vodacom cm programme 2015 - part 4

Maximising Value through Customer Management

Theme 3: Dealing With Complaints and Problems in

Your CompanyAki Kalliatakis

[email protected] www.LeadershipLaunchPad.co.za

mailto:[email protected]

http://www.delightyourcustomers.co.za/

Complaints are Inevitable

…or are they?

A complaint is destructive when it…

•Is uncontrolled opposition which dissolves common ties we have

•Leads to personal attacks and being backed into a corner

•Slows down or stops effective communication

•Reduces cooperation and problem-solving

A complaint is destructive when it…

•Is uncontrolled opposition which dissolves common ties we have

•Leads to personal attacks and being backed into a corner

•Slows down or stops effective communication

•Reduces cooperation and problem-solving

The problem is that when customers don’t get satisfaction

from their complaints, they overreact (the 3R’s)

The problem is that when customers don’t get satisfaction

from their complaints, they overreact (the 3R’s)

In addition, for every one who actually complains,

there may be many, many more who say

nothing

In addition, for every one who actually complains,

there may be many, many more who say

nothing

96% more!96% more!

The package that complaints come in is ugly, grotesque, and unpleasant, but

what is inside is of critical importance to you and your business:

The package that complaints come in is ugly, grotesque, and unpleasant, but

what is inside is of critical importance to you and your business:

• It means that they haven’t done something worse, and are giving you a second chance to delight them

• It gives you a chance to learn something, and to take action to avoid or prevent what went wrong

• You can explore to find out if anyone else experienced the same and be proactive about it

• It means that they haven’t done something worse, and are giving you a second chance to delight them

• It gives you a chance to learn something, and to take action to avoid or prevent what went wrong

• You can explore to find out if anyone else experienced the same and be proactive about it

But the best news is that the most loyal of loyal customers are those who have potentially experienced something bad, but for whom the experience turned out to be a good one because it was properly handled

But the best news is that the most loyal of loyal customers are those who have potentially experienced something bad, but for whom the experience turned out to be a good one because it was properly handled

Why do most customers NOT complain?Why do most customers NOT complain?

• Don’t think they will get any satisfaction anyway• Embarrassing and uncomfortable, don’t want to

make a scene• Feel intimidated by you, or the reputation of the

business• Too much trouble/takes too long• Can just go somewhere else• May just give you another chance, or promise to

“do something later”

• Don’t think they will get any satisfaction anyway• Embarrassing and uncomfortable, don’t want to

make a scene• Feel intimidated by you, or the reputation of the

business• Too much trouble/takes too long• Can just go somewhere else• May just give you another chance, or promise to

“do something later”

What makes customers like you

and me angry enough to complain?

What makes customers like you

and me angry enough to complain?

When Delivery < Expectations, we have unhappy and disappointed customers (Not even their basic requirements are met)

Obviously….Obviously….

Why Do Customers Specifically Get Upset?Why Do Customers Specifically Get Upset?

• Upset about something else• Don’t feel listened to, feel ignored• Don’t want to lose face• Feel put down or shamed• Feel other customers were treated better• Tired, frustrated, or stressed• Feel powerless, out of control (Victim), or that you are

trying to take advantage• “No-one will listen unless I make a scene”

• Upset about something else• Don’t feel listened to, feel ignored• Don’t want to lose face• Feel put down or shamed• Feel other customers were treated better• Tired, frustrated, or stressed• Feel powerless, out of control (Victim), or that you are

trying to take advantage• “No-one will listen unless I make a scene”

And a whole lot more reasons!

We can probably break these down into two main categories…

• The genuinely and justifiably dissatisfied customers

• The totally unfair and unreasonable

We can probably break these down into two main categories…

• The genuinely and justifiably dissatisfied customers

• The totally unfair and unreasonable

“It's not my fault, but it is my problem”

Customers are not always right….

• But they are always our customers…

• And there is rarely a good reason to tell them they are wrong

So what can you do to recover?So what can you do to recover?

