Delighting Customer Importance & Method
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Customer Delight
Not Customer Satisfaction, but...
BY: Prof. Jitendra Sharma
Trainer & Consultant
Email: [email protected]
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Objective of the Session
1.What is delighting the customer?2.WHY delighting customer is important ?3.HOW can we delight customer?
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What is Delighting Customer?
PART -A
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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.
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What determines Customer Satisfaction
CustomerSatisfaction
PerceivedService
ExpectedService
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Levels of Customer Satisfaction
PerceivedService
ExpectedService
CustomerSatisfaction
Much Better than expected
As expected
Worse/Different than expected
Delighted *
Satisfied
Dissatisfied
Loyal
Vulnerable
Walk & Talk
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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
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Delight = Expectation + 1
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+ 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
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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
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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
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“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
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Why delighting Customer is Necessary?
PART -B
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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
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“ Customer satisfaction is no longer good enough to survive today’s competitive market place. What is needed is customer delight.” - Tom Peters
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CUSTOMER ?
CUST ME MER
OR
ATITHI DEVO BHAVA
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“ Figures are your history, customers
are your present and future. “
--- Philip Kotler
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THINK
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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
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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
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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)
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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
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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
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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
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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
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HOW?????
To Delight Customer
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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
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Creating Customer Delight
• What’s working?– How can we do more?
• Any barriers?– How can we overcome them?
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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
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Hygiene vs. Enhancing factors
» Hygiene Factors
» Absence: Dissatisfies
» Presence: Neutral
» Enhancing factors
» Absence: Neutral
» Presence: Satisfies
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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?
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I Will
• Identify crimes committed against Customers, Donors, Program Participants and Each Other
• ……and do SOMETHING
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Two Things I Will Do…
• 1)
• 2)
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What separates the merely good
organization from the truly great?
BEST SELLER!
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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
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METHODS OF
DELIGHTING
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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
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"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
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"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
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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
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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
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What customers first see
24/7
Toll free phone number
Free shipping and return shipping
365-day return policy
Source: TheLetterTwo.com
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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
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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
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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
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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
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Innovation
Innovation allows organizations to remain competitive. Nurturing the ideas of employees is vital to the growth
of the organization.
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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
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Tablet
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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.
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Google Phone- Nexus one
Google’s mobile operating system for phones
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Gillette Men’s Razors:Product Modification
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Gillette Women’s Razors:Product Modification
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LG
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Innovative marketing Strategy
Future
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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
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Requirement –different from traditional marketing
Focus on consumer experienceFocus on consumption situationView consumer as rational/emotionalUse eclectic (diverse) methods and tools
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Example
• Sample house• Virtual 3 D image • Test Drive
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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
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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
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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
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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/
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http://www.dell.com/
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http://www.cannondale.com/custbike/c2.html
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http://www.landsend.com/
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http://www.FordDirect.com/
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http://www.smart.com/
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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.
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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
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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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79
Touch Points
Voicemail
Snail Mail (Post)
Phone
Fax
Face-to-face
Social Media
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80
Radar On Antenna Up
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THANK YOU