Forum

Skip to content
Find location

Blogs

Archive for March, 2010

When Rewards Backfire

March 25th, 2010 by Jane Markham Weinstein

I recently had an experience with a small-chain retailer.  I’d been referred to the chain by more than one fan.  My shopping experience was great, and when I was handed a $40 voucher after I’d made a $400+ purchase (way more than the amount of a typical purchase of mine), I felt like I’d found the next case-study in great customer experiences.  I was looking forward to spending that $40 incrementally over the 8 weeks I had to spend it.  I returned to the store soon after with my eye on a $6 item; at the time I needed nothing else.  And that was the problem.  I had one $40 voucher:  If was going to use the voucher on my $6 item, I’d lose $34 in value, since the voucher was good for one-time use only.

Okay, not great, but, from what I’d seen, it seemed like this chain did value its customers.  So I wrote the store and asked for four $10 vouchers.  Common sense, right?  If I had originally spent just $100, the store would have given me a convenient $10 voucher, so I assumed that I should be eligible for the same convenience—times four.  I sent my e-mail, confident I would be accommodated.

Unfortunately, my expectations were not met.

In the return email, I learned that the policy was the policy and there would be no change. I was advised to manage my needs and combine my smaller purchases to meet the value of the voucher.  Huh?  Why couldn’t my simple request be accommodated?  How simple and grief-saving it would have been.  Did anyone who worked for the chain ever try to use one of these vouchers?  My guess is no.

Ultimately, I was able to get the change made, but the good feeling I had at the time I made my original purchase had evaporated.  While I’ll still occasionally shop at the store, I am unlikely to become an advocate for it.  The irony?  If I had never been “rewarded” with the voucher in the first place, I would still be a fan.

This was yet another reminder of the importance of all aspects of the customer experience.  This store had great products and great people, but its policy was not customer-centric.  Leaders who are profoundly customer-focused understand that all aspects of the experience must be considered from the perspective of the customer.  It is not sufficient for a policy only to appear to be a reward for customers, it must actually be one.

Share

Do You Love Your Haters?

March 16th, 2010 by Jeffrey Baker

Haters.”  A head of sales for a Fortune 100 business unit recently used this term to characterize a group of people contributing to the unit’s profitability problems.  What do you think he meant by “haters?”

  • Industry regulators
  • Leaders in another division of the company
  • Customers
  • A rival New York City-based rap duo

If LL Cool J happens to read our blog, he’ll be disappointed to hear that the rap duo is not the right answer.  Instead, it’s customers.  Haters are customers who have budget and need products or services, but who are so difficult to deal with that they suck up time and resources and ultimately hurt profitability.

Of course, this head of sales was focusing on the haters simply to prove a point:  his business unit’s strategy was unclear, and its execution was poor as a result.  To improve, the unit completely re-segmented its customers, shifting from a purchase-volume to a buying-behavior criterion.  The new segmentation strategy provided a crucial framework for qualifying buyers and opportunities.  At this writing, it is already showing positive returns for the business, as salespeople are now better utilizing their precious time and company resources.

While some of your own customers may have come to mind for you when you read the definition of haters, your customer knowledge may not be as complete as you think.  If you validated your segmentation strategy more than 12 months ago, it is likely out of date by now.  As I noted in earlier research, every recession shuffles the deck, setting up new pecking orders in many industries.  Combine this with today’s continued economic uncertainty, and you can be sure many of your customers have changed why and how they buy.

Knowing your haters is only half the battle.  The other half is dealing with your salespeople still loving the haters.  Salespeople’s customary disciplined, consultative selling approach to selling is now giving way to a much less effective approach:  pitching products to anything that moves.  This is natural and understandable, given that most salespeople are coming off their worst earnings year ever now.  Natural, yes.  Effective, no.  Winning sales organizations today understand how the buying behaviors in each of their customer segments have changed, and align their sales strategies and salespeople with the new realities.

How about you?  Are your salespeople aligned and equipped to execute your segmentation strategy, or are they operating independently, shooting at whatever moves—including the haters?

Share