The Problem With Not Fixing Customer Problems

customer research and not fixing customer problemsNobody likes to hear bad news, but successful companies recognize that negative feedback is a vital mechanism for improving their products and customer service.

So when they hear that there’s bad news that customers aren’t telling them, many companies assume it is product or service-related. They should be asking another question, though. Why aren’t customers sharing the negative feedback? The answer is critical to understanding the customer experience and potential loyalty risk.

Your customers won’t share feedback with you if they don’t believe you’ll take action.

Registering a complaint with a large company isn’t easy — often it involves wading through several phone menus, waiting on hold, then speaking with a customer service rep who may not be empowered to fix the issue.

As a result, many people just don’t go through the complaint process because it’s more of a headache to complain about the problem than the problem itself. And that’s how we end up with products that don’t work, services we don’t want, and ongoing charges that we don’t think we should be paying for.

If customers don’t think they’ll get a resolution to their issue, often they won’t bother to raise it.

A customer who does not bother to let a company know when they have a problem is a customer with serious loyalty risk.  In a 2017 Small Business services study, Verde found that customers who take the time to contact when they have a problem are 50% more loyal than non-contactors, assuming that they are fully satisfied with their problem resolution.  This is typical for nearly all customers across business verticals, both B2B and B2C

That’s good news for companies that make it easy for customers to register complaints and focus on positive resolution. If you are able to fix a customer’s problem and they’re happy with the result, generally they end up every bit as loyal as if they had never experienced an issue.

Citing the same 2017 SMB study, Small Businesses who experienced a problem were 80% less likely to be a Promoter of our client’s services.  But when their problem was fully resolved, all that lost loyalty was recovered.

So how can companies use this dynamic to their advantage?

Make it easy
Customers typically have many options when it comes to lodging a complaint — phone calls, online chat, email, web forms, and even social media. The instructions for each should be clear, and all options optimized for simplicity and speed of response. How many customers calling in for help have had to navigate multiple voice menus, then wait in an endless call queue?

Make an effort
When customers do take the time to reach out, your team needs to know that the objective is to understand and fix the problem. Train and empower everyone, particularly customer service, to focus on a positive outcome — when the customer hangs up they should be happy with the results and satisfied with the interaction.

Follow through and follow up
There’s nothing worse, from the customer’s point of view, than to think you have a problem resolved, only to find out it isn’t. Whether it’s a credit card charge that wasn’t reversed as promised or a missed service call, this event is often the final straw for even the best customers.

Companies need to ensure they’ve taken all the steps to fix the customer issue, then they need to take a final step. They should follow up with the customer to confirm everything is correct, and to make sure the customer is satisfied. This is what is known as a closed loop. Learn more about Verde’s full-service closed-loop tracking program.

Be honest and open
I’ve written about this in a previous post, but it bears repeating. An honest discussion with customers is often the best way to resolve their issues and retain their loyalty. Admitting that your company isn’t perfect, acknowledging your errors, and committing to fix them is a great beginning — just remember it’s all about the follow-through.

Michael Tropp is Vice President, Business Development of The Verde Group and WisePlum

 

 

 

 

Tomorrow is Fine. Free is Fine. What Else Can You Do?

The Verde Group Customer InsightCustomer Insight: How Logistics Raises the Bar on Customer Expectations

Ask any customer shopping online when they want their order delivered, and it’s a good bet they’ll answer ‘tomorrow’.

Thanks to masters of logistics like Amazon and Zappos, customers have come to expect 2-day or even 1-day shipping, sometimes at no cost. They want things NOW and will choose companies based on that expectation. If you can’t deliver, you risk losing customers — even if you have a great product and competitive pricing.

A case in point. Prior to a recent business trip, I needed a new laptop bag. It was Saturday, and I was flying on Wednesday. I found a nice leather case I liked and identified several online retailers who carried it. Whom did I choose? The one who could get it to me by Tuesday and didn’t charge a premium for fast shipping.

Evolving logistics capabilities have impacted the customer experience in other ways. Consumers now want to know ‘where’ their order is every step of the way. And these expectations have spread across industries. If Uber and Dominos can tell you the exact location of their driver, exactly where the driver is, consumers expect that their package delivery company should be able to do the same?

Companies who can meet these constantly rising expectations are being rewarded with increased sales and customer loyalty. Those who can’t may suffer the consequences. Faced with the customer challenge of ‘why drive to the store when I can double-click and two days later it’s at my door?’, Toys ‘R Us had no answers.


Fast and Free Delivery Is Not Enough
With delivery speed and accuracy quickly becoming the norm, how can companies further differentiate the delivery experience? For that, they’ll need to get creative. Going back to my recent laptop bag purchase — supposing the retailer had included a small sample of leather protector in the box? Unfortunately, they didn’t, but adding a small gift or discount coupon can further endear customers to a brand while also providing an opportunity to cross-sell.

Post-delivery follow-up provides another opportunity to differentiate from the competition and add value. This generally takes the form of a post-purchase survey or a request for a product review. Most customers appreciate the touchpoint, and the post-sale interaction typically promotes brand loyalty.

However, when companies master logistics, they can take the Customer Experience to even higher levels. They know exactly when you received the product, how long you’ve had it, and when that product is due for replacement. This mastery of logistics and “big data” gives these companies an edge on their competition – it enables them to be more than a “one and done” with the initial transaction.

 

Where Do We Go From Here?
Customers now expect to get anything and everything to their front door FAST. This has created industries that didn’t exist just a few years ago — think of meal preparation companies such as Hello Fresh and Blue Apron.

The continued growth of online sales and the globalization of supply chains will keep driving logistics innovation. We’re already seeing trials of drones and driverless long-haul trucks. The automatic re-ordering and shipment of products based on a pre-set delivery cycle is certain to disrupt some industries — just ask Gillette, who late last year introduced cheaper razor blades to fend off competitors Dollar Shave Club and Harry’s.

And of course, there’s Amazon, ever the leader in logistics innovation. Amazon continues to surprise consumers with their innovations. In April 2018, they partnered with GM and Volvo to offer product delivery to the trunk of your vehicle rather than your front steps by remotely unlocking your vehicle through the car’s internet connection.   Granted, not all Amazon customers may want to take advantage of this offering, at least initially.  But for those who do (perhaps those with “front porch security concerns”), this is a potentially high value-add service.

Most companies now understand that there is a direct correlation between their logistics ability and their customer loyalty (NPS score). The challenge for these companies will be to develop and deliver innovations to their customers that represent relevant, timely and meaningful improvements.  Understanding which delivery innovations will materially shift customer spend and brand affinity will become a competitive advantage, particularly in those categories where product quality and price are weakly differentiated.

Want to learn more about the link between logistics, innovation and the customer experience? Check out a few of my favorite customer insight articles on the topic:

How Innovations in Logistics Fulfill the Experience Demand

The Amazon Supply Chain: The Most Innovative in the World?

Lori Childers is Vice President, Client Solutions at The Verde Group