And how do you keep the ‘A’s from feeling like they’re not special anymore?JN ‘ We moved people up the value chain through a lot of education and communication ‘ helping them to understand the brands, what we have to offer. Sometimes they got special offers, etc. As we got to the higher levels, we tried to figure out ways to recognize them and get more share of wallet at the same time.Sometimes we would move people up, or keep them around, even if they were a little short on points. That keeps them engaged and ‘hooked.’CM ‘ Sometimes they don’t know they’re in a loyalty program, or what level they are. You have to communicate that to them. You have to constantly learn from your customers about where they are, what’s going on with them, and how things have changed in the past year, you can move them up or down the value chain more easily.MC ‘ We have a much higher price point product, so we’ve done a lot of work to figure out what makes people purchase 2, 3, or 4 times. Once they’ve purchase 5 times, they’re loyalty goes through the roof. So we focus on how to choose the 2nd or 3rd purchase.Chris, are you loyal to your airline brand, or are you loyal to the points?CM ‘ I’m hooked because they’re ‘my airline.’ And I have a status with them (Platinum). If they had the exact same policies as Southwest, I’d go with Southwest due to the service.Are customers loyal to the hotel brand or the points?JN ‘ You have to wonder if once you’ve created these points program or other program, have you created a monster? Maybe. But if you look at it like you’re giving them something they value , would they stay with you because they’re invested, even if you’re not perfect? That can change over time. I might make a different decision when I’m on business vs. being on vacation vs. when I’m visiting my grandparents. It’s more about what the person is desiring. Understand what they value, then give it to them.AUDIENCE QUESTION ‘ Can you share some lessons learned from loyalty programs?DW ‘ We’re not a steeped in loyalty programs as hospitality or airlines. We looked for the highest level of repeat customers and we gave them a ‘backstage pass.’ If you’re close to a Sony store, you can get special stuff at the store. Almost nobody took us up on it. We sent it out to 250,000 and we had only 1000 people take us up on it in a year. We know that people are not as loyal to Sony as they used to be. We thought it would be great because we thought customers would really love the service enhancement.What was it about that program that didn’t work?I don’t really know. The flip side, though, was we came up with a program that’s not a loyalty program, but an enhanced services program. Customers loved that. They could come to a store and talk to somebody face to face in the store when they had a problem.CM ‘ A bank customer tried to do points based on overdraft fees because they’re the most profitable customers. Another bank gave points for ATM deposits. It ended up creating unbelievable lines at the ATM. A utility company tried to create a program that would incent people to use more power by leaving stuff on when they weren’t in the house!JN ‘ One of the things we didn’t do well was to set expectations properly with franchisees, etc. It took us a couple of years to create a dashboard for them to see the effects of the program. Calibrating those expectations is important.Internal alignment and the understanding of the organization is important. We had a lot of technology infrastructure, we had to convert a lot of customers, etc. Sometimes we did that too quickly and we didn’t follow our own best practices. Those were learnings that were ongoing. There’s the famous expression, there’s never time to do it right, but there’s time to do it again. Take it slow and do it right.MC ‘ Our loyalty program is auto-enrollment. Now we’re getting to a point where we have a giant database of people that are pretty much inactive. We’re likely moving to a system that is more opt-in because those people will be a lot more active. Our direct marketing people are scared of losing their giant list, though.
What are you doing differently now than you were before?MC ‘ First, understanding the things that impact loyalty. Next, focus on the things that are most important. This helps get everyone excited and rally around those things when they’re prioritized.What we’ve done recently is start with the customer. 80% of our sales go through a travel agent. So even though we touch the end customer, they purchase before we ever meet them. So we have to understand what drives the travel agent. What are the key drivers for them, so we can focus on the most important things for them, too.Third, what makes employees excited and loyal? Same thing.If we have loyal customers, loyal travel agents, and loyal employees, we’ll do great.Is it a problem to ‘compete’ with travel agents with your direct business?MC ‘ We need the travel agents. We love the end customer. We have to have both, but we can’t deny the travel agents.Chris, what are you doing differently than you were 5 years ago?CM ‘ When you look at your business, 10-30% of your business can come through referrals. Get a hold of where referral lives in your business and figure out a way to maximize your referral program.The people who make referrals to make referrals to people like them. So, high value customers are important to get referrals from.
AUDIENCE ‘ How do you handle the difference in the increase in emotional loyalty?DW ‘ We recognized that the emotional piece was critical to loyalty. We started to do it base on the call center. When you’re calling a call center, you’re usually not happy. We started to rate emotions. We have your info and we can rate the experience based on what happened last time. We made it as simple as a frown face, happy face, or face with a straight line. We told our agents to not worry about how much time they were on the phone, but instead taking care of the emotional need of the customer.We also employed skill-based routing. If I made you happy last time, we’re going to try to route your next call to me to take care of you.AUDIENCE ‘ I’m in healthcare and one of the things we’ve learned in healthcare is how to be ‘sensitive’ to a person’s needs. And in healthcare, we have to change our hats all the time based on the medical need.
Jill, what are you doing differently now?JN ‘ When you’re dealing with 7000 franchisees, it’s hard to get consistency. Over the past few years, the company at large has made a shift to be more customer-centric. It’s interesting challenge because the ‘company’ doesn’t deal directly with the customer. From a very basic standpoint, the organization started to align it’s technology so we can get an accurate picture of the customer and know what’s happened with them on previous visits. We obviously focus on retaining customers.From a loyalty program standpoint, we tried to be relevant to our customer, meaning we tried to find things that were important to them and customize our offers, etc. to address those things. Also we tried to go deeper into personalization.Give us something you learned that was key to making loyalty work:CM ‘ Net promoter score. I used to market against it. Now I’m the biggest proponent.MC ‘ For us, it’s listening to customers, then modeling it to them and prioritizing.DW ‘ I’m a huge proponent of NPS. Alignment is critical. In order to have a successful loyalty program, you need alignment of marketing, sales, etc. Without it, you struggle. Lastly, the significant impact your people have on your customers. Empower them to do things.JN ‘ Showing metrics and ROI as soon as possible gets the company behind the effort as quickly as possible.