Customer Delight

Not Customer Satisfaction, but...

BY: Prof. Jitendra Sharma

Trainer & Consultant

Email: jitendra777@indiatimes.com

Objective of the Session

1.What is delighting the customer?2.WHY delighting customer is important ?3.HOW can we delight customer?

What is Delighting Customer?

PART -A

1-5

Traditional Definition of Marketing

Simple Definition: Marketing is managing profitable customer relationships.

Goals: Profit, Customer Satisfaction & Long term relationship

1. Attract new customers by promising superior value. 2. Keep and grow current customers by delivering

satisfaction.

What determines Customer Satisfaction

CustomerSatisfaction

PerceivedService

ExpectedService

Levels of Customer Satisfaction

PerceivedService

ExpectedService

CustomerSatisfaction

Much Better than expected

As expected

Worse/Different than expected

Delighted *

Satisfied

Dissatisfied

Loyal

Vulnerable

Walk & Talk

WHAT IS IT?

• Customer delight is more

about the experience and

emotion than it is about

the product and its features.

• Its about creating customer life time value by improving the customer loyalty

Delight = Expectation + 1

+ 1s

+ 1 %

+ 1 more smile

+ 1 additional item

+ 1 more personal contact

+ 1 bit more thought fullness

+ 1 extra minute of your time

+ 1 check to make sure all’s now OK

+ 1 telephone call to ensure the customer’s happy

+ 1 anything else that will delight your customers

Modern customer-oriented organization chart

Top manage

ment

Middle management

Front-line people

Customers

Customers

Front-line people

Middle management

Top managem

ent

C

u

s

t

o

m

e

r

s

C

u

s

t

o

m

e

r

s

Traditional organization chart

All profit comes from customers

So if no customers = no profit

and no profit = no business

then no customers = no business

Therefore customers ARE the business

“The greatest danger for most of us is not that our aim is too high and we miss it, but that it is too low and we reach it”

Michelangelo

Why delighting Customer is Necessary?

PART -B

Challenging Scenario

– What are our challenges?• Attitude towards the customer• Competition• Price war • High quality man power• Marketing and Selling attitude • Pace of new service/technology induction

“ Customer satisfaction is no longer good enough to survive today’s competitive market place. What is needed is customer delight.” - Tom Peters

CUSTOMER ?

CUST ME MER

OR

ATITHI DEVO BHAVA

“ Figures are your history, customers

are your present and future. “

--- Philip Kotler

THINK

20

Customer Service Facts

Why customers leave:

1% die

3% move away

68% quit because of an attitude of indifference towards the customer by the staff

14% are dissatisfied with the product

9% leave because of competitive reasons

www.CustomerServiceManager.com

Lifetime Value of a Customer

Toothpaste Rs. 50 K

Detergents Rs. 100 K

Cigarettes Rs. 300 K

Colour TV Rs. 400 K

Branded Shirt Rs. 500 K

Car Rs. 2.5 M

Software Rs. >> M

Source: Atos Origin

91% of unhappy customers will not willingly do business with you again.

70% of complaining customers will do business with you again if you resolve the complaint in their favor.

95% of complaining customers will do business with you again if you resolve the complaint instantly.

A typical business hears from only about 4% of its dissatisfied customers.

• 96% just go away• 91% will never come back

(Source: “Understanding Customers” by Ruby Newell-Legner)

The Truth About Customers

• Ten times more expensive to acquire a new customer than to keep a current customer

- Bain & Company Research• Customers are lost primarily due to

indifference (68%) versus dissatisfaction (14%) - WSJ

Adequate Is Not Acceptable

• Most of what we do is adequate• People talk about Customer Delight• People talk about bad service• People don’t talk about adequate service

Dissatisfied customers can cause a destructive spiral

Delighted Customers

Customers

Dissatisfied Customers

30%

70%

Complain

Walk & Talk

95% of Satisfied Complainants remain loyal

1 x 1111 x 5

Total67

1 x 5 5 x 2

Total16

Source: PIMS, TARP, IBM & other research studies

Delighted customers yield several benefits

» Lower Cost» Cost 5x more to gain a new customer than to keep one» Cost 10x more to get dissatisfied customer back

» Growth» Win customers trust & confidence» Repeat business» Non-competitive, shorter lead-time» Opportunity to deliver new services

» Higher Profits» Lower marketing costs» Less risk; less write-offs; less fee-sensitive » Higher acceptance to leverage new or junior staff

HOW?????

To Delight Customer

Actually• Customer expectations are typically not very

high

• Your job is to surprise them

• Customer Delight is doing what they haven’t even imagined

• What will cause them to say WOW!

