Turning Lemons Into Lemonade

Last year more than 3000 consumers in the U.S. and U.K. took part in a survey that asked about the most critical elements of a customer experience (see http://bit.ly/mzJhTg).  Given the recession, you would expect price to be a major consideration, right?  But despite today’s financial constraints, consumer emphasis on price has decreased since a similar pre-recession survey.  It turns out that now consumers have an increased desire for value.  They want the best possible combination of product & service at the “right” price – the very best customer experience.  So in this new reality, the quality of customer service is as important as the product a company sells.  Brand and price are less important.  The combined product/service experience is the new differentiator, and it’s critical that it be top-notch every time.

Relative Importance to US ConsumersNo matter the ranking, customer experience has always been an important consideration for consumers.  So what has changed?  Today, customers expect top notch experiences and will bite back if not satisfied.  Research shows that both before and since the recession, about 57% of consumers reported having had bad experiences with companies they regularly dealt with – and 66% of those consumers reported it to the company.  Unfortunately, only about half of those customers ultimately end up defecting because the company didn’t take steps to make it right. 

Dissatisfied customers are even more likely to spread the word to people they know than they are to tell the offending company.  80% of consumers surveyed reported that they told friends or colleagues about a recent bad experience.  Of the 80% who told friends and colleagues, most did so in one-to-one conversation, but 18% also did so via email, 7% via texting, and 12% on social media sites.  To no one’s surprise, younger consumers are more apt to use these other channels to spread their stories – and that percentage is growing rapidly.

So given that today’s customers today expect great experiences and don’t hesitate to tell the world when frustrated, how should companies respond?  Many customer experience experts recommend that, rather than focusing on damage control, companies should consider each complaint as an opportunity to create a customer advocate.  In the new business bestseller Wired and Dangerous (http://amzn.to/mFIwQ8) Chip Bell and partner John Patterson describe the impact of this tactic, “Think of it like this: before customers experience disappointment, they operate purely on faith that all will go well.  After they have experienced service breakdown follow by great recovery, they operate on proof – solid evidence that they have seen you at your worst and witness how effectively you right a wrong.”  Intuitively, we all know that such an experience makes a powerful impression.

Customer Experience expert and author, Shaun Smith (see his new book, Bold, http://amzn.to/lOmQiF), often points to Zappos as a company that knows how to turn a negative customer experience into one that cements customer loyalty.  For example, he tells the story of a woman who, while caring for an elderly mother, let several weeks go by after indicating that she would be returning shoes that didn’t fit her mother.  When Zappos contacted her and found out that her mother had died, they not only sent a UPS truck to get the shoes, they sent flowers.  Zappos didn’t know the woman would blog about her experience … the agent just did it because it was the right thing to do for a customer going through a tough time.  But there were more than 500 links and 200 comments within a few short weeks after the post, indicating that Zappos had created more than one advocate.

Today’s customers are increasing seeking the best customer experiences they can get, but too often being frustrated.  Before they tell the world and damage the brand, they will often give the company a chance to make it right.  As Chip Bell and Shaun Smith teach us, companies that know how to do that can actually increase customer loyalty – turning lemons into lemonade.  Drink up!

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About Lorena Harris

Lorena Harris has more than 20 years of marketing leadership experience with large business service companies. Her expertise is in designing research-based content marketing programs for brand building and demand generation. Since earning her MBA from Duke, Lorena has built revenue-generating marketing programs for $B+ B2B service companies such as Fiserv, First Data and Vantiv (financial services), ADP (employee benefit services), Convergys (contact center services) and Donnelly (publishing services). More information available on linkedin.com/in/lorenaharris.
This entry was posted in Customer Behavior, Customer Experience, Customer Experience Research, Customer Loyalty, Customer Service and tagged , , , , . Bookmark the permalink.

3 Responses to Turning Lemons Into Lemonade

  1. Robert Serec says:

    Interesting stats in the article. My conclusion: during tough times customers gain power to negotiate (Porter’s 5 forces), and are thus pushing ever stronger to extract higher value for money, especially the final consumers that usually forget or even ignore “brand loyalty” as such in the times like this.

  2. Like the post and I have to agree customers judge a vendor or service provider by the 10% of the time their expectations are not met. But we can do something about it. Here are three ways to turn prospects into clients, and clients into fans:
    1. DO WHAT YOU SAY YOU ARE GOING TO DO. Become known as a person of your word. This establishes trust. Trust enables friendship. And People want to do business with their friends.
    1. UNDERpromise and OVERdeliver. When you close the 10% margin of error, you become a resource who provides value. Value creates loyalty.
    1. BE PROFESSIONAL. Professional standards of communication and dress have relaxed over the last decade. Become known for superseding the standard.

    • Amy Gubser says:

      Great Blog — Lorena! Nice reminders Lizzie! This post was “spot on” about delivering the BEST customer service experience possible…always overdeliver and exceed clients’ expectations!

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