Customers have all the power today but what's more important, customer excellence or profit?

1. It is a Consumer world
Richard Meyer
Online Strategic Solutions

2. Consumers today
 …make purchase decisions in an average of
2.6 seconds
 …abandon >50% of shopping carts online
without ever making a purchase
 …know fundamentally that power has shifted
from companies to them, and they don’t often
give brands a second chance
 …are your business’s scarcest resource and most
valuable asset.

3. Hello?
 I am your customer. A real person, a human
being.
 For too long you have treated me as a faceless
number and lumped me into a segment in a
mass market.
 I’m not a segment, and I won’t tolerate that
any more. I am an individual.
 There may have been a time when I didn’t
have much choice, but now I have many
choices, so you need more than I need you.
 I have the power & I am in control.

4. The realities of today’s
consumers
 20% of your customers produce 80% of
your revenue
 10% give you 90% of your profit.
 A satisfied customer will tell 3 people,
but a dissatisfied customer will tell
12 other people.
 It cost 12 times more to win back
dissatisfied customers
 a 5% increase in retention would
increase profits 25-55%

5. And the Internet gives
everyone a voice today
If you have to ask “why,” then you are already in deep trouble

6. Dissatisfied consumers are a
real threat to your brand
 A very dissatisfied customer will tell 20 others
 98% of dissatisfied customers never complain,
they just leave
 65% of lost customers are due to negative
experiences, and 75% of negative experiences
are not product related
 Biggest reason people leave: “they don’t feel
appreciated.”

7. Consumers have trust issues
with business today

8. Consumers have rising
expectations and falling trust
Expectation
Increased
Information
Satisfaction
Trust
Loyalty
Decreased
1980 1990 2000 2010

9. And traditional
segmentation is dead
 People now come together by choice:
 similar attitudes
 similar beliefs
 similar lifestyles
 similar aspirations
 “You are more likely to build a relationship with
someone you meet on vacation than you are
with your neighbors”
 A business that attempts to meet everyone’s
needs will end up not meeting anyone’s needs.

10. Smart marketers don't rely
on age demographics now
 People are “age shifting,” and not living lives based
on traditional age stereotypes
 The top end of a common demographic (34) may
have almost nothing in common with the low end
(18)
 Age-based demographics leave out influencers,
gift buyers, and others for whom a message may be
relevant, which get missed because they aren't the
ultimate recipient of the product
 Focusing on age can take you away from
emotional or relevant benefits
 People lie about their age all the time.

11. Businesses need to…
 know a few customers very well
rather than a large number
anonymously
 have deep insights into customer
behavior rather than statistical
and numeric averages
 meet real emotional desires than
rational needs.

12. Measurement precedes
management
 A study done for the White House Office of
Consumer Affairs found that in households
with service problems potentially costing
more than $100, 54% would maintain
brand loyalty if their problems were
satisfactorily resolved
 Only 19% would repeat their purchase if they
were unhappy with the problem's resolution
Considering how
 For less expensive problems (≤ $5), 70% expensive it is to
would maintain brand loyalty if their lose a customer, few
problems were resolved satisfactorily, only recovery efforts are
46% would repurchase if the problem was too extreme
not fixed.

13. Bottom Line: what’s more
important, profit or
customer excellence?
 BOTH !
 Having a customer orientation is not about
blindly obeying the customer, but about
working with them so that you understand
their needs and ambitions.
 “The sole purpose of a company is to
create and retain customers”
Peter Drucker

14. The Zappos’ Formula
 Zappos encourages customer reps to bond with
customers. Call times are not measured.
 A chat that continues for an hour with no sale is
not a crime at Zappos.
 The payoff? That representative has the
customer's undivided attention for an hour and Zappos return rate
is about 35% and
the customer is likely to return next time with a although they sold
sale. And they will bring their friends along. over $800 million
worth of merchandise
 "We actually talk to our customers,” Zappos said, they have yet to turn
and that means 5,000 leisurely calls a day. It's a profit.
unsexy and low-tech, he said, but "the telephone
is one of the best branding devices.

15. What to do?
 Customer excellence should be part of a
company culture.
 Create superior value for customers through
deeper insights and solve their problems with
your product.
 Create shareholder value through sustainable
growth, enhanced margins, and a reduced risk
of customer loss.
 Customer value is a starting point - not the
financial value of the customer to us, but the
value you create for them.

16. Who is Richard Meyer ?
 17+ years in consumer marketing, with a strong emphasis
on Internet marketing.
 Consultant/Owner of http://www.onlinestrategicsolutions.com
 Author of the marketing BLOG, http://www.richsblog.com
 Someone who realizes traditional branding is dead
and that consumers have all the power.
 MBA in Marketing
 http://www.linkedin.com/in/richardameyer
 http://twitter.com/richmeyer