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Retail reward programs no guarantee of customer loyalty

IMG_7981Most retail organizations use discounts to entice customers to buy their merchandise at the end of each season, but that doesn’t do much to guarantee a shopper will ever return to a store or even garner customer loyalty. Retailers spend billions of dollars on loyalty programs which are designed to bring customers back for repeat business, but a recent poll by Crossview, an organization designed to optimize consumer experiences, revealed that 66 percent of consumers responding to a survey about loyalty programs do not shop at a particular retailer despite promises of earning points for future purchases.

Loyalty programs started as far back as 1896, when stores would give out “green stamps” that could eventually be redeemed for household products. Very popular in the 1930s through the 1980s, supermarkets and other participating stores would give out stamps commensurate with the purchase amount, and the stamps would be pasted in collector books. Each book would be completed when 1200 point stamps were collected, and the popular catalog with all the great reward choices became a family’s favorite pastime.

Today most people have at least one loyalty card, but the constant barrage of worthless emails and low-value rewards  have people  discontinuing the programs. Most consumers don’t want to spend the time figuring out the value of points and a reward that may take months if not years to earn.  Who wants to read about useless offers when they open up their email?  Shoppers want immediate benefits; in other words there has to be a program that keeps customers engaged, and shoppers want the programs to make a substantial difference; make it worth their while.

Rodney Clark, a ladies clothing retailer  uses a VIP customer Endless Rewards loyalty program which gives back something to a customer for every purchase they make. Customers have the choice of either the gold or platinum level which entitles the customer from 5 percent to 10 percent discounts for each purchase. According to a store spokesperson, customers spend an average of $100 more per visit than non-VIP customers. Nordstrom’s Fashion Reward program gives cash back and offers private and exclusive shopping experiences to cultivate customer loyalty and incremental sales. Target stores refund 5 percent of every purchase when a customer uses a branded credit or debit card.

Only if the reward programs show customers they are important and allow customers to view the program as valuable, relevant, and exceptional will customer loyalty increase. Retailers spend billions of dollars on loyalty programs and hope that it brings customers back. Stores do need to remember that consumers want immediate benefits, transparency, good prices, great experiences, and exceptional service. Now if the retailer happens to offer another 10 percent discount  just for presenting a  reward card – that’s just another plus.

photo credit: CLF

Personalizing online customer service live chat

Egg EmoticonsAs the popularity of online shopping continues to grow by giant leaps, so does the need for online customer service. What used to be emails, telephones, and traditional online customer support, the current trend of online chats have  now become representative of that real salesperson we used to meet and speak with when we shopped at brick and mortar stores. Our new online chat representative allows us to chat live to a person who now provides us with support, advice, and encouragement.

Last week my online chat support experience brought me to another plateau. When the local computer technician in my area told me the hard drive in my six-month-old computer had crashed and much of my information was lost, I reached out to an online customer support agent. I explained the symptoms and what I had done to try to restore the system, and at the end of my first conversation I used a sad face emoticon. [ :>(    Moments later the customer service representative responded with some technical information and used an emoticon also. [ 🙂

When I go to the mall, service representatives  use hand gestures and facial expressions to convey a message to me. When I communicate by email, people use capital letters when they are angry, emoticons, and internet acronyms such as “lol”, “imho”, and “omg.” Therefore, should it be acceptable and useful for online chat personnel to use these subtle cues?

Most of us have stereotyped, preconceived, and exaggerated impressions of customer service agents we never meet – of course depending on the product or service we are dealing with and what our needs are at the time. Humans do have a desire to know with whom they are communicating, since customer satisfaction also takes into consideration subjective opinions of the personalities of others we are dealing with at the time. As humans and social beings, we become more connected to people who convey more social traits. Although sociability is not going to replace a service representative’s expertise in their particular area, online chats with some personalization can have a positive impact between the sender and the receiver; thus making another connection and loyalty from that customer.

