When Mistakes Happen

Mistakes are a part of the learning process. Every company will experience them at one time or another. Ideally, with good planning, they will be minor and won’t happen often. With better planning, there is an action plan in place to quickly right the wrong. Knowing what to do before it needs to be done simplifies fixing the problem.

My Coke Rewards Apology Email
This My Coke Rewards apology email was delivered quickly and followed the four best practices of making amends for a marketing mistake.

Mistakes are a part of the learning process. Every company will experience them at one time or another. Ideally, with good planning, they will be minor and won’t happen often. With better planning, there is an action plan in place to quickly right the wrong. Knowing what to do before it needs to be done simplifies fixing the problem.

Handling mistakes well is a great loyalty builder. You can measure the effect by conducting a comparative analysis. Pull two segments to compare from customers who made their first purchase five years ago. Choose customers who are very similar in order source, size and selection. Select people who had seemingly perfect orders for the first segment. “Perfect orders” describe orders that are processed quickly and delivered without issues. Place people who had problems quickly resolved for the second segment.

Detail sales history, average order and returns for each segment. Use the information to compare the value of the customers who had problems with the ones who didn’t. This analysis almost always finds that the people who had problems quickly resolved are much more valuable than those who had a perfect order. I believe there is a simple explanation for this: People who have problems resolved to their satisfaction trust the company more. Trust and loyalty go hand in hand.

Planning for failure seems counterintuitive, but it is the best way to be prepared. The first part of the action plan is determining the extent of the problem. Will an apology suffice, or does something need correcting? Apologies are sufficient when the mistake is simple and doesn’t overly inconvenience the person or create an expense.

My Coke Rewards provides us with a good example of a mistake where an apology is enough. Last month, the automated points’ expiration notice malfunctioned. Members received a notification that they needed to add or use points or they would expire. The deadline for keeping the account active was two weeks before the email was sent. The apology came quickly and followed best practices (refer to the image in the media player):

  • Be direct with the apology and explanation.
  • Tell people what they need to do (if anything).
  • Thank them for their business.
  • If necessary, offer a reward for the inconvenience. (If you offer a reward in the form of a discount, make it dollars off with no minimum. This is a payment for a mistake, not a marketing promotion.)

The email from My Coke Rewards was simple, to the point and didn’t offer compensation. The mistake was minor, so an apology after the correction was enough. Bigger mistakes require more. There isn’t a magic formula that determines the ideal response for every problem. Customers are individuals with unique expectations.

The second part of the action plan is determining the specific resolution for each problem. Creating a general list of potential problems and resolutions provides a guide for the customer service team. Anything that satisfies the customer and falls within the guidelines should be resolved immediately.

The best way to determine what needs to be done is to ask the customer with the problem. Lead with an apology and follow with the inquiry. For example: “I’m sorry this happened. What can we do to make it right?” There will occasionally be an outlandish demand, but usually the requested solution is less than you were prepared to do. Asking customers how to right a wrong simultaneously gives them respect and shows that you care. Here are some other best practices when a mistake happens:

  • Minimize customers’ investment in resolving issues. Strive to resolve issues on the first contact without involving other people whenever possible.
  • If you discover the mistake before the customer, reach out immediately. This shows your customers that you are watching their backs.
  • Use the appropriate communication tool. Email works well for most correspondence as long as the messages are not from “do not reply” boxes.
  • When the resolution process is complete, ask customers if they are satisfied with the solution. Every customer cannot be saved, but letting them go without trying is unacceptable.
  • Avoid fake apologies. Apologizing works so well in relationship building that people are making up reasons to do it. Don’t.

Social Media and ROI: Strange Bedfellows, or a Match Made in Heaven?

