E-Commerce Blog

There’s an old adage about it costing five times as much to acquire a new customer as to retain a new one. So why – in these difficult times - aren’t more businesses focused on reducing customer churn, and improving customer service levels, to generate more repeat business? 

This is fundamentally a cultural problem for many companies. There needs to be a shift in the mindset of larger organisations, in order to keep both staff and customers satisfied. I’m not sure that the balance is right, and I’m hoping that the next decade will be all about retention and satisfaction, so here I’m going to lobby for love. I want you to give more love to your customer services staff, for they are at the forefront of your push towards boosting customer satisfaction… 

In an average organisation the sales and marketing department is primarily concerned with customer acquisition, and is rewarded for acquiring new customers. Staffers working in sales and marketing are used to acquisition-related bonuses. At a higher level, marketing executives may be involved in multimillion pound, cross-channel marketing campaigns, jetsetting around the world to oversee the filming of sexy TV ads. This is all very rewarding, in terms of compensation and job variety.

But does marketing really help boost satisfaction levels? And aren’t acquisition bonuses a bit, you know, myopic? I’m not suggesting that you should avoid paying staff for bringing in new sales, but what really matters in business is profit. And profit is mainly related to retaining existing customers, keeping them happy, and growing the amount they spend. 

So now let’s consider the lot of the embattled customer service department, which is primarily concerned with keeping customers happy. Staffers working in customer services roles (CSRs) are right up against it, judging by the state of the average hold time whenever I call up my friendly ‘service’ centre. These are unloved and undernourished departments, sometimes viewed as an out and out burden by CFOs (who may know a lot less about actual levels of satisfaction that the average CSR).

Yet customer services staffers are in the business of service, and service isn’t always about fixing problems. It can be about providing a helpful experience, based on an enquiry as opposed to an issue. It can also be about helping to convert a prospect to a customer, or about selling up. But CSRs are rarely compensated for acquiring new customers, or generating more money out of existing ones, much less paid a reasonable wage for keeping people happy. They are not used to receiving bonuses at all. And their jobs by and large suck, at least as far as variety and working environment and compensation is concerned.

Isn’t this a bit of a joke? Isn’t customer satisfaction as important a metric in modern business as any other? Aren’t customer services staff more likely to impact satisfaction one way or another, compared to an advertising or direct sales campaign? A well-timed offer might help make somebody’s day, but how often do you receive such an offer? Ads and direct marketing often annoy consumers, rather than delight them.

The fact is that we are often most likely to form a positive or negative feeling about a company whenever we engage with them directly. The customer experience at any number of customer touchpoints - in industry parlance - has never been so important. As such keeping your CSRs happy should be at the top of your agenda. Show them some love! 

Big does not mean better

There often seems to be an inverse relationship between the size of a company and receiving good service. The bigger a company gets, the harder it is for them to deliver great service. Satisfaction is often measured using industrial, impersonal metrics, by the larger company: number of complaints, sales volume, late payments, and via badly-created surveys. 

By contrast, and perhaps rather obviously, smaller companies can be far better at customer engagement than larger ones. They’re also well-placed to deliver higher levels of service than the corporate heavyweights (and service can really help a small company to hit the big time). Small businesses do not operate the dreary call centres that make customers chooses from a range of automated options for four minutes before answering (or, as tends to be the case, placing the unfortunate caller on hold for an indeterminate amount of time, and often at the caller’s expense). Small companies are more agile, and staff tend to be closer to the front line, and can wear multiple hats. As such they have a real advantage over the corporate behemoths that spend many millions each year on marketing, but don’t pay enough attention to service and satisfaction. 

So can small companies can become big ones without the need for those huge marketing budgets? I think the best ones certainly can. The key is in adopting a solid customer engagement strategy, which should encompass and embrace customer service. By providing excellent levels of service and support, and by proving that you listen to your customers, you can seriously improve your retention rates.

Take Zappos, the online shoe retailer, based in Las Vegas, and now owned by Amazon. At the start of this decade nobody imagined that you could sell people shoes via the internet, without allowing them to try them on, but this is exactly what Zappos does. In fact, it does allow shopper to try on shoes from the comfort of their own homes. It quickly ships the shoes for free, and it has a free returns policy too. As a result customers simply love Zappos. In fact they love the brand – ‘the service’ - so much that three-quarters of sales are generated by existing customers. And all that adds up to a cool $750m a year, with Zappos now turning over $1bn in online sales.