Hotels, restaurants, and many other hospitality generated service industries can make a positive impression using personalization during customer service encounters. Each organization has to consider what is acceptable.   Of course, some professions do not lend at all to any kind of personalized online chat. Banking and insurance agencies rely on a high accountability of professionalism not suitable for emotional text. Anyway, however it is indeed interesting food for thought.

photo credit: katerha

Are you listening to your customers?

Down the PlatformNew Jersey Transit, America’s third-largest public transit agency has introduced a new initiative called the “Scorecard.” Its purpose is to rate customer service response times and on-time performance of bus and rail lines, crime statistics, ridership, and revenue per hour. The survey is in response to a backlash of frustrated and angry customers.

New Jersey Transit director Jim Weinstein stated;

“We need a way for people to see what we’re doing, to measure how we’re doing it, and, frankly, for us to motivate ourselves and for us to measure how we’re doing.”

Public opinion says the agency needs to do a better job of communicating. The customers’ biggest criticisms center around transparency and seeing results. In the past, customers claim the agency has collected data, and now question what was done with the information? Lastly the suggestions of the past have never been acted upon.

Karl Zielaznicki, a commuter customer thinks that spending extra money on initiatives like Scorecard are a waste of money.

“If doesn’t matter if they hear you if they are not listening!”

Bottom line here! Use what you learn when you go through the trouble of taking the time and money to conduct surveys. Take the time to tally up the results, and it doesn’t matter if 75 people love your business and only 25 people find fault. Listen to the people who have complaints because you want to please 100 people. Look for trends which indicate ongoing problems, and determine if the complaints are valid. Companies need to be realistic enough to deal with those customers who are dissatisfied. Organizations need to be objective, and use the data to gauge what others really think.

In the particular case of the New Jersey Transit Authority, what is going to be different this time that will promote confidence in passengers? Will the agency do a follow-up? Any organization needs to let customers know what changes have been instituted after a survey has been done? Customers want to know if what they have suggested has been followed through and the appropriate changes made. After all, customers are the ones who can just as easily click onto another website or walk into the next store while visiting the mall.

Now as to the New Jersey Transit, it just proves how dissatisfied customer opinions can promote change. Passengers like Karl Zielaznicki might not have many options as to his transportation, however he is being heard, and hopefully this time someone is really listening.

photo credit: JosephLeonardo

Empowering your employees to deliver excellent customer service

Let us assume we have a great product, and we have intelligent, competent customer service representatives who want to do a great job exceeding their customer expectations. Of course there is no magic formula, but the more we empower our staff with the best tools available, the less mistakes they are going to make.

Most companies begin training customer service representatives with a training manual. Is your training manual reminiscent of the days when Catholic schools were so rigid that if you were left-handed the teachers and nuns took the pencil and placed it in your right hand instead? The problem with instruction manuals are the lack of written policies when one size doesn’t fit all. If a customer’s request is reasonable, but still out of the ordinary, the answer just isn’t there. A customer service representative can’t just decline the request because it wasn’t in the accepted policy list, nor is it always appropriate for the representative to have to keep the customer waiting while they seek out an answer from a supervisor. Decisions to be made using certain guidelines would be more appropriate, and then discussing the exceptional situations at staff meetings with role-playing and senior member feedback to empower the employees  build the experience and confidence for the next time a staff member will be asked to “step out of the box.”

If a customer’s request is unreasonable, there is still no reason for a customer service representative to deny a solution and even say they are sorry that they can’t be more helpful. Empower the employee with alternative solutions and revise procedures so that employees do not feel they must just follow blindly and will be in trouble if they deviate from standard office policy. Explain policy rationale so everyone understands. Sometimes policy manuals are out-of-date; a good time to be flexible and revise or update when situations do change.

And finally empower customer service representatives with support. It’s not practical to just provide a list of  telephone extensions and supervisors; help representatives do their jobs well by supplying them with resolutions for problems that repeatedly occur, a call list with whom problems can be discussed and resolved in an efficient manner, and a manager who is available to coach and teach in a constructive and reinforcing manner.

photo credit: Infusionsoft

Can we increase customer loyalty?

