MARCH / APRIL 2012 | PDF | Subscribe | Home

Bangalore Calling
Customer service is retail's greatest missed opportunity.

The years between the real Mad Men and 30 Rock have not been kind to mass marketing. One could argue that all marketing men (and women) are mad today because all they talk about is the individual — both retailer and consumer. The new sweet spot is one-to-one.

In the days when a 30-second commercial reached 30 percent of the audience each time it ran, the majority of the big spenders were the packaged-goods guys — Procter & Gamble, Heinz, Unilever, Kraft, General Foods, Hershey, Coke, General Mills,

However, if you asked a roomful of these packaged-goods types for a show of hands as to how many had visited one of their retailers’ stores (to see the shelves that held their products or to watch consumers in action), they would avert their eyes in horror. Retail was cheesy, messy, boring, and, worst of all, full of consumers — all of which elicited an audible response that sounded like yuck!

Customization, personalized service, one-to-one, loyalty, social media, and engagement are now the politically correct marketing-maven terms. There’s only one problem. Other than the Walmart greeter, no one really wants to engage (the euphemism for “talk to”) the consumer — especially when there is a problem.

The road map of one-to-one marketing depends on modeling behavior of one kind or another: viewing, purchasing, responding, and browsing — then digitally or electronically targeting customers with messages and offers that are relevant, timely, and persuasive based on those behaviors.

These tools are highly sophisticated and getting more so every day. A tremendous amount of energy and resources are invested in designing smarter and smarter scenarios in real-time that are no longer about winning the hearts and minds of consumers; the only interest is in the next dollar they spend, and the one after that, and the one after that.

But wait. There’s a hole in the algorithm bucket. There’s a disconnect between the front-end before the sale and back-end after the sale. Have you noticed that you can browse 14 websites for a particular kind of fastener for an inexpensive backpack you bought in Barcelona seven years ago and, within seconds, you are getting banner ads and emails from Home Depot, Lowe’s, Expedia, Iberia Airlines, Timberland, and Tumi offering an 85 percent discount on the fastener if you’re willing to also pay shipping, delivery, taxes, and Bank of America’s bailout fees?

Immediately following that, you will get a Groupon deal offering 100 fasteners for half-price and an email offer from your cousin in Nigeria, a Dr. Henry Dontuwanto, recommending that you claim your inheritance of 400 billion million dollars so you can buy the fastener company.

But, if you are a regular customer, or just happen to buy a product from most any company and have a problem or fall into a non-conventional category of behavior, you are going to break the system. You fall into the chasm of idiotic email messages: torturous browser responses that lead you to website terms and conditions and eventually declare that, not only didn’t you actually buy the product, but you don’t really exist.

When that fails, you try the “contact us” telephone number for customer service and fall into the blow-your-brains-out automated phone loops and customer service reps in Bangor or Bangladesh who have no clue how to extricate themselves from the problem that the algorithm of automation forgot to fix.

The models can make the right offer to the right customer at just the right time, but they cannot figure out how the hell you bought that product from a store in SoHo when it was only available in Saskatchewan and there’s no scenario from the programmer on what to do about it.

The Whole World is Watching

In the days before blogs, websites, and social media, it was possible to get away with doing a lousy job on customer service. After all, if one customer had a problem with the coffee-maker they purchased and wrote a letter or called customer service, who’s gonna know? Other than within the immediate family, probably not a lot of damage was done to the retailer. Now, before you can send an email apologizing to the customer for disavowing any knowledge of the customer’s problem, that customer has posted scathing, unpleasant remarks about your company on half a dozen sites and social media platforms that are now flying through the internet jetstream to places you never heard of, costing a fortune in lost future revenue.

How long did it take for everyone to find out that Best Buy overpromised or under-bought merchandise for the holidays and thousands of people (or was it one or two?) were denied their holiday presents because Best Buy couldn’t deliver? How well do you think Best Buy will fare with those folks next year? Or even next Father’s Day? Not to mention all those who read about them?

How about this one from Fresh Direct, which has a reputation for really good customer service:

“Thank you for contacting Fresh Direct. I am sorry to inform you that all of the earlier slots are now sold out therefore I am unable to process your request. I apologize for the inconvenience. We appreciate your telling us what happened so we are able to resolve the situation. If you are not satisfied with our solution, or if you have any other concerns, please call us at ... Or contact us directly by responding to this email. And remember — you are our number-one priority.”

