Category Archives: When to Deliver Customer Service

Walmart’s Customer Service Renaissance

Posted on 1 February 2011 by | 1 Comment

It is difficult to argue that Walmart offers ideal customer service (Forrester’s 2011 Customer Experience Index report rated Walmart near the bottom of 30 retail stores).  Nonetheless, Walmart is leading a customer service renaissance through its sustainability initiative.

How?  Walmart is providing healthier food options to its customers.  Who would claim that better health is bad for customers?  For Walmart, however, sustainability and better health are about growth and profitability.

There are only a handful of fundamental ways to increase sales revenues:

  1. Enter new markets
  2. Develop new products
  3. Increase spending per transaction
  4. Increase the number of transactions

The sustainability initiative addresses #4 by lengthening the buying lifetime of its customers.  By providing healthy food to consumers, all other things being equal, customers should live longer.  The longer they live, the more trips they’ll make to Walmart, and so on.  This example is analogous to churn rates (the percentage of customers who defect from your products/services to another option).  The difference is that the “other option” is death.

Some back of the envelope numbers to illustrate:

  • $405,000,000,000 annual revenue (last 12 months ending January 2010)
  • 140,000,000 people shop each week
  • A person spends $55 on average each trip
  • The global population growth rate is 1.133% (2009 CIA estimate)

Now the if(s):

  • IF a consumer’s average spend/trip doesn’t change and
  • IF Walmart’s actions result in improved health so that the mortality rates fall and the growth rates increase by only 0.001%
  • THEN revenue will increase by $4,000,000

These numbers/assumptions are admittedly loose, but they help demonstrate the concept.  We can be sure the smart folks at Walmart (number one on the Fortune 100 list and definitely not operating a charity) know the numbers and that they offer an attractive ROI.

Another potential benefit…

  • IF consumers who normally don’t shop at Walmart start to because they believe the food is healthier
  • THEN Walmart reaps a benefit on #1 above by opening a channel into a new market.  (Have you seen the prices at Whole Foods?)

Whether the sustainability initiative was borne out of altruism or greed, the net result is the same — increased revenue.   The pivot point is that by making strategic investments in the long term viability (i.e. life) of their customers, Walmart simultaneously serves shareholders, employees, and the community.

Which other companies do you know that “get it” and are focused on solving customer problems?

→ 1 Comment

Posted in Customer Service, When to Deliver Customer Service

Tagged , , , , , , , , , , , ,

Strike One… You’re Out

Posted on 7 April 2010 by | 1 Comment

The saying “you get only one chance to make a first impression” has never been truer.  In an age where information flows quickly and freely customer service must be a reason prospects buy from you and customers return to you.  Investing in a positive, memorable customer experience creates a strategic advantage.  Here are two reasons why this is true:

  1. Options – Think about the last time you booked travel.  How much do you care whether you fly American or United?  If you exclude frequent-flyer programs (which with all the blackout periods ought to be renamed frequently disappointed programs) prices are generally the same,  peanuts still come in 0.25 ounce containers, and our surprise is still genuine if our luggage shows up on the baggage carousel.  Airlines have achieved commodity status, consumers have options, and the cost to switch is low.
  2. Transparency – Consumers are able to research experiential information with a few mouse clicks.  Social media magnifies customer service blemishes yet also amplifies outstanding service.  Social media and the blogosphere make information (the good, the bad, and the ugly) instantly available. Nielsen studies show that 90% of consumers trust each other’s recommendations and 70% trust online recommendations.

Sharing the good, the bad and the ugly is seen as a huge risk precisely because it may lure customers to other options.  But those who worry that “negative comments may cost us business” miss the point.  Poor products with dismal service lose business. The choice is whether your company is committed to creating a winning product that customers love and bask in their accolades or hide from faults and slowly lose your customers.

The pivot point is to start with a quality product and continue the experience with transparent customer service.  When you do, transparency becomes a game-changer because companies that make and fix honest mistakes get more than one strike.  Play ball!

→ 1 Comment

Posted in How to Deliver Customer Service, Influential Factors - Helpful, Necessary for Success, When to Deliver Customer Service

Tagged , , , , , ,

Why Getting Rejected is So Great for Relationships

Posted on 18 November 2009 by | 2 Comments

The software industry is faced with a challenge common to other industries; too many good ideas, and not enough time and money to implement them all.  This simple fact can hinder customer service if handled poorly.  When examining customer feature requests (either new ones or product modifications) there are two classifications: healthy and unhealthy.

Healthy

  • Implement the Customer’s Request – No mystery here, right?  Good and easy ideas reach consensus quickly.  When many customers share a need the marketplace self-validates.
  • Reject or Decline the Idea Quickly – Don’t confuse rejecting an idea with ignoring it.  Rejected ideas deserve greater consideration than implemented ideas.  Your company must provide a strong explanation regarding why an idea would be rejected. This rejection is a conversation with your customer.  “I heard you, I considered the idea, yet we will be pursuing another direction.”  Notice that healthy does not mean, without pain.  Customers whose ideas are declined will not be happy yet those same customers will respect your honesty.  That honesty breeds confidence which in turn enables open dialogue which yields future business opportunities.

Unhealthy

  • Provide Lip Service – Letting ideas meander aimlessly along the river Styx to suffer purgatory in an under review status is a coward’s way to work with customers and it does nothing to forge a lasting relationship.
  • Ignore the Request – When ideas are never considered companies send a strong, though silent, message: “your needs don’t matter.” One of the golden rules of service is listening to customers.  If companies fail this most basic of tests they should expect to lose customers.

The pivot point is that when fulfilling customers’ requests, whether for a type of service, a new product, or a product modification, rejecting customers’ requests (with tact) is an acceptable alternative.  Rejection hurts, but so does being strung along.  And no one wants that in their relationship.

→ 2 Comments

Posted in Influential Factors - Helpful, Uncategorized, When to Deliver Customer Service

Tagged , , ,