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April 1, 2015

Rethinking Customer Marketing for the Subscription Economy

This is not your grandfather’s customer marketing. A business that depends on—or hopes to depend on—subscription (or recurring) revenue must relate to its customers in a fundamentally different way than a traditional one-time-sale business. But the changes go deeper than just the customer relationship. To be successful in a subscription business, companies must rethink their own business operations. Let’s take a look at what that means for marketing.

The question I ask you is simple: are you actually marketing to your customers? Or are you just keeping in touch and hoping they’ll stick around?

Customer marketing is one of the simplest business changes you can make to succeed in the recurring revenue business. You don’t need any new skills or expertise, and the processes you need already exist (I hope) in your current organization. The work you need to do is translating them to apply to your current customers.

The Journey and the Funnel

You have, undoubtedly, spent much of your marketing career thinking about—and seeing many different flavors of—the marketing funnel. I’m going to guess your idea of a marketing funnel or customer journey looks something like this:

This gives your marketing organization a good working model and, I hope, a deep understanding of how someone in the market becomes aware of your product or service and how they get from initial awareness to making the decision to purchase.

You also have a set of processes and practices that make your marketing work, make potential customers aware of your offerings and help them make the decision to purchase. These include marketing campaigns and programs, content development and distribution, branding efforts, and much more.

I hope in reading this so far, you’re thinking: “Yes, I do all of that really well. Why do I need to rethink this?”

Customer Marketing: Before

You might have a function in your marketing organization called customer marketing. Depending on how you’ve organized your team, this function does anything and everything from customer references, to success stories, to customer events and conferences, and to customer loyalty programs. You probably also have a way to keep customers informed of new products, updates, and other information you consider important, or that you think will help customers decide to buy from you again.

Rethinking from Day One

Day One is the day your customer becomes your customer, the day after the contract is signed, the day the customer starts getting value from your product or service.

It’s also the day your sales and marketing organizations step out of the picture and hand that customer off to your customer success organization. Every day from then until the customer leaves you, the primary contact for that customer will be in your customer success organization. That organization is then tasked (maybe via its own sales team) with ensuring your customer renews their subscription or comes back to you year after year.

In a recurring revenue business, the repeat or renewal sale is just as important as the initial sale. Sometimes, we assume this sale is easier because we’re dealing with a customer who has already decided they get value from our offering. That makes it no less important.

Rethinking customer marketing means treating your new actual customer on Day One just like the new potential customer who has only just become aware of your offering. Day One begins a whole new marketing and sales cycle. Day One means building a whole new relationship with your customer.

Customer Marketing: After

The goal is simple: keep as many customers as you can.

The process is simple: apply your current marketing funnel or journey, programs, and processes to your current customers.

The transition is not so simple: learn how your customers go from new customers on Day One to a renewal sale. Then how they do that again next year. And again the following year.

The transition requires you to examine both your business and your customers in new ways. You need to ask:

Why do my customers renew (not your long held beliefs; look at the data), why don’t they, and how do I tell the difference between customers who renew and customers who don’t?
What actions do I take right now that make a difference (again, based on the data) in whether customers renew?
How am I helping my customers realize value and renew?
Are my internal incentives (marketing, sales, and customer success) aligned with a goal of maximizing renewals?

Then you need to redefine your customer funnel or journey. It will look something like this:

Then you need to design marketing and sales programs, campaigns, and other efforts around that to help your customers move from purchase to renewal (not to frustration and departure).

Organizations that do this successfully create a microcosm of a marketing team within the customer success organization. This becomes a team that is charged with the full range of marketing and marketing operations functions (except corporate branding and PR, generally), and is measured on the same goals and outcomes as the marketing organization such as leads (which become expansion or adoption programs), conversions to sales (which become integration and realization of value), and sales (which become renewals).

Transformation to Customer Marketing

Rethinking customer marketing as though it were a full marketing function changes the way you relate to your customers. It can also have dramatic effects on the success of your renewal programs, bringing your renewal rates to new heights and your churn rates to new lows.

And, if you are having great conversations with potential customers in your market, imagine how valuable those conversations will be once your current customers—your loyal fans—are part of them.

How is your organization evolving customer marketing? Tell us in the comments!

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February 10, 2015

Customer Service Success Is So Simple that It’s Hard

We all love to complain about customer service. Most of us have some sort of nightmare story at the ready anytime the conversation turns to the topic of customer service. And collectively, we have classes of companies we just love to hate: airlines and cable providers.

I know you can tell any number of stories about how some company (Comcast, anyone?) got it wrong (check out Mr. A**hole Brown has a really good one post). I’m willing to bet you even have a few choice suggestions on how to get it right.

But your suggestions will likely only fix the issue in your case (or your type of case). The company that is failing at customer service has a much deeper problem.

The issue is simple: lack of empathy. But the solution, which is also so simple—create empathy in your customer service staff for customer service success—is, in fact, very hard to make happen.

Why Is It Hard To Achieve Customer Service Success?

Allow me to start with an idea that will sound familiar from my earlier posts: When someone buys a product or service from you, they are doing so because they expect that product or service to do a specific job for them. Sticking with my favorite scapegoat, when someone buys cable television service from Comcast, they are expecting Comcast to deliver entertainment on which they can rely at all hours.

