Random Acts of Hostility are Destroying Your Customer Loyalty

It is both staggering and deeply disappointing to see brands that I once respected lose their focus on the customer. It would seem that brands like American Express are letting their AI and decisioning technology over-ride human intelligence and empathy — the impact is an erosion in customer loyalty. I’ve been a customer of AmEx for about 25 years — since before I moved to America. I’m now looking at alternatives because of how they have treated my brother-in-law.

This article first appeared on TheCustomer.net, and is republished here with permission.

Random Acts of Hostility are Destroying Your Customer Loyalty
Somebody allowed an inadvertent act of hostility to enter the equation and now a once loyal, frequent, and happy customer is shopping for alternatives.

So called ‘random acts of kindness’ have been a feature of customer experience (CX) programs for some time. Firms empower their employees to find ways to surprise and delight customers during moments of interaction. These aren’t systematic and algorithmically calculated in the way an airline or hotel might upgrade one of their better customers, but something that is truly random. I often quote the example of Virgin Media in the UK, where several years ago a service employee sent a picture frame to a new broadband customer who mentioned that he had just become a grandfather for the first time. He wanted the high-speed internet to be able to Skype or FaceTime his family to see the baby as he grew. The employee sent the picture frame along with a note of congratulations – just because it was a kind thing to do.

There are hundreds of examples of employees at forward-thinking companies making these kinds of decisions and actions.

Unfortunately, there are thousands or hundreds-of-thousands of examples of companies performing the exact opposite — what I call “inadvertent acts of hostility.”

We’ve all been there – the airline that won’t refund your flight that they cancelled, but will give you a voucher for a future flight; the hotel that charges you for a night that you can’t stay due to delayed travel, and then doesn’t provide any rewards; the online subscription company that makes it super-simple to sign-up for their offering online, but requires you to call a number that nobody ever answers during very specific hours, and within a very specific timeframe; the refund that takes weeks, when the initial purchase took seconds, and so many others that chip away at customer loyalty.

Somebody somewhere allowed an inadvertent act of hostility to enter the equation. And, now a once loyal, frequent, and happy customer is shopping for alternatives.

Perhaps the worst example I’ve heard in a while though, was American Express. My brother-in-law has been a loyal and lucrative customer for 37 years. Two-weeks ago, he called to get approval for a large purchase that he was planning to make of equipment for a work project. They suggested he clear some of his balance, even though it wasn’t strictly necessary. He did so and got approval for the purchase.

A few days later, a hold was placed on his card. He called to ask why and was told that it was due to an usual change in his purchase behavior. The rep pointed out that he hadn’t made any similar payments in the previous six months. He asked the rep if he could look and see the conversation history that would point to the prior authorization that he had sought and received. He pointed out that purchasing six-figure sums of equipment during a global pandemic hadn’t been particularly necessary – so, yes, his spending behavior had changed.

He had been a customer for 37 years. He had never had one late payment. His next payment, which was minor, was not due for another several days. His next major payment would be due a month later. He had received authorization to make a purchase, even though the authorization was not necessary. He had cleared some of his balance in advance at the recommendation of the company.

Somebody somewhere allowed an inadvertent act of hostility to enter the equation. And, now a once loyal, frequent, and happy customer is shopping for alternatives.

It’s Time to Demystify Decisioning

Note: This is a slightly modified version of an article that first appeared on TheCustomer.net. I was a member of the research team and one of the primary authors of the report discussed in this post.

While marketers have spent years focused on understanding the customer journey and thinking about customer experience across the enterprise, power long-ago shifted to consumers.

Consumers interact with brands in more places, using more (and different) devices and channels than any time in history, yet they expect brands to know the history of their interactions, and to quickly solve theirs needs at the moment of interaction. And, they will punish a brand that fails—either by publicly calling them out, or simply by taking their business elsewhere at a moment’s notice.

The concepts of decisioning and orchestration are not new to marketers and advertisers. We have been hearing the still elusive “right message at the right time to the right consumer” promise for years now. Yet, effective omni-channel decisioning is simultaneously more complex and more important than ever.

A team of colleagues at Winterberry Group and I recently published research, “Demystifying Decisioning & Orchestration” which reveals that only 14% of marketers and advertisers are satisfied with their company’s decisioning technology – the so-called “brain” of the marketing tech stack.

The fact that every organization is at a different point in its decisioning and orchestration journey—and has a unique set of considerations – is reflected in the bespoke nature of most company’s solutions. Meanwhile, a confluence of misaligned processes, political and organizational issues, and fragmented approaches to technology impact the ability of many organizations to successfully implement and evolve its approach.

Decisioning is rarely discussed without mentioning its partner, orchestration, referring to the coordination and delivery of next-best actions determined by the decisioning engine. Orchestration moves analytics outputs and insights through the martech and adtech stack to inform activation in the application layer. This function enables marketers to leverage data and insights across disparate technology platforms and solve for real-time, cross-channel customer journey execution. If decisioning is the brain, then orchestration is the central nervous system within a marketer’s technology stack.

Reflecting these challenges and divergent approaches, our research identified three levels of sophistication among brands – and categorized the levels as those employing a channel-based, multi-channel, and omnichannel approach. Within the most sophisticated firms, marketing decisioning engines solve for decisions both at a macro level – centralized across applications and channels – and at micro levels – at points of customer interaction based on behavioral and environmental triggers.

The research, which is based on contributions from more than 50 senior executives representing marketers, advertisers, publishers, decisioning and orchestration platforms, agencies and data providers, is available for free download here.

