Church of the Customer: February 2004 archives
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February 28, 2004
No funny business here
From a Fortune magazine piece (registration required) on NBC-TV's billion-dollar man, Jay Leno:
One reason he does not use an agent anymore is that he doesn't want anyone to speak for him and possibly offend a client or fan. "That's really what this business is about," Leno says. "Contact with the customers. Because it's really feast or famine. You meet a guy on the elevator and you say hello. Well, for the rest of your career, you are the greatest guy in the world. But if you go, 'Excuse me, I'm busy,' you are just an asshole. Lyndon Johnson used to say that every handshake is worth 250 votes, and it's really true, especially in television.
Whether you argue NBC's stronger prime-time lineups and better-run affiliates have made Leno the king of late-night television, a dominant part of that equation is Leno's marketing prowess. Leno is accessible outside of his show, and long-time competitor David Letterman generally is not. For all of his comic genius, Letterman is more like the CEO who walls himself off from most of the world, who views life from the skybox, not the regular-guy seats. Leno is Mr. Regular Guy.
As such, this immensely wealthy regular guy meets as many of his customers possible each week through an endless series of concert appearances and hobnobbing with local affiliates, their staffs and their best advertisers. That'll drive 250 votes for every handshake, every time.
February 27, 2004
The painful death of business as warfare
Here's hoping that "business as warfare" metaphors have suffered a deathblow now that Atilla the Hun of business, Larry Ellison of Oracle Corp., has been thwarted in his bid to pillage Peoplesoft.
Oracle's style is more business-as-terrorism. Its tactics of domination, intimidation, fear, uncertainty and doubt do more to alienate than rally. With his pith helmet motif, Ellison-as-Gordon Gecko has stirred more anger and resentment against him rather than for his cause, which is clear: greed.
First-strike warmongers are a decided minority. In the culture-changing wake of 9/11 and the hundreds of soldiers killed in Iraq, positioning careerism and business in warfare terms is highly insensitive at best. On the world stage, imperialistic snootyism fuels self-destruction.
The vast majority of customers rally for companies that live by the Golden Rule, not for ones that mock and destroy them. Ellison has earned his comeuppance.
February 25, 2004
Walk into the light, Fred!
In this Direct magazine piece, "Loyalty Rules" author Fred Reichheld says, "The early work I did on loyalty was powerful but useless... satisfaction surveys are such a joke... The key is making your customers' lives better."
Making your customers' lives better can produce far better top-line and bottom-line returns via word of mouth than any points, rewards or frequent-purchaser programs. Making your customers' lives better is planting the deepest roots for customer evangelism.
Fred's earlier work wasn't useless; the culture of marketing to customers continually evolves, as its always does, as do almost all aspects of business. It's up to marketers to understand the pulse of culture and, like riding a bicycle, make course corrections accordingly.
February 23, 2004
Chief blogging officer
I had lunch today with the world's greatest blogger, Robert Scoble.
Scoble was a respected outsider who became an insider at Microsoft 10 months ago. He's accessible and highly connected. As a network hub, he fulfills an important ingredient for customers who love Microsoft products and services: access. His grassroots blog is not part of the company's formal PR efforts. He's BR. Blog relations.
Considering the depth and scope of his audience (he's ranked as one of the most-watched blogs according to service Technorati), Scoble should be named Microsoft's CBO -- chief blogging officer -- and manage a small but influential network of insiders who spread the word of the company's technology and relationship efforts.
For big companies, the lesson here is: Blog-accessible insiders humanize your company's public face.
February 20, 2004
How customer satisfaction scores fall short
New research from Consumer Reports shows that Dell is slipping in customer satisfaction scores. Dell scored 62 points out of a possible 100 for its support of desktop PCs, besting competitors HP and Gateway. It still has a miles to go before it reaches Apple's score of 74.
The magazine's scores reflect satisfaction. A score of 80 would mean that respondents were very satisfied, while 60 is described as fairly well satisfied.
But scores reflecting satisfaction are increasingly meaningless, especially if they're exclusively quantitative. Satisfaction is a snapshot of the past, and it does not measure action. The action is in referrals, which help drive growth. In the word of mouth economy, are your customers telling their friends and colleagues they must purchase from you?
Instead, Consumer Reports (and Dell) should ask:
* Would you recommend Dell to friends and family? Yes or no.
-- If not, why?
-- If yes, have you actually recommended Dell to friends and family?
-- If not, can you describe why?
-- If yes, how many times and to whom?
-- What do you specifically say when you recommend Dell?
Answers to those questions helps everyone from marketing to operations and, eventually, customers.