Unless you’ve been hiding under a rock during the past few years, you’ve noticed that social media has become the new norm in our lives, both personal and professional. For businesses large and small, what was initially a curiosity has rapidly emerged as a highly effective tool for interacting with their customers and prospects. … As interest and investment in social media continue to grow, it’s inevitable that corporate stakeholders and bean counters across corporate America will begin to clamor for marketers to demonstrate ROI …

Unless you’ve been hiding under a rock the past few years, you’ve noticed that Social Media has become the new norm in our lives, both personal and professional. For businesses large and small, what was initially a curiosity has rapidly emerged as a highly effective tool for interacting with their customers and prospects. In fact, according to Emil Protalinski in an article on ZDNet.com, a whopping 68 percent of small businesses say they use Facebook as their main marketing tool. Wow!

As interest and investment in social media continue to grow, it’s inevitable that corporate stakeholders and bean counters across corporate America will begin to clamor for marketers to demonstrate ROI for their firm’s social media activities. And believe me, Social Media spending will most certainly continue to grow. According to an article on CMOSurvey.com, in the next five years, marketers can expect to spend 19.5 percent of their budgets on social media, which is almost three times more than the current level. That’s a lot of shekels. This year alone, in fact, marketers are already spending 10.8 percent of their budgets on it.

With increased budgets will undoubtedly come increased scrutiny. But as is the case with most things, the devil is in the details, and measuring social media success is much easier said than done. Unlike most marketing activities, you see, which can be traced back to number of leads generated, customers acquired or sales made, Social Media KPIs are anything but clear cut.

Think about it for a moment. How much is a Facebook “Like” worth, anyway? How much would you pay to get a new follower or to be mentioned on Twitter? How much does each LinkedIn connection contribute to your company’s bottom line? Given this environment, it’s not a big surprise that there are some who simply shrug their shoulders and say that trying to pin ROI to Social Media is a complete waste of time. I don’t necessarily belong to that school of thought, but I do think that Social Media is an entirely new beast that needs to be viewed in a manner distinct from other places marketers spend their money.

Fact is, social media is not simply another advertising channel with a specific budget that can be attributed to a specific group of sales or other traditional marketing KPIs. This is because social media can be used by a firm for many different activities by different departments, many of which are not exactly under marketing’s purview or control.

For the customer service team, using Social CRM technologies and listening platforms, Social Media is an incredible tool that can be used to listen to and engage with customers on the Web, supplementing their phone bank and other customer service activities. For the sales team, Social Media presents yet another source of red-hot leads to be contacted—prospects that have expressed interest in their firm’s products or services and can be followed up on in real time. For marketers, social media may play a role in the department’s content marketing strategy, enabling them to disseminate awesome content to a large base of customers and prospects at minimal cost. And for a PR department, social media represents a unique way to broadcast company press and news releases to the press and public in a continuous feedback loop.

But as a direct marketer by trade, I must admit that I have a difficult time accepting that any activity run by the marketing department can avoid the inevitable ROI discussion. Sure, most ROI calculations I’ve seen in run-of-the-mill PowerPoints are 50 percent math 50 percent BS … I should know because I’ve made quite a few of them in my day! But that being said, I do think we’ll eventually get there. And I’m not alone: A recent study published by Mediabistro demonstrated that 64 percent of executives believe that social marketing will eventually produce a legitimate return on investment for their firms.

In many ways, this lack of clarity is a result of Social Media still being in its infancy to a large extent, and regarding ROI we’ve still got a ways to go. So what do I think the answer will ultimately be? I’m not completely sure, but let me leave you with this.

Because Social Media is being used by different departments with different budgets for different things, when evaluating social media a firm needs to grasp a firm understanding of how Social Media is being used within the organization. For each department, success will need to be measured and tracked differently based on performance metrics that are relevant to stakeholders in each of those departments. Sales teams, for example, should use metrics relevant to salespeople, such as number of leads generated, conversion rate on those leads and so on. Customer service departments, not surprisingly, operate on entirely different systems and, therefore, need to evaluate Social Media according to an entirely differ set of KPIs. Ultimately, each department’s success measurements for social media need to be based on their specific goals and metrics.

