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Welcome to Loyalty MagazineLoyalty Magazine reports on customer retention,loyalty schemes, rewards, affinity, CRM, call centre issues, direct and viral marketing, mobile and internet channels for both B2B and B2C enterprises. It covers all global markets and business sectors, including retail, financial services, travel and hotels, telecoms and electronic commerce. |
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Friday, 28 May 2010 11:09 |
 Your customers are angry, very angry
Review of The Relationship Revolution by Larry Hochman
Your Customers are angry, very angry” says author Larry Hochman. They feel let down, anxious and betrayed by businesses that over-promise and under-deliver. They are deeply cynical and devoid of trust.
What this calls for, he says, is a “relationship revolution”.
Hochman has worked in customer relations for British Airways and Airmiles. Since then and for the last 12 years, he has worked on the conference circuit. But what does he actually mean by “relationship revolution”?
The premise of his book is that corporate success is founded on relationships that are just as deep and take just as much work as ones in private life. Which leads to the question, whether as a supplier or consumer serving company, would you be missed if you were no longer there?
If you actually have some customers who would mind if you were no longer there, then you can work out what it is about your business that is the “Unique Value”. Then once you know what it is, you have to work hard to maintain and build on it.
Google, for example, built its business on its search facility. This is still there on the home page, in a simple, virtually blank page, regardless of how many other services Google now provides. This is because Search is its Unique Value.
Promises, promises
Hochman then goes on to discuss the Promise Gap – which he defines as the difference between what a business offers, and what is actually delivered.
Those that do best are the ones who offer modestly and deliver well.
A classic example is Tesco, which promises “Every Little Helps”. The very understatement of this allows them to relate with their busy customers, who are well aware that there is never enough time or money, so any help that Tesco gives, whether in terms of three for two offers, or help loading the trolley, will be appreciated.
Hochman comments: “Vigilance over the Promise Gap demands that you try to under-promise and over-deliver constantly, and even obsessively. You, and all of your colleagues, need to know what your promises really mean, and what they stand for in the eyes of your customers. You have to be willing to accept full responsibility for these promises, to hold your hands up and say ‘I’m sorry’ and really mean it when something goes wrong, then sort things out as fast as you can.’
Angry and cynical
Customers, says Hochman, are angry and cynical, because they are constantly being offered what is not being delivered. They are being let down and mis informed. What has changed recently is that Twitter, FaceBook and YouTube are allowing them to make public their anger and their dissatisfaction in a very public and instant way.
Using YouTube
Hochman gives the example of a musician whose guitar was badly damaged by United airlines, which refused to compensate him or in any way make right the disaster. The musician wrote a song about it and put it on YouTube. It was watched by over 6 million people (July 2009, United Breaks Guitars). The several thousands of comments include many that are even more detrimental about United. “This general outpouring of dissatisfaction is extremely damaging and absolutely unstoppable, says Hochman.
United has asked the musician, Dave Carroll of band Sons of Maxwell to take the video down, but Carroll has refused. Hochman comments: “I believe that what Carroll did is just the start of something much bigger. Carroll created a customer community of people who were specifically frustrated with United, or who had just grown sick of the way that big airlines seemed to take their customers for granted. These customer communities I believe, are the seeds of what will develop into Customer Unions. Such customer unions have the power to be a thousand times more powerful than the Trade Unions ever were.”
Don’t be intimidated by your customers
While customers would do well to be afraid, Hochman warns then not to be intimidated by the power of customers. He says those companies who will be successful are those who will continually work with the power of customers to create better produces and better services for their own commercial advantage.
He gives the example of Carphone Warehouse, which has started to publish customer complaints on its website to publicise its commitment to corporate transparency and accountability.
Taking this concept even further, Bazaarvoice has created an entire industry out of providing the technology to host customer reviews. One company that uses its services is Samsung, which says the service has had an enormous impact on the way the entire company works, because customer feedback can very quickly be acted upon.
Hochman says that in the future, the battle will be more do do with getting customer’s attention, as opposed to their spend, with live video adverts bombarding customers on all fronts.
Quoting Darwin, Hochman believes it is those companies who can adapt quickly that will survive, but this ability to move immediately to make use of new technology, or customer feedback will only be possible if there is a Common Purpose in an organization. So a highly motivated workforce with the common goal of building the customer relationship is essential.
Hochman says: “There exists an almost mandatory obligation to align company values with the individual values of the people who work there. Study after study has shown that the biggest reason people fail in their jobs has little to do with being lazy, ignorant or even morally corrupt. They fail because their personal values were obtuse to the values of the organization.”
Hochman begins the book by warning that the “Urgency of the economic moment is clear” and he finishes by reinforcing this point.
“My intent throughout the book was to bring a sense of urgency to help people focus on a core set of issues that I believed would determine their organizational survival. In my experience, it’s always been about the customer. I do think it is impossible to refute that building and maintaining customer relationships is the key premise to commercial success of any kind. The idea of calling this book “The Relationship Revolution” was a simple attempt at capturing the clarity and the urgency of this.”
“The Relationship Revolution” by Larry Hochman is published by Wiley, RRP £16.99. |
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Countries in the EU are currently working on their responses to the complex policy proposals suggested for the handling and storage of personal data. The legislative changes currently underway are of critical importance to the loyalty sector. Jeremy Henderson-Ross, legal director and general counsel – EMEA for Aimia suggests companies should play an active part in the discussions.