SoCAPiE conference Stupid Company

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The Stupid Company How British businesses
throw away money by alienating consumers
SOCAPiE conference 2 October 2006 Philip
Cullum
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The case for customer satisfaction
Satisfied Starbucks customers spend 3,000,
dissatisfied ones spend 200
Lifetime value of a satisfied BMW customer is
143,500
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Active consumers Consumer switching levels
have risen by 52 since 2000 If 100 people
have a bad experience, a retailer stands to lose
between 32 and 36 current or potential customers
We read about this young couple who had changed
their mortgage provider. It made us realise we
werent bound to the same provider forever.
As far as I was concerned, the company I was
with couldnt provide a reliable broadband
service, so I went elsewhere. If you have
experience of a good company you pass it on if
you have experience of a bad company, you make
people aware.
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Service rage Two-thirds of UK consumers
think customer service has not improved in the
last five years Top of mind issues and
sectors Call centres, extended warranties,
missed appointments, poor after-sales service,
cold calling, automated services or being put on
hold Financial services, telecoms, electrical
retailers, garages
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The consequences consumer revenge Average
company life expectancy is 12.5 years Just 21
years after the establishment of the FTSE 100
share index, two-thirds of the original 100
companies had fallen off the list. Chief
executives on average stay in post for no more
than about four years. The average tenure for
chief marketing officers is 22.9 months.
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Feeling what its like to be a customer Most
people say theyd be happy to help companies
improve if they thought anyone was listening,
but that most of the time its easier to simply
walk away. 70 per cent of consumers tell us
that company bosses are out of touch, with no
idea what its like to be a customer. NCC
research over two years with 5,000 consumers
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1 Inflated expectations and broken promises The
Stupid Company over-promises and under-delivers
Hyping up products which fail to meet the
promise Advertising setting false expectations
Travel websites highlight the 1 bargains,
and you go, you search for two hours and you
then find its 60.
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5 ways companies get it wrong consumers views
1. Inflated expectations and broken promises 2.
Sell sell sell 3. Sneaky and dishonest 4.
Impersonal and robotic 5. Incompetent and
ineffectual
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2 Sell sell sell The Stupid Company is
obsessive about making a sale. All about the
sale, with poor after care - especially
electrical retailers Offering you the world
when youre a potential customer and then
treating you like crap when youre an existing
customer. Trying to sell you more when you
get in touch - especially financial services and
mobile phones Theyre not happy with just the
one product, they want to go into every single
product under the sun.
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2 Sell sell sell (contd) Aggressive
marketing intrusive and pushy Theyre
constantly ringing you up, hassling you to buy
this particular product, and theyre constantly
sending you mail when you dont want it, even
when youve asked. Chasing possible new
customers rather looking after existing ones
introductory offers If you go to a bank on
lunchtime, and you want to pay something in,
youre there with half of the world, and while
youre standing in a queue, somebody is walking
up and down, and looking at you, saying oh, Id
better target you, do you want some of that? Do
you want some of that? Ignoring potential
markets Nut allergy sufferers, rail passengers,
disadvantaged consumers
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3 Sneaky and dishonest The Stupid Company
thinks it can succeed by misleading customers
and being underhand and evasive. Deliberate
mis-selling They dont explain the full price
or options to you. Hidden costs and small
print Theyre quick enough to write you letters
saying only 19.99 or something a month and
then at the very bottom when you read it all up
youre paying an absolute fortune. Dragging
their feet Insurance companies, with claims,
they just delay and delay things.
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3 Sneaky and dishonest (contd) Passing the
buck When you ring them up to complain because
youve got a thing thats faulty and they say,
oh its not us, its the warranty company.
Junk mail Putting things in envelopes, making
it look like its more important than it is
Misleading advertising First Trust fees free

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4 Impersonal and robotic The Stupid Company
appears distant from consumers and deals with
them in a clinical manner. Call
centres/telephone systems I think just about
everyone in the world hates call centres and this
automated drivel. Helplines that take ages to
actually get through in the first placeTheres
select this number and dial one for this, and
two for that. And then all you get is a recorded
message at the end of it, going back to lack of
human contact again.
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5 Incompetent and ineffectual The Stupid
Company is slow moving, patronising and gets
basic tasks wrong. Confuse patronise
especially electrical retailers, garages,
financial services They baffle you with
science. Not being treated like a human being,
they make you angry as they make you feel
slightly stupid because theyre talking to you
like youre a child. Inefficient, with poor
follow-through Why write one letter when five
to me will keep them even busier? They expect
you to take a whole day off work to have
something delivered.
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Getting smart the consumer agenda for action
1. Provide continuity and ownership 2. Show
respect and honesty 3. Give the personal touch
4. Reward existing customers 5. Provide
aftercare
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1 Provide continuity and ownership Ensure the
same member of staff deals with an individual
customer from start to finish Get the
employee to provide contact details so that it is
easy to get directly in touch with him or her
again. The call centres, the person could give
you their name and reference number for future
calls. Nice to have a stable workforce, nice
to deal with the same people over X number of
years rather than always finding theres
somebody different because they left last week,
and you wonder why. The same as its nice to
have a workforce of varying ages and ethnic
groups.
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2 Show respect and honesty Be straight about
things like delivery times Explain complex
things simply Be realistic with times and
targets. Not telling you well yeah you can
have it, it will be delivered on this day and
then two weeks later its still not there.
Dont push them into a sale, let them make
their own choice and give them help if they need
it. Deliver on their promises and
commitments. Talking to you like youre an
adult.
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4 Reward existing customers Provide
incentives for customer loyalty Acknowledge
repeat business, so not this get them on board
and then forget about them, which I think a lot
of companies are guilty of. Probably where
Im most loyal is where I get the most
feedbackCar companies and flight companies are
always particularly good They send you mail
regularly to remind you what a fantastic
purchase you made and how wonderful you are, and
if theres anything they can do for you, and
dont forget youre part of this car club or this
flight club It makes you feel as if youve
been valued.
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5 Provide aftercare Dont forget about
customers after theyve bought something
instead check they are still happy. Consumers
can be remarkably forgiving if things are put
right promptly. Follow up calls are always
nice, it shows that theyre not just going to
deal with it and forget about it, follow up,
make sure youre happy, which some companies do,
but not many, not nearly enough. When you
crash your car, a good insurance company will be
phoning up to make sure youre okay, hows the
car, hows it all going.
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Getting it right I love Asdabasically because
everything is cheap and its reasonable prices,
plus I get all my daughters clothes from there
and again theyre reasonable and the staff are
very happy to help you as well, and its a
really nice supermarket If you cant find
anything theres always someone around on the
shop floor to help. Julie who cuts my hairhas
restyled it exactly as I asked and remembers
everything Ive told her in conversation from one
visit to the next (about 8 weeks) so that we
pick up where we left off. A different generation
but I think of her as a friend. London
Transportjust sent me a letter asking for my
email address so they could send targeted
communications about my regular journeys which I
think is a really good idea.
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Treat your customer how you would like to be
treated if you were the customer.
p.cullum_at_ncc.org.uk www.ncc.org.uk