Okay, I’m out of space so I’ll leave it there for now. Have you tried to work out KPIs or perform ROI calculations for your Social Media program? If so, I’d love to see what you’ve come up with, so let me know in your comments.

—Rio

CEM: Getting Acquainted With Your Customers

You’ve probably heard of CRM, right? CRM is old hat. An acronym standing for Customer Relationship Management, the goal of any CRM program is to manage a company’s interactions with prospects and customers, while reducing the costs and building customer lifetime value. Now how about CRM’s twin sister, CEM? Probably not.

You’ve probably heard of CRM, right? CRM is old hat. An acronym standing for Customer Relationship Management, the goal of any CRM program is to manage a company’s interactions with prospects and customers, while reducing the costs and building customer lifetime value.

Now how about CRM’s twin sister, CEM? Probably not. Unknown to many, CEM is an acronym that stands for Customer Experience Management. As a side note, Customer Experience is sometimes also referred to as CX. Now if you’re a marketer, regardless of what you decide to call it, Customer Experience Management is a discipline you need to get acquainted with.

In general, CRM programs tend place a heavy emphasis on marketing and communications. After all, establishing touchpoints with customers or potential customers at crucial points in the customer journey is incredibly important to achieve desired behavioral outcomes. Fair enough.

In many ways, CRM programs tend to be one-dimensional in nature, focusing on how the firm makes decisions as regards place, product, price and promotion, with little emphasis on customer needs or desires. It shouldn’t be too surprising then to learn that many CRM programs fail because they use an approach that—while brilliant on paper—is misaligned to actual customer wants, needs or expectations.

This is where CEM steps in. You see, it turns out that to succeed in today’s challenging multichannel and mobile/social environment, firms need to expand their scope of their CRM initiatives to create a program that aims to focus like a laser on customer needs, both rational and emotional, and drive toward expected outcomes and KPIs.

At a baseline, the goal of any CEM program is ostensibly to move customers from satisfied to loyal and then from loyal to advocate by taking a holistic view of the totality of their experiences—regardless of place, time or channel.

This is important because, let’s face it, at the end of the day customer perception is built through interactions across multiple events—most usually through multiple channels. As such, successful CEM programs all feature the capability to manage and track engagement where they actually take place—on the Web, on a mobile device, when a customer speaks with a customer service rep or deals with an automated switchboard on an IVR. It all adds up.

Depending on the type of business, customer engagement channels might include contact the Web (main website), mobile (mobile website or app), brick-and-mortar stores and call centers, while touchpoints may include phone (call center, IVR or in-house customer service team), Social Media, email, self-service Website (traditional or mobile) or in-person. Lifecycle engagement includes ordering, fulfillment, billing and support.

But that’s not all—CEM programs also take into account when engagements take place in relation to the customer’s (or buyer’s) journey. An initial conversation between a sales rep and a new customer would be tracked and discerned, for example, from an inquiry on the Web. And this has real-world repercussions. A customer service inquiry by a high-value customer, for example, would be handled differently than in initial inquiry by a prospect on a Web form.

As is the case with most disciplines, CEM programs have evolved over time. This is a good thing. If you look at the chart, you’ll observe that I’ve broken down CEM into its three dimensions: Engagement Channels, Engagement Touchpoints and Engagement Lifecycle.

You’ll notice that I’ve bolded four of them in red. I’ve done so because these are recent additions to the CEM value system.

Okay, I know I could go on more, but I’m running out of room for this post. Got any questions or feedback? Please let me know in your comments.

Thanks,

Rio

Talk to the (Twitter) Hand: The Perils of Non-Engagement

Every day, companies are jumping on the Twitter bandwagon—and perhaps, yours has done the same. Maybe it’s the lure of gaining new followers. Or possibly the attraction comes from all those Twitter success stories circulating the ‘Net. Or maybe it’s because Twitter takes five minutes to set up and doesn’t cost a dime. That’s OK, too. The thing is, many brands forget that Twitter is more than having a “who’s bigger” follower list or having the ability to Tweet pithy sales pitches.