Here’s where it gets complicated (frankly, it’s not really all that complicated for Comcast, but it is for most companies). The definition of “entertainment” varies widely among the millions of people who are Comcast customers. Personally, I want my cable company to bring me intelligent, unbiased, detailed news coverage any time of day (largely the responsibility of the news outlets and not even within the control of a cable provider). Or you might want access to a huge library of foreign films. Someone else might want endless reruns of TV shows from the 1970s.

Sounds pretty simple for a cable provider, right? So where do they go so wrong?

Customer service doesn’t happen until something goes wrong. Service is out. Channels with my entertainment disappear, or worse, move to a higher tier of premium cost. Or the CableCARD stops working with the latest update of my DVR.

Then I have to call (chat, e-mail, whatever). Someone explains the process of why it’s broken. Then they explain the process the company has set up to fix it. It’s going to take time. It’s going to cost me money. It’s going to require that I sit at home and wait for someone to show up.

There’s a lot of process. There’s a way to handle the situation. But there’s no empathy. There’s no one who is capable of understanding why I am actually disappointed and figuring out the best (maybe even the right) way to make sure I get what I need.

Empathy is not a process. It’s not a set of rules. It’s not a policy. It is a human ability. And it requires the one thing the giant customer service organization fears most: individual freedom to act.

Halfway There

I have a lot of respect for Frank Eliason. If you don’t know who he is, he is the guy who started @ComcastCares, Comcast’s Twitter based customer service. It’s generally believed that he singlehandedly taught the corporate world what social customer service means.

Frank recently wrote an article exhorting Comcast to improve its customer service. He included five suggestions on what they could do to improve. The last of these was, “Live up to being the Philadelphian that you already are. We will support you, but you need to support us too. Treat us in the same manner you would want to be treated.”

I don’t disagree with his first four suggestions. But they are all process improvement ideas. They don’t do anything at all to get your customer service staff to understand your customers’ problems and help bring solutions that address the actual issues right there and then.

The fifth suggestion (quoted above) gets closer to the mark. It doesn’t say it the way I would, but it suggests that each and every customer service representative needs to be a decent upstanding human to create successful customer service. That sounds a bit like empathy to me.

Getting it Right?

It is nearly impossible to train empathy into an organization. It’s a uniquely individual skill. People can have empathy, while organizations can’t. But that doesn’t mean you can’t let your customer service people use the empathy they already have.

Companies such as Nordstrom and Zappos became customer service success standouts for one reason: every single employee can do (nearly) anything to solve a customer’s problem. On the margin, this led to stories (unconfirmed) of things such as a customer returning a set of tires to Nordstrom (which has never sold tires), but these stories are a very small group of exceptions to the rule.

The policy of “do whatever it takes to make it right” doesn’t just let the front line employee use their skill and empathy; it challenges them to do so. Even better, it challenges them to create a story in that customer’s mind about how amazing the customer service provided by that employee was. And it creates a culture that makes employees want to be better at serving customers with empathy because their peers are also doing it.

These companies don’t train an organization to deliver empathy. They created a culture of customer service success that valued it, paid attention to it in hiring, and challenged their people to do it—and do it better. This requires trust (often anathema to many large hierarchical corporations) as well as a different approach to dealing with your own people and your customers.

Can You Change?

The obvious question is can a company such as Comcast really change? Could it ever figure out how to change from a policy- and practice-driven organization to one that lets their people make their own judgments about what is the best practice in every individual situation?

It would be hard. And it would take time. Maybe for Comcast, their newly hired chief customer officer will be a start.

What about your organization? Are you telling your people how to solve your customers’ problems? Or are you hiring amazing people and letting them figure it out? If you are the former, can you change? Do you think your organization can help your people develop empathy?

Customer service success is so simple that it’s hard.

Tell us in the comments how you think your organization might do it.

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December 10, 2014

Requiem for the Home Page: Rethinking Website Architecture

The Home Page is dead! Long live the Home Page! That might be overstating it a bit, but it’s well past time to rethink our approach to website architecture.

Evolving Website Architecture

I’ve been involved in website architecture, design, redesign, and rebuilding projects in various ways during the past decade. In this time, nearly everything has changed about how companies communicate with customers and prospects. We’ve become comfortable with email as a marketing tool—in fact, we’ve become pretty good at it. Printed mail certainly has not gone away (judging by my mailbox this week), but we’ve found effective ways to replace some printed media and blend print and email.

We’ve become social. Do you remember your social media presence in 2004? I’m guessing not, primarily because you didn’t have one. Twitter didn’t exist, and Facebook was the cool new thing on Harvard’s campus. Now, most companies have some sort of social media presence, and the ones that are doing it well are integrating social media directly into their communication with prospects and customers.

In 2004, even search marketing (both SEO and SEM) were hardly in use. We were still figuring out how that worked, which gave rise to the seemingly endless supply of people who spend their time trying to outwit Google’s search algorithm (and Bing’s and Yahoo’s and…).

But in the same decade that saw the creation and explosion of email, search marketing, and social media, website architecture has been virtually unchanged. We still build websites in the same traditional structure as we did in the late 1990s: We start with a home page that summarizes our company and brand message, include a hierarchy of pages (products, solutions, about us, careers…sound familiar?) that describe everything we want visitors to see when they show up.

