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Delighting customer-importance-method
- 1. Customer Delight Not Customer Satisfaction, but... BY:Prof. Jitendra Sharma Trainer & Consultant Email: jitendra777@indiatimes.com
- 3. Objective of theSession 1.What is delighting the customer? 2.WHY delighting customer is important ? 3.HOW can we delight customer?
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- 5. 1-5 Traditional Definition of Marketing SimpleDefinition: Marketing is managing profitable customer relationships. Goals: Profit, Customer Satisfaction & Long term relationship 1. Attract new customers by promising superior value. 2. Keep and grow current customers by delivering satisfaction.
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- 7. Levels of CustomerSatisfaction Perceived Service Expected Service Customer Satisfaction Much Better than expected As expected Worse/Different than expected Delighted * Satisfied Dissatisfied Loyal Vulnerable Walk & Talk
- 8. WHAT IS IT? •Customer delight is more about the experience and emotion than it is about the product and its features. • Its about creating customer life time value by improving the customer loyalty
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- 10. + 1s + 1% + 1 more smile + 1 additional item + 1 more personal contact + 1 bit more thought fullness + 1 extra minute of your time + 1 check to make sure all’s now OK + 1 telephone call to ensure the customer’s happy + 1 anything else that will delight your customers
- 11. Modern customer-oriented organizationchart Top manag ement Middle management Front-line people Customers Customers Front-line people Middle management Top manage ment C u s t o m e r s C u s t o m e r s Traditional organization chart
- 12. All profit comesfrom customers So if no customers = no profit and no profit = no business then no customers = no business Therefore customers ARE the business
- 13. “The greatest dangerfor most of us is not that our aim is too high and we miss it, but that it is too low and we reach it” Michelangelo
- 14. Why delighting Customer isNecessary? PART -B
- 15. Challenging Scenario – Whatare our challenges? • Attitude towards the customer • Competition • Price war • High quality man power • Marketing and Selling attitude • Pace of new service/technology induction
- 16. “ Customer satisfactionis no longer good enough to survive today’s competitive market place. What is needed is customer delight.” - Tom Peters
- 17. CUSTOMER ? CUST MEMER OR ATITHI DEVO BHAVA
- 18. “ Figures areyour history, customers are your present and future. “ --- Philip Kotler
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- 20. 20 Customer Service Facts Whycustomers leave: 1% die 3% move away 68% quit because of an attitude of indifference towards the customer by the staff 14% are dissatisfied with the product 9% leave because of competitive reasons www.CustomerServiceManager.com
- 21. Lifetime Value ofa Customer Toothpaste Rs. 50 K Detergents Rs. 100 K Cigarettes Rs. 300 K Colour TV Rs. 400 K Branded Shirt Rs. 500 K Car Rs. 2.5 M Software Rs. >> M Source: Atos Origin
- 22. 91% ofunhappy customers will not willingly do business with you again. 70% of complaining customers will do business with you again if you resolve the complaint in their favor. 95% of complaining customers will do business with you again if you resolve the complaint instantly. A typical business hears from only about 4% of its dissatisfied customers. • 96% just go away • 91% will never come back (Source: “Understanding Customers” by Ruby Newell-Legner)
- 23. The Truth AboutCustomers • Ten times more expensive to acquire a new customer than to keep a current customer - Bain & Company Research • Customers are lost primarily due to indifference (68%) versus dissatisfaction (14%) - WSJ
- 24. Adequate Is NotAcceptable • Most of what we do is adequate • People talk about Customer Delight • People talk about bad service • People don’t talk about adequate service
- 25. Dissatisfied customers cancause a destructive spiral Delighted Customers Customers Dissatisfied Customers 30% 70% Complain Walk & Talk 95% of Satisfied Complainants remain loyal 1 x 11 11 x 5 Total 67 1 x 5 5 x 2 Total 16 Source: PIMS, TARP, IBM & other research studies
- 26. Delighted customers yieldseveral benefits » Lower Cost » Cost 5x more to gain a new customer than to keep one » Cost 10x more to get dissatisfied customer back » Growth » Win customers trust & confidence » Repeat business » Non-competitive, shorter lead-time » Opportunity to deliver new services » Higher Profits » Lower marketing costs » Less risk; less write-offs; less fee-sensitive » Higher acceptance to leverage new or junior staff
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- 28. Actually • Customer expectationsare typically not very high • Your job is to surprise them • Customer Delight is doing what they haven’t even imagined • What will cause them to say WOW! • You know what you can do - they
- 29. Creating Customer Delight • What’sworking? – How can we do more? • Any barriers? – How can we overcome them?
