The Customer Karma® book is at the final phases of its production. The cover design is done. Now it is left to the publishers to do their share to make the book look good so that I can get the book in your hands. As I look back and relive every moment I spent writing this book, I have to admit that it was one of the best times in my professional life. I wrote the book as me, without trying to be anyone else. You will find "no non-sense" business sense, and my signature attempts at being funny. But the thing I am most proud of is the thread that goes through the entire book, about the similarity of human relationships with our relationships with customers. Having this thread throughout the book helped me look at actions brands take in the name of “investing in customer relationships”, from a totally different perspective. There were some actions that one would never ever consider in everyday relationship but it is OK for brands to do it in their relationship with customers. That simply did not make sense. Here is an excerpt from the book on my customer relationships and normal human relationships are so similar. As brands strive to build a strong connection with its customers, it must remember that relationships have phases. A deeper understanding of the phases will shed more light on how business relationships evolve. Understanding why we get into relationships and how relationships evolve is important in order for brands to realize why a customer will choose to build a long-term relationship with them. A journey must start with self-discovery. Before jumping into the dating world and seeking a relationship, it is always important to have a clear idea of who one is and what one is seeking. Here Are the Four Relationship Phases of a Date First Impression: Within seconds of the start of a date, one forms a first impression that sets the tone for the rest of the date. Doesn’t the same thing happen within minutes of entering a new store that one is visiting for the first time? The first impression is important in building a relationship. Making It Easy to Explore: This is the early part of the date. During this phase, both individuals are cautious and simply want to explore. The same thing happens with a first visit to a store, as the customer in this phase wants to walk around and let the surroundings soak in. Seeking Confirmation: As the date progresses, both persons become aware of a reality. The reality is that at the end of the date, each has to decide if there is going to be a second date. Hence, they start becoming a little more proactive in getting information they need for this decision. The Grand Finale: Decision Time: At the end of the date, each person makes a decision about the future of the connection. A customer goes through exactly the same emotions during the first visit to the store. As we go through the phases of customer karma, it is important to know that the focus should not be only on doing good karma always; how and when you do good karma also matter. Good karma should be done in a spontaneous, natural way without the other person feeling stressed or overwhelmed. As you reflect on the similarities between both, let me ask you a question. Think it is the birthday of one of your best friends or the person you started to date. You want to do something nice on his/her birthday. Would you ever consider giving him/her a coupon for “½ off dinner” at a restaurant” or “$5 off if you spend $25 or more” at a retail store? Probably not. If you are a little tight on cash flow you can still give him/her a $5 gift card with a nice card. That will be a good reflection of your feelings. The recipient can use the $5 gift card however he/she wants, as there are no conditions to its use. The “½ off dinner” at a restaurant” or the “$5 off if you spend $25 or more” at a retail store both require the person to spend money to use the offer. That is simply not a nice gesture. Instead why doesn’t the brand simply offer a $5 gift card at the restaurant or the retail outlet, where the recipient can use it however he/she wants. That makes it a true gift instead of it being “how can I trick you, on your birthday, to spend money at my store?” Subscribe to be notified of new blog postings ...
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Happy New Year everyone! I hope you and family had an amazing holiday. Now that the holidays are behind us, you may be reflecting on the stress of the last minute shopping in December and then the anxiety of returns in January. You will realize that retail brands have not wasted a moment and have moved to the next event on their calendar, Valentine’s Day. After Valentine’s Day it will be Easter, then Cinco De Mayo, then Mother’s Day also in May and then Father’s Day in June. Retailers like to celebrate each of these days with a lot of energy, hoping it will bring them closer to us customers. Not only the special days, but brands want to get closer to our personal life too, and some brands go the extra mile to try to include themselves in our birthday celebration. A few years back, I started tallying all the nice gestures different brands were extending to me on my birthday. Here are few examples: A free cookie from a restaurant. That was a nice gesture but come on. Just one cookie and you expect me to go all the way to your restaurant to get that cookie? I have a suspicion that you are trying to trick me as you think I will also buy some food at your restaurant when I go to get my cookie. Even if your intentions are honorable, I am sorry that I do not think I can make a trip to your restaurant just to get a cookie. Another restaurant offered me a Buy One Get One Free offer. Hmm, this was interesting. I felt this meant I have to find someone who would like to go to this restaurant with me, and if he/she pays for their own meal (at full price), I get a free meal. I am still not sure how this was a birthday gift. Why would I be excited about this? You are using me on my birthday to make me introduce my best friend to you. The local Regional Transportation Department sent me four free passes for the light rail. When I got it, I started searching for the disclaimers. Do I have to use these passes at odd hours, say after 10 pm on weekends? Or, do I need to get a friend of mine to travel with me and pay full price for me to be able to use the free passes? I searched hard and realized that these passes were truly free; they were unconditional, and I could use them. I felt good giving them to my daughter who was excited to use the free passes. Thank you Regional Transportation Department for the nice gesture and useful gift. Then was the gift that totally startled me. A lingerie company sent me a personal letter with a classy printed card that said, “Happy Birthday Arjun. Here is a free sports bra for your birthday!” When I got this, I could not believe it. I thought it was a prank from one of my friends. But the more I thought about it, I realized that my daughter shops in that store and I had taken her there a few times. Here is my recreation of memory: Every time my daughter and I went to the store, I felt quite embarrassed. I simply wanted to do my task, pay and leave. In fact, when we left the store, I wish I had a brown paper bag in which I could carry the stuff my daughter bought from the lingerie store. On one occasion as I was getting ready to pay, my daughter discovered that the she gets a free product if we share our email address and other personal information with the store. I honestly did not care and was ready to do whatever it took to get out of the store. So I gave the email address and other personal information (like my birthday) and left the store. I then realized that this was the input the store had used. Even though the “free sports bra” offer initially had shocked me, the more I thought about it, I felt there were quite a few good elements to this gesture. Here are few: They put in the effort to find out my birthday and to remember it. The document that they sent me on my birthday was a classy one and completely customized to me. The gift, a free sports bra, was way more valuable than the free cookie or the buy one get one free offer. But then what was wrong with the offer? They automated their offer and sent the same offer to every customer. Did they not take the time to think that that teen daughters with dads (accompanying and paying) are a big segment? Hence, it is not the value of the gift but the relevance that matters. So I want to ask retailers around the world the following questions: We can be friends but why are you trying to force yourself into all aspects of my life? Can I not have my birthday celebration without you trying too hard to be included in the party? Why can’t some moments be left to the customer to enjoy? Offering a Valentine’s Day selection to help me is nice, but creating Valentine’s Day décor and having each employee dress up in the spirit of Valentine’s Day may make some of the customers uncomfortable. I know you may run all the numbers to “whoosh” my suggestions and keep doing all these promotions as I am sure some of them are profitable for your brand. But, can I please make one request to you? Can you please never ever send me a free sports bra again? As a single dad with a daughter, it is really embarrassing. Thank you. Arjun Subscribe to be notified of new blog postings ...
