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Getting what you pay for: How Amazon’s membership fee retains customer loyalty

Amazon’s $20 increase for Prime members certainly drew a lot of derogatory hoopla this past week with social media and forums all buzzing with criticism about the 25% hike. In fact, according to Brand Key, a loyalty consulting agency, Amazon’s ratings dropped from 93% to 83% two days following the hike.

“Based on immediate Prime member reactions, they may have underestimated the negative effects of the increase,” stated Brand Key.

For anyone not familiar with the Amazon loyalty program, there are estimated to be about 20 million Prime members in the United States. These are the people who spend twice as much as non-Prime members annually, and it’s all about convenience, selection, and price comparisons. And why does this happen? Say it anyway you want, but the best part of any kind of loyalty program is the money a customer saves versus the cost of the rewards’ programs. Now Amazon has never raised the price of their premier rewards incentives since its conception in 2005, and the “thinkers” threatened members with a $40 increase, and then magnanimously acquiesced to only a $20 increase.

My formal declaration arrived yesterday:

Dear Cheryl:

We are writing to provide you advance notice that the price of your Prime membership will be increasing. The annual rate will be $99 when your membership renews on August 1, 2014.

Even as fuel and transportation costs have increased, the price of Prime has remained the same for nine years. Since 2005, the number of items eligible for unlimited free Two-Day Shipping has grown from one million to over 20 million. We also added unlimited access to over 40,000 movies and TV episodes with Prime Instant Video and a selection of over 500,000 books to borrow from the Kindle Owners’ Lending Library.

For more information about your Prime membership, visit our Prime membership page.


The Amazon Prime Team

So what am I getting for the extra money? Amazon has promised to maintain the free two-day shipping, although there have been lots of complaints about delivery in that time period. Amazon has promised access to their digital library also, but I haven’t read where my customer service is going to increase with the higher dues, but I’m still going to renew my subscription.

And so all of that brings some ideas to promote customer loyalty in smaller businesses. All loyalty programs seek to turn consumers into loyal customers. Thoughts are that even though some customers are going to leave Amazon because of the “principle,” but let’s face it – Prime customers spend an average of 150% more than non-Prime consumers because they want to get their money’s worth.

For many of us with a small business that might benefit from a reward’s program, can we be a bit more innovative than just showing a card after spending a ton of money? No doubt the free reward cards are an incentive to customers returning, but why not give the Amazon Prime idea a turn? For instance, a local restaurant might offer a membership fee which then entitles patrons to preferred seating, preferred reservations, a bottle of wine or special appetizers. Perhaps a retail establishment could offer prepaid bonus cards where an initial fee is paid, and then the customer enjoys a constant discount on merchandise and special incentives during holidays and peak shopping hours.

In the Jacksonville, Fla. area, a beachwear boutique offers their customers a subscription to newsletters and special promotions. Many ardent swimsuit devotees take advantage of the latest styles, health, beauty hints, and private promotions which always includes two-day free shipping.

Not everyone is going to be a disciple of reward programs, but the whole structure of the idea is just a motivating factor into customers buying more and staying loyal; we all want to get our money’s worth!

Increasing customer service popularity with Facebook

FB-f-Logo__blue_144Facebook gives organizations the opportunity to “WOW” customers with their human and approachable touch so important to building business, loyalty, and the development of a company’s brand. With over one billion active users, why not use Mark Zuckerberg’s brilliant social platform to help to build an audience, engage them in interesting conversation about one’s product or service, and then have the opportunity to convert visitors into more customers?

Facebook isn’t just about tracking down your old boyfriend, sending birthday wishes to your friends instead of the snail mail obligatory birthday cards, or posting photographs from your high school graduation cheerleader captain days; now it’s also about interest groups and ones that are organized by workplaces intended to target visitors to specific sites. In addition, business pages encourage friends and their friends to “like” us, and thus engages another opportunity to share feedback and to help people. After all, we do tend to share our best referrals with our friends and relatives.

The best business pages make answers easy to find. In the very complex world of algorithms, Facebook business pages crawl to the top of the popularity lists through comments, shares, and “likes.” Leading the parade are comments and shares, and of course it is better when customers praise a company with positive comments. Mind you now, this is a perfect opportunity to acknowledge the positive comments with “thank you” responses. On the other hand, it still provides an excellent venue to listen to complaints by responding quickly and being able to help with solutions.

Customer service always comes with the territory on Facebook, as it gives consumers an outlet for airing their issues and allowing  for the most frustrated to have their voices heard. Imagine Ralph Waldo Emerson’s “shot heard around the world” as the American Revolutionary War in 1775 began on the North Bridge in Concord, Massachusetts as the first shot rang out killing British soldiers? Although not nearly as dramatic as America’s fight for freedom way back when, disgruntled people are always searching for solutions, and the more people who they can engage, the more drama that emerges.