• Predict and identify problem areas before major complaints & relationships break down – kill dumb contacts

• Ensure that recovery is legendary (SWAT Team?)

• Identify triggers for failure, and initiate proactive responses

• Use a consistent system for recording and responding

• Do root cause analysis and prevention, as well as internal analysis

• Don’t punish the messengers. In fact, make it easy for customers to complain, and empower employees to help them

• Go “undercover”: Use your own business as a customer would

• Predict and identify problem areas before major complaints & relationships break down – kill dumb contacts

• Ensure that recovery is legendary (SWAT Team?)

• Identify triggers for failure, and initiate proactive responses

• Use a consistent system for recording and responding

• Do root cause analysis and prevention, as well as internal analysis

• Don’t punish the messengers. In fact, make it easy for customers to complain, and empower employees to help them

• Go “undercover”: Use your own business as a customer would

What positive expectations do customers have?• That you will deal with them with a sense of urgency• That you will be trustworthy, have what they need and be able to solve their problem, reliably and professionally

• That you will care, show empathy, and be cheerful• That you acknowledge how this has affected them• That you will let them know that their business is valuable to you

• That you will remember them after it’s over• That your prices and compensation will be fair• That you will stand behind your products and services with a guarantee (Build their assurance)

Unhappy Customers Will Buy Again

No complaint 37%Complaint not resolved 46%Complaint resolved 70% Complaint resolved quickly 95%

Unhappy Customers Will Buy Again

No complaint 37%Complaint not resolved 46%Complaint resolved 70% Complaint resolved quickly 95%

With thanks to Toyota SA

Two examples…

The Art of the Apology

The Art of the Apology

Does “Sorry” Work? The Impact of Apology Laws on Medical Malpractice

Apologies made by physicians for adverse medical events have been identified as a

mitigating factor in whether patients decide to litigate

However, doctors are socialised to avoid apologies because apologies admit guilt and

invite lawsuits

And Customers from Hell?

And Customers from Hell?

When someone behaves in this way, what are they saying about themselves?

When someone behaves in this way, what are they saying about themselves?

7 Choices7 Choices

• Laugh it off: water off a duck’s back• Allow the abuse to continue• Put the ball in their court: What do you want?• Confront them equally aggressively, or…• Confront assertively• Cut the anchor: let them loose, make it easy to

leave• Sort it out, whatever it takes. But tell them!

• Laugh it off: water off a duck’s back• Allow the abuse to continue• Put the ball in their court: What do you want?• Confront them equally aggressively, or…• Confront assertively• Cut the anchor: let them loose, make it easy to

leave• Sort it out, whatever it takes. But tell them!


Theme 4: Customer Management in Your Company

Creating the Culture and InfrastructureAki Kalliatakis

[email protected] www.LeadershipLaunchPad.co.za

mailto:[email protected]

http://www.delightyourcustomers.co.za/


Agenda• Are We Customer Driven?

• Portrad Case Study

• The Customer Management Ecosystem

• Putting Together Your Plan

Okay, what do you do with the company’s

architecture, infrastructure, processes, and

culture?


3 Prerequisites for Customer Management

Customer management, however well designed, can

only work within an environment delineated by three factors

Customer management, however well designed, can

only work within an environment delineated by three factors

Marketing Strategy

Conditions

Information Technology Conditions

Culture and Climate Conditions


What does an ideal integrated marketing approach look like?

Marketing Strategy

Conditions

• Gets into the mind and heart of the customer

• Homogenous, distinct targets and specific value proposition for each (SCM Structure)

• Propositions capable of tailoring (TSPs)

• Customers that value tailored propositions

• Whole organisation aligned to enable tailoring

If you cannot be distinct, then you’re going to be extinct

Be interesting, or be invisibleinvisible

What is your competitive advantage?

Why should anybody do business with you?

If you cannot be distinct, then you’re going to be extinct

Be interesting, or be invisibleinvisible

What is your competitive advantage?

Why should anybody do business with you?


Information Technology

What do ideal information technology (IT) conditions look like?

