It’s All About The Service, Stupid

During lunch yesterday in the conference room with my office mates, I solicited suggestions for the weekly blog. Many ideas were offered, each individual contributing various marketing or advertising topics, until Lesa asked “With the holidays coming, why don’t you write about bad service experiences and the impact on customer retention?” I realize that I’ve covered “service” as it relates to Brand in the previous blog, but the group’s reaction was highly animated and the topic important enough to continue this week. Most interestingly, everyone was very willing to share his or her recent service horror stories!

Years ago our bank’s resident market research guru proclaimed that, on average, an unhappy customer would likely tell seven other people about a bad experience. Think of a recent bad episode you’ve had – did you go home and forget about it immediately? Chances are, before you were even out of the parking lot you were on the cell telling your friends about it. Then, the next day, you likely mentioned it to your office co-workers … and maybe a neighbor or two … or perhaps if you were still steamed, the dentist’s receptionist … your letter carrier, the grocery bagger, even!

If you tally the number of folks that heard about the experience, seven might be a tad short! Think about the number of individuals who changed their outlook of that store based on your experience. Think of how many told others your story!

And… that was before the Internet - before blogs, before Twitter and Facebook. I’d be willing to wager that today, an unhappy customer today could tell at least several hundred or even thousand people about their bad customer experience. I recently googled a bank’s name followed by “customer complaints” and literally hundreds of links to sites with complaints about that one bank appeared!

Another marketing adage is that it takes six times the effort and expense to get new customers than to keep an old customer from leaving. Whether it’s six or seven or even ten, and with customers telling others about their bad service experiences – the question remains… why wouldn’t store ownership/management want to provide good service experiences? Now, go have a good customer experience and get ready for the holidays. But before I sign off this week, let me tell you that…

  • Someone was upset that their gas station didn’t have receipt paper in the pay-at-the-pumps (and never do…)
  • Someone went to pick up a laptop at a store only to be told that they were out of stock (but could offer an obviously inferior make and model)…
  • Someone went to a teashop and was harangued by the salesperson with other items that weren’t needed.
  • Someone had a question but the three salespeople available on the floor were more interested in their weekend catch-up than bothering to inquire whether they could be of service.

Store names were not included to protect the guilty and avoid messy lawsuits. Have you had any bad service experiences you’d like to share?



Is Service Inherent to all Brands?

I recently read an article in an issue of Inc. about “How to: Deliver Great Service” (Vol.2, No. 5 – Inc Guidebook).  I started thinking about the concept of customer service and it’s impact on a company’s brand.  While many companies build their brand on product quality or innovation, I wondered whether there were any companies who touted service as their sole brand differentiator.  Or, can we assume that the concept of service is built-in to all brands?  Is this the reason why, when we go to an establishment and receive poor service we become indignant?  And is this why companies who provide superior service grow fastest, have more loyal customers, and in the end, are more profitable? 

The following are a few instances of exceptional service I’ve recently experienced at businesses around town.  Would this level of service keep me as a loyal customer through time even if other needs were not met?  Read on:

1.  In one instance, my pharmacist was running behind on orders and rather than have me wait at the store, offered to drop off my prescription on her way home.

2.  My bank branch representative who knows me by name transfers funds between accounts for me completing all of the necessary paperwork for me.  (I’m usually not this lazy…)

3.  The waiter who hovered at my table throughout the meal checking to see that water glasses were filled, and empty plates were removed.  He was never obtrusive and never rushed at us with a check until we asked.

4.  My department store salesperson reminded me that the season’s end sale was coming up and wondered if she could put something aside for me.

Are these higher than expected service experiences enough to keep me or others as a customer – at the pharmacy, the bank, the restaurant and the department store if the product purchased isn’t as good as their competitors?  Here’s where service does make a difference:  Chances are, even if I wasn’t entirely pleased with bank rates, the food, or the quality of merchandise, I would likely stay with these establishments longer than not.  The service factor, being superior to their competitors, is a motivational factor.  Sometimes it is the ability of those in service industries to show that they care about you and your business that keeps customers there.  The service promise is an inherent part of a brand promise and if missing, makes the brand proposition weaker.    Trust me.

(C) Alder & Associates


A Shifting Scenario

Interesting data about checking trends for the coming year was posted recently on Results from the organization’s 2010 Checking Study were shared -- an important trend reversal was highlighted. 

For years, banks have offered free non-interest checking accounts to customers with few strings attached, if any. Well, it appears the party may be ending. The study points to a rise in checking fees, ancillary fees, ATM fees, and a decline in the deposit rates banks will pay.

If your bank hasn’t already notified you of new fees, chances are there may be an updated fee schedule coming to your mailbox very soon. What’s going on?

