Product information, broadcasted via different methods and encountered by different means, is processed by potential buyers and creates certain expectations in our minds.
Functionality:
There are multiple “channels” by which an interest in buying a product creeps into our mind, but it is often a desire to experience functions and features of this product, and a promise of making our lives better, that makes us consider to part with our money. Hence if our expectations are not met by actual product experience, we often feel cheated and express dissatisfaction with the product. Sometimes it’s caused by actual and intentional misrepresentation of a product’s functionality, but more often it is misinterpretation of marketing messages associated with the product by a Customer.
Reliability:
No person decides to purchase a product expecting it to be “dead on arrival”, but it happens more often than you think. There is no way to know what is the expectation of every Customer for longevity of a product, but I can bet that at a minimum it is at least 1 day longer that the length of the product’s warranty. However, longevity is only one parameter of the Customer Reliability expectation. The other one is availability of the product for use or experience. Consider an example where a product breaks (i.e. is not available for use) during its reasonable life expectancy, and the Customer has to send it in for replacement or repair. Even more troubling are the instances when the loss of use is accompanied by associated damages or losses of perishable products, data, reputation or business opportunities, etc.
I consider Reliability reputation the single most important factor in my personal purchasing decisions as a failure to consider it very carefully can result in the most damage and unhappiness.
Support:
While there are ambiguities of Customer misinterpretations of Functionality messages, and a factor of Customer inexperience that may lead to negative Reliability experiences, there is no excuse for creating negative Support experiences. A Customer, rightfully, expects delivery at the stated time, respect for promised exchange and refund policies, and most importantly knowledgeable help from people who are genuinely interested in helping out. Unfortunately many companies treat Customer Support as the cost factor to be reduced, instead of an opportunity to learn and correct potential shortcomings in the product’s design and its messaging. This unwise strategy leads to commoditization of their markets, destruction of their brand value and profit margins as the Customer starts to look at their products as “disposable”.
Reputation is one of the most valuable assets of any company – It takes significant time and effort to build a good reputation. Great company reputation provides an opportunity for higher profit margins, as trust in your product improves, and allows less discounting and advertising expense compared to less reputable competition.
Higher sales becomes a result of Confidence in your product’s quality, reliability and support – as opposed to its price.
The only way to build Reputation is to provide your Customers with Experiences that consistently exceed their Expectations.
I’d love to get my hands on data for comparative analysis of the resources required to design remarkable products vs marketing ordinary ones.
Robert Stephens, the founder of Geek Squad that was acquired by Best Buy, reportedly said that “Advertising is the tax you pay for being unremarkable.” Given the choice, I would always select voluntary taxation such as consumption/sales taxes and/or lottery instead of mandatory, regressive income taxes, however, the governments have the luxury to extract both and don’t give us much room for choice. The reasons companies elect to pay an “advertising tax”, that often reaches 30% of retail price, is because we, the Customers, pay it.
I do realize that advertising is only a part of the marketing budget, and wonder what role the rest of the marketing organization play in maintaining competition based on the price per feature strategy. How much do marketers know what their Customers think about the product they purchased? Have they realized the value they were expecting? If not, what is the best way to close this gap?
Based on 64,601 Customer Reviews published before January 26, 2010
When you exceed Customer expectations, just unobtrusively help them to share their experience as much as possible. At this point all they really need is a really tall soapbox.
I took almost a month to recover from my CES2010 and now I can attempt to write something more or less cohesive. The experience was absolutely overwhelming. Bright images on gigantic screens and loud sounds continuously blasting away are to be expected at Consumer Electronics trade show, but my mind could not function very well in these conditions. I have not visited such large, noisy and heavily attended events for a few years and the assault on my senses was very difficult to bear, but I managed.
We are a new associate member of the Consumer Electronics Association and this was my very first visit to this event. CEA offers a terrific Mentoring program to its members and I came to Las Vegas to take advantage of it. It is amazing how much one can learn from truly knowledgeable and generous people even during a short personal meeting. I am very grateful to Bill Matthies of Coyote Insight for sharing his deep knowledge and understanding of the marketplace. I started this company with an idea of converting virgin data into actionable information, and we have almost succeeded – Bill made me realize that the link between our metrics and an action is very obvious to nobody but me, and advised to share that link with others using “stories” and “pictures” like this:
Robert Heiblim of BlueSalve and my CEA Mentor, helped me understand the inter-workings of the CE community better and to meet people in CE product marketing to learn more about how they go about conducting their business. I only wish I could get more of Robert’s guidance and advice.
