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Posted by mesut dogan In: permission marketing, return on customer, seth godin

Permission Marketing ! Does anybody know what it means

I think that at last i will get crazy and cancel my HSBC account and everything i have to do with that Bank. Their e-mails that they send to me everyday became so annoying that i want to recommend two essential readings for the guys responsible for CRM and Customer Loyalty programs.

Return On Customer - Don Peppers and Dr.Martha Rogers

Permission Marketing - Seth Godin

In Permission Marketing Seth Godin states that because of the varying alternatives in live and decreasing time to allocate for each of the alternative activities entity's should get permission for every intervention in our lives. For example if you have only 15 -20 minutes for checking your e-mails you shouldn't have to pick meaningless advertisements from companies. In their very important piece Return On Customer, Don Peppers and Martha Rogers state that the Return of a customer is not only the return made in any transaction. The Return is the sum of all transactions that are currently made and the ones that will be made in the future. So if a company annoys any customer by trying to communicate their message too much with the aim of increasing the return of the customer in current accounts, they will probably suffer a decrease in the return curve of the customer because of the loss in future transactions due to the inconvenience they create.

So i am not sure if HSBC is aware or not, but by sending disturbing emails almost everyday is not increasing my satisfaction, contrarily they are increasing my dissatisfaction. If they would send at least bulletins that would be customized for my interests maybe i wouldn't feel that outrageous but WHY SHOULD I CARE WHAT THEY OFFER FOR CAR SERVICES ! I HAVE A COMPANY CAR.... (And a lot of things too that are not in my interest)

The fact that they didn't understand the importance of customization in this kinds of bulletins, at least considering that being a customer didn't mean that i allow them to fill my inbox with irrelevant things and as taking into consideration the importance of Permission Marketing as stated by Seth Godin, they could give at least the option as the entity's who are aware of this concept. A statement like " You are getting this email bacause of ............If you don't want to receive this emails anymore click the link below.....

Posted by mesut dogan In: differentiation, innovation, Spencer Johnson

A Tribute to Spencer Johnson

Last day one of the news showed a demonstration in one of the major centers of our Capital City. Known with it's Bar's offering various kinds of music with relatively cheap prices the Sakarya Avenue has always been an attractive choice for especially students. Most of them having a bad habit, smoking, which is now the major concern for the managers of the entitys because of the new law prohibiting smoking in all kinds of indoor locations caused the demonstration. The pictures related in my mind instantly to Spencer Johnson's fabulous story, " Who moved my cheese" and i thought what a good case it was presenting the characteristics of Hem.

In the story 2 mices Sniff and Scurry and 2 little humans Hem and Haw were living in a labyrinth containing in different paths stations some of them having cheese which represented all kinds of needs for those characters. While Sniff and Scarry were only simple rats acting according to their instincts they were always smelling the cheese and realized the change earlier than Hem and Haw. So they started to search for a new cheese in a different station much earlier. The hitting point of the story is how Hem and Haw realizes the change and in which ways they respond, which indeed represent the attitude of most of us. Actually we are acting either like Hem or Haw in all parts of our lives (worklife, relations, etc.)

Back again to our demonstration the correlated facts were;

The center consists of a lot of entitys with very similar business processes. The only difference is the kind of Music they play but there is no differentiation in the service they provide. The only advantage, their prices makes them attractive for their target segment students who lives in dormitories and normally can allocate a lower budget for entertainment.

The basic business structure with a lack of efforts to differentiate services or create any innovative processes, made them act like Hem and Haw. The routine of the business created a comfort zone for the Bar's which prevented them from smelling the cheese i.e. to see the changes outside of the box. They even couldn't smell the change of the new law which was indeed declared one year ago (That suprised me the most!)

So in the news i saw a lot of Hem's shouting "That's unfair, I WANT MY CHEESE BACK !!!!)

I couldn't believe it. They were asking the government to allow the people smoke in indoor places again which is an extreme level to resist to change. So i think it will be unlogical to expect the people to figure out that there is always new cheese out there which in fact made me think for the last couple of hours. I would like to discuss what the new cheese could be for Bar's which are loosing customers due to the smoking prohibition. And i would like to hear your ideas what they can offer for the changing environment...

Posted by mesut dogan In:

Who Is to blame ? The Frontline ?

DIMENSIONS OF CUSTOMER SATISFACTION

According to J.D.POWER customers ultimate level of satisfaction results from the combination of two factors :

The processes imposed by management
The personal interaction that takes place between employees and customers

Management can do everything within its power to establish processes designed to maximize efficiency and customer satisfaction, but all its efforts will evaporate like a mirage in the desert if a customer encounters a rude employee charged with carrying out those processes. Of course, the converse is also true. Even the best employee, regardless of his or her personality, will find it difficult to salvage a customer experience sabotaged by poor processes.