Here’s the nut of it: Zappos uses customer service as it’s marketing. It has described itself as “a customer service company that is in the business of selling shoes”. There’s a lot to take away from that. Customers are so happy with the service that they adore the Zappos brand, and keep coming back for more. This kind of customer-centricity is fundamental to customer satisfaction, yet - despite the myth - not all companies put customers first. It doesn’t have to be that way. Simply put, by ramping up your customer engagement strategy you can boost satisfaction. 

It is worth trying. Everybody knows that a happy customer sticks around for longer, purchases more often, and is more likely to recommend your brand (in other words, to increase your profits while doing your marketing for you). The end result is an improvement in customer retention rates, which is of massive importance in a difficult market environment. 

Consider the rise of Twitter (Zappos certainly did, and uses it with aplomb). Some companies see Twitter as a free marketing platform, but it should be used – first and foremost - as an engagement platform. That means listening and responding first, and promoting as an afterthought. And if you do use it to promote things then be sure to do it in a meaningful way, and to demonstrate real value. We use Twitter to promote our service by giving away free advice, how-to articles, site reviews, and research. It drives interest in our paid-content business (as well as our in-company and public training, and our events). We listen and communicate via Twitter, and we’ve found it to be very helpful in boosting engagement both online and offline. And this is great, because we know that customer engagement is key to improving satisfaction and loyalty rates, and revenue.

By listening to customers, and letting them know that you are listening, you can improve your business, your products, and your levels of service. Your customers, along with your staff, should be your best assets. You need to keep bother customers and staffers happy, satisfied and rewarded.

Remember: happy customers will spread the love about your brand, and keep coming back for more. Zappos knows this, we know this, and you know it too. Make it so…

[Image by vlima via Flickr, various rights reserved]

See the rest here:
Love your customer service staff, love your customers

He won the US presidential election in no small part due to a brilliant online strategy, which Barack Obama is encouragingly continuing at his Change.gov website.

Today, the soon-to-be American president launched a new social democracy-in-action feature on the site, The Citizen’s Briefing Book.

On it, Americans (or anyone, really), are invited to submit ideas to
the new administration as well as to rate or comment on other posted
ideas. Like Digg, the most popular ideas rise to the top, and
presumably to the attention of the Commander-in-Chief.

This is
more than an empowering example of online democracy and the tactics
that helped a nation radically change course. It’s a strong example of
how organizations, large or small, can leverage social media to engage
audiences, as well as listen to and presumably address their concerns.
To encourage and facilitate participation, the site is searchable, and
posts are tagged and categorized.

As if the guy doesn’t have enough on his plate before Tuesday’s inauguration!

Online
marketers and analysts should keep an eye on the Briefing Book to glean
best practice ideas for online research, surveys, engagement marketing,
and likely, some surprises we haven’t even thought of yet.

View original post here:
Obama continues to leverage social media and online democracy

Since the dawn of US ecommerce, the question has been “to sales tax, or not to sales tax?”

Consumers and online retailers are squarely in the don’t-tax camp, while state governments, which stand to reap the tax dollars, are of a differing opinion. New York state has been trying to get out of state sellers, such as Amazon, to collect and pay state sales tax on transactions, which could reap hundreds of millions of dollars in annual revenue for the cash-strapped government (particular now that once-lucrative Wall Street revenues are fading fast).

The rule of thumb has long been that if the online seller has a bricks and mortar local presence in the state, e.g. Apple.com has local Apple stores, state tax is levied on online transactions. Amazon, as well as other online-only retailers such as Overstock.com, challenged New York’s attempt to get them to pony up 8.25 percent on all New York state transactions.

Yesterday, a NY State judge dismissed Amazon’s suit as groundless.

Blame…..the affiliates?

Because Amazon generates more than $10,000 in referrals from New
York-based affiliates, the judge’s reasoning goes (ergo, New Yorkers to
earn money from other New Yorkers) Amazon, as well as other
out-of-state retailers with affiliate programs, are going to have to
get on the state tax bandwagon.

And that’s going to hurt. Not NY state, of course, but online retailers and consumers.

A
seldom-discussed bit of accepted wisdom is that ecommerce is buoyed in
no small part by its ability to enable buyers to avoid paying taxes on
high ticket items (which also lessens the burden of shipping charges).
Buying that new laptop on Amazon versus a local store can shave a
couple hundred dollars in sales tax right off the price - a strong
incentive to buy, particularly in tough economic times.

The
aftermath of this ruling is going to be interesting. How much (more)
will online retailing suffer, now that their tax amnesty status in New
York is lifted? Will affiliate programs be designed on a state-by-state
basis in the US? It’s an absurd notion relative to the nature of the
web, but entirely possible in hard economic terms.