- 30. Understanding What Customers ReallyValue Perceived Service Expected Service Customer Satisfaction What Customer Values Deliverable (tangibles, reliability) Financial Informational (ease, access, responsiveness, security) Interpersonal (credibility, competence, contact, empathy) Environmental Process Moment s of Truth
- 31. Hygiene vs. Enhancing factors »Hygiene Factors » Absence: Dissatisfies » Presence: Neutral » Enhancing factors » Absence: Neutral » Presence: Satisfies
- 32. Making Customer DelightA Core Value • Staff Meetings • Board Meetings • Define and visualize the ideal experience • Make a part of each agenda • What did we do right? • Missed opportunities? • Recognition • Who is the “champion” for Customer Delight? • How are we treating customers now?
- 33. I Will • Identifycrimes committed against Customers, Donors, Program Participants and Each Other • ……and do SOMETHING
- 34. Two Things IWill Do… • 1) • 2)
- 35. 35 What separates the merely good organization fromthe truly great? BEST SELLER!
- 36. 36 RemarkablRemarkabl ee 1. A Customer ServiceCulture 2. Alignment of Products and Services With Mission 6. Organizational Adaptability 7. Alliance Building 3. Data-Driven Strategies 4. Dialogue and Engagement 5. CEO as a Broker of Ideas Commitment to Action Commitment to Purpose Commitment to Analysis and Feedback
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- 38. Selected MethodsSelected Methods 1Customer Services 2. Improving Employee commitment 3. Innovation 4. Customization 5. Experiential marketing 6. Permission Marketing
- 39. 39 What is CustomerService? "Customer service is the ability to provide a service or product in the way that it has been promised.“ Source: Customer Service Manager
- 40. "Customer service isabout treating others as you would like to be treated yourself and how they want to be treated." Source: Customer Service Manager
- 41. "Customer service isa process for providing competitive advantage and adding benefits in order to maximize the total value to the customer." Source: Customer Service Manager
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- 44. 44 2009 Business week CustomerService Champs 1. USAA 2. JAGUAR 3. LEXUS 4. THE RITZ-CARLTON 5. PUBLIX SUPER MARKETS 6. ZAPPOS.COM 7. HEWLETT-PACKARD 8. T. ROWE PRICE 9. ACE HARDWARE 10. KEYBANK 11. FOUR SEASONS HOTELS & RESORTS 12. AMAZON.COM 1. NORDSTROM 2. CADILLAC 3. AMICA 4. ENTERPRISE RENT-A-CAR 5. AMERICAN EXPRESS 6. TRADER JOE'S 7. JETBLUE AIRWAYS 8. APPLE 9. CHARLES SCHWAB 10. BMW 11. TRUE VALUE 12. L.L. BEAN 13. JW MARRIOTT Source: BusinessWeek Online
- 45. 45 Case Study -Zappos.com Source: The Letter Two.com
- 46. 46 Zappos is committedto WOWing every customer. Customers come… Over 10 million total purchasing customers Customers come back… 75% of purchases from returning customers Repeat customers order 2.5x in the next 12 months Customers come back, order more and order more often… Source: TheLetterTwo.com
- 47. 47 What customers firstsee 24/7 Toll free phone number Free shipping and return shipping 365-day return policy Source: TheLetterTwo.com
- 48. 48 What customers experience Fast,accurate fulfillment Most customers are “surprised”-upgraded to overnight shipping Friendly, helpful “above and beyond” customer service Occasionally direct customers to competitors’ web sites Source: TheLetterTwo.com
- 49. 49 Internal Methods 5weeks of culture, core values, customer service, and warehouse training for everyone. Culture Book Interviews & performance reviews are 50% based on core values & culture fit. Source: TheLetterTwo.com
- 50. 50 Zappos Delivering Happiness (customers andemployees) “People may not remember exactly what you did or what you said, but they will always remember how you made them feel.” Source: TheLetterTwo.com
- 51. 51 Zappos Core Values DeliverWOW Through Service Embrace and Drive Change Create Fun and a Little Weirdness Be Adventurous, Creative, and Open-Minded Pursue Growth and Learning Build Open and Honest Relationships With Communication Build a Positive Team and Family Spirit Do More with Less Be Passionate and Determined Be Humble Source: TheLetterTwo.com
- 52. 52 Innovation Innovation allows organizationsto remain competitive. Nurturing the ideas of employees is vital to the growth of the organization.
