What Is the Customer Actually Buying?

It’s not about what you sell; it’s about what the customer is buying. If you focus only on what you sell it rapidly becomes a commodity. If you focus on what the customer is actually buying, nothing needs be a commodity.

I was reminded of this again last week when the Palessi designer shoe hoax was revealed. In case you missed it, Payless Shoe Source created a “fake” designer store for a line of shoes from a made up designer, Bruno Palessi. They stocked the store with shoes they normally sell in their Payless stores for less than $40 and sold them for up to $600. Same exact shoes. Customers went nuts for these amazing shoes from a “recognized” designer sold in a store befitting the “brand.” (It was a former Armani store used for this “stunt.”)

Same shoes almost 10x the price because the people were not just buying the shoes. Want to sell your goods and services at higher prices? Stop focusing on what you are selling and consider what the customer wants to buy from you they might not be able to buy anywhere else?

Mitch

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The Power of Who and the Power of Focus (Part 10)

For many years, we have espoused the idea of knowing Who should be your customer, and, sometimes more importantly, Who should NOT be your customer. Some recent research suggests that this is powerfully true in terms of customer satisfaction as well.

The July-August 2018 issue of the Harvard Business Review reports on a study done of thousands of banking customers and hundreds of banks that showed a remarkable correlation between reported customer satisfaction and who the bank “typically” serves. The study found that the variation in reported satisfaction had little to do with any other variable. In other words, the more the bank served those customers it was designed to serve, the better the level of satisfaction. The more it strayed into other bank services the less satisfied were its customers.

This again reminds me of the importance of focus. The narrower your focus the better your results.

The research demonstrates that to improve customer satisfaction, it’s not just about training, it’s about focus on attracting the right customers who value what you are designed to offer. If there aren’t enough of those customers, that may be a strategy issue for you.

While this research is about banks, there is no reason to believe it is unique to banks. Decide Who you want to serve and develop offerings and processes to support those offerings for those customers.  Be transparent about who you are “for.” Know who you are going out for business to serve, and focus on them.

Mitch

What Really Sets Amazon.com Apart

Amazon.com has claimed a relentless pursuit of customer-centric processes since its inception. Sure, Bezos’ access to VERY low-cost capital and minimal profit expectations gave him an advantage, but others have had those factors and no longer exist. It’s the fact that they are relentless in their focus on customers that makes the difference. Others have had it and lost it, FedEx is an example, but when your competition is UPS and USPS the bar is pretty low. Amazon has hundreds of competitors, so they can’t afford to lower their guard.

I was treated to a recent example of Amazon amazing this last two weeks and while the process needs improvement, the result was stunning.

I bought a file cabinet from one of their online stores, We Love Our Customers. (If anything was further from the truth, I am not sure what it would be, but I digress.) The cabinet arrived on time as agreed and needed handles screwed onto the 4 drawers (as advertised). Each drawer was to come with 2 screws. Unfortunately, one arrived with only one screw.

I contacted the seller and 2 days later they told me they would check with the “factory” to see if they could send me a new screw. 2 days later they told me they couldn’t but would offer me $8.00 as a credit or they could have me ship the unit back for a refund or replacement. I had not kept the box and could not believe they would want the entire product returned and then ship another for lack of a screw. I suggested if that was their solution they should just ship me another unit, I would remove the screw I needed and then ship the replacement back in its box. They didn’t like that idea, but offered no other solutions.

I escalated to Amazon customer service. Shortly afterwards I talked with a mediocre customer service person whose English was “ok” and who was clearly reading a script, but did want to help. She said she would look into things and get back to me and that I could file an A-Z refund claim. She called me back (pretty amazing) and, reading from her script, told me she was waiting for an answer from the seller. I filed an A-Z claim and was told it would be up to 2 weeks for them to “investigate.”

Meanwhile, I made several trips to the hardware store buying what I hoped would be the right size screw to replace the missing one. Turns out it’s a metric, fine machine screw, which, on my 5th try, I got right. So I have now solved my own problem. We Love Our Customers (liars) have said nothing and not communicated anything. Amazon calls me again (amazing) and I tell them I have solved the problem for about $25 in screws and 5 trips to the store. They offer to try to get me a $25 refund. I explain that is not really my issue. They do however, after another 2 days, get me the $25 refund.

I am quite upset by this whole process and have pretty much lost faith in Amazon’s vaunted customer service. Why? They don’t seem to be doing much, the rep is mediocre at best, and the A-Z process is taking too long. So, I start shifting my buying to other sites.

Today, out of nowhere, Amazon has refunded the entire purchase price and not asked for the item to be returned. Pretty amazing. Did it take WAY too long? Yes. Did Amazon lose some of my business in the mean time? Yes. However, what they ended up doing exceeded my expectations and I am now, again, a loyal customer.