Although Facebook promises to provide opportunities to boost businesses, an important caveat needs to be considered; the staff monitoring the page must know their business and be diligent and prompt with responses. Unhappy customers become even more disgruntled if they are ignored; maybe it’s not intentional because staff members are attending to other business dealings, but it’s doubtful a customer whose product has failed will have much sympathy. There is even a good possibility the customer has already tried to communicate via telephone and was met with “please don’t hang up; your call is very important to us” while waiting 15 minutes on hold listening to the same advertisement about the company over and over again. Therefore if a business decides to use Facebook as another customer service portal, make sure to be diligent with sharing feedback, personally answering customers, and responding quickly with solutions.

Constant monitoring can help customers find answers before comments become negative. Even building a FAQ can drive customers to helpful answers. Setting up keyword alerts for words like “frustrated” or “disappointed” depending on the type of business or service, can notify staff members to address a potentially volatile situation before it gets out of hand. Being warned beforehand can still be one of the best opportunities to turn the negative into opportunities.

Take advantage of social media; it’s here to stay.

Ease up on customer service demands during inclement weather

Snow Storm, Dec. 2008Whether it be hurricanes, blizzards, fogs, or floods, inclement weather has its own way of leading an otherwise civilized society into moments of rage and unacceptable behavior. Spend a few hours in a busy airport and listen as a few narcissistic and petty customers scream profanities at service workers in fast food establishments, airline employees, or transport personnel as if the adverse weather and all of the complications that frequently occur during such times are the fault of the employees.

For airlines at least, and of course in my business of real estate sales, force majeure, or an act of God as contracts state, parties are free from liability when an extraordinary event or circumstance prevents them from fulfilling their obligations. Of course this rarely excuses them altogether, but at the same time airlines are not required to compensate passengers for hotels or other expenses during the delay, and hence something seems to click negatively in the human brain of a few, but no matter how upset we may all become, maybe a “teachable experience” can remind us of what we teach our children.

It is the responsibility of airlines and other services to safely operate during severe weather and emergency  conditions. Businesses that stay open during harsh conditions often have employees who have risked their own safety and comfort to provide necessary services. So instead of telling the person behind the desk she is a “blithering fool,” please learn how to treat people with decency and respect.

For employers who need their staff to brave serious weather conditions, be flexible and realize the difficulty of the situations. Employees are not automatically entitled to being paid if they can’t get to work, and those policies should be clearly explained in staffing contracts or the company handbook. Maintain fair and consistent employment relations with employees before emergencies and have an “adverse weather” policy in force for the continuation of services in case of such emergencies. If employees are able to work from home using remote devices, it maintains stability of the business as well as an important morale booster in times of stress for both employers and employees.

And for all of my fellow travelers in the airports of the world, although airline companies can be a challenge all of their own, use these simple suggestions to ensure a better experience during inclement weather:

  • Check online before your flight or call ahead when adverse weather conditions are expected.
  • Call reservations. While most delays do not require rebooking, some do.
  • If you are expecting to board a connecting flight, see the reservation personnel for additional help.
  • Maintain your patience.

Check the website of the airline carrier for their policies concerning inclement weather. For instance, United Airlines has some extremely useful and informative information.

The golden rules of customer loyalty

It’s well recognized amongst all business owners that it cost more money to find new customers than to keep the customers we already have while trying to attract more clients to climb aboard our growing organizations. No matter how we try to dazzle, the golden rule of presenting the best product and doing it right, continues to successfully align our future for growth and success.

The ultimate satisfaction for customers is receiving the best product at a reasonable and competitive cost. We must strive to deliver all that we have promised on our websites, in our flyers, and on social media. To add to the best product or service we can supply, can we then deliver more? How do we step out of the box to help our customers realize the extra mile is what we are anxious to provide? Most of us have experienced customer service at its best and its worst. I treasure the shoe store where the salesperson knows me by name, knows what I like, and sends me a quick email when new merchandise comes into the store. And when I get a moment and arrive at the boutique, I am greeted with a big smile by my name and can always be assured the best is yet to come.

Now on the other side of the customer service grid lies the company only interested in viewing me as a dollar sign. “Look around, and if there’s anything we can help you with, just holler,” was the only interaction I received after having been in the store for 15 minutes. Those were the words the salesperson uttered as she looked up from the customer she was assisting seemingly annoyed; as if I was going to interfere with her lunch break.

Studies have shown that retail and restaurant customers will spend 40% more if the service provided is outstanding, so everyday we as business owners, should try to do better. Understanding their reality and adapting our programs, efforts, and products to enrich our customers lives show how we value each person.