CBR001831Customer loyalty is an integral part of doing business, but what precisely is involved?  Better yet, how do customers become loyal? Most of what we hear about loyalty centers around loyalty to products, but brand loyalty is different from service loyalty. The first element of customer loyalty to consider is reliability; either product or service, but more so, it is doing what you say your service will do. Breaking it down, customer loyalty is based on doing it right the first time, and doing it on time.

Customers will accept the occasional mistake, but too many mistakes are the kiss of death. Customers will ultimately find a better product or service, won’t refer you to their friends, nor will they stay with you if you let them down too often. We take it for granted that the new computer, the new television, or the new i phone will work, and if it doesn’t the product will be replaced. Do we take it in stride however, that someone does not call us back, does not deliver what she said she would, or does not send the information promised to us? Probably not, because we will most likely move on to someone who does. In other words, everything you say has to be reliable.

Then there is another important aspect of building customer loyalty, and that is one of being likeable. Customers want to feel good about the people they do business with, so don’t ever underestimate the need for “charm school.” Being likeable doesn’t cost a lot of money, but the following people skills may keep your clients coming back:

  • Always display a genuine smile and be warm and friendly.
  • Listen to your customer using eye contact, and make it obvious that you are listening.
  • Address your customer by name.
  • Keep your promises.
  • Treat your customers as you would expect someone to treat you.
  • If there is a problem or complaint, respond quickly and show genuine empathy for the situation. Picture in your mind how you would feel if faced with a similar problem.
  • Occasionally do something special for your client or customer to show her/him that you appreciate their loyalty.

Customers rely on those intangible cues, and as we deliver and develop the interpersonal bonds, we increase our customer loyalty. It’s part of making outstanding service our primary “product.”

photo credit: Spirit-Fire

Every employee can contribute to customer service excellence

[ Expression of Hospitality and Style ] A Legend in the Heart of Tokyo, Japan“Wow” customer service isn’t about what we learn in manuals; it’s about behaviors and the development and encouragement of excellent habits. Every employee can contribute to outstanding customer service, share with others, and together display the professionalism every organization desires.

The three main reasons customers leave are moving away, competitors offer better terms or prices, or the consumer is unhappy with the product or the service. In the poor service category, a whopping 68 percent of consumers consider indifference of employees as bad service. So with that in mind, isn’t it imperative that we as service providers show customers that we really care?

Let us use an example of staff meetings and their relevance to customer service. Why not let employees compile a list of behaviors that contribute to great customer service? The staff can compare and discuss areas to improve upon with specific actions that have either been taken before or ideas that develop through discussion. When employees are involved, and their feedback and suggestions are deemed important, staff meetings become relevant, interesting, and beneficial.

Who better to speak the language of the customer than the front line personnel? Speaking the language that we care about our customers is synonymous with identifying the customer through their own lens. For instance, selling real estate to a young couple who are purchasing their first home is much different from showing properties to investors. The young couple is more interested in the mortgage process, qualifying, specific school districts, decor, etc. while investors tend to be more concerned with potential profits.

All employees understand the little things that count – perhaps the physical environment, inventory, professional dress, or even the music in the background played in a brick and mortar establishment at the mall. Employees can be acutely aware of being polite and just looking cheerful; sometimes a rare commodity in today’s retail venue. Helping employees to achieve their personal best encourages confidence, and confidence builds career satisfaction. Employees who like their jobs and look forward coming to work bring enthusiasm to their organizations.

Sharing best practices of an organization contributes to customer service excellence. When the elements of truth in advertising,  services that exceed customer expectations, prompt service, and the handling of complaints is done in an expeditious manner, every aspect of customer service excellence is addressed – the perfect combination for a “wow” experience.

photo credit: UggBoy♥UggGirl

Better banking customer service please

buerosExcept for well-paid banking executives, I doubt there are many people who would not agree that banks need to improve their customer service skills. While everyone will agree the objectives of any business are to make a profit and satisfy customers, the first aim needs the second aim to achieve results. Banks are falling short of satisfying customers, and therefore a favorite pastime of  the American public and beyond is “bank bashing.”