We’ve seen tremendous advances in website design: from the “above-the-fold” designs of the 2000s to the current trend of responsive, parallax, and endlessly scrolling websites designed for the ever increasing number of devices we use to visit these sites.

If you’ve read my previous posts, you know I tend to focus not on what your company wants to say but what your prospects and customers want to hear—and how they want to hear it.

Looking at it from that perspective, we’ve learned one very important lesson in the past decade about how visitors, prospects, and customers use our website: People come to the site looking for something. They want to go directly to whatever that particular thing is on our site and skip all the other stuff.

Some visitors take advantage of the hierarchical structure of the site to find what they need. Many, many more come in directly to some specific page on our site as the result of a Google search. Many come to our site as a result of an email or social media campaign directing them to a landing page. And some come to a specific page on our site through referral (a link sent to them, posted somewhere, etc.) or other various means.

We even spend time designing click paths through our websites both to serve specific kinds of visitors and to encourage them to take actions we design.

Improving Website Architecture

This means the way we build websites has no relationship whatsoever to how visitors use them.

What can we do differently?

A modest proposal: Outside–in architecture.

Let’s go back to that idea of click paths. We know how to do that (at least some do, and most of the rest of the marketing world is learning). We also know that pretty much every single person who visits our website will have a click path that is unique to them and serves well the visitor profile (or persona) they fit.

My proposal: Build for that.

Take the personas (or whatever method you use for profiling visitor needs) and the click paths and needs you’ve already figured out. Build those pages. Put the right information, content, and calls-to-action on those pages that lead where you think that person wants to go.

Then do it with every single profile/persona you have built (and maybe a few on the edge that don’t visit as often).

Then you will have a jumble of pages that meet defined click paths.

Every single one of those journeys through your site starts with some inquiry, and most (we hope) end in some action, even if it’s just reading information.

Arrange your starting points in a circle (conceptually or on your design board). Lay out the paths moving toward the center of that circle. They will overlap. Some will spiral. Some will go straight to the center. Some will stop halfway.

But you will find significant overlap among your paths. Many different kinds of visitors need the same information at different points in their journey through your site.

Each of those landing pages and stopping points becomes a page. If you’ve taken into account all the types of visitors who come to your site (don’t forget job seekers, investors, researchers, etc.), then you’ll also find you’ve included all the information you need. And anything that is not there, by definition, is not needed by your visitors and does not need to be on your website.

We know where our visitors land or start. We have a pretty good idea of where they go and how they get there. Why not build our websites around that journey and make it easy for them to get there and engage with us they way they want to—and, ultimately, the way we want them to.

What do you think? Have you done this? Have you taken an unconventional approach to website architecture? Tell us in the comments!

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October 14, 2014

Customer Retention Is Also about Keeping Your Promises

If you’re reading this, you likely already know your brand is your promise to your customers. But there is an important extension to this: keeping customers means keeping your promises.

Let me tell you the story of what just happened to me (I admit this is a bit of a rant, but if you’ve been following my customer retention stories, you know how I love to pick on the companies with the worst customer service—they are fantastic examples of what not to do).

This story is about my mobile phone upgrade. You’re probably not surprised to learn I have not been thrilled with my mobile phone carrier. When my contract was up and the new devices became available, it was time to upgrade. I did my homework, calling and asking lots of detailed questions about devices and plans. I got great answers from very helpful people.

In other words, they made me a promise. They made promises about the features and plans, and more importantly, they made promises (implicitly) about the kind of service I would receive (friendly and helpful, making the upgrade process easy and smooth).

When it came time to place the order, things started to go wrong, and small issues turned into big issues, leaving me wanting to switch to another carrier. First, when I called to place the order, I was told I could only do that online. Just a small inconvenience, so I tried online. Even though I was out of contract, they wanted to charge me a fee for upgrading (this is a common, if customer hostile, practice). I called to complain and was put on hold, then transferred to three (!) different departments. Then I was told this fee was required, and that I could not upgrade my phone without it. And no, not even if I paid full price for an unlocked phone could I avoid this fee.

More than an hour later (trying my patience), I hung up and called another carrier. They agreed to sell me new phones (the same model) with a similar plan without any fees to get started. The only reason I did not sign up right there and then was a small technical feature I need—which they do not have.

So I called back my old carrier and told them I would leave if they didn’t waive the fees and process my order without further hassles. I was transferred to the “customer retention department.”

As you probably know, these are the people whose job it is to handle the angriest customers and the worst customer service mistakes the company has made to improve customer retention. The mere fact a customer retention department exists means customer service is failing (If you have such a customer retention department in your company, I advise you to do a better job of customer service). They succeeded (they were nice, apologetic and made the process easy for me), and I renewed and upgraded.

But they’d made me a promise: an easy process with no hassles. They broke their promise and failed in every possible way to deliver. Then they were forced to spend time, effort, and money to “retain” me.

If you’ve dealt with customer service or even customer retention departments, you probably have at least a few stories that sound just like this or maybe worse. But this, as I noted above, is the bad example.

What you can do to avoid having a customer retention department and doing this to your customers is simple: keep your promises.

