Categories
Business Performance Customer Experience

Cut your advertising budget by 10% and invest in customer service

What do you think would happen if you took 10% of your advertising budget and invested it in customer service?

Your immediate reaction might be to think that whilst it’s a nice idea, it’s too risky to cut an advertising budget that doesn’t quite go far enough already. No Marketer in their right mind would willingly give up some of their budget anyway, right?

I’ll be honest, I’d be a little nervous making that suggestion to my Finance Director too. But let’s just play out the thought process here:

  • It’s often cheaper to retain an existing customer than it is to acquire a new one. This makes sense, as you already have the customer, you’ve just got to keep them happy. Yet, so many companies focus more on finding new business and playing the tricky – and costly – game of trying to convert prospects
  • Look at your current promotions. They’re aimed at new customers right? Sign up and get 5000 free minutes of phone calls. Transfer your account and receive a £100 bonus. When you’ve been a customer of a business for several years, how do you feel when you see a better deal being offered to new – and sometimes brand-hopping – customers? Shouldn’t you be rewarding loyalty in your customers instead?
  • One way to ensure a happy customer is to give them a fanatastic product or service at a reasonable price. And to keep on giving it to them. How much time and effort do you put into improving your product – changes both  big and small? Do you listen to customers or just use your own ideas? Do you monitor conversion data to identify the problems in your products or rely on gut feeling?
  • Look at the output of your customer service team. What is the average response time to customers who contact you via email or a website form? How long does the average customer wait in the queue on the phone? Now put yourself in their shoes. When something goes wrong with your order on a website or you need to arrange an insurance quote, how do you feel having to wait so long for an answer?
  • Look at the average salary of employees in each department within your business. Where does your Customer Service Rep fall within that scale? If they’re not at the bottom, I’d guarantee they’re not outside the bottom quarter. Maybe that’s fine – I’m not trying to devalue the skills and contributions of those in other areas of the business – but what is the gap between those salaries?
  • If the average customer service rep salary is one of the lowest in the business, how does that reflect on the company’s opinion of customer service? Does that perception and the renumeration motivate those that do the role or those that are considering joining your organisation?
  • Whether your company structure diagram acknowledges it or not, your Customer Service department is an extension of your Marketing Dept. – these Reps are your Marketers. They are the face and voice of your brand at the coal face and experience more interaction with customers in a week than most of your ‘official’ Marketers and Executive Management do in a year (or more). You want these people to be motivated, to be enthusiastic about your brand and product.
  • Don’t think it stops there either. Whilst your customer service people have the most contact with your customers, EVERY employee who speaks to a customer is a representation of your brand, be they in Accounts, Sales, IT, Procurement, Legal or wherever else. The experience an individual has with these employees IS the brand.

So when you say your customers are important to you, that you’re a customer-centric business, what does that actually mean? That you care about their experience, or that you care about their wallet? Put your wallet where you marketing message is, by investing in your customer experience.

Scott Stratten (@unmarketing) said at Jobsite’s FreshThinking event recently “People don’t talk about average, they talk about awesome”.  Consider how you can you can apply this to your customer service. How you can get your customers talking about the awesome service they receive from you?

So that 10%, what could you do with it?