- 54. 10 - 54 •$50 billion in profits over 27 years • Early new-product development relied heavily on copying the competition • $4.2 billion annually invested in R & D • Innovation is critical to Microsoft’s future success • Much of R & D efforts are Internet related • Many new products and MicrosoftMicrosoft Case Study
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- 56. Copyright 2007, Prentice Hall,Inc. 8-56 Firm History • Steve Jobs’s creativity led to innovation in user friendliness of computers. • LazerWriters and the Macintosh established Apple firmly in desktop publishing market. • Status as market share leader and innovator was lost in Apple Computer – Innovation atApple Computer – Innovation at WorkWork Case StudyCase Study Firm Recovery • Steve Jobs returns in 1997 and revitalizes Apple by first launching the iMac. • The Mac OS X next breaks ground and acts as a launching pad for a new generation of computers and software products. • iPod and iTunes change the face of music and
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- 58. Google Phone- Nexusone Google’s mobile operating system for phones
- 59. Gillette Men’s Razors: ProductModification
- 60. Gillette Women’s Razors: ProductModification
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- 64. Experiential Marketing “Experiential Marketing:Beside product features and benefits, promotion connecting it to unique and interesting experiences” if you charge for the time consumer spend with you, then & only then you are in experience business Employ multiple touch points & multiple senses Often involves special events, contests, promotions, sampling, on-line activities, etc. Combine brand education & entertainment Distinctive and relevant Example: (Disney Village), Rainforest Cafe, Planet Holywood, Levi‘s and Nike Brand Stores Example: Day@Xcellon
- 65. Requirement –different from traditionalmarketing Focus on consumer experience Focus on consumption situation View consumer as rational/emotional Use eclectic (diverse) methods and tools
- 66. Example • Sample house •Virtual 3 D image • Test Drive
- 67. One-to-One Marketing: Competitive Rationale “One-to-oneMarketing: From transaction- based marketing towards relationship marketing including customer databases - dialog - customization.” Three things 1.Focus on individual customer through customer database 2.Respond to consumer dialogue via interactivity 3.Customize product & services as per their requirement
- 68. One-to-One Marketing: Five KeySteps Identify consumers, individually and addressable Differentiate them, by value and needs Interact with them more cost-efficiently and effectively Customize some aspect of the firm’s behavior Brand the relationship
- 69. One-to-One Marketing: Consumer Differentiation Consumershelp to add value by providing information Firm adds value by generating rewarding experiences with consumers Creates switching costs for consumers Reduces transaction costs for consumers Maximizes utility for consumers
- 70. Web Sites forIn-Class Activity 1) Computers: Dell - http://www.dell.com/ Gateway - http://www.gateway.com/ Apple - http://store.apple.com/ 3) Automobiles: Ford - http://www.forddirect.com/ BMW - http://www.bmw.com/ Jaguar - http://www.jaguar.com/us/ 5) Jewelry: Mondera - http://www.mondera.com/ DeBeers - http://www.adiamondisforever 2) Clothing: – Lands’ End - http://www.landsend.com/ – Shirtcreations - http://www.shirtcreations. com/ – Americanfit- http://www.americanfit.co m/ 4) Bicycles: – Cambria Bicycles - http://www.cambriabike.c om/ – Cannondale - http://www.cannondale.co m/
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- 76. Permission Marketing The practiceof marketing to consumer only after gaining express permission….. Permission marketing can be contrasted to interruption marketing Permission marketing “encourages consumers to participate in a long-term interactive marketing campaign in which they are rewarded in some way for paying attention to increasingly relevant messages.” Anticipated Personal Relevant Marketing based on consumer willingness and that marketers respect consumers‘ wishes.
- 77. 5 Steps inPermission Marketing Must offer incentive (overt, obvious, and clearly delivered) to prospect to volunteer Must offer a curriculum over time, teaching the consumer about the product or service Must reinforce the incentive over time that prospect maintain permission Offer more incentive to get more permission from the consumer Must leverage permission to generate profits
- 78. Integrating the Brand IntoSupporting Marketing Programs Product Strategy − Deliver tangible and intangible benefits − Add value through customer information Pricing Strategy − Understand perceptions of value − Balance price, cost, & quality • Communication Strategy • Mix & match communication options • Channel Strategy • Blend channel “push” with consumer “pull” • Develop & brand direct marketing options Supporting marketing mix should be designed to enhance awareness and establish desired brand image.
- 79. 79 Touch Points Email Voicemail Snail Mail(Post) Phone Fax Face-to-face Social Media
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