When a customer comes to make a purchase—any kind of purchase —make them a promise. Your promise is not just that the product or service you sell will perform an expected task, but it is a promise about the kind of service you will offer, what the buying experience will be like (now and every time they come back), what their experience will be using the product, how they will feel about your product, and how your product will affect their reputation.

The single biggest mistake companies make when they are seeking repeat or return business is breaking promises.

As a consumer, you know what it feels like to have a company break a promise. You are left with a sour taste and a desire to seek out competitors. Sometimes you switch, but even if you stay put, you are not a happy customer.

In your business, you are probably breaking promises to your customers far more often than you think (and certainly far more often than they are telling you). Without your customers’ willingness to tell you every single time you break a promise, how do you know?

Here are two questions you must ask for effective customer retention:

What promises are you making to your customers? Make sure you know every single promise your customers think you are making and not just the ones you want to make.
Which promises do your customers value? Companies break promises all the time, but most of the promises broken are unimportant to their customers. Find out what’s important to your customers.

Once you know the answer with a great deal of certainty, you are left with the very hard customer retention work (don’t underestimate this) of finding out how you are breaking those important promises. It might be in very small ways (oops, we forgot to tell you we charge $40 to upgrade your phone. Didn’t you read the small print? And if your agent starts quoting small print or company “policy” to your customer, you have blown it). You will have to look hard.

You’ll probably have to do the hardest thing of all: get outside your view as a representative of your company and step into the view of your customer. Live the experience your customer has with you as if you are your customer. You might be surprised at what you find.

In my experience working with companies whose business depends on having customers come back again and again, the work of fixing the issues you find is the easiest part. Often there are some simple tweaks to your processes that will help. Almost always, giving your employees on the front lines the authority to solve customers’ problems will solve most of your customer retention problems.

No matter what kind of business you are in, you depend on customers coming back. Breaking your promises in important ways (even if the importance is small) can ensure they never do come back. If you are in a recurring revenue and custom retention business, broken promises will certainly spell the end of your company.

Please share how you found out about your own broken promises and how you fixed them in the comments.

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Contributed by MENG Member Jeff Weinberger, CEO & Founder at DS3 Consulting.
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August 21, 2014

Four Steps to Fixing Your Biggest Customer Service Mistake

There’s one big mistake you can make in your customer service, and, if you’ve read my earlier posts, you know this is a pet peeve of mine: Letting your process and policies govern how you deal with people.

This often happens even in the best customer service organizations. In fact, this one mistake can sour great service more often in companies already known for great customer service than in ones where there is little or no customer service in the first place (though sometimes this is true because there is no service to sour in the latter set of companies!).

My Customer Service Experience

Here’s what one recent experience I had looked like:

My computer (partially) died. It could do a few simple things, but it was useless for anything significant and pretty much stopped all my work and productivity. My computer is from a company known for great customer service. So I called.

They sent a technician to my office the next business day with a replacement part. He opened up the computer, did his work, and left in less than an hour. I was thrilled.

The people were helpful and friendly, the service was quick and personalized, and what could have been a lengthy loss of time and work for me turned into a quick repair without my ever leaving the office

Then things went sour. It turns out there were two parts that needed to be replaced, and the technician didn’t know this. But the company acted quickly, and the next day he was back replacing the second part, avoiding a potentially poor customer service outcome.

But while the technician was working on the second part, he broke an even more critical part. He then spent two more hours in my office trying desperately—and unsuccessfully—to fix it.

So, again, I called. The customer service department wanted to send him out a third time with a replacement for the broken part. This was just a bit too intrusive for me. The next best offer from customer service was for me to ship my entire computer to them—and be without it for 10 days.

Yes, there’s a lot of drama behind this story. But the point is that it started out as a fantastic experience based on a set of customer service policy rules that allows the company to provide me with great initial service. Then it turns quickly sour because the same set of policy rules which are intended to make the service great end up creating more pain for the customer.

And yes, you’ve done this to your customers. I don’t know if you do it all the time, but I’m sure it’s happened. And I’m sure you looked at how it happened and decided that the policies in place were really best overall and that the particular case was unusual. But we’re all the unusual case.

How do you redesign your customer service policies to delight your customers─and keep delighting them even if things go wrong?

Develop People Centered Customer Service

Most customer service processes are designed to keep interactions short, solve problems quickly, and get cases closed as fast as possible.

People centered customer service does not lengthen the process. Rather, it changes the policies and procedures so they work around how your customer works and what is happening to them.

Sometimes changing this focus is easy. Car dealership service departments have been notoriously customer hostile, and they take your car (usually your primary mode of transportation) away for some inconveniently long period of time. The key issue is that the car owner’s life revolves around his or her car, and loss of the car is a pretty big deal.

The solution to that, at least for some dealerships, was to set aside a fleet of loaner cars. Now, for some cars, when you take your car in for service, you drive away in a loaner car (if yours is like mine, a newer and nicer car than yours!) which you use until your car is fixed. Transportation problem and intrusiveness problems solved.

In my computer situation, the company was so focused on getting quick, personal (on-site) repairs scheduled, that they lost site of why it is an issue for me. They forgot that my primary means of working is my computer. They forgot that sending someone to my office to fix it is intrusive. They forgot that every time they do a repair, I then have no computer for ten to twelve hours while my backup restores.