Here are the Golden Rule suggestions of showing customers how much we value their business:

  • Treat all customers equally. Of course, some customers may spend more than others, but the referrals are what help us to succeed and grow. One never knows who just might walk into your store one day or call upon you for your expert services.
  • Value each customer and make everyone’s experience as efficient and as pleasant as possible.
  • Appreciate people and show them your appreciation by being on time, listening, acknowledging them as they walk into your store even if you are with another client, be polite and smile, and be well informed.
  • Have a process formulated to thank your customers; whether you send out personal thank-you notes, email appreciation letters, small gifts, or coupons for discounts on subsequent business.
  • Use loyalty reward programs. Especially useful now during the holiday shopping season when customers are plentiful, plan something special for after the holidays when business slows. Take that time to work on customer retention.

Although it is human nature to cater to the top tier of our business customers, we must never forget that earning the trust and respect of everyone is what helps us to succeed.

Image courtesy of Andres Rodriguez

The top remedies to quell ‘customer rage’

Cliente enfadado?

In the world of social media, where consumers publicly speak out against poor customer service, it has been estimated that U.S. businesses can lose $60 billion in future sales of goods and services. A recent report from a cloud contact provider stated  85% of consumers retaliate against a company with bad customer service. “Customer rage”, as it is called, has caused 49% of consumers from doing business with a particular organization, and interestingly enough, the 18 through 34 year-old age groups are three times more likely to vent their frustrations out on social media.

For at least 70% of the purchasing population, the first line of complaint begins with a phone call. As so many  large organizations utilize call centers, customers get easily frustrated with the maze of number presses, the disconnects, rudeness from call center personnel, language barriers, and of course, the incompetent service representative.  That adds up to a lot of complaints when 43 billion calls a year are processed through these call centers.   The major companies which notoriously press a customer’s “rage button” include cable television providers, satellite providers, telephone products and services, electronics, retailers, banking institutions, and automobile manufacturers. Ironically these most often are big ticket items; thus involving more hard earned income and therefore more serious consumer consequences.

So what enrages customers the most and how can we improve our services? Oddly enough, out of the ten most popular solutions to improving customer service, six suggestions have no bearing on prices. The overwhelming top response from unhappy consumers centered around being treated poorly and the lack of respect. Although we may laugh at some of the popular “customer rage” videos popular on YouTube, the message to be conveyed is not to have to call back, explain the problem to someone else, and repeat the vicious cycle of ineptness until the proverbial cork pops out of the bottle.

It’s hard to find a company who actually admits blame, but unhappy customers want to hear a company acknowledge they are sorry, and then to make an offer to correct the lack of service or fix or replace the defective product.

“I’m not asking for a miracle, but I want the company to acknowledge my time is valuable, my business with them is important, and they will try their best to make it better for me,” explained Pamela Davis, a former AT&T Bell Labs executive assistant. “I’ll even settle for mediocre now before I change companies, but I want them to resolve my conflict.”

Customer service, despite all of the edginess of progress and innovative tools available to businesses,  still boils down to the importance of communication. “I’m sorry you are unhappy,” and “Thank you for your business,” aren’t  complex formulas, but it brings the humanity back from a very complicated world; and although it doesn’t cost a lot, it certainly encourages brand loyalty.

‘Social listening’ can help businesses become more effective

Catching up on e-mail...The buzz phrase “social listening,” also known as social media monitoring, can help organizations and businesses be more effective and build stronger brand relationships. For those of you who are unfamiliar with the concept, media marketing software combines both monitoring and analytics to help us listen, understand, and engage. Through Facebook and Twitter, conversations can be measured to help attract new customers, and ultimately these customers can become advocates helping our businesses to grow.

Perhaps the Dell story with the “power to do more” further explains the concept of “social listening.” Dell’s social media 10,000 employees are tuned into more than 25,000 conversations about Dell every day claiming the more information gathered, the better the company will be able to deliver the precise products and services customers want. The company considers social media an extension of their brand, however it’s not that easy, and it’s not just about purchasing the software. Michael Dell’s “direct-to customer-heritage” starts with training. At the Social Media and Communities University, associates are fully trained and then empowered to listen and focus – transforming “online ranters into ravers.” Eleven languages, 24/7 availability, and participating in social media for the sake of the company, help Dell to continue growing stronger brand relationships with customers.

One can’t separate however, customer service with “social listening”; as Dell states it is a key part of the brand. The company combines customer service phone calls, social media engagement, online strategies, traditional print advertising, and everything in between to further Dell’s recognition.

Once upon a time, businesses would learn how customers felt about them through polls, surveys, and focus groups. Now with “data mining,” specific keywords on social networking, websites, and blogs can identify what is being said, where it is being said, and who is saying it. Of course, the anonymity of sitting behind a computer screen can easily make for bogus complaints, (unfortunately there are no mental stability tests required to type on a computer) but knowledge is a way to be prepared for an action plan if needed.