• You know what you can do - they don’t

Creating Customer Delight

• What’s working?– How can we do more?

• Any barriers?– How can we overcome them?

Understanding What Customers Really Value

PerceivedService

ExpectedService

CustomerSatisfaction

WhatCustomer

Values

Deliverable(tangibles, reliability)

Financial Informational

(ease, access,responsiveness,

security)

Interpersonal(credibility,

competence,contact, empathy)

Environmental

Process

Momentsof

Truth

Hygiene vs. Enhancing factors

» Hygiene Factors

» Absence: Dissatisfies

» Presence: Neutral

» Enhancing factors

» Absence: Neutral

» Presence: Satisfies

Making Customer Delight A Core Value

• Staff Meetings• Board Meetings• Define and visualize the ideal experience• Make a part of each agenda• What did we do right?• Missed opportunities?• Recognition• Who is the “champion” for Customer Delight?• How are we treating customers now?

I Will

• Identify crimes committed against Customers, Donors, Program Participants and Each Other

• ……and do SOMETHING

Two Things I Will Do…

• 1)

• 2)

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What separates the merely good

organization from the truly great?

BEST SELLER!

36

RemarkableRemarkable

1. A Customer Service Culture

2. Alignment of Products and Services With

Mission

6. Organizational Adaptability

7. Alliance Building

3. Data-Driven Strategies

4. Dialogue and Engagement

5. CEO as a Broker of Ideas

Commitment to Action

Commitment to Purpose

Commitment to Analysis and

Feedback

METHODS OF

DELIGHTING

Selected MethodsSelected Methods

1 Customer Services2. Improving Employee commitment3. Innovation4. Customization5. Experiential marketing6. Permission Marketing

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What is Customer Service?

"Customer service is the ability to provide a service or product in the way that it has been promised.“

Source: Customer Service Manager

"Customer service is about treating others as you would like to be treated yourself and how they want to be treated."

Source: Customer Service Manager

"Customer service is a process for providing competitive advantage and adding benefits in order to maximize the total value to the customer."

Source: Customer Service Manager

Example

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2009 Businessweek Customer Service Champs

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2009 Business week Customer Service Champs1. USAA 2. JAGUAR 3. LEXUS 4. THE RITZ-CARLTON 5. PUBLIX SUPER MARKETS

6. ZAPPOS.COM 7. HEWLETT-PACKARD 8. T. ROWE PRICE 9. ACE HARDWARE 10. KEYBANK 11. FOUR SEASONS HOTELS &

RESORTS 12. AMAZON.COM

1. NORDSTROM 2. CADILLAC 3. AMICA 4. ENTERPRISE RENT-A-CAR 5. AMERICAN EXPRESS 6. TRADER JOE'S 7. JETBLUE AIRWAYS 8. APPLE 9. CHARLES SCHWAB 10. BMW 11. TRUE VALUE 12. L.L. BEAN 13. JW MARRIOTT

Source: BusinessWeek Online

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Case Study - Zappos.com

Source: The Letter Two.com

46

Zappos is committed to WOWing every customer.

Customers come…Over 10 million total purchasing customers

Customers come back…75% of purchases from returning customersRepeat customers order 2.5x in the next 12 months

Customers come back, order more and order more often…

Source: TheLetterTwo.com

47

What customers first see

24/7

Toll free phone number

Free shipping and return shipping

365-day return policy

Source: TheLetterTwo.com

48

What customers experience

Fast, accurate fulfillment

Most customers are “surprised”-upgraded to overnight shipping

Friendly, helpful “above and beyond” customer service

Occasionally direct customers to competitors’ web sites

Source: TheLetterTwo.com

49

Internal Methods

5 weeks of culture, core values, customer service, and warehouse training for everyone.

Culture Book

Interviews & performance reviews are 50% based on core values & culture fit.

Source: TheLetterTwo.com

50

ZapposDelivering Happiness

(customers and employees)

“People may not remember exactly what you did or what you said, but they will

always remember how you made them feel.”

Source: TheLetterTwo.com

51

Zappos Core Values

Deliver WOW Through Service

Embrace and Drive Change

Create Fun and a Little Weirdness

Be Adventurous, Creative, and Open-Minded

Pursue Growth and Learning

Build Open and Honest Relationships With CommunicationBuild a Positive Team and Family SpiritDo More with LessBe Passionate and DeterminedBe Humble

Source: TheLetterTwo.com

52

Innovation

Innovation allows organizations to remain competitive. Nurturing the ideas of employees is vital to the growth

of the organization.

