It is a Consumer world

Richard Meyer Online Strategic Solutions

Consumers today

 …make purchase decisions in an average of 2.6 seconds

 …abandon >50% of shopping carts online without ever making a purchase

 …know fundamentally that power has shifted from companies to them, and they don’t often give brands a second chance

 …are your business’s scarcest resource and most valuable asset.

Hello?

  I am your customer. A real person, a human being.

  For too long you have treated me as a faceless number and lumped me into a segment in a mass market.

  I’m not a segment, and I won’t tolerate that any more. I am an individual.

  There may have been a time when I didn’t have much choice, but now I have many choices, so you need more than I need you.

  I have the power & I am in control.

The realities of today’s consumers

  20% of your customers produce 80% of your revenue  10% give you 90% of your profit.

 A satisfied customer will tell 3 people, but a dissatisfied customer will tell 12 other people.

  It cost 12 times more to win back dissatisfied customers  a 5% increase in retention would

increase profits 25-55%

And the Internet gives everyone a voice today

If you have to ask “why,” then you are already in deep trouble

Dissatisfied consumers are a real threat to your brand

 A very dissatisfied customer will tell 20 others

  98% of dissatisfied customers never complain, they just leave

  65% of lost customers are due to negative experiences, and 75% of negative experiences are not product related

  Biggest reason people leave: “they don’t feel appreciated.”

Consumers have trust issues with business today

Consumers have rising expectations and falling trust

Satisfaction

Expectation

Information

Loyalty

Trust

Increased

Decreased

1980 1990 2000 2010

And traditional segmentation is dead

  People now come together by choice:  similar attitudes

 similar beliefs

 similar lifestyles

 similar aspirations

  “You are more likely to build a relationship with someone you meet on vacation than you are with your neighbors”

 A business that attempts to meet everyone’s needs will end up not meeting anyone’s needs.

Smart marketers don't rely on age demographics now

  People are “age shifting,” and not living lives based on traditional age stereotypes

  The top end of a common demographic (34) may have almost nothing in common with the low end (18)

  Age-based demographics leave out influencers, gift buyers, and others for whom a message may be relevant, which get missed because they aren't the ultimate recipient of the product

  Focusing on age can take you away from emotional or relevant benefits

  People lie about their age all the time.

Businesses need to…

  know a few customers very well rather than a large number anonymously

  have deep insights into customer behavior rather than statistical and numeric averages

 meet real emotional desires than rational needs.

Measurement precedes management

 A study done for the White House Office of Consumer Affairs found that in households with service problems potentially costing more than $100, 54% would maintain brand loyalty if their problems were satisfactorily resolved  Only 19% would repeat their purchase if they

were unhappy with the problem's resolution

  For less expensive problems (≤ $5), 70% would maintain brand loyalty if their problems were resolved satisfactorily, only 46% would repurchase if the problem was not fixed.

Considering how expensive it is to

lose a customer, few recovery efforts are

too extreme

Bottom Line: what’s more important, profit or customer excellence?

 BOTH !   Having a customer orientation is not about

blindly obeying the customer, but about working with them so that you understand their needs and ambitions.

  “The sole purpose of a company is to create and retain customers”

Peter Drucker

The Zappos’ Formula

  Zappos encourages customer reps to bond with customers. Call times are not measured.

  A chat that continues for an hour with no sale is not a crime at Zappos.

  The payoff? That representative has the customer's undivided attention for an hour and the customer is likely to return next time with a sale. And they will bring their friends along.

  "We actually talk to our customers,” Zappos said, and that means 5,000 leisurely calls a day. It's unsexy and low-tech, he said, but "the telephone is one of the best branding devices.

Zappos return rate is about 35% and

although they sold over $800 million

worth of merchandise they have yet to turn

a profit.

What to do?

 Customer excellence should be part of a company culture.

 Create superior value for customers through deeper insights and solve their problems with your product.

 Create shareholder value through sustainable growth, enhanced margins, and a reduced risk of customer loss.

 Customer value is a starting point - not the financial value of the customer to us, but the value you create for them.

Who is Richard Meyer ?

  17+ years in consumer marketing, with a strong emphasis on Internet marketing.

  Consultant/Owner of http://www.onlinestrategicsolutions.com

  Author of the marketing BLOG, http://www.richsblog.com

  Someone who realizes traditional branding is dead and that consumers have all the power.

  MBA in Marketing

  http://www.linkedin.com/in/richardameyer

  http://twitter.com/richmeyer