This will be
an interesting one to watch. Bottom line, New York’s decision to
disincentivize ecommerce could not possibly have come at a worse time.

Read the original:
Recession collides with “Amazon Tax”

Guy Stephens is the Knowledge and Online Help Manager for Carphone Warehouse, having joined the company in September last year.

I talked with Guy about how Carphone Warehouse provides help and support to its customers online, his plans to improve the service offered, as well as the company’s attitude to Twitter and other social media.

What is Carphone Warehouse’s general attitude to online customer service?

As a company we are looking to do more online, and recognize the role
that online has to play in providing good customer service. My role at
Carphone Warehouse is help and support so I came to it from that
perspective. Customers are changing and many now want to receive help and support in different ways.

Is this partly about reducing pressure on call centres?

It?s about looking at providing a better service and meeting different
customers? needs. There will always be customers who want to call up
and speak directly to someone about their issues, and some problems may
be more suitable to be dealt with over the phone.

Most of us tend to root for the underdog. There’s something powerful in
the thought that the most disadvantaged can muster up the strength to
overcome a significant challenge or a more potent competitor.

Few, however, seemed to be rooting for Palm, the company that created the market for the smart phone.

Perhaps it was that Palm didn’t seem to have any strength left. Or perhaps it was that Apple and its iPhone were so appealing that nobody wanted to consider that the fight in the consumer smart phone market wasn’t basically over.

Whatever the case, Palm’s unveiling of its new smart phone, the Pre, at CES last week caught almost everyone off guard.

I’m not a huge fan of smart phones (to me, they’re a utilitarian business necessity more than a fashion accessory) but there’s no denying that the Pre isn’t an attractive phone. More important, however, is the fact that early reviews indicate that its style is exceeded by substance, function eclipsing form.

While I haven’t been given the opportunity to try the Palm Pre myself, I do have a friend in the United States who has and despite the fact that he’s a huge iPhone fan, he was extremely impressed. He told me his initial skepticism was eliminated after just moments of use.

Words he used to describe the Pre include ‘sleek enough‘, ‘intuitive‘, ‘speedy‘ ‘thoughtful‘.

The last word - ‘thoughtful‘ - caught my attention.

Based on my friend’s experience and all the reviews I’ve read, it’s quite clear that, despite its woes, Palm went into the ‘lab‘ and built a viable product. While there are plenty of good reasons to be skeptical and I’m not exactly ready to embrace the enthusiasm of analysts who are usually wrong, even if the Pre doesn’t make Palm an immediate contender for the smart phone throne Apple and RIM compete for, it’s hard to argue that it hasn’t given Palm new life.

And when you’re a company that has been written off, new life (and a bit of Apple-like cheering from the media and blogosphere) is all that you can ask for.

So how did Palm pull it off? The development of the Pre could only have been accomplished with a focus on the user, a healthy dose of introspection on its past failures and current position and a lot of thoughtfulness.

It’s quite clear that Palm knew the stakes were high and invested significant effort and resources in attempting to make the Pre a competitive product in an unforgiving market. From the slide-down QWERTY keypad to the Linux-based webOS that some have called the most elegant and sophisticated web-oriented mobile OS out there, the Palm Pre has done what Palm desperately needed - create a good first impression. And it continues to do so - one of its employees is soliciting developer feedback on how Pre applications should be distributed.

Making a good first impression was important - had the Pre flopped, the demise of Palm probably would be all but official.

The glimmer of hope that the Pre has given Palm serves as a lesson for all companies - to survive and thrive, there’s no substitute for getting back to the basics and focusing on the product.

Far too many companies in Palm’s situation are unable to pull themselves together for one last fight, and far too many companies at the pinnacle of their existence stray from the basics.

In these tough economic times, Palm’s lesson is one that may have some value to companies facing significant challenges of their own, such as Yahoo, GM and the New York Times. And it may have some value to companies that are still holding their own but risk going astray, like Google and Microsoft.

If Palm has proven anything, it’s that you can teach an old dog new tricks.

Underdogs and favorites alike should reflect on the lessons of the past but a major part of developing a dynamic business that is capable of adapting to changing circumstances and overcoming unexpected challenges is finding a way to leave the past behind. Markets are almost always more dynamic than even the strongest companies in them and learning new tricks is the only way to keep up, and when necessary, to catch up.

Whether Palm’s new trick will win it praise from the marketplace in the form of financial success remains to be seen but one thing is for sure - it isn’t chasing its tail anymore.

Originally posted here:
Palm proves that you can teach an old dog new tricks