This information can come from Google Alerts to sophisticated applications, but knowing what to do with the results is as important. Obviously, one can’t join every social network on the Internet, so identifying those who need your product or service, and then joining and being active, will help to build a solid customer base and hear what people are saying about your product and services. Search out the competition, and make your business stand out through customer service and excellent products.

Make customers advocates of your organization and ask those who love your products and services to spread the word. Listen and learn because social media isn’t just about a sales pitch; it becomes a reflection of you.

Is customer service more about loyalty or preventing frustration?

Football: Jets-v-Eagles, Sep 2009 - 07So here we are in the midst of football season, and wherever I sit to watch a game, invariably the question comes up as to whether offense or defense is more important? Of course, in football every yard gained by the offense means the defense has given that yard up, yet it is the offense who has to score. Then again the defense is in charge of keeping their opposition from scoring.

Since customer service is now getting more and more complicated because prices have become so competitive, does it also depend on a better defense or one of offense? In Forbes, “Defense Can be Better Than Offense in Customer Service,” there comes a question whether going that extra mile for a customer much like Nordstrom’s Department Stores, Zappos, or the Ritz Carlton hotels, actually reap the benefits of the amount of money spent to train the staff, or to give employees the latitude to be able to make independent decisions that can ultimately cost an organization a lot of money?

Matthew Dixon’s book, The Effortless Experience: Conquering the New Battleground for Customer Loyalty, contends we should not be searching for loyalty by offering customers the ultimate customer service experiences through expensive programs. Instead of recognizing top customers with promotions and rewards, extensive feedback, or even apology programs,  rather it’s less expensive just to focus on “preventing frustration and delay.” The less an organization does, the less the cost. Avoid loss by targeting customers who may be leaving and look for ways to keep them before they run over to the competition.

Remember the defensive position is reactive; responding by emails, calls, live chats, and social media with the end result of loyalty. Some say if you strive to make everyone happy, word of mouth increases business while others say just try not to lose customers because it’s just too hard to get them back. Should we forget about raising satisfaction scores and just try to avoid the lowest scores so as not to lose customers?

Depending on the position an organization chooses is most dependent on the product or the service offered. No matter which way however, both sides depend on the effectiveness of the customer service department including product knowledge, communication skills, and the ability to take responsibility for their own actions. Personally I prefer the more defensive approach, and have for years appreciated the customer recognition status and associated perks. With products in two different stores being of equal quality and competitively priced, my business would still be at the store with the better recommendations from my neighbors, family, and friends.

In the fiercely, competitive struggle of fashion and service, Burberry does it well

burberryy-logoWhat keeps a company in business in today’s competitive retail market? For the luxury brands, buyers insist on the quality of  merchandise accompanied by exceptional customer experiences.  Within minutes of entering a boutique, can a prospective buyer be confident of a friendly atmosphere, of comfortable surroundings, and that of a customer service consultant capable of expertly assisting without being annoying?

Welcome to the world of Burberry, a company which dates back to 1856 with 21-year-old Thomas Burberry opening his own outdoor apparel shop in Hampshire, England. Introducing gabardine, a water-repellent and comfortable fabric, Burberry’s trench coat eventually became a household word often included in the wardrobes of the rich and famous, and happily filtering down to the working class.

But it’s not just about the high end clothing even though the men’s single breasted trench coat sells for $1,295 or the cotton polo with the Burberry distinctive tartan trim sells for $150, it’s also interesting to observe some of the innovative methods used in a highly competitive market to set themselves apart. Chief creative officer Christopher Bailey made sure only one central location would be responsible for the Burberry theme; thus concentrating on design and the ‘brand’ which is inexorably fashion. The strong growth in China has boosted the organization’s growth more than 13 percent in the last three months, and according to Wikipedia, the organization has 500 stores in over 50 countries.

With the expert incorporation of social media, Burberry has more than 10 million Facebook followers, but even Twitter was not to be the final public method of expanding the younger consumer desire of fashion and function communication. Burberry began its own social platform capitalizing the roots of their 150 year-old British tradition with The Art of the Trench, described as a “living celebration of the Burberry trench coat and the people who wear it.” Where one might think that customers may have turned up their perfectly coiffed hair at such a public display, the site is full of young, good-looking customers; even featuring a few pint-sized kiddies modeling their trench coats.

And in my own experience, the Burberry store in Palm Beach Gardens offers the visually appealing, experienced sales consultants, and the ease of completing a purchase with the least amount of stress. Since 2012, sales personnel use iPads as part of the company’s technological makeover which contains customer history,  buying preferences, and all that is needed to tailor one’s shopping experience. Match that with their online collections, excellent return policies, concierge service, and alteration facilities, the customer experience keeps you smiling and relaxed. Shopping should be enjoyable, and should it matter if we pay $49 or $149 for a polo shirt? Can’t other stores take a lesson or two from a London tradition who just seems to do it better than most stores?

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