The rules have changed! For starters, a new Federal Reserve rule introduced to consumers this past summer requires customers to “opt in” for overdraft protection. Many have chosen to opt out which may be negatively impacting the fees banks have historically collected. Banks are looking for ways to replenish that fee source.  Add to this are lost fees as a result of the economic downturn as well as other changes in regulation passed earlier this year and soon to be implemented. The business is in a period of change. Banks will react… and so with their customers.

The coming year with the expected associated changes in how consumers pay for banking services will be an important one for the industry. As customers learn of new fees or account requirements, they will analyze how they bank and how much they’re willing to pay for the privilege. While there is always fee elasticity, this might be a perfect opportunity for some community banks, especially those with competitive edges, to get in front of potential customers with brand and product advertising. It’s a great time to “tell their story” through those ads. Community banks tend to offer most of the services the average consumer needs yet they are small enough to offer the personal service that some larger banks lack – all at a lower price.       

So the moral of the story is – Nothing is certain except change and in a changing environment… continue to advertise!

(c) Alder & Associates

BankRate 2010 Checking Study

Union First Market Bank


Advertising in a Tough Market: To Spend or not to Spend

The Nielsen Company recently reported that advertising spending in the US has increased by almost 4 percent in the first half of this year after six quarters of declining spending – which had likely been precipitated by the economic downturn ( Since I work for an advertising agency, I’m happy to hear of the spending growth. And, I may be biased, but is a poor economic environment ever a good reason to cut ad budgets?

Here are a few reasons why one would continue advertising during a challenging economy:

1.            Even in an economic downturn, consumers do still make purchases. They are likely to be more careful of their spending and research product or brand alternatives before making a purchase decision. In this case, is it not logical that being “visible” might impact purchase decisions and that a well-designed, efficient media campaign would place your product in front of the purchasers and decision-makers?

2.            During challenging economies, the media may be in a position to offer “special deals” to entice advertisers. The offer of better rates, more favorable packages, or better positioning for your product or brand ads can make a campaign more effective (and less expensive). Your competitors cutting back on ad spending leaves more “room” for your brand, or said alternatively, “…In a room of people speaking loudly, it’s hard to hear one voice. In a room of silence, one voice stands out!”

3.            It takes time to effectively build a brand and relay the brand message and campaigns are built around ad reach and frequency. Disappearing from newspapers or television during a critical time and for a protracted period or even during a maintenance schedule can diminish the impact of brand advertising.

4.            In earlier blogs, I’ve mentioned the importance a company’s employees have on the brand.  Employees are an important audience. It is vital for a company’s employees to view and understand your brand and its message so that they may continue to be brand ambassadors.

5.            Lastly, after having spent decades in corporate marketing departments, I’d like to remind the finance folks that if budgets must be cut during tough times, a threshold level of awareness should be maintained among the masses within your target audience (i.e. 70 percent should see your ad 3 or more times during a 4 week time period. If you can’t maintain this level of spend, wait until you can!)

There are a number of studies that have been conducted through the past various economic downturns. They relay the results of companies that continued advertising and compare them with others who ceased advertising. The American Business Press and Management Review have several of interest to view.  What do you think? 

(c) Alder & Associates


What’s so Social about Social Media?

There’s no doubt that social media is evolving quickly and may one day be something absolutely wonderful, but recently, I’ve had some doubts… And last week, I came across Duncan Geere’s article about Twitter in “Wired” magazine that has me wondering about social media even more.

In the article, Duncan talks about a Canadian-based study that showed that 71 percent of Twitter tweets get absolutely no response from the world. Just 6 percent get retweeted and 92 percent of those occur within the first hour (which means if it doesn’t happen immediately, the tweet falls into the vast darkness of history)... What I found especially troubling were the comments posted by readers following the article. Granted, big Twitterers are probably always tweeting and have no reason to read analytics on the media, but overwhelmingly, the comments had a very negative slant toward tweets, Twitter, social media, and those that partake in it. Given the attention and lavish praise traditional media has heaped upon social media, I was surprised.

I don’t tweet but I have been known to be on Facebook from time to time. Other than reading ongoing postings and seeing an occasional photograph, is there much substance? Occasionally one comes across bits of a conversation but the majority of comments read are “mass broadcasts” with relatively little substance or depth. I have heard from friends that many of their messages sent to other friends through Facebook have gone unanswered. Too busy? I wonder how social this media really is.

But then, consider the “advertising” potential of this social media. Not only can businesses ply their trade on Facebook pages, but they can also improve their website optimization if done properly. Then there’s also the availability of tracking data through the media – but that is a completely different topic for a future blog…

Are you a Twitterer? Facebooker? Are you enamored of the social media? Post a comment and tell us how you view this “social” experience!

(c) Alder & Associates