The number of US homes receiving foreclosure filings may climb to 20 percent this year. Last year, 2.87 million property owners received notices of default, auction, or repossession. Yesterday, the US Treasury announced that 600,000 homeowners have been granted “permanent” mortgage modifications under the Obama administration’s anti-foreclosure effort called the Home Affordable Modification Plan. The bad news is that more than 800,000 homeowners were declined. The modification plan, which lasts five years, reduces the monthly payments, interest rates, and extends the term of the mortgage. It does not forgive the amount owed, but gives a temporary forbearance of the principal owed.

Since I sell real estate and frequently list “short sales,” (those homes that are worth less than the mortgage amount) I listen to the stories of homeowners who are losing their particular American dream. While I do not agree that anyone should be exempt from paying their mortgage, and there are too many people just bashing banks because they are looking for a free ride, nevertheless banks need to improve their communication skills and most especially their customer service.

Delinquent homeowners complain about customer service rudeness, ridiculously long waits on the telephone, constantly submitting the same documentation over and over again, and no communication whatsoever. There are no penalties provided in Obama’s plan for the banks since HAMP is a voluntary program. According to Prentiss Cox, a law professor at the University of Minnesota, the fundamental flaw of HAMP is that the people who caused the mortgage crisis are now the ones assigned to fix it, so how can they be acting in the public interest?

Banks need employee training, changes in processes, and changes in procedural management. They need to provide homeowners with better online service and access to customer service representatives who can actually steer a homeowner in trouble to a place where people who actually want to do the right thing can obtain real information. When people count on banks to help manage their financial lives, it is important for banks to accept responsibility. Banks play an important role in the community, and too often they are now labeled the bad guys.

Banks need to re-examine the core values which include the professionalism of their staff, wait times, responses, and services actually delivered. Never in the history of the US has the housing industry been in such turmoil. Banks need to return to respecting their customers and focus on service instead of only focusing on loss profits.

photo credit: loop_oh

Let Your Customers Count Cows

Crow in spruce“Counting cows” was a backseat game that parents used years ago in rural areas to quell the endless “Are we there yet?” queries from their children. The rules were simple: each person took one side of the car when the journey began. One point was given for every cow you saw on your side; five points for every horse, and if a graveyard appeared on your side, you lost all your points and had to start over again. Active participation in a simple, competitive game made the car trip seem much shorter.

Today’s customers have a strong need for speed. They are as impatient and restless as a group of “desperados waiting for a train,” to quote the country music song title made famous by The Highwaymen. Faxes gave way to e-mails which gave way to text messages from anywhere at any time. Netflix and FedEx taught us you could get it next day; Zappos.com surprised us with an order for new shoes placed on line in the evening arriving at our door step the next morning. The customer’s standard for the speed of service has continued to hasten with seemingly no end in sight.

But, there is a way to slow the speed of service. Let your customers “count cows!”  Look for ways to help customers participate. Like Disney World, entertains guests who are waiting in line to board that special ride, perhaps you could entertain your customers in an engaging yet appropriate way. My bank has a popcorn machine and big TV’s playing CNN or CNBC to help you wile away the wait should the teller line become long or the CSR is tied up and not quite ready to provide you assistance.

Is there a way you can make getting service seem to go faster through turning it into a compelling game? Ted’s Restaurant (as in Ted Turner) in Atlanta helps calm fidgety little kids waiting for a meal by providing them color crayons and a kids menu turned into coloring book. What would be the adult version for your customers? How about a clever contest? Or, a social gathering? How can you manage the customer’s perception of service pace as you work to improve the reality of service pace?

Chip R. Bell and John R. Patterson are customer loyalty consultants and the authors of Wired and Dangerous: How Your Customers Have Changed and What You Can Do About it due in bookstores in May.

photo credit: alexfiles

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