  • To riff on Scott’s quote, awesomeness starts at home. Do something special for your customer-facing staff (and others too). Give them a thank you gift to show how much you appreciate their work. Don’t make it a one-off.
  • Give them £1000 to leave. I take no credit for this idea, it is all Zappos. For Tony Hsieh, CEO of Zappos, great customer service is the cornerstone of a successful business. So following 4 weeks of training and immersion in Zappos culture he meets with each new staff member and offers them $1000 to resign. His thinking – if they take the cash they don’t have the commitment that it will take to do the job. What would be the equivalent in your company?
  • Give them the tools they need. Don’t make do with the tools and systems you provide your customer service team. Needs change, new products emerge – let your staff service your customers as quickly and efficiently as possible, using the right tools.
  • Look at your headcount. You’re in business to make a profit. That’s fine, but consider whether you’re scrimping on customer service headcount. Earlier when I mentioned the average response time, what was your answer? Happy with that? If you add extra headcount, what impact will that have your customers? Providing better service can lower costs by 1) retaining existing customers who were considering leaving due to an issue and 2) win new customers who were impressed with your business when they made enquires.
  • Consider time. Do your customers buy your products 24 hours a day? If you’re an internet business, then there is a good chance they do. So why do you only offer service between the hours of 9am and 5.30pm? Can you automate your product by providing a self-service option? What happens when a customer has a question at 1am – how will you deal with it? Can you earn new custom – and repeat business – by providing a product and support that reflects your customers’ buying behaviour?
  • Hire or assign a Marketing Manager to the Customer Service department. Or incorporate the team into the Marketing Dept. If your service reps are truly the ambassadors of your brand, shouldn’t they have a greater understanding of your business’ goals, marketing message and company ethos? It’d give them a greater voice in discussions about new product ideas, things to fix, and timings of launches – the opposite of the current situation in many businesses.
  • Continuing the thought on the awesomeness theme – what could you do for your more loyal customers? How can you say “thank you. I appreciate you sticking with us. I value your loyalty and custom. Here is _________ as a thank you”. The _________ is up to you. It could be a discount on their order or an additional product. Or it could be some other ‘value add’ or perk – like client activity days or free seminars. You’ll need to do the math. What is the activity cost versus the cost to acquire new business should you lose their custom?
  • Of course, you wouldn’t need to offer so much customer service if you had a great product. Or at least one with minimal flaws. Draw up a list of everything that is ‘broken’ and fix it. Listen to your customers and staff and ask them what needs to be done to make your offering better. Scott at FreshThinking put it best – “Think Stop. Start. Continue. Ask your customers: What should we stop doing? What should we start doing? What should we continue doing? If you can deliver on those answers then you’ll have happier, more loyal customers. Don’t use the excuse of lack of resource to make these changes. If you can’t divert your existing resources, invest in contractors to speed up the development and delivery.

The list could go on. You need to stop and look closely at your own business. Where can you make it better for your customers?

Find out the churn rate of your customers. Is the number acceptable? How much could you improve it with a greater investment in customer service? And would the value of that improvement be greater than the revenue generated by spending 10% of your budget on new customer attraction.

It’s a bold idea. Are you brave enough to try it?

Categories
Business Performance Social Media

Social Sports: the ball is in your court

Sport is big business. The competition on the field is nothing compared to the competition off it for fandom, viewership and in this economic climate, the fan’s dollar / pound. Recognising its potential, Sports businesses are looking to social media to help them reinforce and develop their relationships with fans – and of course to broadcast their product in as many different channels as possible.

Global brands such as New Jersey Nets, Manchester City (image above) and multi-billion dollar entities such as the NFL (3.1 million Facebook fans and counting) are already forging ahead with engagement via social media, including foursquare check-in competitions, Commissioner Q & As and team and player fan pages.

Whilst the Big Boys of sport are already finding success, would this work for other, smaller sports? What would this approach bring to leagues and clubs that are fighting to raise awareness and put bums on seats?

In his blog post ‘How football clubs can use mobile and social media to their advantage’, Felix Wetzel suggests “Opening up these channels would give live events a completely new dimension. It would bring even more energy and most importantly whet the appetite of all the people that are not in the stadium and consequently drive attendance for live matches in general”.

If this is indeed correct, are smaller leagues and clubs taking notice?

To put this to the test, I took a look at a minority sport here in the UK – Basketball – and looked to see how the top flight, the British Basketball League (BBL) utilise social media. I have a very limited familiarity with British Basketball having only seen a few games back in the ‘90s when there was a team nearby. So I was viewing this with fresh eyes.

There are two parts to my review – how the League uses social media on an ongoing basis and how it’s used for an event – in the latter’s case – the 2011 Playoffs Final in Birmingham, the showcase event of the season.

The Social Day-to-Day

Facebook Updates from the League

The BBL is clearly aware of the importance of having a social media presence. They have both a Facebook and Twitter account, and actively promote them in a prominent position on their website. They actually have both a Facebook Group (929 fans) and a newer Fan Page (611 fans), which is a little confusing , plus 633 followers on Twitter. I was a little surprised the Facebook figure was not higher given the 12 teams of the BBL have a combined 6,300 facebook fans.

Both channels are used to broadcast news stories from the league (all links point back into the article on the league website) and score updates during and after games. To a much lighter degree, Facebook has some conversational status updates (i.e. “Who do you think will win between X and Y tonight?”), whilst there are number of retweets of BBL Club accounts’ tweets on Twitter.

As such the league do a very good job of keeping fans up to date with news and events via two of the most popular social networks. Rather than rely on fans visiting the league website, they take the news to the places where their fans are hanging out. This is a good starting point.

