How Do Price Changes Affect Consumer Perceptions?
By Kara FinnertyJun 1
Published February 17th 2016
We’ve heard it plenty: customer service has changed.
That isn’t really news any more, but it’s good to think about what that means for businesses right now.
Brands now have practically infinite touchpoints. Customers can contact them by phone, email, snail mail, social media and via countless other mediums. That’s scary.
The last such time this happened was the advent of the telephone.
Back in the middle part of the last century, executives were petrified that allowing customers to actually speak to their business would cause nothing but trouble.
Outside of carefully created and curated marketing messaging on billboards and TV, the idea that a communication channel between customers and businesses could exist was indeed troublesome.
How could businesses control the messaging of their brand when the medium includes thousands of customer calls to low-paid junior staff members, the nature of which cannot possibly be anticipated?
For many, the answer was through heavy moderation. With scripts and fixed, rigid rulebooks guided customer service reps through each contact with the customer, nothing could go wrong or deviate off-brand.
But seriously, as someone who has likely encountered such a brand’s customer service, was the experience one to be remembered as positive?
Naturally, social media poses the same wave of questions to senior brand executives once again. Most have acknowledged that some kind of social customer care is important and worthwhile, but some problems persist.
A key issue remaining is that customer service is still too often considered the removal of something bad; the resolution of potentially negative commentary and the pacification of disgruntled consumers.
What can be overlooked is that customer service is an opportunity to add value. It’s a chance to not just mitigate negativity and satisfy your customers, but to actually delight them.
There are plenty of documented cases that instead of simply resolving a query, going the extra mile can provide an incredible amount of value to the brand.
Nordstrom’s notoriously empowered service team are the sole reason that many of their customers shop there at all.
As Bill Price, Amazon’s first VP of Global Customer Service, says: “customer satisfaction is everything.” If you’re keeping your customers happy, you’re making money.
The 5E model, borrowed from experience design, suggests that there are five stages to a customer’s journey with a brand, and each offer a different moment for the brand to add value. The value to the consumer is what drives purchasing behaviour.
Customer service can play a role in each stage.
Entice – attracting customers to the brand initially
Enter – bringing those that are enticed closer to the product/service
Engage – getting customers to actually purchase, and use the products
Exit – the experience following consumption of the product, or following usage
Extend – how repeat purchases or follow-up processes happen.
Adding value means you don’t have to compete on price, and competing on price is a zero sum game – the winner also ends up a loser. Loyalty on price is shallow; loyalty on value is deep.
All brands should be seeking to add as much value as possible.
A critical component of using customer service for value creation rests within service recovery. You don’t even have to improve your products – each failure is an opportunity for advocacy.
If a customer’s delivery is late, find a way to go beyond apologising. Send an upgraded replacement instead. Maybe even deliver it by hand.
If a much-cherished item is out of stock for one particular customer, see if you can source it from somewhere else for them, even if it costs you much more. If not, send it to them for free once you have it.
These counter-intuitive examples illustrate how failure can provide brands with an ideal chance to engage with their customers and add real value in ways that marketing campaigns struggle to.
Though in the short term such measure can seem costly, when compared with the money spent via traditional marketing to accumulate that same level of value in the consumer’s eyes it is trivial.
The oft-repeated but utterly valid wisdom about customer acquisition could not ring truer in this context: “it’s eight times more expensive to acquire a new customer than it is to keep one.”
Couple it with another famous business quote: “you never hear from 96% of your unhappy customers”’
Add a third: “Have a bad experience tell five people, good experience tell ten.”
The argument for exceptional customer service should now be obvious – on social and elsewhere. Capture more customers. Lose fewer of them.
Create memorable moments for them. Foster deep advocacy in them. Keep them longer. Go beyond what’s expected.
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