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Satisfied Employees; Happy Customers and other articles

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Market Watch is a snapshot of current issues and insights that can influence your consumers or customers and, therefore, impact your brand

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Satisfied Employees; Happy Customers and other articles

  1. 1. ©XPotential 2011 August 2011 Feature Focus: Satisfied employees; happy customers The link between customer satisfaction and loyalty is obvious, but a recent study has shown that this link is almost twice as strong in organisations where employees feel satisfied. This demonstrates the importance and benefits of investing some effort into making the workforce happy. In order to do this, companies need to understand what motivates and satisfies their staff. It is not usually money that provides the most motivation and satisfaction for employees. With input from over 700 companies, it has been shown that employees are most likely to want to give “the extra 10%” when they feel that what they do matters, and is an important component of the business. Businesses can help to make staff feel valued by creating a good working atmosphere, through incentives and benefits such as flexible working hours. But ultimately, the task of maintaining a happy and satisfied workforce is made easier by considerate recruitment; hiring the right people (including managers who will mentor employees and contribute to the feeling of being valued) brings high satisfaction levels closer within reach. “The goal is not to convince people to share your core values. It’s to hire people who already share your core values” James Collins (author, Built to Last). In the context of building customer satisfaction and loyalty for a brand, it is especially important that customer-facing employees feel satisfied in their roles. A feeling of discontent in these employees will drain the emotional resources that they need to be caring and attentive when dealing with customers. Customer service can be a challenging field, but teams who are trained and empowered by their employers are better equipped to make decisions that benefit the company by satisfying each individual customer. Instead of following a flow chart procedure for interactions (often mutually frustrating), employees who are entrusted to make the right choices themselves feel more valued and satisfied, and deliver a better service. American department store, Nordstrom are especially good at putting faith in their employees. New staff are given a Welcome handbook with the following content “We have great confidence in your ability to achieve [our goal of providing outstanding customer service].” And the one rule “Use best judgement in all situations”. This freedom and feeling of trust has earned Nordstrom a position in Fortune 100’s Best Companies to Work For. The approach has also put Nordstrom in the lead when measured against the American Customer Satisfaction Index with a score of 83%, ahead of Kohl’s and Sears, suggesting that satisfied employees really do lead to happy customers. Consumer Connections: Benefits of narrow branding As marketing author, Al Ries put it “Good things happen when you narrow focus”. A new study from the Norwegian School of Marketing has reaffirmed this theory. Ultimately, the study showed that a narrower strategy increases strength of association in consumers’ minds. Participants were introduced to fictional shampoo brands, one with 3 brand associations (e.g. good pH values) and one with a single association (narrow brand). Participants were subsequently able to associate the narrow brand with characteristics more quickly, indicating a stronger association. To follow on from this, the researchers did another study where a hypothetical competitor brand with the same association was introduced. When compared to the narrow brand, this new competitor was viewed less favourably than when compared to the broad brand. Continued on next page… -1-
  2. 2. ©XPotential 2011 August 2011 Consumer Connections cont…: The findings have big implications for brands, especially those who put their name to a wide spectrum of products. These companies could be better off adopting a strategy of separate brands, more of a house of brands portfolio, than a branded house. For example, Jaguar’s production of affordable cars will compromise their position as a luxury performance brand. In contrast, when Honda launched an upscale vehicle, they marketed under a different name in the US (“Acura”) because for American consumers, the Honda brand had associations of being economy, and adopting a broad strategy to include all products under the one brand would have diluted the strength of their brand associations. This approach requires branding to take a consumer focus, building a branding strategy around their perceptions and thought processes. In recent years there has been a shift towards narrower strategies, thanks to improved production capabilities. With new media, it is also easier to micro-target communications to individuals. However, the more personal products and brands become, the higher the associated costs, so companies face the evaluation of how narrow a brand can be made to yield sufficient benefits for consumers, without becoming unsustainable. Brand extensions have a higher success rate when keeping a consumer focus by targeting similar people than when the extension is based on product similarities. Aside