That could be the most idiotic email ever sent. A VIP customer is supposed to be guaranteed a delivery time slot. And was not. Then they want to know if the customer is happy with the solution. What solution?! And, not to worry, the customer is their number-one priority. My goodness, can you imagine if the customer were number two?

Here’s another (from a customer perspective) at a really good company: Lululemon. If you buy a product online and try to return it online, you are told by the website that the item you received just yesterday cannot be returned because you are over the time limit. When you call customer service you are told that, in fact, you can return the item because “the problem is that the website isn’t smart enough to know when you bought the product.” What?

It’s not just customer problems or dealing with the things that go wrong. Often it’s self-inflicted, unforced errors (due to lack of attention to detail on the back-end) where companies fall short, because it’s after the sale and there is less interest. After-the-sale is as much a part of marketing the next sale as anything else that can be done. Here, the retailer has a customer already in the fold, who is many times more likely to buy again if the experience is a good one.

Timing is Everything

If you place an order online at Mikasa, you receive an email when your order ships. Nice. The email also asks you to “tell us what you think about the product” (that you haven’t received yet) and write a review of your recent purchases to win a $100 gift card. Why wouldn’t Mikasa think that through to realize that, on average, the item is going to take “X” number of days to arrive and hold that email asking for a review for five days, after it arrives?

At Century 21 in New York, you can sign up for a loyalty program in the store. While still in the store after signing up, you receive an email welcoming you to the program. Very impressive. Two days later, you receive an email asking if you’re a member yet! What?!

Communicating with the customer at every touch-point is an opportunity that shouldn’t be treated as an after-thought. When you send a customer a “welcome to the loyalty program” after they have received their first reward, it sends a signal that you’re not really paying attention and you’re not really that interested in them and how they are doing.

So, all the money and time invested in targeting the exact right offer at the exact right time at the exact right price is undone by proving to the customer that you have no clue who they are or what they need. Treating customers with disdain or wasting their precious time with inane and untimely emails and contacts is why so many emails end up unread and why so many people are willing to relate their poor experiences on Yelp, FourSquare, Facebook, Twitter, etc.

This isn’t a new phenomenon, though. It’s only become more obvious because of the overwhelming number of interactions that we all have with everyone and everything. Most bricks-and-mortar retailers’ highest rate of turnover is at the front-end — exactly at the spot most customers have their only interaction with the retailer. Cashiers or checkout people are often the only individuals who come into contact with the customer, but they are the least trained, most poorly paid, and most ignored part of retailing.

Seventy percent of retail has some form of loyalty or membership program. Thousands of hours are spent on designing creative, modeling customer behavior, targeting the right offers, managing the point-of-sale — and yet, if the cashiers don’t do a good job of signing up customers for the program and reminding them to use their card or identify themselves, the program will be a bust.

Two Powerful Words

Two of the most powerful words in the marketing language are “welcome back.” They are so rarely used — even in venues where they should be repeated many times a day. Hyatt, Marriott, and most of the major chains with loyalty programs give you the option of room size, type of bed, type of pillows, what floor you prefer, and, in some cases, you can specify the types of mints for your pillow, the music playing on the sound system, the type of water you’d like to come out of the shower (hard or soft), what to stock in the bar, and what channel the television should be on, but, the front-desk clerk has no idea if you’ve ever been to that location!

Ninety-five percent of the time the front-desk clerk will ask if this is your first time at that location, while she’s scanning your Gold Passport card (making sure you get your points) that has the information that you’ve stayed at that hotel 17 times. It makes a difference when the front-desk clerk says, “welcome back, so nice to see you again. Since the last time you were here ...”

The same opportunity exists for restaurants that use a reservation site like Open Table. Instead of having the server ask you if it’s your first time there and if you are familiar with the menu, the owner should stop over to thank you for being a regular customer and tell you what’s new on the menu.

The other nice thing about marketing through customer service is the cost: virtually zero.

Customer service and customer problems should be viewed as a marketing and sales opportunity to build a tighter bond with the customer through service that cannot easily be translated to conventional marketing.

When customers have a problem, they are distraught, feel stupid, inconvenienced, and sometimes angry. When those emotions are turned into a positive experience, the positive comments that flow into the social-media sphere can generate follow-on sales at a very high return-on-investment. And, because the positive outcomes are more unusual, they are remembered, repeated, and reinforced. Just ask any (or almost any) average Apple customer.

SPENCER L. HAPOIENU is president and co-founder of Insight Out of Chaos, a database and direct marketing company. He can be reached at or (212) 935-0044.

MARCH / APRIL 2012 | PDF | Subscribe | Home