Where they don’t do so well, is engagement. Their approach is broadcast, not conversation. I suspect a fair amount of automation in their social activity – likely due to resource, like many organisations. It looks like they use the RSS feed of articles posted on the league website to distribute to the social hubs (using Twitterfeed).

Whilst there is nothing wrong with streamlining activity to make it more efficient, the downside of this approach is that you can be unaware of what is happening in your online community if you’re not present. So you see a lot of news articles, some fan comments and questions, but no response from the league. Ignoring your fans is not a great way of developing a loyal customer base.

As an example, as a paying attendee to the Finals, I enquired via Facebook as to the schedule of events on the day. Attending with a small child, this information was important to me and not available on their website. Sadly the question went unanswered, probably due to an unmanned account.

The Finals Day

Let me just say the BBL Playoff Finals were one of the best, value for money sporting events I have attended. For £21 per ticket, you could see the Final, the All-Star game, a Schools Final, a French acrobatic Basketball Display Team and several other events. The day was very well organised and a great showcase for the BBL.

In terms of social media activity on the day, I had low expectations – and that is not anything to do with the BBL per se. Social media use as an event enhancement is still in its infancy. The NBA and Premier League examples mentioned above are more the exception than the rule, and I wouldn’t expect anything significant in a smaller league, particularly as geo-location adoption is still in an early (but rapid) growth phrase.

Fan Photo Tagging Competition

What I was pleasantly surprised to see leading up to the day was a fan photo tagging competition on Facebook, with a prize of tickets to the Final. It was encouraging to see them experimenting with this approach. Hopefully it proved successful, enabling more innovation in the future.

Upon arrival at the venue – the National Indoor Arena in Birmingham – I checked in on Foursquare. I was the only one, but it was early. Perhaps that would change nearer tip-off… It did, but sadly it peaked at 4 people. My chance at the ‘Swarm’ badge will have to wait a little longer. Maybe next year. It would be unfair to put this on the BBL. It’s a reflection of geo-location uptake generally.

A scan of Twitter around related terms revealed very little in the way of conversation from fans during and after the game, the majority being score and news article updates from the League or clubs.

Recommendations

The great thing about all the new social platforms, apps and technology is that there is so much to play with. It’s a great opportunity for an organisation to experiment and strengthen its customers’ loyalty towards it product or service. With the BBL, for starters, I would suggest:

  • Monitor and participate in the conversion around the BBL brand (Radian6 is great for this). At very least, respond to direct questions via Twitter and Facebook. Preferably, start and encourage conversation.
  • Merge the two Facebook accounts. You’re doubling your efforts and reducing your impact. Go with the newer Fan page (has benefit on being able to message all your fans) and don’t forget to switch the link on your website homepage

The NBA on Youtube

  • Consider other social networks. A Youtube channel would be a great way to share what is a very exciting and visual sport. Check the NBA page on Youtube as an example. Put game footage up there. Let fans add their own videos. Perhaps run a fan video competition. The same approach could be taken with a Flickr photo account. In both instances, let the fans add content – make it theirs, not a corporate place – and you’ll strengthen their interest and connection
  • Make it easy to share the website articles by adding social share buttons. Given the popularity of their networks, I’d certainly recommend a Twitter Tweet button (from either Twitter itself or Tweetmeme) and a selection of the Facebook suite of buttons (Like, Share, Send, etc.). This gives fans an avenue to share content of interest with their friends, removing the reliance on the league to be the only source of distribution.
  • On game day during the season and at events, encourage the use of a hashtag, such as #bbluk or #bbl2011, so fans on Twitter can follow and join in the conversation (just don’t use #bbl as it means “Be back later” in Twitter parlance).
  • Make use of geo-location technology by running a game day check-in competition. Using Facebook Places or Foursquare (or both), any fan who checks into the venue will be eligible for the competition – be it to win merchandise or perhaps a prize draw for entry into a half-time free throw competition.

Overall, I think the BBL are taking very positive steps into the social arena and it could pay dividends. Their approach going forward will be crucial. Social media use is growing at an astronomical rate and other sports are already staking their claim to space within it. If basketball in the UK is to thrive, the League should embrace social with a passion and view it as a central pillar of their acquisition and retention strategy.

How else could the BBL use social media to engage with its fans? What have you seen from other sports or clubs that has worked successfully? I love to hear your thoughts so please fill free to chip in via the comment section below.

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