Is 2015 Going to be About Many Black Fridays?

Just in case you are not familiar with Black Friday, it is a shopping event held on the last Friday in November, (just after the American Thanksgiving celebration,) and retailers use it to declare that Christmas shopping is now open. It’s called Black Friday because up until that day retailers are theoretically “in the red,” but bargain-crazy shoppers now purchase enough to put them “in the black” again. A tiny number of customers get a chance to buy massively discounted goods, and there is a scramble, sometimes starting at midnight, to grab these amazing deals. With luck, some of them even appear on TV news, but for the rest of humanity the initial excitement is often followed up by considerable disappointment, humiliation, and even fist-fights.

This coming year both desperation and salvation are on the cards in the retail industry and other consumer-facing sectors. The madness of “Black Friday” is going global and South Africa will be caught up in it, even while enraged and frustrated customers will increasingly hit out at brands that let them down. This trend really worries me because the schizophrenic business environment is just right for some pretty disastrous experiences both for customers and for business owners.

Some sensitive and smart businesses will lift themselves above the chaos and achieve better, stronger relationships with customers. We can also expect positive developments and initiatives to woo customers through responsive service.

With 2015 rapidly approaching, once again companies will desperately need to deal with differentiating themselves from their competitors and attracting and keeping more loyal customers looking for outstanding deals and value. So where are we going in 2015 as the customer loyalty battleground deteriorates, and what can companies do to respond?

1 More desperate companies will fall into the trap of competing only on price, (or by giving away lots of stuff for “free.”) When companies start playing around with price just to get market share, it is a perilous game with serious consequences; the truly smart business leaders are realising that their most important competitive edge is to provide customers with brilliant – and innovative – product, delivery, service, brand and/or charming customer experiences.

2 Sympathetic pricing, on the other hand, that also offers imaginative discounts that relieve customer pain points will prove very profitable. So, for example, how can you help your customers to split a price of a product or service (like share a lift in a taxi,) between them? How about insurance that covers only my trusted group of family and friends, and what is not claimed at the end of the year is shared equally? Or, if caught in a rain storm, is it possible that instead of millions of people carrying and storing their own brolly often needlessly, there are umbrellas freely available all over for those people outside that actually need a brolly for a short while? These all exist right now – usually at the swipe of a credit card or in a smartphone app!

3 Encouraged by customer victories in the law courts, social media and consumer media, customers will increasingly express their frustration and sense of powerlessness by challenging companies in very public places. Customer reviews in any social or traditional media rule, and people make even small decisions, (“Which movie should we watch tonight?”), based on what strangers say and how you responded to that. We will see more rebellious customers, who will stop at nothing to get revenge: think about those huge public banners attacking a cell phone business for “the most useless service.” They have become like vigilantes, will ruthlessly confront businesses they see as arrogant and unresponsive, and will punish companies that have deceived or disillusioned them – or any other customers that are in the same “community.” At times, this will resemble a banner-waving customer liberation movement. While I still believe that customers want to be loyal to brands, I know that more and more previously-loyal-but-now-disenchanted customers will jump ship quickly and easily if they feel betrayed in even the smallest way. Brands will never again be revered the way they were in the past. Perhaps we are returning to a true “customer democracy,” where customers everywhere have voice again. As Chris Anderson put it in his book The Long Tail, “The ants have megaphones now.” (And if you are in government, don’t think you are safe. The first rebel broadsides have already been fired at Eskom, Sanral, SAA and the SABC.)

4 Random loyalty programmes and broad reward systems that are used to attract customers will be challenged. If you must reward customers, reward those that are most loyal to your business. To give away fifty cars in a lucky draw means that the lives of fifty customers may be changed – but there are millions more customers who feel cynical, abandoned and betrayed afterwards. Better yet, why not reward customers that are “better” citizens? It will make them feel good and improve society also. This can range from the simple, (those that re-use and recycle, for example) to the innovative, (like free train rides for people who do ten squats in front of a machine, or cheaper products for customers who eat healthily at a fast food store.)