10 - 54

• $50 billion in profits over 27 years

• Early new-product development relied heavily on copying the competition

• $4.2 billion annually invested in R & D

• Innovation is critical to Microsoft’s future success

• Much of R & D efforts are Internet related

• Many new products and services are in development

MicrosoftMicrosoft

Case Study

Tablet

Copyright 2007, Prentice Hall, Inc. 8-56

Firm History• Steve Jobs’s creativity led to

innovation in user friendliness of computers.

• LazerWriters and the Macintosh established Apple firmly in desktop publishing market.

• Status as market share leader and innovator was lost in the late 1980s after Jobs left the company.

Apple Computer – Innovation at Apple Computer – Innovation at WorkWork

Case StudyCase Study

Firm Recovery• Steve Jobs returns in 1997

and revitalizes Apple by first launching the iMac.

• The Mac OS X next breaks ground and acts as a launching pad for a new generation of computers and software products.

• iPod and iTunes change the face of music and are the hit of the decade.

Google

Google Phone- Nexus one

Google’s mobile operating system for phones

Gillette Men’s Razors:Product Modification

Gillette Women’s Razors:Product Modification

LG

Innovative marketing Strategy

Future

Experiential Marketing

“Experiential Marketing: Beside product features and benefits, promotion connecting it to unique and interesting experiences”

if you charge for the time consumer spend with you, then & only then you are in experience business

Employ multiple touch points & multiple senses Often involves special events, contests, promotions, sampling,

on-line activities, etc. Combine brand education & entertainment Distinctive and relevant Example: (Disney Village), Rainforest Cafe, Planet Holywood,

Levi‘s and Nike Brand Stores Example: Day@Xcellon

Requirement –different from traditional marketing

Focus on consumer experienceFocus on consumption situationView consumer as rational/emotionalUse eclectic (diverse) methods and tools

Example

• Sample house• Virtual 3 D image • Test Drive

One-to-One Marketing:Competitive Rationale

“One-to-one Marketing: From transaction-based marketing towards relationship marketing including customer databases - dialog - customization.”

Three things1.Focus on individual customer through customer

database2.Respond to consumer dialogue via interactivity3.Customize product & services as per their requirement

One-to-One Marketing:Five Key Steps

Identify consumers, individually and addressable

Differentiate them, by value and needsInteract with them more cost-efficiently

and effectivelyCustomize some aspect of the firm’s

behaviorBrand the relationship

One-to-One Marketing:Consumer Differentiation

Consumers help to add value by providing information

Firm adds value by generating rewarding experiences with consumers Creates switching costs for consumers Reduces transaction costs for consumers Maximizes utility for consumers

Web Sites for In-Class Activity1) Computers:

Dell - http://www.dell.com/ Gateway - http://www.gateway.com/ Apple - http://store.apple.com/

3) Automobiles: Ford - http://www.forddirect.com/ BMW - http://www.bmw.com/ Jaguar - http://www.jaguar.com/us/

5) Jewelry: Mondera -

http://www.mondera.com/ DeBeers -

http://www.adiamondisforever.com/

2) Clothing:– Lands’ End -

http://www.landsend.com/

– Shirtcreations - http://www.shirtcreations.com/

– Americanfit- http://www.americanfit.com/

4) Bicycles:– Cambria Bicycles -

http://www.cambriabike.com/

– Cannondale - http://www.cannondale.com/

http://www.dell.com/

http://www.cannondale.com/custbike/c2.html

http://www.landsend.com/

http://www.FordDirect.com/

http://www.smart.com/

Permission Marketing

The practice of marketing to consumer only after gaining express permission…..

Permission marketing can be contrasted to interruption marketing

Permission marketing “encourages consumers to participate in a long-term interactive marketing campaign in which they are rewarded in some way for paying attention to increasingly relevant messages.” Anticipated Personal Relevant

Marketing based on consumer willingness and that marketers respect consumers‘ wishes.

5 Steps in Permission Marketing

Must offer incentive (overt, obvious, and clearly delivered) to prospect to volunteer

Must offer a curriculum over time, teaching the consumer about the product or service

Must reinforce the incentive over time that prospect maintain permission

Offer more incentive to get more permission from the consumer

Must leverage permission to generate profits

Integrating the BrandInto Supporting Marketing Programs

Product Strategy Deliver tangible and

intangible benefits Add value through

customer information

Pricing Strategy Understand perceptions

of value Balance price, cost, &

quality

• Communication Strategy• Mix & match communication

options

• Channel Strategy• Blend channel “push” with

consumer “pull”• Develop & brand direct

marketing options

Supporting marketing mix should be designed to enhance awareness and establish desired brand image.

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Touch Points

Email

Voicemail

Snail Mail (Post)

Phone

Fax

Face-to-face

Social Media

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Radar On Antenna Up

THANK YOU