AMAZON, usually a consumer-first A-player, is letting this entitled customer down

Note: This week I began writing a bi-weekly column for TheCustomer, a great resource that covers all of the disciplines within the customer engagement ecosystem, exploring the latest research, technologies and personalities driving the customer revolution. This article is a re-post from TheCustomer.

When we conducted our research – and particularly in our case studies and expert interviews – Amazon was frequently referenced as a best-in-class example of consumer-first marketing. I’ve always questioned just how good they really are — for example, I find their recommendations are just as likely to miss as they are to hit. But my experience during the Covid-imposed lockdown has been a real disappointment. Here’s my perspective:

I am an entitled consumer. I have high, maybe even unreasonable, expectations of brands. I want them to know me, value my attention and time, predict my needs, and deliver an experience that is both convenient and enjoyable.

And, I’m not alone. In research we conducted for Marketing to the Entitled Consumer, consumers were clear that they’ve had it with companies that treat them as “target customers” and serve them with generic marketing messages. We surveyed 7,000 people in six countries and found that that 74% “expect companies to treat me as an individual, not as a member of some segment like ‘millennials’ or ‘suburban mothers.’” And 70% told us that “when a company interacts with me, it’s important that they understand my current situation, and not just try to sell me their product.”

Here’s the thing, I don’t believe that being an “entitled” consumer is a pejorative concept. Quite the opposite – brands should want these types of relationships. In focus groups that we conducted with consumers across four countries, the brand that was mentioned more than any other as an example of a company that gets this right was Amazon. And, it makes sense — Amazon has long delivered a service that is reliable, quick, easy, convenient, and can even make you feel-good (if you use Amazon Smile).

But, my recent experiences with Amazon don’t live up to my entitled expectations. Apparently, I (or my family using my account) have placed 177 orders with Amazon in 2020. That averages to two orders every three days. Amazon has a fully automated email program that 1) acknowledges the purchase within seconds, 2) informs me when the items ship, and 3) informs me again when the item has been delivered. At first glance, this could be considered best practice.

The problem is that these transactional emails fail to tell me what’s in the order, unless I click on the email to get to Amazon’s site. It might sound petty to complain, but when you’re ordering something on average every 36 hours, it’s hard to keep track of the items that you’re waiting on. Of course, Amazon includes items that they recommend for you — and many are well targeted. The problem is that Amazon is failing to respect my time, provide me value, or demonstrate any customer empathy.

Other brands that I purchase from have made the confirmation emails fun, informative, and helpful. Amazon is suffering from what we call the “Transference of Entitlement” — when we encounter an experience we enjoy, we learn to count on it. Then we expect all other companies to step up and deliver the same experience. Then, as we begin to rely on it, we become disappointed when other providers don’t step up to offer it.

Amazon has traditionally raised the stakes in this customer experience arms race. Unfortunately, a global pandemic, resulting shutdown, and subsequent increase in engagement, has lowered my satisfaction buying from and interacting with this once-pioneering brand. Given its history, I don’t count Amazon out, but I do hope it gets back to putting me, the customer, at the center of everything they do.

This article originally appeared on, and is re-posted with permission from, TheCustomer

Data Transparency Delivers Long Term Benefits

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I was interviewed by DMNews for a piece on the challenges of delivering personalization to consumers who are skeptical about sharing their data.  It’s a good piece that underscores the importance of telling consumers the truth about what you intend to do with their data and the benefits they will receive.

 

Do your supply chain and distribution channels impact your Entitled Consumer?

I had a great conversation yesterday with an omnichannel apparel manufacturer and retailer. This company – which primarily makes and sells footwear – sells them differently in different markets. In some cases, a product or brand might be sold 100% retail; in others, it’s 100% wholesale; and in the majority, it’s a blend of retail, wholesale, and e-commerce. What was interesting in the context of The Entitled Consumer, is that the head of marketing referred to experiencing the “entitled” phenomenon in some of their retailers – especially smaller, specialty retailers that have a niche focus and physical presence. These merchants don’t have huge stock rooms and they don’t want to hold inventory of every style in every size in the hopes that a customer will wander in. But, they do want the manufacturer to be able to get them the specific product they want as soon as a customer wants to buy it. Compare that to the typical four month process that the manufacturer’s typical large retailer follows. The manufacturer is having to rethink their processes, systems, and relationships to adapt to now-entitled sales partners.

amazon-logo-copy-800x258And, then today, news emerged that Amazon is requiring merchants that sell through their site to adopt the same consumer-friendly policies as Amazon offers its direct customers – mostly relating to making returns easier and way more convenient for the consumer. In some cases, Amazon is even eliminating the need for a return. Yep, with “returnless refunds,” consumers will get their refund without having to send back a product that is expensive to ship or hard to resell. Small businesses are up in arms. They fear that the new policies will ‘crush’ their businesses. And, while some will look for new distribution channels, others will adapt to the new Amazon requirements.

What’s interesting is that CNBC in their coverage pointed out that “It’s no secret that Jeff Bezos’ first, second and third objectives are to please Amazon customers, giving them more stuff at the lowest prices and at faster speeds.” But, can they do that and maintain their relationships with sellers – and if those sellers leave will others just quickly take their place?

One thing is for sure, Amazon is one of the companies that will continue to raise the bar of what an Entitled Consumer expects from their relationship with a brand. The challenge for the rest of us is to do the same, but also to do so profitably, and to maintain a healthy and sustainable ecosystem (manufacturing, supply chain, and distribution chain).

If you haven’t started to adapt to the Entitled Consumer, don’t wait too long – or Amazon might have completely undermined your business model while you weren’t watching.