5 On the other hand, companies that visibly show a deep and profound respect for their customers will gain long-term trust of those customers, and become far more profitable than their rivals. In a world filled with uncertainty, thievery and fear, businesses that protect and take care of their customers, and give them a sense of comfort, will reap the rewards. (This includes protecting and keeping private all their personal information that you have collected.) Examples include offering safety deposit boxes in unusual places where customers gather, (beaches, stadiums and malls,) offering free warm coffee or cold refreshing drinks depending on the weather, taking care of their children, creating flexibility and guidelines rather than more rules, opting out of all your marketing communications, cancelling their contracts hassle-free, and dozens of other possibilities. One of my favourite examples: Amazon introduced the “Mayday” service for Kindle products that lets users see and talk to the service agent in a small window on the Kindle screen. Service agents can see the user’s screen on their computer and take over the screen to guide users through the issue. Are you listening, Apple?

6 In 2015 we will see a shift in marketing investment away from customer acquisition – to customer retention and loyalty creation. When most customers are bombarded by thousands of intrusive advertising messages every day, most will be ignored, so the conclusion must be that companies cannot keep throwing money at something that is so desperately ineffective. Marketers will have to find ways of ensuring that their messages are relevant, anticipated and personal, (see point 8 below.) However, a lot of the customer retention spend will go to improving customers’ experiences and adding value, rather than on more CRM technologies. I’m sure you can also see that Google, Facebook, Twitter and other forms of mass on-line or sponsored advertising – no matter how clever the logic of the formula is – will save your brand if it is crap and customers don’t like it. Are you going to allow the best and most affordable marketing channel, your customers, slip through your fingers because of corporate stupidity? Your customers are your marketing department, and there are thousands, perhaps millions of them that you don’t need to even pay. (Just beware that they don’t go on strike!)

7 Acknowledging the importance of customer management and loyalty, more large companies will appoint a chief customer officer or similar, and more CEOs will take a personal interest in customer issues as they finally understand the measurable ROI of successful customer management. Most CEO’s already realise that there are no shortcuts to developing decent customer relationships by using cheaper technology and efficient call centres, so they will apply their minds to improving these for customers. I’d go so far as to say that your company’s infrastructure and architecture will probably need to be completely redesigned so that it puts customers at the centre of everything that you do – everything.

8 Leading from this will be the respectful and engaging manner in which employees are treated. Everyone knows that employees that feel abused or unfairly treated will take it out on customers rather than the boss. (Why did you hire people who hate their jobs in the first place?) So your business will have to enhance the culture and people practices in your company, and reward or recognise people who are instrumental in creating and maintaining great customer relationships. You will need to engage more and explain things to them, do lots more training, get them more involved in projects and sharing their ideas, empower them to take quick decisions without checking, and build in some fun to make coming to work worthwhile. So it’s not about memorising scripts, or following a certain sequence of specific steps, but it is about changing hearts, minds, attitudes. It’s about infusing the unpretentious, (not artificial,) desire to continuously improve service into the very fabric of your culture.

9 Know Thy Customer! Companies must get better customer insights so that they can use the information to manage their customer segments for profitability, growth and reduction in cost-to-serve. The traditional segmentation model, which used mostly demographics and spending power to determine segments, is dead, and your business may even find that your total customer base consists of multiple segments of one. There are some really wonderful opportunities like cross-sales, up-sales, reducing the cost to serve, and using the power of referrals and recommendations which most businesses just allow to slip through their fingers. (Improved customer insights also affect the next few points.)

10 The manner in which your firm gathers and measures customer insights will change. To evaluate your customer experiences you will need much more than customer satisfaction measurement, (CSAT,) Net Promoter Score, (NPS,) and/or Customer Effort Score, (CES.) You probably need to do all three, observe their behaviour, and more, in order to truly, viscerally understand your customers’ expectations and perceptions of what it’s like doing business with your company. Nothing beats a transparent , strategic, knee-to-knee, jaw-to-jaw conversation over a cup of coffee or a beer. But also be aware that there is nothing so frustrating for old customers to be treated as if they are new, and to not be acknowledged for information that they have already shared with you. Why do I get the same welcoming letter from the bank that financed my seventeenth car in 35 years – and with the misspelling of my name to boot? Why, after more than 1200 flights with the same airline, do I have to still ask them for the same seat, (near the front of economy class, on the aisle)? I’m not asking you to be creepy, (see Uber example in point 14 below,) but use the information in a way that delights and surprises your customers.

