Today’s customers are a liability. Empowered by digital media communications and availability of information, they will no longer put up with a raw deal. So has customer service become the new marketing? Is the old style of interruptive, promotional marketing dead, replaced instead by a new interactive, customer-centric approach? An approach that boosts profit by acquiring and maintaining customers through trust, great customer experience, a tailored service and lots of positive customer buzz in the digital arena?
Anyone who doubts it can’t have heard of Dell Hell, says Navigate Consulting managing director Nick Baggott, CIM fellow and course director for CRM and digital marketing.
“One frustrated customer managed to create such a social media buzz about Dell’s poor customer service that at one point the Dell Hell site was dominating the search engines, overshadowing the official site.”
Happily for Dell, the company rectified this with a classic piece of social media customer service. “Dell Idea Storm was created as a channel for customers to make suggestions to Dell and has been used many thousand times by customers since,” says Baggott.
With each person having an average of 130 friends on Facebook, negative word of mouth spreads faster than ever, Baggott says. Twitter, a channel particularly favoured by mobile customers on their smartphones, provides further proof of the potential for negative comments to reach many others super fast.
Smart companies, says Baggott, are channelling at least some of their efforts into responding. “Other customers who have similar issues can see the brand is listening and answering questions, one of which may be just the same as theirs. If the customer’s comment is damaging, they reply on Twitter and try to move the issue into private channels such as e-mail or private messaging. This allows them to show that they’ve dealt with it and nipped it in the bud.”
Even on sites such as Tripadviser, organisations are increasingly responding directly to reviews, in the realisation that today’s customers are more likely than ever to pick destinations based on what others say.
Blurring the lines
Josh Bernoff, co-author of Empowered and senior vice-president of idea development at Forrester Research, believes too many marketing departments are still focusing exclusively on short-term promotions and campaigns.
“While these might win short-term customers, there’s a cost associated with not retaining customers in the long term that offsets the expense of offering good customer experience. The proportion of investment into customer service not only needs urgently increasing within most organisations, but it should come from the old-style marketing budget,” says Bernoff.
A worrying number of businesses are still based on the concept that “customer service equals call centre” and “marketing equals creating revenue”, he cautions. “But we estimate that people in the UK alone make 50 billion impressions on one another about products and services every year in social channels.”
Marie Myles, director of consulting at Experian, agrees. “Many times we have seen the acquisition department so volume-driven that they carry on with promotions and offers that attract deal seekers who leave as soon as the offer ends. Even when this is known in the business, acquisition still continues with such offers, because sales commissions or market share statistics drive this shortsighted behaviour,” she says.
Marketers should be thinking both reactively and proactively within the new marketing model, believes Bernoff. “Reactively, your objective should be to avoid people saying you’re terrible – that’s where companies listening in to social media channels come in. Carphone Warehouse and Best Buy do this well. Depending on the size of the organisation, the ideal is to have a small team dedicated to identifying when people are complaining and to reach out directly to those people and help them out. From a proactive perspective, your objective should be to find people who like you and get them evangelising your brand online, perhaps inviting them to try out new products or to a big launch party. It’s far more effective than shouting about how great you are.”
But for every company that “gets” the growing link between customer services and marketing, there are another 10 just waking up – or worse, he says.
“Incredibly, many companies’ IT systems still won’t allow staff – sometimes even in customer service departments – to access sites such as Facebook or YouTube. From a marketing perspective, not keeping your staff updated on what customers think of you is about the dumbest thing you can do and can undo all your hard work,” says Bernoff.
Other companies expect people phoning customer services to wait on hold for long periods while being subjected to repeat promotional messages. “This is crazy, when they haven’t even had their problem dealt with yet,” he says.
Listening to customers
At the other end of the spectrum, some have discovered the ultimate (and free) focus group.