Should they move faster? Yes. Should their reps be better English speakers without the need to read a script all the time? Yes. But the net result is more than most other companies would do. Good for them.

Mitch

If You Can’t Fix It, Feature It: Part 7

As I said in the earlier six posts in this series, one of my Group Executives at Teledyne, Roy Fields, said those words to me (If you can’t fix it, feature it) and they have proven hugely valuable. I think store’s position needs no further comment.

 

 

 

 

Mitch

A Brief Study in Contrast

Two customer experience stories in the same day. One is an example of great (and from an airline no less). The other is an example of pathetic, at best. Let’s start with the great one.

I was sitting in the Burbank airport waiting for my Southwest flight when the gate agent called my name and asked me to come up to see him. I did and he said he and Southwest wanted to thank me for being an A List flyer and that I would be getting a small gift from them. I selected free wifi on a flight. Southwest calls this Surprise and Delight. It did both. Well done.

Then at the other extreme we have Comcast/Xfinity. I needed to talk to them about a technical issue I was having and did not want to spend 30 minutes on chat. Try to find a phone # to call them. They make it almost impossible to call them. They claim they will call you but you must have an account # to do that. I didn’t have the #, so I just kept searching for the phone number. The website made it impossible, but fortunately my friends at Bing found it for me quickly. The technical problem was solved promptly (faster than finding the # to call). Wow how awful, but then they have an effective monopoly where I live so I am stuck with them (not that AT&T is actually any better).

What a study in contrast that day.

Mitch

The Try Something Loop

Most companies use the “try something loop” when they have a shortfall in sales that needs to be addressed in the short-term. The try something loop consists of having a brainstorming meeting to come up with ideas to increase sales in the near term. One of the ideas is picked (how it is picked can be a popular vote or other random method, including the one the boss likes best). The idea is tried and it usually doesn’t work, because if solving problems by brainstorming and picking was a good idea, most problems would be solved that way.

The “loop” often results in implementing a new CRM because many are convinced that if a new CRM is put in place, then a new process will result. It doesn’t.

The next most likely “solution” is to change sales managers. Apparently, according to this article, which summarizes the churn at the CSO level well, the tenure is now about 19 months. Even more volatile than the CMO. Rearranging the deck chairs continues.

If you want to improve sales, you need to know the root cause/constraint to getting more revenue. Today, in most US companies, those constraints are on the delivery side not the revenue opportunity side. “Tomorrow” it is likely to return to the revenue generation side. Don’t resort to the “try something loop” when that day comes. Learn to find the constraint or bottleneck and relieve it.

Mitch

More Sales Prevention

I am thinking that to be as good at sales prevention as some companies are, and still exist, it is because they have a monopoly or near monopoly, or their entire competitor base operates the same way.

Today’s sales prevention example, which is stunning in so many ways, is Comcast.

I recently needed to add Comcast service at a new address. I am not currently a Comcast customer. Being thoroughly up to date, I went to the comcast.com web site to see how to get new service. Turns out you can’t. Their website apparently is focused only on existing customers, or people looking for a store. I finally decided to chat with someone and they were able to give me a phone # to call.

That person was quite helpful and told me I could have their 1G service at the new address. That was awesome since AT&T was offering 18MB at the same location. (I am thinking that is just a bit over dial-up speed). Got all signed up.

The next day, late in the day I got a vm message telling me they had a question about the address, and I needed to call. I did, pushed 1 for service since that was the instruction if they had called you. Phone went silent for over a minute. Hung up, tried again. Same result.

Next call I tried acting as if I was a new customer, thinking they might actually care about that (despite how difficult it is to find a # to call them if you actually are a new customer). Got a great young woman on the phone who proceeded to tell me I had no order in their system and that clearly I had talked to a 3rd party provider who had not entered my order correctly. I told her that wasn’t actually possible since I had an email from them. Anyway she decided to re-enter my order and advised that 1G service was not available at the address but I could have 250MB (400MB also not available). Disappointed was I, but still better than 18MB, she signed me up, gave me the same appointment I had before from the fake Comcast person, sent me my confirmation emails; and all done.

Today, I decided to go online and look at my account and see what was going on. Can’t access my online account. No reason given, just can’t. So I decided maybe it wasn’t set up yet so I tried to set one up. I end up in a loop asking me to create a password, that never seems to take but does not give me a message about why.

So, I call them (I have a # now). Talk to a guy on the phone who advises that you can’t set up an account without actual Comcast equipment, which I won’t have until installation.

Seriously, if these people actually had to compete with a real competitor they’d be all done. But they don’t, so they aren’t.

Do you have that luxury? I doubt it, so make sure your “sales prevention department” is not in action.

Mitch