Thursday, 29 October 2009

Never mind the X factor, watch out for the Hassle factor

According to research just out, one third of all consumers think it’s just too much hassle to change energy suppliers. And yet, prices of electricity and gas have soared over the past few years.

I am not so surprised. For a start, utilities are just not that sexy are they? A bit like insurance, a sector I have worked in myself. We always found it difficult to get consumer engaged in what is essentially a commodity. Ask me to spend one hour researching the perfect pair of boots – yep I’m there. Ask me to spend 5 minutes looking for car insurance or to change my gas supplier – yawn…... It doesn’t help that in this multimedia age, many of us are using a PC at the same time as listening to music and have the TV on. Difficult to grab my attention and get me motivated.

You can never underestimate the barrier to purchase that is the “hassle factor”.

Whether the purchase is online or offline, successful companies will make the experience as simple and smooth as possible. Put up even one significant barrier in these type of sectors and you will lose the sale.

In fairness switching utilities is quite easy and sites such as uswitch compare prices and do it all for you. The new energy supplier contacts the old and gets the transfer done. Something insurance companies should seriously consider. And yet still consumers “can’t be bothered”.

Apparently consumers are unconvinced about the savings to be made by switching. So my advice would be to offer fixed price plans and guarantees to undercut rivals over a longer period of time. Good value for money combined with a no hassle approach is a winning combination.

Secondly, the utilities need to look at incentivising and not just nectar points as EDF are proposing. Offer me a free pair of shoes from one of my favourite sites in return for switching? I’m there. A brand affinity program could do wonders for this sector to get a bit of “wow factor” into the proposition. If you can’t be a sexy product, team up with a sexy friend. Get your target audience motivated and leap over the hassle factor barrier.

Friday, 16 October 2009

Marks &Spencer back on top

You have to admire Marks and Spencers, how many other brands can last over 100 years? We have seen the demise of some other very well-known and established brands such as MFI and Woolworths, but M&S are still on form.

Yes they had a few shaky years not that long ago, but they have made significant changes and a back to good times.

I love M&S because you know where you are with them. The experience you get is the one you expected. Those food ads were so inspired but they also work because when you buy it, the food really is good! Statement of the obvious but think about MacDonalds - who are they trying to kid with their Big Mac looking all round and perky on their ad, instead of flat and shoved into a Perspex box in reality?

M&S staff actually appear to like their customers because well….the staff are the customers. The 40 something woman behind the till can identify with the customers shopping for clothes. And yet other brands will continue to try and sell to 30 something housewives using spotty youths (see my Argos post).

M&S are the kings of the customer. They give a proper welcome to customers because the staff are well mannered and helpful. They refund, no quibbles. They are not the cheapest but they have really grasped the good value message with their “Dine in for £10” campaign.

At the recent M&S investor day, Ian Dyson,Finance Director outlined his "2020" programme to create long term sustainable growth. £1bn capital expenditure on IT and the supply chain. Aims to be customer focused, multichannel and international.

For once I actually believe a statement from a corporate person that talks about being customer focused. I think he means it.

M&S are also making changes to improve their online experience so that it is closer to the offline (store) experience. This is very sensible since customers are likely to do both and will purchase more if they are reassured with a similar experience. Also sensible since growth is expected to come from direct sales. M&S reports to have 32 million customers but only 2.5 million shop online. The potential is a further 8 million who shop online but elsewhere.

Finally, they don’t rest on their laurels, at the same investor day John Dixon announced that “customer service needs to be improved” –good stuff, can always be better.

Please your customers, increase your sales, please your investors. Simples.

Monday, 12 October 2009

CRM crashes out with Audi

We hear a lot about CRM (customer relationship management) and how it can help our business. I believe this to be true. However I also believe that CRM is only a technology, it is how you use it that counts.

Friends of mine, already Audi owners, recently received a neat little piece of mail asking them to come in and look at upgrading their car. They weren’t really thinking of changing at this time but were seduced by a secondary message suggesting they might be able to get a better financial deal by coming into their local concession. So my friends made the effort to get an appointment and come in. The mailing was probably well targeted and had the desired effect.

So far so good.

From then on, it all fell apart. During the appointment the salesman was arrogant and cold suggesting that my friends already had had a good deal 18 months ago and couldn’t expect to get any better. The Audi rep talked exclusively to the male of the couple (what could a female expect to know about cars?) Finally he informed the prospective buyers that there really were no deals to be had and when asked, he claimed not to be entirely sure why they had received the letter in the first place.