There was no process in place to allow the company to ask whether one more day, one more on-site visit, or one more restore would be just too much for me (The end of the story and the right answer is that they are sending a new computer but only after way too many hours on the phone arguing).

How do you implement people centered customer service in your organization? Here are four steps:

1.) Develop a model that helps you understand your customer’s life surrounding your products.

You might already do this to some extent for your marketing efforts. And if you have lots of different kinds of customers who use your products in different ways, you will have to develop something such as marketing personas for describing the various situations.

Your model needs to ask questions such as: How does this customer use the product? How critical is the product to their work or life? What will happen in the customer’s life if he or she is without the product for a period of time?

2.) Develop your service, support, and repair procedures to fit the scenario this customer faces.

Ask questions such as: How much are you requiring the customer to do on their own? Can they do it, and do they have the skills? Is it best for them to do it themselves? How much can you do for them without intruding on their routine? How can you choose routes to the solution that fix the problem effectively but minimize how much it affects the customer?

3.) Ask.

Before you insist that there is a defined next step in solving the problem, ask the customer if that next step is reasonable. Taking the same step three or four times may seem right to you, but it might not work for your customer.

4.) Consider the context and what came before.

When you offer a next step in a solution, look at what came before. Have you put the customer through significant burdens in the previous steps? Are you asking them to accept the same burden one more time? Your process and policies need to consider that when the problem is not solved on the first try, the tolerance of the customer is often challenged in subsequent attempts.

Don’t forget that this applies not only to previous attempts to solve the issue at hand but also to how you handled issues in the past. If you need to ask the customer to do some work to resolve the issue, you need to know if this is the fifth time in six months you are asking.

Make sure your process allows for escalation and severity increases that go along with failures to fix the issue.

If you can design those four steps into your customer policies and processes, you will go a long way to making your customers happy—and keeping them happy.

And we know that a recurring or repeat customer is the most profitable of all.

Let us know how you are making your customer service people centric.

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This MENG Blog post was contributed by MENG member Jeff Weinberger, Founder of DS3 Consulting.
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June 17, 2014

How Do You Define Customer Success?

Customer success is a very hot topic (rightfully so). With the rise of the subscription economy, companies are more obligated than ever to make sure their customers are happy with their products and services. Companies from salesforce.com to Dollar Shave Club are adding “customer success’ departments (or the like), appointing chief customer officers and finally paying attention to what happens after the initial sale.

But what constitutes “customer success?” Regardless of your business, it’s a hard question to answer. For a company such as salesforce.com, one customer might be successful if they use the software to track and report on sales reps, but another might be successful if they can establish and enforce a sales process. For a company such as Dollar Shave Club, a customer might be successful if they get a close shave from the razor blades, while a different customer might be very happy as long as the blades are delivered on time.

Not My Definition of Customer Success

Here’s a personal story of how a large subscription economy company failed to understand customer success:

A few weeks ago, I was watching television one evening. The picture became pixilated and then disappeared, leaving me staring at a blank screen (Have you guessed that I’m going to pick on my favorite target: my cable television provider?). After ruling out all the other equipment in my home, I determined the CableCARD device that my cable company provides was malfunctioning (A CableCARD allows a third-party device to decode the encrypted signal sent by the cable company, meaning you don’t need extra boxes in your house…sometimes.).

When I called the cable company’s “customer success” line, they walked through it with me again and agreed with my conclusion: the problem was with the CableCARD. They said they would send a technician to install a new one in three days.

Three days (!) seemed a long time to wait just to be able to watch television again. When I challenged this, I was told:

“This is not a priority issue. We are successfully delivering a signal to your home, and a malfunctioning CableCARD is not important enough for us to send someone tonight or tomorrow.”

I reiterated that I felt they were leaving me without their service for three days, and that this is a failure to deliver the service promised. They reiterated:

“We are successfully delivering signal to your home, so we are successfully providing service.”

Our definitions of “success” did not match. Theirs was “signal on the cable wire,” while mine was “seeing a picture on my television” (I’ll spare you the rest of the argument; it didn’t go well from my perspective.). Maybe there are other customers who use their signal differently and who consider “signal on the wire” to be success, regardless of whether their TV is watchable. Not I.

As I reflected on this discussion, I thought about all the other companies that fail to make sure I am using their service successfully, and only focus on the limited set of issues they choose to define as success.

A recent study showed that 53% of Americans would choose to switch cable providers if they had the choice (cable television service is a monopoly in many parts of the country). If the monopoly is broken, it does not bode well for these providers. Not only does it mean customers will be looking to leave and take their recurring revenue elsewhere, but it opens the market for disruptive competitors who may be more than happy to meet the needs that the current providers are not meeting.

The important question for your business is this:

Do you know how your customers define “success”?

If you don’t know that, you can’t help your customers be successful. And their definition is the only one that matters (cable companies, be damned).

An Approach to Customer Success

One company that is making a good effort at answering this question is Contactually (a social CRM product I use in my own work). Susan Watkins, their newly appointed head of customer success, tells me that when a customer shows up, Contactually contacts the customer and offers to help them get started, including personal tutorials on how to do the things the customer hopes to do with the product.

In that process, they discover how the customer intends to use Contactually—and how the customer defines success. When renewal time comes, they can then contact the customer and, instead of just asking for a renewal, ask how they are doing against that definition of success and how Contactually can help them be more successful.