Consider the actions a marketing product manager can take based on the data that their product ABC has a low satisfaction score. I can’t think of any other action than to learn more, i.e. to discover more data. Presumably information is created when our marketing product manager (or product marketing manager) compares ABC’s product satisfaction score with the one of a competing product, hence comparison of two points produce information, i.e. higher value.
Correlating the information produced by tracking these two data points over time with sales numbers can create knowledge – “product with an inferior reputation tends to undersell its competition by X%, when sold at competitive (i.e. similar) price”. Now, this is an actionable piece of knowledge as our MP/PM manager can attempt to discount the ABC product to stimulate sales or attempt to improve the customer’s opinion about it.
Can you suggest any scenarios where aggregated customer feedback about reliability of a product XYZ can lead to/suggest an action that protects and/or improves its profit margin? Your help will be deeply appreciated.
Meaning: from the many, one. The following illustrates how many voices can come together via social networking and the internet to help us spend our money more wisely.
Craig Newmark, founder of Craigslist says in this interview:
“Posting information about products and experiences as everyday as hotel stays (”Generally all my reports are shower-related,” he said) helps other people make more educated purchases, he said during a panel session Tuesday, and can ultimately lead to better customer service when large numbers of people weigh in on social-media forums. Participating in these sites is an act of compassion, in some sense patriotism.”
Think back to your last “pig in a poke” purchase or “Hotel from Hell” experience. What would you give to have had someone spare you that? We all tell our friends our good and bad experiences in the marketplace. Now with social networking our “friends” can be like friends squared, we have the ability to reach the full six degrees of separation (just about anyone who has an internet connection) and share information. I agree with him that the numbers have to be large for it to really work and your idea of a great laptop and mine may vary due to what we want or require from it. Each reviewer contributes a piece of the puzzle to give shoppers a better picture of the product or service.
While it is often our own current economic woes that are making us choose more carefully where we spend our dollars, it is also the “green” thing to do. There is a lot of waste in the process of returns, and many products, particularly electronics, are not disposed of in an environmentally friendly manner. In the end, the manufacturers and retailers include that cost of returns into the purchase price of their products. If we were able to choose more wisely, resulting in fewer returns, perhaps prices would reflect that. While my skepticism prevents me from holding my breath for that, (it could happen) I totally agree with Craig that it is a public service we can provide for one another and benefit from ourselves.
It seems words like “hope”, “change”, “renewal” help us to detach our actions from their inevitable consequences, at least in our own minds. At the turn of the New Year we habitually make ourselves (and others) insincere promises to change, to start working out, to start learning languages or skills, to lose or gain weight, etc. We also like to make predictions nobody takes very seriously or calls us on.
Gone are the days when marketers could carefully craft messaging and then broadcast that message in a few channels to huge portions of their audiences. Oh, you can still spend money that way if you want to but in our transparent world, no marketing budget can possibly overcome the actual experience consumers have (and share with friends, followers and Google) with the product, service, or organization. It no longer matters what you say; in 2010, your brand will be more defined by what you do and who you are!
I wish Augie Ray, the author of this prediction and a new Forrester analyst, was right, but we both know that he is not. I am hoping that we will see consumers re-gain their power of choice and intelligent, rational selection and I believe that it has already started happening as reported by many observers. Here is an example from the Gerson Lehman Group quoting a McKinsey report:
“Two-thirds of the touch points during the active-evaluation phase involve consumer-driven activities such as Internet reviews and word-of-mouth recommendations from friends and family” .
I just don’t believe that “it” will happen in 2010, primarily because the fundamental change is not an event, it is a process. A process that takes time and a lot of education as too many consumers have willfully relegated their power of choice and are more comfortable to see themselves as victims. Here is an example of a discussion “Does your Company’s Reputation Really Matter?” that illustrates my point:
Perhaps things will change if capitalism develops into a more socially equable system, or a new form of leadership evolves for the 21st century. In the meantime, what do you think? Is reputation still something to be valued and maintained? Does it really count for anything? And how do we ensure that our voices — customers, citizens, taxpayers — are heard amid the deafening noise of spin?