So i will now discuss a case that i experienced a couple of days ago, in a store of one of the most important bookstore chains in Turkey, D&R. The store, probably one of the biggest among all, was located in one of the most important Schopping malls. Therefore, as usual, a lot of people walking through the aisles, were searching for all kind of media (music, movies, magazines, books etc) in their interest from the well organized and classified shelf's. Although i never found the entity very successful in customer oriented applications, i always was satisfied to some basic degree from their services because of their employees who were always polite, a very big range of products presented in very well organized shelves and some other nice servings. But indeed they never could make a wow effect while almost every application was developed for meeting the standard expectations.

UNSUCCESSFUL ATTEMPTS TO BUILD LOYALTY

At further applications like D&R card which function i couldn't realize yet, taken into account my ownership which last for about 1,5 years know. After about every 20 -25 book purchases when i checked the bonus in my card they told every time that i could get about a quarter of a book with it which i found not attractive compared to direct discounts that other bookstores were applying. Also the notification about the advantages of owning and using the card is very poor compared to similar devices provided by other companies. For example i am always informed for the advantages of

my cineclub card which fosters me to watch movies always by the Cinecity cinemas. They make direct discounts for every purchase and inform me for how many additional tickets i will get extra ones. On the other hand the case of D&R reminds me always to the case of the Russians in the movie Dr Strangelove. The Russians build a doomsday machine that will automatically trigger itself in the case of nuclear attack, to make a disincentive factor for other countries but couldn't achieve the disincentive results because they didn't gave info about the machine. So the device is far away for creating any degree of loyalty for me to the corporation because of ;

lack of info about the benefits from using the device
Meaningless bonuses which didn't gets my interest until 20 - 30 transactions

OLD FASHIONED UNSUCCESSFUL E-BULLETIN

Another crm attempt of the company is their e-bulletins they send in specific time intervals which are designed for the general audience and mostly didn't mean anything in means of my interest. Compared to emails from services like Amazon.com, which contains only updated info about specific transactions made by me ! and therefore presents the interest of specifically me! the old fashioned bulletins send by D&R and meanwhile by HSBC which is an even worse case which i will mention in another article makes me send them directly to the trash.

BACK TO THE STORY

So when i turn back to the story, that day i picked one magazine and went to the cash desk. They had two cash desks one looking to the right side and one to the left, of a semi circle. I checked the area and no line draw my attention. I checked while from my previous visits i knew that they hadn't developed any system like Starbucks has for all of its stores, is part of its culture and so prevents any problems to evolve. While I'm always sensitive in such issues and don't like people who didn't respect others rights i got sure that there was no line and stand behind the customer who was waiting for the return of his money. After the cashier finalized the process he did something which was a big surprise for me. He looked to the other side and called one customer from that part as if i was not existing. I realized that the person came before me to the desk but felt ashamed while i was treated like an infringe which attitude i think i had not deserved. I understood that the employee was thinking he was doing the right thing and wouldn't let the rights of the other customer be violated but he couldn't think about the situation In which i was. So i had a little argument with them and explained that the system was not well designed but could only get an answer that i was right and that they had experienced different problems with other customers too. They tried to explain the management the issue but were not successful.

FINAL THOUGHTS

In my opinion i think that problems like this which decreases customer satisfaction for the company will continue to arise while the management is ignoring some important and basic issues. This is very funny for a company in this scale taken into account the amount of money they spent to CRM applications, projects, probable consultancies they get etc, and the relative cost & efforts to change these simple problems. The issues;

Lack of empowerment for the front line employees, who are most aware of the customer needs because of their everyday interactions. To ignore this knowledge in designing business processes makes the company to move away from the needs of customers and decrease their satisfaction.
Giving importance to observation of customer needs instead of giving decisions according to market researches. Ok market research data is also important but going to the field and observing the services provided and the degree of how effective this services are on customer needs is much more important. Howard Schultz explained in his book Pour Your Heart Into It: How Starbucks Built a Company One Cup at a Time that he was very determined that non-fat milk would lower the quality of their coffee's and so refused to provide such products. But while he was always aware that observing the customer preferences in the store rather than only checking data from computers, he went to a store, saw a woman in sportswear asking to the Barista for a non fat coffee and get out the store (probably to a competitor) angry with the answer we don't use non- fat milk. In the article Howard Schultz vs Howard Schultz it is stated that he still visits 25 stores a week which i think is very fascinating. It would be also obvious to the D&R management how uncomfortable processes they had like the line issue if they would observe the transactions made in different stores.

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