Their data is not in yet, but I’ve seen this approach reduce churn by 5% to 10% in other companies.

In the subscription economy, if you don’t help make your customers successful—by their definition—you won’t be in business for long.

Post a comment and tell us how you figure out how your customers define success.

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April 17, 2014

Escape Social Media FOMO : Ask the One Right Question

If your company or brand is trying to have a presence in every social media outlet possible, you might have social media FOMO (fear of missing out). But fear not, there is a cure, and unlike consumer FOMO, you don’t need to stop marketing completely.

“Don’t I have to be on every social media outlet? How will I find my prospects and customers?”

If you’re asking this question, you probably already have FOMO. You can escape FOMO with one simple question:

“Is this the media in which my prospects prefer to establish relationships?”

EAT24, in what is now a well-publicized move (much to their benefit), recently broke up with Facebook. If you haven’t done so already, you should read their tongue-in-cheek-but-entirely-serious rationale as well as Facebook’s response.

What they really are saying is they don’t believe social media (specifically Facebook, but this applies to any social media) is about blasting out ads to their fan base. Rather, it is about establishing relationships and raving fans. They conclude, given that Facebook allows them very limited organic reach, that they cannot succeed in engaging their fans and building relationships (even those based on sushi porn) in this particular media.

Will this cost them exposure? Yes. And while I have no inside knowledge of their media strategy, it’s easy to conclude there are other media which are more effective for their prospects.

They could buy more exposure on Facebook, but it’s also obvious that the amount and depth of engagement is simply not worth it—there are better places to spend that marketing budget.

Applying the test above, it becomes clear their customers and prospects don’t really prefer to build relationships on Facebook, so it’s not worth spending the time and money.

In another recent high-profile move, OKCupid strongly urged its customers not to use the Firefox web browser on their site due to the homophobia of Brendan Eich, the now former head of Mozilla, the organization that publishes Firefox. Given Firefox’s 10.5% market share (source: netmarketshare.com April 2, 2014), this could be a risky move.

Firefox isn’t a social medium, but it is an important means of accessing OKCupid’s services (and every other service online). OKCupid is making two statements with this action:

their customers and prospects care about equality and will act on that belief, and
it’s easy to engage with them using another browser (Chrome, Safari, etc.).

OKCupid clearly believes that once the information about Eich’s homophobia is known, Firefox is not where its prospect and customers will prefer to engage so it does not feel the need to be easily available in every browser.

Back to your brand: How much time and effort are you investing in making sure you are available everywhere—on every browser, every social media outlet, and everywhere else? Are these time and budget investments well spent? Do they have the expected or needed ROI?

You know who your customers are. You know which prospects you are trying to target. Make sure you’re spending your time and money doing what they need you to do to build those relationships.

So before making an investment in a new media outlet, ask yourself: Is this the medium in which my prospects prefer to establish relationships?

It’s a surefire cure for your FOMO.

February 12, 2014

Choosing the Right Way To Create Transparency

We hear about transparency every day. We are told that, in a world where everything is exposed in media (mostly social media), it’s far better to be transparent than to try to hide blemishes, problems, and defects in the hope that they’ll go away or, at least, not be discovered until we fix them. Marketing blogs and publications are filled with disaster stories about companies that have chosen not to be transparent and success stories of companies that have chosen transparency.

But just like our personal lives, we have to choose the right level of transparency, and we have to choose the topics on which we will be transparent.

The following is a great example.

In November, I wrote about Buffer, a tech start-up that put transparency on top of their values list. Not only do they talk about nearly everything internally (including personal goals, such as education and weight-loss), but they publish many of their results externally, such as their customer success metrics, for the world to see.

Since then, they have become even more transparent, releasing more and more information publicly. Two of the ways they have done this have produced very different outcomes. Let’s take a closer look.

A Transparency Tempest in a Teapot

In December, Buffer decided to make public all the salaries of all their employees, including the formulas they use to determine these salaries.

This produced a small tempest in social media: some praised their transparency, and others chided them for releasing personal information about their employees or for creating potential envy and dissatisfaction in their ranks.

The question I asked was this: how does this disclosure benefit the customer (or any other constituent)? The answer is simple: it doesn’t. Granted, it does no harm, but it adds no benefit either.

This is a case of transparency for transparency’s sake. Some have made the argument that disclosing this information is consistent with Buffer’s culture, so it enhances their reputation and brand. I disagree. Disclosure is a choice, and we can always find something they are not telling us (they can’t possibly think of everything!), and this choice does not add value to the most important audience of all: their customers.

The Slippery Slope of Transparency

Buffer’s chief happiness officer, Carolyn Kopprasch, also publishes a monthly report on their customer success efforts. One element of this report shows how quickly Buffer responds to customer inquiries, tech-support requests, and the like (they state 85% of requests are answered in less than six hours though they’re not quite there yet).

This does add some value to their customers (including me) in that it shows what I can expect in terms of response to my requests as well as how well they are doing with all the issues brought to them.

To be clear, I think this disclosure is useful and valuable. But it also creates a potentially slippery slope.

Not long ago, I sent in a tech-support request and waited four days for a response. This is not typical of Buffer support or of my experience. It left me asking about the distribution of response times. Specifically, Buffer publishes the percentage of responses in one and six hours, but how often does it take a day? Two days? Four days? Was my response in the bottom 10%? 1%? 0.001%?