It is interesting to see a victim-hood mentality spilling over from Harvard Business Review by a “Leadership Coach”. I suppose if you don’t believe you have the power – you do not have it.
All the moaning, blaming everything in sight and somehow hoping for a better outcome, meanwhile continuing our patronage of those who don’t deserve it, is not going to bring any change for the better.
I rather do without many things I deem to be necessary – many are not. I stopped buying products that do not deserve high regard from customers who experienced them. I’d rather be without or pay more for quality if it is available. I have enough headaches, thank you very much. I stopped flying anywhere I can drive within a reasonable time, and I do a lot of my long distance meetings using technologies ranging from Skype to Cisco.
For the same reason you cannot change your weight without changing your diet, you cannot get the quality you deserve without demanding it — consistently. Change before you have to.
This time I played out a different scenario. It is quite common that customers of the products with high reputation for reliability, do not have much to say about support. It is understandable as they have no reason to experience Support Organizations. So I applied an unusual combination of filters to expose very popular and reliable products with negative customer experiences of Support.
This report helps to focus and to research root causes of problem by quickly exposing negative sentiment reviews about support.
I have used the following filters:
Product Reviews>50
CSI>1
PFS>1
PRS>1
PSS>1
This world has led to a new breed of consumers. They expect customization (make it mine), communities (let me be a part of it), multiple channels (let me call, click or visit), competitive value (give me more for my money) and choice (give me search and decision tools).
In this post I would like to focus on the combination of the first (customization) and the last (choice) and call it “personalization” for the purpose of this discussion.
As a consumer selecting a product to purchase, I rely on marketing collateral to form my expectations, and on the comments of my peers who already experienced the products I consider to buy. Any decision is made with a relative shortage of information required to make this decision. An unavoidable ambiguity of available information from marketing collateral and product scores from online retailers or advertisers, does not help the consumer to reduce uncertainty of their decision easily. I want to know how likely this product will satisfy me, because while I know that other customers, who described their experiences are my peers, their product scores do not help me to understand whether we share and value the same aspects of a product experience. The only way to figure that out is to read carefully the descriptions of their experience. That takes a lot of time and effort.
The higher number of customer reviews and more detailed their description of a product experience (more data), the more useful and accurate are the results of personalized information to support the purchasing decision.
The key element for me, as a consumer, is the reliability issues of the Garmin product when it is compared to very similar Magellan GPS. These reliability reputation issues are not “visible” looking at traditional 4.5 stars customers gave to Garmin. However for me reliability of GPS device represent the highest differentiator, and allows me to “personalize” my choice.
A very similar problem facing marketeers who want to understand specific, personal characteristics that affect the reputation of their products and brands, and how they influence their competitive position in their market segments. Their problem is multiplied by a number of products, brands and competitors they have to follow and lack of consistent methodology to produce effective output. The technologies are complex to implement and costs are staggering.
Through its maturation as a discipline over the past half century, marketing has emerged as a rigorous field. Tools such as conjoint analysis, economic and econometric modeling, behavioral economics, data mining, and techniques derived from mathematical psychology have raised the level of rigor and strengthened the insights that marketing can contribute to the enterprise. But many of the most rigorous tools were developed years ago. Today’s challenge is how to move from using old tools that are focused on solving problems of the past to developing new and rigorous tools that are relevant to the challenges of today and the future.
I would like to pose that “personalization” is the new “segmentation”, and certain aspects of personal Customer Experience provide a lot more guidance for marketers than demographics, ethnicity, etc. because they are much closer correlate to how your customers use and experience your products in their circumstances.
Marketing is divided between behavioral and quantitative approaches to marketing questions. Increasingly, the recruitment of faculty and doctoral students, and the design of workshops, are focused separately on behavioral and quantitative approaches. Ideally, the
two sides should come together. Markets can be seen through either a behavioral or quantitative lens, but as with binocular vision, we gain more depth when we look through both.
The resulting report can be seen here. The information can also be downloaded as a Excel file format to produce graphs, presentations and additional analysis.
