Saturday, October 5, 2013

The Effortless Experience: Book Review

We all know the stories about Zappo's.com or Dutch Coolblue.com and their extreme focus at customer service. The stories are often very inspiring and motivating (for marketers and customer service professionals). After reading these stories, I often get very much motivated to use these experiences in my daily job. But not all companies can differentiate with such extreme customer service. What if the holy grail of service for many companies is not customer delight, but customer relief? It's always good to see things from a different perspective. 
Besides that, to have a great customer experience (and conversion) in your digital channels you have to understand customer service! 

So I decided to buy a book about customer experience. "The effortless experience"  by Nick Toman and Rick Delisi. I've read it and below a short summary of my findings combined with my personal opinion and the relation with digital.

First the book starts with asking the question: what companies you do business with or buy from specifically because of the exceptional customer service they provide?
Then the follow up question is of course: what companies have you stopped buying from and refused to do business with because of the awful service you have experienced?
The second question is often much easier to answer then the first one.

This is in line with a recent study in China I published at my slideshare profile, where negative messages spread much faster at social media.

I sometimes buy with Coolblue, a company in the Netherlands which is know for it's excellent customer service. It's customer service reputation, might be a reason to buy there, but for me personally it is not my trigger to buy there. I bought a few products there this year, but I never needed the customer service department. So service for me, is not differentiator for buying at coolblue. 
They just need to meet my expectations in delivery, communication and quality. And they do.

Should companies try to create differentiation and build customer loyalty by delivering superior service?
The answer to this question is in the book. Below the key findings.

The book defines three definitions of loyalty

  • Repurchase - customers continue to buy from your company;
  • Share of wallet - customers buy from you over time;
  • Advocacy - customer say good things about your company.


All the things in a service interaction that could make customers loyal to companies, which ones actually do?

The authors did extensive international research to answer this question. They conclude the following:


  • A strategy of delight does not pay
International research among 97.000 customers says there is no difference between the loyalty of customers whose expectations are exceeded and those whose expectations are simply met! A delight strategy might cost a lot of money, but do you get the loyalty back? Not according this study.

  • Satisfaction is not a predictor of loyalty
In their research 20% of the customers said, they were satisfied by the service interaction, but at the same time they also were actually intending to leave the company and buy from somebody else.
Satisfaction does not always means loyalty.

  • Customer Service Interactions tend to drive disloyalty, not loyalty
Customer Service is a strong factor in disloyalty! It might sound strange But often customer interaction might lead to disloyalty. Positive product experiences lead to loyalty.

Impact customer service at customer loyalty

A positive product experience has more impact on loyalty
then customer service




































  • The key to mitigating disloyalty is reducing customer effort
The customer effort is the important factor for mitigating disloyalty. (e.g. generic service, more then one contact to resolve the problem, etc) First Contact Resolution is key in providing service and loyalty.

The main argument in the book according to the authors is : mitigate disloyalty by reducing customer effort. That's the strategy you should handle.

Hej, customer effort, I remember, I wrote about it earlier, you can measure that :)
Read much more and the relation about customer effort score and digital marketing at the next page!


Wednesday, October 2, 2013

E-commerce strategy and third party advertising - the pro's and con's

Many company's who are into e-commerce, sooner or later will ask themselves the question "is it an advantage or disadvantage for us to promote our products at third party websites like Amazon, Ebay or local variants"?

This question is not so easy to answer. It really depends per organization, but we tried to establish a list with pro's and con's.

You have to remember that the philosophy of many of the real large "third party" marketplaces like Amazon, Rakuten, E-bay, is that they expect, that in a few years time there will be only a few real large webshops available for the mainstream products. They are tend to be one of them! They need your product feed to establish that!



The position of third party advertising in your e-commerce strategy?


Pro's (why sent your product feed to a third party webshop)

Reach

Third party webshops usually have an enormous reach! Millions of people search for a product and because of price of reputation they might choose your product at a third party webshop.

Branding

Due to the reach factor, people see your brand more often. Your brand recognition might improve.

Turnover

In short term, working with these marketplaces can increase your turnover rapidly. You will reach a lot of new customers!

Test new markets (internationlisation)

Of course with an international view, third party advertisements are a great way to test a new market. Thinking of expanding your online business abroad? Try selling your products via third party's first!

Con's 

Insights

By selling your products at a third party webshop, the third party webshop will gain enormous valuable information about your productline. They might start selling your products themselves in the future!

No exclusivity

There might be a fierce competition between other merchants who offer similar products. It is possible to get into a fierce price competition at the third party webshop.

Profiling

This is really very important to understand. Many company's have old fashioned CRM systems where they cannot profile. But don't worry these big marketplaces will gain very, very valuable information about your customers! And they will use this information to target and profile them! There is a huge risk that customers keep on buying from the third party because of their very extensive profiling possibilities.
Don't forget that e-commerce customers more and more want retailers to "understand what they want" , Amazon, Rakuten, and similar party's know this! And all of their business intelligence helps them offering what the visitor wants (even if the visitor it does not know yet!)

Contracts

When you co-operate with those third party webshops, often you have to sign a contract which indicates that you do not own the customer data from the people that order.You cannot sent them e-mail marketing, you might not even brand your company in the parcel's customers order via this channel. It is very important to realise this and to see the connection between this and the profiling part. Of course they do not want you to brand your own company! They loose this valuable profiling information if you do!

SEO

Be aware that these marketplaces have a very good SEO ranking. Your website might rank lower then these marketplaces, with your own products! In your "third party strategy" think about this. By for example sending over separate or less extensive product content, you might lower this risk.

Pockets

Third party's like Amazon, Rakuten etc. have billions of dollars (or Yens). They overclass you in possibilities or duration!

Webshop features and relations

The party's you sell your products are more likely to be able to offer new functionalities or inspiration for a certain product range then you can. They might not return or not even ever visit your website! Relations between the third party grow stronger an stronger by tailor made discounts and offering everything one needs!

Technical adjustments

To work with third party's you often have to comply to their requirements. They do not adjust to you! They are way to large for that. This might result in investing in (new) software or change your internal processes.

Legal

Third party's might state in their terms and conditions that they may alter your images (copyright).

Conclusion

So in your e-commerce strategy think about these things and adapt them in your strategy. Focus at things you can distinguish with. For example customer service and customer experience. Give people a reason to shop with you and not with the third party's. Differentiation at price is very difficult to hold in the long run. Find other ways to differentiate. Think of a strategy to get the customers back to your webshop after they first bought with the third party. This is difficult, given all the restrictions, but be creative! There are possibilities.
You might want to think about a short term and long term vision for these kind of e-commerce promotions.

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