Which then led to the logical next question: since we know not all requests are of equal importance or urgency, and Buffer’s resources are limited, how do they make the triage decisions as to which requests get one hour response times and which get four day response times?

You can keep going, asking more and more logical questions until their entire operational plan is public.

Let’s say that Buffer chose to disclose the entire response time distribution and the triage criteria. Where would that lead?

In our interview, Carolyn noted that most customer service and support organizations train customers to get angry. Customers learn that getting angry leads either to faster resolution or to a supervisor who has the power to resolve an issue. This is a version of gaming the system.

Buffer’s disclosure of the triage criteria most likely would cause its customers to game the system. If I knew the criteria, I would certainly try to adjust my request to get a higher position in the queue and get a faster response.

Clearly this doesn’t help Buffer or its customers; it only adds to animosity and frustration.

Let’s say they only disclosed the distribution of response times. That would create frustration on the part of customers who were in the bottom 10%, or worse, the bottom 1%. My assuming my request fell at the bottom is not nearly as bad for my relationship with Buffer as having them tell me exactly how unimportant they deemed me. We are all better off if I don’t know.

This is, then, a choice Buffer has made about how much information to disclose and where to stop disclosure. I think they have made a good choice in that what they disclose helps customers understand their efforts better without taking away from the relationship and adding to frustration.

Is this two-faced? Yes. But not in a detrimental way.

Buffer values transparency on one hand and says it will keep increasing transparency. But it also makes choices about just how much disclosure meets their transparency value. Being transparent is an aspiration. We have yet to find out how far Buffer will go.

We expect transparency from companies. But we also expect there are boundaries, just like there are in our personal lives.

How Do You Decide?

You make decisions every day on what to disclose to whom. Do we tell our customers this fact? Do we tell the world that policy?

How should you decide?

I propose there is one simple standard embodied in these two questions: Does the disclosure add value? And if so, to whom? If it adds value for your customer, disclose.

Tell us how you’ve made your difficult disclosure decisions in the comments.
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December 12, 2013

Four Ways for Your Customer Service Team to Make Your Customers Less Angry

When your customers contact your customer service team, are they already angry?

An Increasingly Angry Customer Culture

Last month, I interviewed Carolyn Kopprasch, chief happiness officer at Buffer. She said:

“We live in a culture that has trained customers to start on the offensive just to get good service…Often, you don’t get to talk to a manager or someone with authority to solve your problem unless you say a curse word.”

This is, sadly, the case for many organizations. Consider companies with which you do business in your personal or business life. If something goes wrong and you need help, what happens? How do you find that help? And how do you feel by the time you call or send them an email? I’m going to venture a guess that by the time you make that contact, you’ve tried a number of things—to no avail—and are pretty angry.

In fact, a recent report (“Duck and Cover: More Customers Are Experiencing Rage”) on customer rage shows “customer satisfaction over a company’s ability to solve a complaint is no higher today than it was in the 1970s” and “customer dissatisfaction over complaint resolution has increased eight points in the past two years.”

This culture of anger is the result of a widely practiced approach to helping customers that is designed to lower costs for the company. This approach is also thought to improve the speed of resolution, but it often just creates bad experiences.

The practice is one of self-help or community driven help (the latter being very common in the technology business). Companies will try to figure out what most customers need help with and then post those issues on their websites in some form of FAQ. The assumption is that most people will go there, find the answer, and solve their problem. The advantage for the company is there is zero marginal cost to help each customer.

The second step of this practice is a community driven approach. The company will form some sort of online forum and allow customers to post questions and answer each other’s questions. The underlying assumption is that someone else has had the problem before and can help solve it.

This is not a zero cost approach, as many companies also have customer service team members watching the forums, adding comments and solutions and, sometimes, looking for common problems or requests that can point to product improvements. But it is a very low-cost approach to helping customers. And it puts a big onus on customers to seek and provide their own support.

The next step is to contact someone at the company on a customer service team. While a few companies don’t provide any direct contact capability, most do, either by telephone or email.

But by the time the customer reaches that point, they have probably tried to solve it through the other two methods, maybe had some unpleasant exchanges with forum members or employees, and have probably been forced to search the FAQs repeatedly to try to solve the problem on their own.

In other words, they’re angry.

Guiding Your Customer Service Team

Four things you can do to avoid this:

1. Stop making it us vs. them.

When your customer contacts you and is frustrated, angry or worse, it’s your customer service team’s job to take the company’s side. However, your rep should take away the need to take sides at all. The conversation should never be about what the customer wants vs. what the company will do.

The only conversation your customer service team should have with your customer is about the result they need to achieve and how they can help the customer get there. If every interaction is not designed around that idea, your customers will see your customer service team and your company as “against” them, and they will get even angrier.

2. Know why your customers are getting angry.

Don’t just ask. Measure. Don’t be biased by the loudest and angriest customers (perpetuating your contribution to the anger culture), but look at all your customer interactions and know why escalations happen.

Once you identify points of frustration, you can act to intervene. Depending on the issue, you can post simple solutions on your help pages or accelerate personal contact when a particular issue is raised. The better you get at directing more of your customers to their desired outcome, the happier your customers will be.