“Would Marks & Spencer have discovered that their tiered pricing of bras by size caused so much resentment in their customer base if a group of consumers hadn’t taken up the cause on Facebook? Social networking enables companies to discover not just the answers to their questions, but the answers to questions they’d never thought of asking – that’s both customer service at its best and a marketer’s dream,” says Gavin Sheppard, development director at the communications charity Media Trust.
Customers like the new model too. A survey by the Global Web Index found people think better of brands that provide a page on a social network where you can ask questions. Audi used this to its advantage by gathering views and feedback using Facebook as part of its product development cycle.
Conversely, as the Dell case reveals, customers who feel cheated are increasingly willing to fight back. “Supermarket parking is a current example,” says Merlin Stone, CIM fellow and marketing, sales and service consultant. “Many customers are very angry about outsourcing of parking and a subsequent penalty charge that pretends to be a civil offence. This is the most awful, punishing service. But there is lots about how to challenge this approach on the web, as anyone who Googles ‘private parking scam’ can find out.”
Banks, which have been notoriously bad at customer service, have a particularly steep learning curve, he believes. “I came across an awful example recently where a bank kept ‘helping’ a customer by increasing a personal loan, except they did it by replacing the smaller loan with a larger one and charging a loan cancellation fee each time on the old loan.”
Stephen Woodford, CEO of integrated agency, DDB UK, believes Metrobank is the one to watch when it comes to a new marketing model within this sector.
“Here’s a bank that welcomes pets, opens seven days a week and offers genuinely childfriendly services such as change machines when other banks turn small change away,” he says. From blogs to reviews and Twitter to the national press, it’s certainly being talked about; Metro Bank consequently opened more accounts in its first month than it expected to create in the whole year. Other banking institutions, including HSBC, Standard Chartered and Liverpool Victoria, have recently announced a far heavier focus on customer service in the future.
In today’s connected world, it’s easy for marketers to be tempted to focus on large‑scale customer service efforts. But, says Bernoff, it only takes one bad customer service experience. “The same goes for a good experience. An online retailer recently offered me credit for something I bought that went wrong, even though the warranty had ended – that’s exactly the kind of thing people blog about,” he says.
At Pitney Bowes, every single customer interaction is followed by an e-mailed customer satisfaction survey, asking questions about the quality of service.
“Around 15 per cent of customers respond in the UK and any unsatisfied customers are contacted within 48 hours to remedy problems,” says Valerie European, customer service experience and retention manager. Other efforts to improve customer satisfaction levels include incentivising the Pitney Bowes’ engineers and customer contact agents, as well as its sales force, she says.
Better results
Meanwhile, a project by Ford Retail called Moments of Truth has transformed the company’s 52-strong dealership network from a business with a sales focus to one with a definite customer focus, according to Richard Beevers, CIM fellow and managing director of Customer Plus, who designed and implemented the project.
“Moments of Truth worked from the inside out, allowing customers to decide whether or not the change was genuine, rather than simply using marketing communications to make unsubstantiated claims about customer experience,” says Beevers.
“The result has helped to turn a £0.85m loss into a £15.7m annual profit during what are very difficult times for the automotive sector.”
Ford Retail wanted to distance itself from the traditional view that the volume car business was all about the hard sell, and that little concern was shown for customers once the deal had been done.
Ford recognised that products, pricing and quality were similar across the industry, so it would need to find other ways to differentiate itself. It opted to pursue a new way of doing business, bringing service to the fore with the aim of making customers for life. Such customers buy more, pay premium prices, recommend other customers and cost less to serve.
“It would be easy to see it as a customer service plan, but actually marketing was at the core,” says Beevers.
“Indeed, right from the outset, a key element of the project’s success was creating a brand identity to capture the vision of differentiation through customer service.”
Such moves are the future of marketing, believes Martha Rogers, co‑founder of Peppers & Rogers Group.
“We’ve coined the phrase ‘trustability’, which provides an example. Most companies, if you asked them, would say they’re trustable because they do what they say they’re going to do.
