Monthly Archives: January 2007

Lab Store: The Next Inspector

This is a great B2B example of a Marketing / Customer Service program operating in Fulfillment from a vendor of ours. It drives profitability on the vendor side as well as increased satisfaction on the customer side. Simple as a rock, effective on a number of levels, and measurable.

When we open a carton (usually 6 or 12 items in a carton) from this vendor, the first thing we see printed on the inside lid of the box is this message:

Remember
Our Customer is the
Next Inspector

Think about that message. If you are packing the vendor boxes, you see this message every time you start to seal the box. Every time. How much “training” would it take to have the same effect? In addition to the more direct message it sends to a packer about quality control at the carton level, it also sends a broader message to employees concerning customer experience and care. After all, the employees know customers see the same message.

Simple, direct, impactful.

As a customer, when we opened these cartons for the first time, we thought, “Wow, that is pretty neat. These guys really give a crap about what they do.” Whether they really do care or not, of course, is up for speculation, but that is not the point, is it? We think they care. In fact, my wife’s response to this message was to cut off the carton flap with the message on it and put it over the packing station. Not sure they planned for something like that, but a nice “halo effect” :).

And, unlike most of the vendors we deal with, we have never received a mis-packed box from these folks in 6 years.

I talked with the vendor about this and he filled me in. The idea came out of Marketing as a potential solution to a packing error problem that was causing nasty-gram traffic in Customer Service and the hard loss of customers. An Operational defect that had a direct and trackable negative effect on both Customer Service and Marketing – as these process problems almost always do. He doesn’t know what the ROI is because it’s silly to even calculate it – the incremental profit generated by decreased packing errors (cost reduction in “make good” shipments and returns processing) since program implementation is so large relative to the cost of printing the message on the box that the ROMI would have 8 or 9 figures to the left of the decimal point.

That’s not including any customer metrics like slowing of customer defection rate and halo effects, because those are obvious to them. Customers simply stopped defecting due to mispacked packages.

Period. Do you need to run a lot of math on a result like that to figure out if it’s profitable?

Proactive versus Reactive Customer Experience Management

The data-based business model was customer-centric long before this idea became a buzz phrase. When you have detailed data on your customers and your operations, you understand a lot more about how the customer experience directly affects profits. This means you can quantify the value of reducing process defects before they impact the customer.

For example, in catalog (and a few great web retailers) you know what it costs to process a return on both the business side and the customer side (customer value / LifeCycle issues) and you do everything you can to prevent that return from happening – up front. This means before you launch a new product:

* Fulfillment reviews it to make sure it is shippable and the packaging is going to protect the product in transit

* Customer service reviews the product to make sure the packaging and any instructions are clear to the customer and won’t generate costly calls to customer service or usability problems. If the packing is incomplete, it is either rejected, modified with an insert, or at the very least, discovering this defect generates a training class for the reps who are going to take the calls.

* Marketing reviews it to make sure that the item and usage fits the brand image of the company, and that the purchase history of customers purchasing similar items / categories does not raise red flags (defection rate, LifeCycle).

This is what I would call a Proactive stance on customer service and experience management. The Proactive stance understands “value” is a two-sided equation and that to maximize customer value to the company, you must maximize company value to the customer – including the removal of process errors that whack people off (you don’t want to make people Cranky). It strikes me that most offline retailers and many online retailers are Reactive; they wait for crap to hit the fan and then they do something.  That doesn’t mean that some or even many don’t provide great service when stuff hits the fan.

But it seems to me many of these folks don’t work nearly as hard to prevent it from hitting the fan in the first place as the folks who really know the costs / customer value destruction surrounding defective product selection.  Or for that matter, any defective operational process directly affecting the customer. Responding to complaints is much more expensive than preventing them, and the folks who feed on customer data know this. The data enables a proactive analytical culture that can support the additional care / expense required up front before a product is even available for sale, because the downstream negative affects are quantifiable.

Top flight customer service / experience management would mean that there is significant effort to prevent problems from happening in the first place, not responding to them after they happen, no matter how good the response is. How much effort would it take to make sure packaging, instructions, fulfillment, web site copy, and so forth don’t create problems that would have to be solved later? That’s a base requirement, in my opinion. Better, how about taking the same touchpoints and actually making them work harder to deliver a positive experience?

I suspect most so-called “empathy” for the customer / experience takes place on a generic level; it’s a “standards” kind of thing for treating customers. Listen to the complaint. Empathize with the customer. Respond in a calm voice. Etc. This is reactive empathy and in today’s world, the baseline expectation of the customer. If you really want to make it to “surprise and delight“, you need to engage in Proactive Empathy.

There is a great deal of difference between a culture of reactive customer empathy and a culture of proactive customer empathy; and there is a big financial difference between “I’m sorry” and no complaint in the first place.

Marketers interested in direct contribution to profitability and increasing Marketing Productivity will seek out their peers in the operational silos and start creating and managing proactive empathy for the customer through each process of the business. And the smartest of them will be able to actually prove how much incremental profit embracing a proactive empathy for the customer culture generates for the company.

The Deconstruction of Marketing

Seems to me these days “Marketing” is being deconstructed into a bunch of pieces.  When I was coming up through the ranks, Marketing included Customer Service plus all the stuff now called CRM, Customer Experience, and all the related ideas.  The person in charge of Marketing was in charge of all these things.  It made so much sense to manage a business this way, because to control your fate as a Marketer, you had to control or at least influence all the customer touchpoints.  So why are these responsibilities being split off into little sub-cultures today?

The answer is they’re not really; that’s just the way it looks to me, because every industry I worked in for 25 years was rich with customer data and we used that data to prove why it made so much sense for Marketing to be in charge of all these aspects of the company interface with the customer.  We proved time and time again that by exerting cross-silo influence where the customer was involved, Marketing could generate much improved profitability.  Every Marketing program worked even harder towards generating profits when Marketing got all the silos aligned.

So I guess it just looks to me (and some other data-driven Marketing folks) like these functions are being split out of Marketing.  The reality is that many companies never had any of these data-driven functions before, and when they start getting access to customer data, they created these areas as new entities.  The question: why not create them under Marketing?  This approach sure would have saved a lot of trouble in CRM, for example. 

And I suspect the answer is the Marketing folks took one look at this new data-driven world with the associated need to have a basic understanding of technology issues, and said, “No thanks, I’ll stick to Advertising and PR”.  And as Marketers let go of / failed to capture control of these key operational touchpoints with the customer, they essentially devolved Marketing from a strategic C-Level force into “MarCom”.

And that’s a real shame.  This splintering of Marketing Management by technological issues is a waste of time at best and a long term problem at worst.  Ultimately, after we go through all this CRM and Chief Experience Officer stuff and whatever else you want to call it (seems like a new name every day), people will realize that all of this belongs in Marketing.  And then we’ll just need some brave Marketing folks who think they can handle it to step up to the plate and really make it work.  If you’re a mid-level MarCom person and want to start preparing for this transition, start making some friends in Finance, Technology, and Customer Service.  Find out what it is that keeps them awake at night, and think about how Marketing could help solve their problems.

And to jump-start your brain towards making Marketing decisions based on customer data rather than using nameless, faceless GRP’s, try taking a look at the business side of web analytics.  You’ll be amazed at how much of it transfers directly to Data-based / CRM / Customer Experience Marketing.  Why?  Because the web analytics community has decided best practices require a cross-functional team approach with a focus on Customer Experience and a requirement to examine the Financial implications of actions taken.  Web analytics teams are a functioning microcosm of what Marketing used to be, and what it should be in the future.