3. Learn your customers’ interaction preferences.

Some of us like to talk through our issues with someone. Others like to do research and solve it themselves.

Do you know what your customers prefer? Are you providing it? Or are you making assumptions that result in more escalations than needed?

Talk to your colleagues in marketing, and steal one idea. Ask who is good at developing what marketing people call “personas,” and create the ones you need. Figure out how to identify what type of problem solver each customer is and what you need to deliver to have them walk away happy.

4. Be honest.

If your customer has a problem, you have a problem. It doesn’t matter if it might be their fault. If you don’t eliminate your rep’s need to take sides and help your customer get the outcome they need, it’s going to be your problem, one way or another.

When you have a problem, admit it (“yes, I can see how the instructions are not that clear about that”). Show understanding. If it’s not your fault, help your customer get past it. If it is, be direct and just fix it.

When your customer service reps get to the point of quoting warranty limits, user agreements and company policy, you have lost — not just the conversation, but the customer — and you can kiss repeat business goodbye.

Are you already doing some of these? Are they working? Tell us what you think!

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October 16, 2013

Customer Service Culture Keeps Customers Coming Back

Below are examples of two very different customer service cultures. Which would you prefer? Let’s say you have to bring your car in for repair. The mechanic diagnoses the problem. Would you choose:

A) The shop where the mechanic tells you: “This is a simple issue. We fix these all the time. It’s not going to be any problem at all. Your car will be good as new in a few hours. Just go about your business, and I’ll call you when it’s ready.” or

B) The shop where the mechanic tells you, “Your car’s coolant system has three leaks in different hoses. The hoses are easy to access, and I have replacements in stock. It will take me two or three hours to replace the hoses and test them to be sure they are working. I’ll call you as soon as I’m done.”

If you’re like me, not only do you prefer option (B), but if you run into the mechanic in option (A), you’re likely not to come back (and maybe not even leave your car in the first place).

The reason is we don’t like to be dismissed, and we don’t like condescension. The mechanic in option (A) was condescending and a bit insulting. She assumed we not only have no idea how our car works but that we don’t care to know and will trust her implicitly. The mechanic in option (B) showed respect for our knowledge, ownership of the car, and likely, our time.

Is your company’s customer service insulting your customers without even knowing it?

I’ll give you another example of good and bad customer service. Recently, I contacted technical support for two different software products. Both are websites that run SaaS products. Both issues were simple ones that required little explanation and should have been easy to identify as issues (I can’t say how hard they would be to fix).

Company 1 responded like this:

We really appreciate you bringing us this kind of issue affecting our software’s performance. Rest assured our developers are fully aware of the changes and the glitches that occurred after the software update. They have made these adjustments their top priority to ensure our software is as stable as possible.

Thank you for your patience and understanding during this time.

Company 2 responded like this:

Thanks so much for writing in! This is a great question, not too odd at all! 🙂 I’m afraid there isn’t a great solution for this at the moment. Sorry about that. 🙁 We haven’t figured out a great way for it to know to re-look for the image and description if nothing shows up at first. Great idea though, and we definitely see the value of it.

Sorry I don’t have a better answer for you on that one. Is there anything else I can do to help or any questions I can answer?

I’m guessing you know which one I thought was well-done and which I thought was disingenuous

Company 1’s response is more troubling than just a dismissive response. It points to a customer service culture that assumes customers want reassurance and kind words above all else. It suggests that the company’s customer service protocol has guidelines or even templates that advance the idea that customers are to be dealt with and dismissed as quickly as possible.

This was reinforced after my follow-up question asking if they knew about the specific issue and might be working on it. I was told there are many issues on which the developers are working and that I could be certain they would be informed of this one. Further reinforcing the dismissive approach, five days later the company announced an update that resolved the specific issue. I have to assume someone there knew that this update was coming yet failed to communicate that to me.

Company 2’s response points to a customer service culture of openness and honesty. Telling me that there is “no great solution” admits the software has shortcomings and just can’t do everything all the time. This is true of all products of all kinds. Being direct about the limitations and aspirations of your product shows both honesty and confidence in your ability to deliver value to your customer.

My cultural assumptions were reinforced on follow-up exchanges, where I offered an idea for a solution, and an interesting discussion on how to best get the specific value I needed from the product ensued.

Evaluating customer service

Far too many companies evaluate the performance of technical support or customer service success on how quickly issues can be resolved and how friendly the language of the company’s representative is. Both of these measures lead the customer service teams to shorten their responses, use more reassuring and friendly (not honest and direct) language, and to be dismissive of customer issues in the hope they will accept answers such as those above from Company 1 and go away.

But customers are evolving the other way. Customers demand more details and honestly from companies, as well as more and more transparency.

In order to meet the needs of this evolving customer, companies must also change their customer service culture and the metrics that support it. For example, rather than measuring duration of interactions, you might measure how many interactions it takes for the customer to consider the issue resolved. You might also want to measure how much progress each interaction made toward resolving the issue (if it makes no progress, you are wasting time and angering your customer). Your metrics should always focus on what the customer perceives as progress and what your customer perceives as a resolution.

Is your company’s customer service culture dismissing and alienating your customers?

Try acting like a customer with a problem for a day, and go find out. Then tell us your story in the comments.
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