The title of a panel discussion at a Luxury Marketing Council meeting was certainly to the point: “The Absolute Decline in Customer Service and What Top Luxury Brands are Doing About It.” And the panelists in attendance were just as direct: “The consumer is sitting there with the iPad and has access to the same information the sales associate has. Good is not enough,” said Karl Haller, VP of strategy and business development at Brooks Brothers.
Customer service has been “a story of disappointment” since 2008, added Kristen Harmeling, a vice president of the Harrison Group, a research firm that polled 600 wealthy consumers for an American Express survey and found they have become more self-reliant as companies have cut back on customer service to cut costs. Disappointed shoppers will do their own research online and come to the store knowing as much as the sales people, raising the bar and breeds a vicious circle of disappointment, Harmeling said.
To be sure, it’s not just the experience-driven luxury marketers that need to worry about their brand image in the face of weak customer service. A variety of factors–economics, technology, and consumer behavior–that came together during the economic downturn has brought customer service into a much sharper focus for marketers of all brand types.
To deal with increasingly empowered, demanding consumers, marketers have had to step up their game in customer service. Thanks to online and mobile, shopping consumers at all levels are pickier and more fickle than ever. And with social media giving customers the ability to take their complaints viral, marketing departments are becoming more closely involved in the handling of customer care as it moves online.
“Small companies are already incorporating customer service into marketing, not only in retail but even in B2B businesses. You’re seeing CMOs becoming increasingly powerful because there are so many [consumer] touchpoints in operations,” said Judith Russell, COO of retail industry publication The Robin Report.
Customer Service As A Key Differentiator
Zappos.com–the company most experts cite as a successful early adopter of customer service as a marketing tool –has successfully used customer service to set itself apart from other online apparel companies. It continues to use it as its point of differentiation to move beyond shoes and into other apparel categories, said Michelle Thomas, senior brand marketing manager.
“We believe that customer service shouldn’t just be a department–it should be the entire company,” she said. At Zappos customer service is reinforced in every marketing channel and touchpoint, sometimes with very literal approaches, such as the company’s 2010 “Zappets” ad campaign with puppets acting out real-life customer service calls.
“The goal is to make Zappos' customers very happy and let them do the marketing for us,” Thomas said.
As the recession bore down and shoppers shut their wallets, new technology for online and mobile commerce gave them new tools to seek out lower prices, turning most products into commodities and making intangibles, such as customer service, a more important competitive weapon.
“The markets for all consumer products and services are much more competitive now . . . [marketers] have to spend money on this area right now,” Russell told CMO.com.
And with the explosion of social media, these more selective consumers became more empowered to build up a brand–or bring it down, depending on their experiences. “It brought down the Egyptian government. Think what it can do to a company,” Russell said.
Conversely, a good resolution can turn a bad experience into priceless goodwill and extra sales, experts said. A recent survey by ForeSee showed that customers who have a good experience when they call a marketer’s service call center are more than twice as likely to become loyal customers and advocates for the company than customers who don’t. ForeSee polled 11,000 customers and found those who were “highly satisfied” with their treatment were 154% more likely than less satisfied customers to purchase from the company again, and 238% more likely to recommend the company to their friends and family.
“You’re not paying the cost of converting a consumer–you’re paying the cost of keeping a consumer. That’s much more effective than paying for an advertising campaign,” said Christina Heggie senior analyst at A.T. Kearney.
Next Page: Social media at your service.
Increasingly, marketers have taken to the Web, specifically in social media, to address service issues. Companies as varied as AT&T and Nordstrom respond to questions and concerns on dedicated Facebook and Twitter accounts where any customer can see them. In addition, Delta Air Lines helps stranded customers via its Twitter account, DeltaAssist, and even expanded it late last year to add a Spanish-language version. Best Buy has a dedicated Twitter feed, the Twelpforce, to handle tech-related questions from customers.
Customer service was one of the first uses that many brands saw for social media, said Emi Hofmeister, social marketing strategist at Adobe. “People are talking about your brand anyway–you might as well join in the conversation,” she told CMO.com. “People were out there saying these things, and brands immediately caught on to the fact that people are sharing customer complaints. They’re not bothering to call a hotline or email a support team.”
Marketing and customer service were in an unnatural split in the past, with marketers reaching out to consumers and the consumers responding via customer service, but the two conversations were in separate channels, Heggie said. “What this digital age is giving is the opportunity for that conversation to finally go to its natural state: a conversation occurring naturally in real time,” she told CMO.com.
This brings with it a new transparency that didn’t exist when the call center was the only medium to service customers. And this is making how a marketer handles complaints a growing part of its brand profile. “In the social space, it’s really easy to make 10,000 friends, but it’s also really easy to make 100,000 enemies with one bad move,” said Sloan Broderick, managing director of innovation at digital media agency MediaCom.
Many of the traditional whipping boys of consumer advocates–such as airlines, cellphone service providers, and cable companies–have become among the most active users of social media in customer service. Some of it has to do with the immediacy of problem-solving online versus via call centers, and in the case of cable companies and telecoms, it’s thanks to already having the technological infrastructure available.
Travel, retail, telecom, and mobile phone providers found out early on that a poor customer experience recalled in the social space was something they needed to proactively address, Broderick told CMO.com. “You could at worst neutralize it, but at best turn it into a positive and generate good will,” Broderick said. “But if you’re absent, the bad customer experience turns into bad news.”
That bad news/good will management has increasingly brought marketers together with customer service staff. Marketing departments were the early champions of social media at most companies, so it stood to reason they would be involved as the media were applied to customer service, experts said.
The decision on how to execute a social customer-service strategy and who will do it has to begin with working out a customer-response strategy, Adobe’s Hofmeister said. There has to be a central social media orchestrator to centralize that function so all communications have the same voice, she added. “The big imperative for brands is to develop strategy: Where do you want to talk to your customers and how to talk to them?” she said. “Choose the best platform and then you can decide on what tools are best to work on that platform.”
Which department leads–marketing, public relations, or operations–depends on the type of company, but all three have to work together, experts said. “It’s speed and technology plus the customer service gene,” Broderick said. “Who really can sit through and manage and be polite, respectful, responsive to customers when they’re really angry?”
Most experts advise that operations retain the ultimate resolution of customer issues, since call centers already have the playbook on how to handle complaints. But marketing needs to get involved in analyzing the social-media metrics these channels are producing and identifying the CRM issues that arise. “It’s important for CMOS to really understand what moves their business,” Broderick said. “Operations still has the knowledge to know where do we go from here to resolution. But the identification of the issue has to come from marketing.”
There is no one-size-fits all answer yet, but branding and customer care functions will be working more closely in the future, AT Kearney’s Heggie said. “For a company that’s incredibly brand-centric, that face to the consumer is crucial,” she said. “I don’t think it can remain separated.”