Lab Store: Managing Customer Experience

When Ron wrote this great post on Marketing’s responsibility for managing customer experience (more on process improvement from me here), I thought I would relate this simple example from the Lab Store.

We sell some exotic pet food that is meant to be a continuity item – the customer buys it every 3 months or so.  This product offering is, of course, designed to extend the Customer LifeCycle.  The food is a “staple” meaning it is generally kept in the cage at all times to supplement the fresh foods fed to the animal.  This food is not as appealing to the anlmal as say, fresh fruit, but it’s an important part of a well rounded diet for the animal.  The feeding instructions on the web site are extensive – portion size relative to fresh food, when to feed, amount to feed, etc.

So we start analyzing the repurchase rate of this staple food that is supposed to be our “back end” and it is dismal relative to expectations.  Why?  Have the customers switched to a different, cheaper source?  Are they not feeding the diet plan we suggest?  Is this even a “marketing problem”?  Well, in the Lab Store, anything related to customer behavior is a marketing problem.

So we grab a sample of the customers who passed the re-order point Tripwire of 3 months without ordering again and ask them, Why aren’t you ordering the staple food?  And the answer is “The critters don’t like it”.  Really?  That’s a surprise; we know the animals generally eat the food.  So we ask about portion size, are they following the diet plan?  And they say, “Not really, when they didn’t eat the staple food, we thought they would be hungry and so we gave them more fresh food.  They never ate any of the staple food”.

And there you have it.  We don’t need to ask any other questions.  The animal is not going to eat the boring staple food when they are being overfed the fresh food.  This is like asking a kid if they would rather have spinach or candy; one is good for them, the other tastes better.  And the customer isn’t going to buy staple food the animal will not eat.

The problem is, this “fresh food only” diet is unhealthy for the animal; they are not going to get critical nutrients they need from the staple food.  But, this exact feeding scenario is covered on the web site; we’re already communicating this issue to the customer.  So it’s not a marketing problem, right?

Wrong.  That is the marketing problem – the information is on the web site.  We started including a package insert with the staple food containing the very same info as on the web site, except now, of course, it was “contextual”; delivered in exactly the right place and at exactly the right time – when the customer opened the staple food package.  And magically, the repeat purchase rate on the staple food increased 32%.

The point is, if we had been off “marketing” and not paying attention to the Potential Value of the customer by setting up the Tripwire, we’d have never found this flaw in the process.  And by fixing it, we increase the return on all the acquisition marketing we do, because the LifeCycle of the customer has been extended.

Marketing Productivity, indeed.  More Lab Store tales to come.

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2 thoughts on “Lab Store: Managing Customer Experience

  1. Hi Jim, I love it. It’s all about the context.

    I always thought it was quite hilarious that my bank would hand me a brochure about signing up for online banking as I was going through the drive-up from about 2000 to 2003. Hilarious because I wanted to sign up for online banking. But obviously I don’t have access to my computer when I am driving. And by the time I get home, the last thing on my mind is signing up for online banking. The ONLY media in which that makes CONTEXT is via email- deliver the online banking message where I’ll get it when I am using a computer and can do something about it…… isn’t that obvious to everyone? CONTEXT, CONTEXT, CONTEXT. If everyone understood that, the world would be a better place.

  2. Agreed. The interesting thing we see in web analytics all the time is the physical manisfestation and resolution of the “context problem”.

    For example, let’s say 10% of people who add a product to the shopping cart end up checking out. We see the highest percentage drop out on the “choose shipping method” page. We then test putting a link right next to the “Continue” button that says “Shipping Policies” and links to the shipping policy page. Checkout completion rises to 14%.

    Context, and close relative empathy, are critical in a customer-centric marketing effort – you have to think like the customer, understand their potential issues, and provide solutions IN CONTEXT.

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