Customers are demanding greater product quality in tough times
In my last post I set out the key organisational attributes and barriers that organisations face in excelling at crafting and delivering a positive multichannel customer experience. But what do customers want? What matters most to customers? In Jodie Monger’s latest post she looks at the analysis performed on calls into call-centres (automotive, appliance, electronics indudstries) and points out that customers are demanding greater product quality in tough times. Specifically, she writes:
- Economic hardship is causing customers to seek to repair instead of replace products.
- There is a growing perception on the part of customers that things are no longer “made to last.”
What about efficient customer service and low prices?
I have been reading the Customer Experience Consumer Survey Report published by Econsultancy this month. Across five industries (Banking, Mobile Phones, Retail, Travel, Gaming) the attributest that matters most to consumers are:
- Efficient customer service
- Low priced products;
- High quality products.
Looking at these responses through the lens of my customer value formula this makes perfect sense. Efficient customer service increases value (for the customer) by reducing the effort involved in dealing with the company (buying, using, troubleshooting). Low priced products help the customer to make their budget stretch further. And high quality products increase the benefits received by the customer.
Let’s dig a little deeper to see what the variations were for some of the industries.
Banking – what matters to customers?
Mobile Phones – what matters to customers?
Retail – what matters to customers?
Travel – what matters to customers?
Gaming – what matters to customers?
What do I think about the findings?
First of all I find it interesting that customers do not hold out the expectation that companies put their needs first. I interpret this as customers are living in the real world and they have a pretty good grasp of reality – most companies put their needs first and customers are used to that. However, that does not mean that you cannot differentiate yourself by putting your customers first. Remember that consumers were not asking for or expecting coloured computers – when Dell provided them their sales took off.
Second, customers are simply asking and expecting companies to get the basics right. Provide me with good value (product quality, price) and make it easy for me to do business with you – take the hassle out, save me time.
Third, the ‘fancy’ stuff that so many commentators focus on and which matters most to companies (joined up experience, consistent branding, relevant and timely communications) does not matter that much to customers.
Finally, never take consumer research at face value. Why? Because consumers are not that great at figuring out what really drives their purchasing decision and what really influences them. . If you were to ask consumers if advertising mattered and influenced them most would probably say no. Yet, advertising does influence hearts, minds and behaviour. If you spend time counselling people and you will be amazed at how little insight many of us have into our lives – what matters to us, what drives our behaviour.
What are your thoughts?
Maz, very interesting statistics. Assuming these factors are actually what drive customer behavior, perhaps it will serve as a wake up call for companies to pay less attention to the “fancy stuff” and concentrate on what matters most.
One might conclude after reading other commentary and “research” that if only every company jumped on social media, integrated every possible channel and trained their customer service reps to act like they were working at Disneyland, it wouldn’t matter if the product actually worked or how much it cost.
I just bought a storage cabinet for my office. Good price, nice buying experience (online), quick delivery. Everything was great except for the actual product when I tried to assemble.
To me, the conclusion is that significant differentiation is required to break out of the paradigm that consumers expect these days — a quality product, competitive price, and responsive service. These are key attributes of what customers think a “customer-centric” should provide according to a study by Dick Lee and David Mangen a few years ago: Customers Say What Companies Don’t Want to Hear.
Most companies are nibbling around the edges to improve customer experience (mostly to fix service/support problems that shouldn’t exist to begin with) and haven’t innovated their product offering enough to truly stand out. For such companies (most), then price becomes the buying criteria. For all the complaints that people make about air travel, they still tend to shop for lowest price.
All that said, how do you explain the success of Apple? When the iPhone came out I thought it would flop because it was just too expensive. Who would pay $500+ for a fancy phone? I’ll wager that Apple customers ranked price as important in general, yet when it came time to buy they behaved otherwise. And I’ll place another bet that coffee drinkers said they would only pay 50 cents for a cup of coffee, yet Starbucks proved otherwise.
Hello Bob
You make great points as usual and once again you and I are in agreement. Most customer efforts lack ‘heart’ and simply ‘nibbling at the edges’ as you say. And then there are leaders that set out to build customer-centric businesses and have been willing to play for the long term: Amazon, Zappos, Apple, Virgin, Richer Sounds, 02 come to my mind.
Lets, just explore the success of the iPhone. When I look at this I do not see a product that people buy at $500. Here in the UK people buy phones by taking out a contract and paying a monthly fee. The likes of 02 provide the iPhone pretty much free of charge if you enter into a 18/24 month contract and are willing to pay around £50 per month. Given that many people were used to paying around £30 per month for the better Nokia’s – an increas in £20 per month is not that great and you get a pretty good call and data package for that price.
The second factor that I can think of is benefits. There are huge benefits in owning an iPhone. It works great as a music player (the equivalent of the iPod). It works great as a camera – I use it constantly to take photos of the content created in workshops that I facilitate. It is a video player – I use it all the time to view podcasts. In short it is an advanced portable computer that happens to make phone calls. Finally, it showers significant psychological benefits – owners feel special and they are looked upon with a certain status.
Now the thing is that everything that I write can simply be post-hoc rationalisation. I know how the story has turned out and I am making up a logical and rational story to explain that outcome. Everything can be explained in hindsight!
I believe your underlying point is that we must not blindly listening to what customers say through research. Why? Because the research taps into and gets access to their conscious – largely rational mind. This is the mind that cares about value. Yet, the neuroscience and life in general suggests that most of our decisions are made by our unconscious mind (without us even being aware that this is happening) and then some seconds later the conscious mind kicks in and creates a logical explanation. Which is why there is such a scope for beautiful things – many of us are lifted by beauty. Many of us can find the money for the things that matter to us.
Finally, we really don’t know what we will do until we are in that situation. And what we end up doing can be remarkably different to what we thought we would do. This provides a great opening for entrepreneurs who naturally think that the world is awaiting to be born fresh each day rather than the operational folks who think that the world is as it is and our job is to fit things into that model of the world.
Thanks for taking the time to comment and as always I wish you well and look forward to hearing from you Bob.
Maz
Max –
Bob’s points about personal perceived value are, as always, right on the mark. True, the more basic, functional table-stakes elements of product and service performance must be delivered (The Kano Model, like Bob’s storage cabinet experience, tells us what happens to customer behaivor if they are not); but, increasingly, companies are coming to understand that differentiated and positive experiences, i.e. those that create emotional trust, beyond benefits, and drive the highest strategic loyalty behavior, are where the best business outcomes are achieved. I offered an example of my own several years ago: http://www.customerthink.com/article/how_auto_dealer_group_builds_trust.
In addition, increasingly we are seeing the downstream behavioral values of building trust and brand value through experience: http://www.customerthink.com/article/customer_advocacy_and_the_branded_experience and http://www.customerthink.com/article/corporate_reputation_and_advocacy_linkage
Marketers, in sum, need to have real confidence in the research techniques they apply to understand drivers of customer behavior. Unless customer research can reflect real-world relevancy, i.e. the way b2b and b2c customers are influenced and actually make decisions today, and be accountable and actionable regarding linkage to actual business outcomes, questions and ‘loopholes’ such as Bob’s will always arise. We believe that the optimum research approach is customer advocacy: http://www.customerthink.com/article/customer_advocacy_behavior_personal_brand_connection
Michael Lowenstein, Ph.D., CMC
Executive Vice President
Market Probe (www.marketprobe.com)