• IT strategy and system derived from marketing strategy and customer needs

• Driven by top management team

• Well resourced

• Cross-functionally managed

• Flexible specification, managed against goals


What do the right people conditions look like?

• Bottom line: Deliver the perfect customer experience!

• Positive climate with happy employees and therefore happy customers

• Market-oriented with structures and processes built around customer needs

• Strong culture and commonly help values

• A learning culture that is capable of change

Culture and Climate Conditions

Video Case Study – p127

Quality, The Only Way

1.What’s wrong at Portrad?

2.What would you do if you were appointed CEO tomorrow morning?

INPUTSINPUTSINPUTSINPUTS

Facilities &Equipment

PROCESS

Raw Materials

Information

People: Skills & Attitude

SUPPLIER

OUTPUOUTPUTT

OUTPUOUTPUTT

Procedures, Systems & Processes

Energy

CUSTOMER

The ServQual Model

Previous experiences

Customer’s expectation of service

Service quality specifications

Customer

Company

Perception of service received

Actual delivery of service

Customer needs

Word of mouth from others

Managers’ perception of customer expectations

Company’s external communication

Process and System ManagementProcess and System Management

Leadership, People and OrganisationLeadership, People and Organisation

Customer Information & Technology SupportCustomer Information & Technology Support

Customer Retention Strategy

Analysis & Planning

CVP (Customer Value Propo-

sition)

Customer Expectations

Perceptions of Experience

Segmentation & Targeting

Enquiry Management &

Conversion

Welcoming & Getting to Know

Delivering the Basics

Customer Value

Development

Managing Problems/ Recovery

Win Back

Measu

rable

Resu

ltsM

easu

rable

Resu

lts

Benchmarking Best PracticesBenchmarking Best Practices

Customer Management

Value Innovation

Value Innovation

Retention Activity


The CM EcosystemThe CM Ecosystem

Two dimensions affect your success…

1. Proposition flexibility: the degree to which your customer value proposition can be tailored

2. Marketing granularity: the degree to which customer needs differ

These two work together to determine you relative ROI and success with customers, but also lead to your business making the right choices

Increasing Proposition

Flexibility

Low

High

High

Increasing Market Granularity

The CM EcosystemThe CM Ecosystem

Zone of Inaccessibility

Zone of Inaccessibility

Zone of Low ROIZone of Low ROI

Customer Management Z

one

Customer Management Z

one

Mass Market

CMRCMR

IT-Enabled Micro-Segmentation

IT-Enabled Micro-Segmentation

Proposition PrefabricationProposition

Prefabrication

1 to 1 Marketing

1 to 1 Marketing

There’s a motion chip in each shoe, eliciting a response: “That’s a cool shoe! Awesome choice!”…

Or “That’s a really nice shoe, sir”


•70,000 m2 of shop floor space

•Separate “store” for each sport

•Hosts entire Nike range

•Hand-picked designer consultants

•One-to-one appointments in a two-story high glass and steel cube in the middle of the building

Organisewhole co.

aroundcustomers

Sharewith everyone

In company

DevelopUnique

customerobjectives

Developcloser rela-tionships &

insightsCMStages

Decidecustomer mix& resources


• Customer Expectations and Perceptions• Value Proposition and Creating Awareness

“ A CVP is the unique combination of resulting experiences, (including price,) which a company

delivers to a group of intended customers in return for those customers buying, using and doing what the company wants, rather than taking some other competing alternative. It refers to the benefits that

customers are assured of receiving as a result of their relationship and partnership with the company”

The CVP should be translatable down to individual level


What is a Value Proposition?

A good value proposition provides convincing reasons why a

customer should support your business instead of your other

competitors

• A promise of value to the customer

• Unique package of product, price, channel support, service and brand offerings that meet a particular customer’s needs

• Combines hard functional features, (e.g. simple product range, competitive prices, good delivery and service,) with the softer emotional benefits of what the customer can expect, (e.g. peace of mind, status value, innovation, personal experiences)


What is a Value Proposition?

