Tuesday, January 20, 2015

Branding and Customer Service

I talk about these two topics often. It probably bores you. Sorry, but here I go again.

Only two companies really brand themselves around fanatical customer care - Zappos and Rackspace. And while Zappos is a billion plus dollar company, it still acts like a small business. Rackspace is raking in $1.5 Billion in revenue annually, but it is far from a household name.

Rackspace competes with quite a few powerhouses: Amazon and Google. It also competes with CenturyLink (Savvis). It still has to act like an SMB - mainly because its competitors do NOT!

Seth Godin has a profound post about customer support by the giants. Customer support in banking (finance, credit cards), airlines, hotels, telecom, cable is known to be automated and horrible.

These companies need millions of users - and they treat them like a number. the number they have forgotten is the Lifetime Value of that Customer. Recently, a rural telephone cooperative sold for $25K per member. So what is the lifetime value? Must be more than that. So why worry about the $17-$50 to answer a call from a customer? Numbers game I guess.

The lifetime value of a customer determines how much you can spend on customer acquisition and retention. Churn can kill a company. (Excellent post about what churn means and what a good churn number is for SAAS companies.)

A couple of data points from AMDOCS:

Over 60% of customers that encounter a problem with their bill or device prefer live assistance.

48% of consumers choose not to use online self service as they expect answers to be either inaccurate or incomplete.

54% of the customers complain to their service provider via social media but only 27% actually get a response.

The NetPromoter Score of telecom is very low.

To reduce churn, you need to work on customer care and retention.

The Lifetime Value of a Customer is a significant metric.

GapingVoid on Great Customer Service is an oxymoron.

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