Every day, companies are jumping on the Twitter bandwagon—and perhaps, yours has done the same. Maybe it’s the lure of gaining new followers. Or possibly the attraction comes from all those Twitter success stories circulating the ‘Net.

Or maybe it’s because Twitter takes five minutes to set up and doesn’t cost a dime. That’s OK, too.

The thing is, many brands forget that Twitter is more than having a “who’s bigger” follower list or having the ability to Tweet pithy sales pitches. Twitter is two-way communication, people. Not a one-sided soliloquy where you’re Tweeting solely for corporate self-gratification.

So let’s talk about two major brands that “get it” and use Twitter to its fullest potential. And then zero in on one company’s massive Twitter #fail.

Alaska Airlines and Starbucks give really good Tweets. When you read them, you get a sense that there is a person behind the computer—rather than a faceless corporate PR entity. In fact, Alaska Airlines even names the person handling the Tweets that day. And yes, their Tweets are more than just what these folks had for breakfast. For instance, Alaska Airlines promoted gift certificates and Starbucks previewed an upcoming sale on Cyber Monday (see the actual Tweets in the media player at right).

But here’s what makes both companies decidedly different: These brands engage with their customers. Starbucks and Alaska Airlines chat with their Twitter followers, answer questions and provide real-time customer service (see more examples in the media player).

Pretty cool, eh? And that’s why many people follow Alaska Airlines and Starbucks. The content is good, you know you’ll get a response and you’ll learn something. Maybe it’s early notification of a sale. Maybe it’s when in-flight wi-fi will be back. It’s useful information.

Let’s compare this to Citibank’s Twitter stream.

To say that Citibank has had reputation management issues in 2009 is putting it mildly. From taking bailout money to hiking credit card rates on some customers to 29.99 percent, the bank’s latest missteps have caused many good customers to cut up their cards. If there ever was a time for a robust social media campaign so people could “meet” the friendly customer service team members behind the scenes (that is, humanizing the corporation), now would be that time.

The good news is that Citibank has a Twitter account. The bad news is that it’s running it all wrong. Rather than using Twitter as a way to engage customers, the firm’s locking its customers out.

For instance, check out some Tweets mentioning @citibank in the media player, above, followed by a screen capture of Citibank’s Twitter page.

So, OK, let’s give Citibank the benefit of the doubt. Maybe it signed up for a Twitter handle to protect its brand identity—but doesn’t plan to leverage this account for some reason. You could almost forgive the bank … except for the Twitter account promoting the Citi Forward credit card (see the media player again, please).

Here are three problems:

  1. Although it will re-tweet, Citibank doesn’t answer Tweets (I tried)—so there’s no real interaction
  2. Saying that Citi Forward is “the card that rewards you for good behavior” seems a bit disingenuous considering that other Citibank customers with good credit histories have had their interest rates hiked to almost 30 percent.
  3. There’s no customer service component.

In short, Citibank is basically telling its Twitter followers to “talk to the hand” (or perhaps, its middle finger.) Rather than dealing with its reputation management issue head-on—communicating with folks and showing the human side behind the financial institution—Citibank is sending out Tweets that provide useful tips, yes … but talks AT its followers rather than WITH them.

If you’re planning a Twitter account (or currently maintaining one,) remember that Twitter is a real conversation (in 140 characters or less.) You wouldn’t keep a friend who constantly talked about herself, seemed oblivious to how other people perceived her and never listened to you.

It’s no different in the online world.

The perils of non-engagement in the Twitter universe are real—and the rewards for an excellent, interactive campaign are also real.

After all, what would you rather do? Tell people to talk to your Twitter hand or, instead, engage with your prospects and customers in a new, interactive (and profitable) way?

Seems to me, the choice is easy.