Read MoreHow can an idea so good not work in increasing loyalty? During my days with one of the top three pizza companies, my team came up with a brilliant loyalty building idea. “You buy 10 pizzas and after that, you can buy pizzas for the rest of the year, at a special price of $7.” Now, to put things into perspective, those days, a large pizza was valued at $10 and this was a 30% off offer, without any coupons. Also, I had followed the cardinal rule of loyalty programs, as this offer was the best deal the customer can get from the pizza company. Before rolling it out, I was in a focus group where the idea was presented to loyal customers. During the focus group, I was my usual self. I was romancing the customers, making them feel excited by being there and getting their feedback. It was evident that this idea was working, as nearly every customer was buying more pizzas from my company and was not even thinking of going anywhere else. Isn’t that the ideal goal of a loyalty program? But there was something missing. Is there something more a brand should seek other than customers buying more? I got the answer when, towards the end of one of the focus groups, I asked the respondents, “What else can we do to make sure that you never ever buy pizzas from anyone else? Do not hesitate. Do not hold back!” An older woman in the group said “Son, looks like you are not that smart. In fact, you may be a little slow to get things.” I had no clue where she was going. She went on, “Look son, not once, not twice, not just five times, but ten times (she showed her ten fingers as she said this), I have shown you that I can afford to buy your large pizzas for $10. I had no problems with the price. But do not get me wrong; I like the fact you reduced the price to $7. But you know what it made me realize? It made me realize that earlier, you were really really ‘hosing me’ at $10. Even now, you are making a lot of money at $7. So the deal made me question everything about your restaurant.” Wow, that was some insight. By reducing the price and offering a ‘sweet deal’ only to people like her made her doubt my brand and in fact, weakened the connection between her and my restaurant. That means, I gave up profits for my brand to fail in her eyes. After the price drop, she was visiting more often as she was handcuffed by the $7 price point. But the connection was not strong enough to survive if I could not offer that $7 price point in the future. I paused and then looked at her and asked, “What one thing can I do for you that will make you come to me every time you order a pizza?” She was ready with her response. “Treat me special. Find out about me. Give me things that I want. Give me things that you do not give everyone else.” “And what might that be?” I asked. She gave me a look and the only way to describe that was, “wait and be patient, I am telling you.” She went to say, “If I am truly so special, why not put my pizza at the front of the line every time I order. Put me and the rest of the people in the group first.” Another wow. How could I miss it? I have experienced every time I have flown. Even on a flight which is delayed, the super fliers get to board first, effectively saying ‘na na boo boo, you cannot have this’ to the rest of the customers. Yes, special means getting things that the person feels are special and that are not what everyone gets. MY REFLECTIONS ON THIS LEARNING, LOOKING BACK: I am sure that the results (measured by increase in sales) achieved by my marketing team using the ‘after 10 pizzas, get a large at $7’ idea is one of the best loyalty ideas to ever hit the pizza industry. But did the team put this idea to sell more pizzas or reward the customer? Marketing had identified an idea that was easy to track and implement. And in some ways, since it was topped with a deal that was so “incredible” that result, measured by sales increase, was bound to happen. But in the process, the brand’s connection with the customer was not getting any stronger. It was just transactional where the barrier to leave was high. But we were also eroding the brand equity as the loyal customer was now looking at us as a $7 pizza company. Is that what was the intended positioning of the brand? Looking back, I would like to ask myself the following questions, if I had to do it all over again: Was it a true gift or a bribe? Did we give the customer what was easy or convenient for us to give? Did the customer feel special getting the gift? Were we excited all the way from our heart to give the gift? What kind of future expectation did we set? May be after 20 pizzas, get a large at $6? Was the whole idea driven by driving short term transactions without understanding the consequences of us becoming a $7 pizza company to our loyal guests? Based on all these reflections, I see this “loyalty idea” similar to me telling my date, “Now that we have gone out on 10 dates, I want to buy you free dessert on all future dates.” I am sure the response to the free dessert offer will not be favorable, nor will it increase her loyalty (connection) with me. The dating example truly puts in perspective the grandma in the group saying “Son, looks like you are not that smart. In fact, you may be a little slow to get things.” Subscribe to be notified of new blog postings Email Address // ...
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