11 Your business must encourage customisation and personalisation of everything you do for customers, and allow them to choose from many options. In fact, take this one-step further, and have fewer customers but satisfy multiple needs for each customer. This is perhaps one of the most powerful ways to add value for customers – even B2B customers – in today’s business world of turmoil. Another possibility to allow your customers to help themselves through self-service, customer training, enhanced “search-ability,” and similar strategies.

12 Respond to all time-starved customers’ requests with speed, speed, and more speed, and create seamless simplicity and convenience, rather than rules and bureaucratic obstacles. Customers expect help when they need it and that probably means 24/7, and also using a number of media like phones, email, social media, websites, chat and others. I am also convinced that they want to do as much as possible at places convenient to them, rather than your premises. “Seamless” means that if a customer wants to cook a Moroccan lamb tagine for a dinner party tonight, everything – including the harissa spice paste at R120 a packet – had better be available in one place, or the customer may just storm out and buy everything from your rival. Another example: Can I check in and out of my hotel room on my mobile instead of waiting in a long queue? Why not? And can you repair my office computer by remote rather than charging me a callout fee?

13 While there will still be a shift from stores to on-line purchases, bricks-and-mortar businesses will embrace the on-line experience using tablets on the walls and smart-phone apps, for example. Some on-line businesses will also shift to personal and memorable experiences back in the stores. Thus your future bets will need to blend the fuzzy line between on-line and off-line. That customer that orders the Moroccan lamb tagine on-line can choose that you deliver everything to their home – with a free recipe, and a clay pot on loan. As far as the “internet of things” is concerned, I’m not sure if I really want a fridge at home that detects when things run out and automatically re-orders those things, but I do see that similar technology can be really useful for B2B transactions to take the drudgery out of keeping stock levels right.

14 You won’t be able to avoid those difficult conversations anymore. The time for egos the size of Mount Everest are over, as is the hypocrisy that passes for PR. When one of SA’s biggest banks withdrew an ad campaign that shared the dreams of our youth – and just happened to show the ANC government in a bad light – the public howled at the cowardice of it all. But it does not end there: you also need to be careful of what you say. (A senior executive from Uber recently stated – in a private conversation – that the company should spend a million dollars to mine the personal data of journalists that are critical of Uber. Then more stories came out about how they tracked customers’ movements, and made comments about “one night stands.” It emerged that if a particular passenger appeared desperate, the price would go up, and in India they were accused of not screening drivers after a woman was attacked. This also led to a banning of the service in Spain, and eventually a US Senator wrote to the CEO demanding an explanation. Time will tell what the fallout from this PR nightmare will be.) Companies will have to be more transparent, and to live the values espoused in their mission and vision statements. They will have to go one step further, and share their opinions while they take a stand against what is wrong with our society, rather than sitting on the fence. And they need to use the power of their brands to persuade other companies and people to follow them. Only then will brands regain the trust and iconic respect that they lost in the past few decades. If you think that’s impossible, ask Nandos how they get away with attacking sacred cows.

15 Challenge everything. Maybe it won’t be in 2015, but your business will probably need to examine every assumption and every factor that you compete on in your industry. The best and most profitable companies inevitably innovate and disrupt their markets.

Our favourite questions are:

- What do we need to do less of – or even stop doing – because it doesn’t add value for our customers, (even though it is accepted that it is a competitive factor in our industry)?
- What must we do more of, to way above industry standards, because our customers love it?
- What must we create from scratch that our industry has never offered?

Will you take on this ever changing “brave new world” – or fade away into obscurity in a slow dance of death? The choice is yours.

And perhaps you won’t need to do Black Friday in November 2015.


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