I ran across an article in Telephony Online with the intriguing title, “Are marketing billions being wasted?”(http://telephonyonline.com/global/news/service-provider-customer-retention-0803/) It told of a survey of Chief Marketing Officers at telecom service providers in which the CMOs admitted that their efforts to gain and retain customers (are being) crippled by internal barriers (and) IT inefficiencies.”
Yes, they are. And it’s not just telephone and wireless companies who are doing it. It’s what I call being “pennywise and billions foolish.” The article might as well have been called, “It’s Not Rocket Service: You’re Wasting Your Marketing Dollars.”
A few years ago, I was teaching a customer service course to a wireless telephone company. The company had 23% turnover in customers over the past 12 months. I told them, “Having 23% churn means that at least 23% of your marketing dollars are being spent to replace customers you already had and could have kept!” What a waste! Telcos and other organizations skimp on hiring the right customer-facing people, keep wages of those people low in an effort to cut costs, create bureaucracies that stop customer-contact people from having any authority to fix the customer’s problem, and have no idea what the customer expects. And then when churn is higher than they want it to be, what do they do? They increase the marketing budget and invest in advanced CRM systems that tell them everything about the customer except the way he or she wants to be treated.
Three things popped out at me from the survey by the CMO Council and its Customer Experience Board: One, more than half the CMOs said “their companies need to improve their responses to customer pain points” two, 89% said they need to handle and respond to customer problems better, and three, “more than half believe their organization is not culturally or organizationally aligned around the customer.” And they wonder why they’re seeing higher rates of churn.
Sadly, these numbers are not unique to the telephony business. The same range of numbers comes out in survey after survey in industry after industry.
The answer is twofold: One, figure out what roadblocks are stopping your customers from having the experience they expect and deserve. People buy again and again because they like the experience – the experience of using the product and the service they get when they buy and need help with the product. In the article, writer Carol Wilson talks about using news forums, blogs and other social media to track what people are saying about the issues with the products. Customer surveys won’t tell you half as much as finding out what people are saying online.
The other answer is to invest in hiring and training truly customer-caring people and paying them well. Then, give them the authority to fix customer problems the way the customer expects. Yes, it’s going to cost more, but if you don’t spend it on increased service levels, you’re going to waste the money on marketing anyway.
Tags: bad experience, bad service, Chief Marketing Officer, customer expectations, customer experience, Customer Experience Ownership, DSL service, taking ownership, telco, telephony, training, wasted marketing, wasting dollars, wasting money, what customers expect
January 6, 2010 at 1:16 am |
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