from building the strength of brand associations and defence capability against new competitors, the narrow branding strategy also creates a buffer in PR crisis situations, protecting the separate brands that make up a company’s portfolio. Trend Spotting: Subscribing to products The latest buzz in the beauty blogosphere is around a new product called “Glossy Box”. Users subscribe to pay £10 a month to receive the monthly box containing a surprise selection of beauty products (many from luxury brands) and can earn loyalty points for reviewing the products online. For Glossy Box, it’s all about buzz. The surprise of the contents makes it “like a nice surprise present” and the loyalty points for reviews direct subscribers back online to talk about the products. -2- Men Are Useless positions around the benefit of not needing to remember (or bother) to do toiletry shopping in order to be well groomed. Like Glossy Box, Men Are Useless benefits from consumers’ enjoyment of receiving surprising packages in the post, “It felt like getting a treat”. Including some sweets in the box boosts this positive feeling. Amazon even has a subscription option for many products, “Subscribe and Save”. This service has proved particularly popular with mums for ordering bulky routine essentials such as nappies. Aside from the convenience of subscription (users can choose how often the products are delivered), Amazon also offers the tangible benefit of savings when you subscribe, usually a saving of around 15%. For businesses, the subscription approach offers the advantage of a constant stream of revenue, even though all of the above examples allow for cancellation at any point (without charge), unlike more traditional subscriptions. By taking away this constraint there are fewer barriers for consumers and they are more happy to sign up. Instead of tying users in by contract, the companies rely on the theory that customers will become attached to using the service. Men Are Useless offers a similar product to Glossy Box, a monthly box full of men's’ grooming products, but in this case the contents are “toiletry essentials”, the type of thing that men often forget to buy.
  3. 3. ©XPotential 2011 August 2011 Retail Therapy: Mystery Shopping Demand for mystery shoppers has increased 40% in the past 2 years, even though mystery shopping projects can cost up to £700,000 a week and ROI is difficult to measure. The current focus on improving service and retail standards is thanks in part to the wave of attention brought by Mary Portas: her TV series where shops’ service deficits are exposed and challenged, and her “Secret Shopper” website where users can review the service they have recently received at big retailers. Some people argue that mystery shopping is outdated and thanks to modern technology, acquiring feedback from real customers is easier than ever before and provides a more true-to-life and insightful means of reviewing stores. Many chains are now asking real customers about their experiences. The Co-operative use their chip and pin machines to ask for quick feedback while they have the customers’ attention. Boots prints out online survey invites for shoppers with their receipts. However, customer feedback is given retrospectively and is subject to their emotions. One unsatisfactory event during a customer’s store visit could taint their whole view of the store. In retrospect, customers may be asked about store features, such as lighting which they had not paid attention to and could not recall accurately. The argument for mystery shopping is that the feedback information can be more detailed and objective, assessing specified discrete features and paying attention to areas of interest during their visit. This provides retailers with a more accurate measurement of their service levels in order to gain actionable insights for improvement. Market Watch is a snapshot of current issues and insights that can influence your consumers or customers and, therefore, impact your brand. If you would like further information about these articles or our services, you can reach us on: (+44) 01628 485847 or visit our website www.xpotential.co.uk XPotential aligns individuals, functions and organisations, throughout the world, to create and deliver brand equity. Brand Barometers: Design your own skincare “Customerization” is becoming ever more popular as new technologies emerge to support preference, and even location-specific communications and offers to consumers. One French skin care brand has gone even further to offer consumers tailor-made products. Codage skin care is sold through their website, where a consumer’s skin care “prescription” is built around their answers to a questionnaire, ranging from skin concerns and diet to exposure to second hand smoke. From the recommendation, consumers can see the list of suggested ingredients and customize them further to suit their preferences. Relevant nutritional supplements are also offered. Of course, the product does not come cheap (+/- €70 a bottle). And there is always the risk that consumers can not accurately rate their own skin (e.g. level of greasiness); research into hair care has shown that only 20% of women can correctly diagnose their hair type. The Codage brand provides a product that feels specialist and unique, but they might run the risk of weak brand associations (see Consumer Connections article) by not focusing on credentials for any one particular skin issue. -3-

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