Alf's Articles

Valentine's Tales with No Happy Endings

by Alf Nucifora

The week started with an email from an anguished reader presenting, in great detail, her experience with a respected telecommunications behemoth. They maintained she owed them more than three hundred dollars. She had, in fact, paid the bill and had cancelled checks to prove it. Their customer service department demanded that the cancelled checks be faxed and, because it "took time" to process the inquiry, her account could not be made current immediately, nor could she be advised as to when that might occur. She was instructed to call back every day to determine when the error had been corrected internally. In the meantime, she would remain without service. The error with plainly the company's yet they considered the problem to be hers, not theirs. The reader noted that she had spent more than 30 hours in recent months fixing problems with this particular provider and had remained a loyal customer for more than 28 years. Her loyalty was obviously not returned.

On a recent short airline trip, I couldn't help but notice that half a dozen or more of the first class seats were vacant, this, in spite of the fact that a first class up-grade is a highly sought after perk for weary road warrior types. It got me thinking. There had to be others like me in the back of the plane, admittedly flying on a cheapie, non-refundable fare, but who were Everest-level members of the airline's frequent flyer program. Here's the question…if the seats are vacant and there's no additional cost in putting bodies in those seats (beyond an extra bag of peanuts and the odd free can of beer), would it not make sense to offer an unsolicited up-grade to those loyal, heavy-traveled customers in the back of the plane? Gate agents know who they are because the computer clearly notes the passenger's status. Imagine the enormous surprise and goodwill that such an unexpected gesture would generate.

And then there's the world's worst customer experience…buying a car. My wife and I each buy or lease a car every three to five years. Always the same make. In fact, we both drive similar makes and models and our last four have come from the same manufacturer (a Japanese import). It's time to buy two new cars. I've tried to do it by phone but can't get the time of day from the two dealers that I've called. Obviously I'm looking for a deal. I am, after all, a committed and loyal buyer of the brand. But, in neither case can I get the dealership to answer my inquiry promptly (I had to call them back), nor can I get them to treat me seriously as a committed buyer who is seeking a win-win transaction, coupled with a modicum of recognition for my past loyalty. I've always considered automotive retailing to be marketing's bottom feeder, the dregs of civilized commerce, so to speak. This recent round of dealer behavior confirmed the belief.

Why is Loyalty Important?

We often hear the much-quoted 20/80 rule. It's the twenty percent of your customer base, give or take, that generates eighty percent of the revenue or profit margin. That twenty percent represents the loyal customer core…those who come back time and again to do business with you, to buy the brand, to continue the relationship. And, those are the ones we should love to death. Their dollars deliver more profitability and their word-of-mouth generates treasured business leads. As in a good marriage, we should listen carefully to their needs, maintain constant communication and display our affection and respect by making the extra effort to preserve the relationship and extend it into a lifetime partnership. That's what loyalty is all about. They give us their dollars and their commitment; we counter with appreciation, acknowledgement, exceptional service and, very occasionally, an attractive deal.

In none of the three instances referenced above did the brands or companies back-up their end of the bargain. And, shame on them for it. They don't deserve loyal customers.

Where's the Remedy?

I preach constantly in this column about the need for Customer Relationship Management (CRM). Not some customized, proprietary software program that costs millions to design and implement, but for most of us, an inexpensive off-the-shelf version like Goldmine or ACT!. CRM is the lubricant that helps maintain a smooth and edifying relationship between marketer and customer. The technology and database information deliver the ability, on the marketer's part, to customize the communication, cross-sell more product more effectively, be in constant contact with the customer and, ultimately, cement the relationship over a lifetime. To that phone company, those auto dealerships and the airline, CRM is either a foreign language or a token tool with minimum perceived utility or potential.

There is also the question of where the responsibility lies in preserving the relationship. In the case of the phone company, the customer service representative operating in a boiler room in some far-away State, has never been indoctrinated in the importance of protecting the loyal customer; has never been taught how to recognize one; has never been trained how to handle one. In the case of the airline, the culture has failed. As a result of their hemorrhaging, airlines are focused exclusively on revenue dollars and have become blinded to the value and worth of the customers who have been loyal to them for so many years. They're trying harder, but they still don't get it. And, for the auto manufacturer and the dealerships, somewhere, somehow, a disconnect took place between the two. All those hundreds of millions of dollars spent in establishing and developing the brand with expensive advertising stand for nothing when confronted with a "front counter network" that is myopically consumed with today's paycheck rather than the drawn-out payback resulting from a lifetime relationship.

As for the abused, loyal customer, a few simple words of advice…get a divorce. In this very competitive environment, I can guarantee there's another suitor and potential partner just around the corner.