Another classic case of the right arm not being in sync with the left. Head office had done a great job in segmenting, targeting, and finally producing a nifty bit of direct mail, but the local concessionary had unravelled the customer experience in about 20 seconds. Basic breach of the R of rover for Reception. Audi didn’t even get as far as the R for Reassurance, not to mention the brand damage of a company that thrives on being a luxury brand. My friends have told about 15 people the story so far.

What did my friends do? They walked straight into Mercedes across the road and bought a new C Class. They also got a better finance deal with half the APR. They had no intention of changing their car but were seduced by a great deal and top class customer service.

So CRM is great so long as the chain isn’t broken and the promises you make upfront are backed up all along the journey. Can anyone afford to be letting customers slip away during such tough times?

Thursday, 8 October 2009

Can anyone think of any good reason to visit an Argos store?

Is it just me that thinks Argos are stuck in an 80’s time warp? Surely that decor was the same one 20 years ago? I know they are cheap and that’s a summary of their brand positioning. I know that there is a catalogue which is good to look through. However once I have decided what I might want to buy, I realise that I have to go in store.

What a drab experience that is likely to be. I will have to negotiate long queues to pay, my product may be out of stock and then I have to wait in a crowded waiting room to be called to A or B or C.

At Argos I am a number.

And when it is called, I have to fight my way to the counter through people whose number hasn’t be called but are hovering there anyway. The staff are usually young, untrained and pretty clueless. Overall nul points in the customer experience stakes.

What a different experience it could be?
Argos have the massive advantage over traditional catalogue companies of having a retail arm. So they have a window for their products. When internet shopping arrived, they could have positioned themselves as having all the advantages of internet shopping: cost and comparison all in the comfort of your own home, without the disadvantages: not being able to see or touch the product and get it same day.

Argos could have made their stores the place to go to see the products. Imagine your product was brought out for you to inspect? Or that they developed a virtual world where you could use the terminals to see products in 3D, turn them 360 degrees? There are so many ways that the shop could be made into a shopper’s heaven. My advice: get a great designer and a great customer experience expert and make a concept store to show shareholders what it could be.

In addition, Argos could have done a tremendous job on upsells. Once you are in the store there could be 100 ways to sell you something else while you’re there. Instead of which we are treated to the “discount” rack.

Way before the same internet promises, Argos were offering money back guarantee. But they stagnated on discount positioning and never took utilised their initial advantages.

Argos has survived so far but for how much longer? Owner Home Retail suffered a share fall end of September when Credit Suisse downgraded its recommendation to “underperform”.

Credit suisse had this to say a week ago “The downgrade is driven by our negative assessment of Argos, increasing our conviction that structural risks and increased competition are likely to restrict its ability to grow medium-term sales and earnings margins.Pricing analysis suggests that Argos' pricing model is under pressure.”

The discount route is being offered by many outfits now including the formidable Tesco Direct. With only price as a differentiator, little or no clear brand positioning coupled with a very average customer experience, can they survive the recession? The jury is out.

Tuesday, 6 October 2009

Customers in Control

One of the ways to give a great customer experience is to offer real choices so that the customer can really get involved with the purchase.

But should you really bothered if the customer is involved? You might be thinking that the sale is the only real thing of importance. Well research and personal experience has shown that the more engaged a customer becomes during the purchase process the more likely they are to buy.

In other words, the more you hook customers in by giving them opportunities such as changing their product colour, upgrading to a higher spec, the less likely they are to make the effort to go elsewhere.

There is a risk that I could spend my time writing blogs about rubbish customer experiences and let’s face it, the material is there. However I found a good example of great choices recently when I was buying business cards on

The choices were abundant with different paper quality and finish, ability to add your own photo or choose from a large range of preset designs.

Right from the start I was pulled into the process by the offer of free business cards but then quickly realised I liked the look of some of the paid-for extras. By the time I had designed my own card it was unlikely that I was going to search again for another supplier.

This site also followed another of my ROVER rules with customer reassurance that they are in the right place. A price guarantee tick box as well as a satisfaction guarantee tick box were well presented at the bottom of the purchasing pages.

The only downpoint to the process was having no less than 3 upsell screens before I could get to checkout which caused some frustration. An option to skip those pages would have been useful. So choices are great so long as the customer is in control at every moment.