“But it’s one thing for a mobile phone company to say, ‘We’re going to charge you £x and lock you into a contract for two years and if you go over it, you’ll be charged.’ It’s quite another to say, ‘You’ve been with us for five months, but we’ve noticed you’ve never used your minutes but go over on your texts, so let’s change you to another plan where you pay the same fee and don’t get charges.’
“That’s trustability and I believe that with customer service becoming the new marketing, this is what people will increasingly expect,” she says.
The alternative in a global, online economy is that there will always be a competitor that customers can turn to who won’t abuse their trust or offer the raw deal you did, she says.
“Take Blockbuster Video, which has traditionally made a ton of money on late fees, the cause of most of their customers’ complaints. Even employees have hated the policy, but the company felt justified because that was the deal. But then other companies came along with a completely different model where you could hang onto a video as long as you liked and they took millions of customers away, just like that,” says Rogers.
People will also increasingly expect a tailored service, she predicts. “It’s one of the reasons Amazon works so well – it tracks customer reactions so well through CRM and tailored services that even the offers it shows you that you don’t want are never irrelevant. In fact, Amazon is such a personal experience that if you go on someone else’s Amazon page you feel as though you’re on the moon. Amazon just gets smarter and smarter, including using the customer experience to develop new products and, as a result, people – including me – just buy more and more.”
A behavioural shift
While behavioural targeting – tracking customers online – has had a bad press, even this becomes an inevitable evolution of marketing, adds Baggott.
“Behavioural targeting is the future. Sure, you can build clever predictive models to help you guess more accurately who may be interested in a particular service – and some of these models can be very accurate. But surely the fact that someone has clicked on a link, or watched a video or read a white paper, is an even better predictor.
“The key challenge is how overt to be with your use of this data. Calling them up as soon as they exit your site and saying, ‘I see that you have just been watching our video’ may be a step too far. But sending them relevant offers and personalising content based upon previous behaviour, can be particularly powerful. As long as you are clear about your privacy policy and provide content that is relevant, you should have few complaints and much higher customer engagement,” he says.
Not everyone, however, agrees customer service is the new marketing. “It depends, for example, on the level of competition and choice and the nature of the customer decision making process,” says Beevers. “Some companies are poor at customer care yet are highly profitable – Ryanair and some mobile phone providers, for example.”
In any case, comparing an old style of pushy marketing with a new customer‑centric approach is over-simplistic, he says. Recommending products based on a customer’s past purchasing behaviour, as Amazon does, is pushing products at customers, he insists.
Bernoff disagrees. “In 1997, people woke up to the idea that websites and online click‑throughs should be a part of every marketing programme,” he says. “Now we need to go the next step and realise the huge impact that social media is having too.”
What not to do
Old-style marketing in new territory
n 2009, mobile phone company T-Mobile sold millions of records from thousands of customers to third-party brokers. These brokers sold the data onto other phone firms, who then cold-called the customers as their contracts were about to expire. The data breach was described by Christopher Graham, appointed during the same year as the watchdog responsible for safeguarding personal information, as “the biggest of its kind”. T-Mobile admitted it faced a consumer backlash after its own lax data security controls enabled an employee to sell the customer data.
Furniture retailer Habitat was forced to apologise for causing offence in 2009 after accusations that it had used online interest in the Iran protests to promote its spring sale on Twitter. Keywords – called “hashtags” – such as “Iran” and “Mousavi” were added to its messages so that people searching for those subjects would see the firm’s adverts. One of the controversial tweets read “HabitatUK: MOUSAVI Join the database for free to win a £1,000 gift card.” The tactic led to an outcry, with contributors to Twitter posting messages claiming Habitat should be “ashamed” and saying it was “piggy-backing” on the political situation in Iran. Habitat blamed an “overenthusiastic intern”.
Kate Hilpern is a freelance journalist who writes for titles including TheGuardian
to magazine