The positive effects of Word of Mouth references in customer acquisition (btw I hate that term) are very well documented. Often I see the term “peer to peer” marketing being used in the same context interchangeably, however not being a marketing professional I am not sure if there is a difference or if they are really synonymous. Wikipedia defines WoM Marketing as
Word-of-mouth marketing, which encompasses a variety of subcategories, including buzz, blog, viral, grassroots, cause influencers and social media marketing, as well as ambassador programs, work with consumer-generated media and more, can be highly valued by product marketers. Because of the personal nature of the communications between individuals, it is believed that product information communicated in this way has an added layer of credibility. Research points to individuals being more inclined to believe WOMM than more formal forms of promotion methods; the receiver of word-of-mouth referrals tends to believe that the communicator is speaking honestly and is unlikely to have an ulterior motive (i.e. they are not receiving an incentive for their referrals).[2]
Customer Reviews, describing personal experiences, opinions and recommendations of individual customers, are one of the best examples of WOMM. Amazon pioneered the approach and now there are many retailers like NewEgg, Best Buy and others, with technologies from BazaarVoice and PowerReviews that collect, manage and publish Customer Reviews. I have both contributed and used them as guidance for my purchases for many years, and even though I understand that the reviews sometimes tell more about the reviewer than the product reviewed, I still find them the best tool for reduction of purchasing decision uncertainty. I know some tech pros and gadget mavens, who’s advice is sought and respected by many, to use customer reviews as an important part of their product evaluation process.
Consumers have no squabbles over paying for independent advice and recommendation, often called unbiased which is incorrect as such a thing does not exist IMHO. The Consumer Report was a very successful example and provided great service to generations of shoppers who subscribed to their magazine and its online version, however their model has difficulties to cover an ever expanding breadth of the products offered, and it does not really deal with customer experiences. The point however is that their approach is not misleading – you, the customer, pay them to learn their opinion and recommendation and thus the only incentive is to provide you with good and honest information.
I want to make very clear that I am not attacking profit motives or the marketing profession. I love profits when they are honestly earned by providing quality customer experiences, and I love marketing that helps me find providers of such experiences. The problems arise when some people or companies decide to focus on deception instead. Many years ago, one of my good friends shared with me her great admiration for Amway products. I was very grateful for her zeal to “help” me find a good product, until I realized the concealed motivation. Needless to say, we are no longer good friends, just acquaintances and I would never buy anything associated with the Amway brand. That is not to say that Word Of Mouth Marketing cannot be incentivised, just that marketers have to understand that it could become a double-edged sword and can easily create unintended adverse consequences. It also creates a challenge for us, at Amplified Analytics, to develop an effective approach to weigh authenticity of reviews we analyze for producing Product Reputation metrics.
I used to have a sign in my office that said – “Happiness is expectation management” that could be interpreted as “It’s hard to be disappointed if you don’t expect much”. Apparently this wisdom does not resonate with a lot of consumers:
A recent Brandweek article titled “Retail Customer Service Stinks” reported that the service received by shoppers in over 1000 retail interactions in the study rated 48.2 out of a possible 100 points – a flunking grade. The study, conducted by the research firm The Salt and Pepper Group, examined retail interactions in 73 stores over a four-month period.
This quote, and the others to follow, came from an excellent article by @RetailProphet appropriately called How Consumers Killed Customer Service. In this article, the writer puts responsibility for deteriorating Customer Service on the shoulders of Consumers with our focus on low price.
We demanded the lowest airfare wherever we flew. We went to the buy-one-get-one sales. We made Walmart what it is today. We camped out for Black Friday. We built the dollar store channel. The bottom line is that we voted with our wallets and customer service lost. We killed customer service.
I’m glad this is finally articulated as I’ve felt this way for a long time. It is rare to see an advertising campaign that is focused on quality of experience, and the only differentiator seems to be the price. These unbalanced optimization attempts inevitably trigger a “law of unintended consequences”. Results range from retail stores, that both feel and smell like dumps, to rising costs of waste disposal caused by purchases of low quality products, that do not last and are priced too low to fix. Apparently most of us do not value the extra time, effort and energy wasted to deal with inferior products and services, to balance the economics of our decisions.
Examples of better balanced services (Apple Store, Nordstrom, etc) point to the fact that market segmentation works as intended and some of us, who expect more than just the lowest price, can still find better experiences.
For most of us it’s become a matter of making trades and concessions based on the type of product, the brand, or the store we choose to shop at. Just as we don’t expect the lowest price for a laptop at the Apple Store, we can’t in good conscience demand brilliant service at Sears, whose stores have become a virtual sea of sale banners. And if in fact we really can’t live with that trade-off, then I’m afraid we’ll need to rethink our definition of value as consumers and as a society.