Customer Hell redux
SBC, the second-largest local phone company in the United States with 57 million lines in 13 states, produces oceans of evidence why monopolies are never customer-friendly. According to the Chicago Tribune:
Looking back, Judy Leach realizes that her mistake was thinking that SBC's unlimited calling plan meant just that."They have limits, but they don't tell you about them," the Marengo resident says.
Leach's phone line was cut off after she rang up a monthly bill of more than $2,500. She had signed up for a flat-rate long-distance plan advertised for less than $50 a month.
She never saw the fine print that said Internet use was not part of the deal. Nor did she anticipate such a rule since she had been dialing her Internet service provider through SBC's local service for four years.
Leach is not alone in her frustration. As SBC battles other phone companies for new long-distance customers, bills are getting more complex and new fees, while not hidden, are easy to miss.
Sadly, SBC's customer trickery is standard practice among most phone companies and wireless providers when it comes to monthly bills. Forget "trusted brand names" for any consumer-based phone company; their continued contempt for customers helps spur rising demand for Internet-based telephony.
February 16, 2004
10 first dates with a book
Warning: shameless self-promotion post ...
Jon Strande at the Business Evolutionist blog has produced his top 10 reasons why "Creating Customer Evangelists" is required reading. Jon's blog is one of the arenas on our upcoming business blog tour.
Here's my top reason why you should read Jon's blog during our blog tour stop there: Jon will officiate the very first wedding-ceremony-by-blog event, as I become Britney Spears' betrothed. Then, 72 hours later, Jon will preside over the first annulment-by-blog proceeding.
February 14, 2004
TV ads don't sell cars, people do
$18.4 billion.
That's what automobile manufacturers spent last year on TV advertising. Car companies are the largest purchasers of television advertising time.
Is it worth it? Cap Gemini Ernst & Young asked that question, too by researching agents of influence in the car-buying process. U.S. consumers were asked what ultimately influenced their purchase decision:
* 17% cited TV advertising
* 26% cited ads on Internet search engines
* 48% cited direct mail from a dealer
* 71% cited word of mouth
If word of mouth is the driving influence for car purchase decisions, then why do car manufacturers spend $18.4 billion to cajole, pander and otherwise annoy us while watching "24?" (Besides, we skip over the ads using our TiVo, right?)
For instance, I want to know:
Why don't car manufacturers redirect 25% of their advertising budgets (that's $4.5 billion) and invest in better design so we have something remarkable to tell our friends?
Why don't car manufacturers redirect 10% of their advertising budgets (that's $1.8 billion) and help the dealers improve the car-buying experience so that we are compelled to tell everyone about the great service?
Why don't car manufacturers take another 15% (that's $2.7 billion) and reduce MSRPs? Is there not a direct correlation to the high price of cars and $18.4 billion spent on ineffective television advertising?
That still leaves roughly $9 billion for manufacturers to spend on annoying the heck out of us.
February 12, 2004
So what's TiVo's problem?
Sirius launched in mid-2002 and today, in 2004, Reuters reports:
Sirius Satellite Radio on Thursday raised its subscriber forecasts for 2004, boosted by a new agreement that calls for retailer RadioShack and EchoStar Communications' Dish Network to distribute Sirius' service. The New York-based company said it now expects to reach 1 million users this year and that its full-year 2004 revenue will exceed $70 million. Its previous forecast was 860,000 subscribers and $60 million in revenue. Sirius said it still expects to reach the cash-flow break-even point of 2 million subscribers by the end of 2005.
Radio broadcasters, the future is calling.
February 11, 2004
Changing the world, again
The duo that brought the world Kazaa (and picked up where Napster failed) has used strong word-of-mouse networks to build their new monster: Skype, a PC-based telephone system.
There's nothing new about PC-to-PC telephony, but Janus Friis and Niklas Zennstrom know a few things about viral strategies and upsetting industries.
As this Fortune article discovered:
[Skype's] P2P underpinnings mean that Skype can grow without adding much, if any, infrastructure. It costs Vonage -- the top provider of paid Internet telephony, with 97,000 users -- almost $400 to add a new customer. It costs Skype $0.001. Not only has Skype been downloaded more than 6 million times in six months, it is regularly used in more than 170 countries -- and it has spread by word of mouth alone.
In the customer evangelism model, Skype is doing several things very well:
1. It has generated significant buzz within influential networks.
2. It's free, which is the ultimate bite-size chunk. (Eventually, Skype will create revenue by charging for add-on services such as voicemail.)
3. If ever there was a cause for rallying angry, continually dissatisfied customers, it is destroying and rebuilding the telecommunications industrial complex. Skype appears as a very large bulldozer.