The 30 second elevator pitch…

•Who is our target market?•What do we offer – products and service?•At what price?•Number 1 benefit for the customer?•Points of differentiation?


Translating CVP into clear actions

Customer Segmentation, Targeting & Selection

Definition of a Segment

Groups of customers with similar needs or wants and priorities...

and who because of this...

seek the same benefits and attach the same importance to their satisfaction

Sometimes this corresponds to the amount that they purchase from the company


SegmentationSegmentation

It is obvious that if you haven’t deeply and profoundly understood the

customer’s needs*, your chances of success are severely limited

It is obvious that if you haven’t deeply and profoundly understood the

customer’s needs*, your chances of success are severely limited


* You need insights into customers’ needs, wants, desires, perceived benefits, expectations, fears, motivations and all other variables that will turn them on – or off – to your business and it’s offering

But What do Customers Actually Want? Identifying

Customer Insights*(*BTW – They don’t always know!)


Customer Insights

A fresh and not-yet-obvious and profound understanding about a customer need – known or

unknown, realised or unrealised – that can become the basis for competitive advantage

(Adapated from Mohanbir Sawhney, DefiningTheLimits.com)

3 main sources of customer insights…

•Cognition

•Affect

•Behaviour

“You have to be able to get into your customer’s heads – and into their

hearts - before you can get into their pockets” (Reckitt and Coleman)

“We are them, and they are us.” (Grateful Dead)

“You have to be able to get into your customer’s heads – and into their

hearts - before you can get into their pockets” (Reckitt and Coleman)

“We are them, and they are us.” (Grateful Dead)



•Heavy to transport

•Difficult to handle

•Messy to store on shelves

•Sold 2/3 to visitors, not Londoners

Key Account Segmentation: Computer Hardware Firm• Koala Bear: Use an extended warranty to get cover. Won’t do anything themselves,

prefer to curl up and wait for someone to come and fix it. “Nobody ever got fired for buying IBM”

• Teddy Bear: Lots of account management and love required from a single preferred supplier. Will pay a premium for training and attention. If multi-site, requires supplier to cover these effectively. “Protect me and hug me.”

• Polar Bear: Like Teddy Bear, but colder! Will shop around for cheapest service supplier, whoever that may be. Full 3rd party approach. Train me, but don’t expect me to pay. Will review annually – seriously. If multi-site, requires supplier to cover these effectively.

• Yogi Bear: A wise Teddy Bear working long hours. Will used trained staff to fix if possible. Needs skilled product specialist at end of phone, not clerk. Wants different service levels to match the criticality of the product to their business process

• Grizzly Bear: Trash them! Cheaper to replace than to maintain. High maintenance and exhausting. Won’t pay for training, negotiates everything, and are probably so reliable that we are obsolete.

• KGB Big Bear: My business is totally dependent on your products, but I know more about them than you do! You will do as you are told, or we have ways and means to sort you out. I’ll pay for training and extra cover, but you will….

• A tool to understand customers• A cost-effective promotional vehicle• A symbol of commitment to customers


• Have identified 20000 different market segments• Each customer has a unique “DNA Profile” derived from the products that they buy (“You are what you eat”)

• Sell information and intelligence back to manufacturers

• Know that average diet lasts 18 days and can respond with encouragement and recommendations


Segmentation Activity – Part 11.Write down all the benefits sought by your

customers on Post-Its2.Stick all those that are similar or cluster together,

and give them a title3.Divide all of these needs into 2 categories:

1.The hygiene factors – essential, deal-breakers2.The motivators –

desirables that contribute to the decision on who to buy from


Segmentation Activity – Part 2 (Simple)

1.Choose two motivators on which customers vary on their needs – the differentiating motivators

2.Make sure that they are independent of each other

3.Estimate the split of customers between high and low for each. (50/50? 60/40? 70/30?)

4.Cross multiply to create a perception map, and give each segment descriptive lables


vodacom cm programme 2015 - part 4

Education

customers dont

dissatisfied customers

disappointed customers

loyal of loyal customers

ignored dont

face feel

shamed feel

internal analysis dont