(Note: I will continue my series on Social Media and Customer Loyalty later this week.)

Today, I am introducing a new feature here at Customers Rock! called Expert’s Corner. Once a month, I will be sharing recorded interviews with experts in the field of customer strategy and loyalty.

I am very pleased to kick-off this feature with an interview of renowned expert Martha Rogers, Ph.D., founding partner of Peppers and Rogers Group. Martha was named by Business 2.0 Magazineas one of the nineteen most important business gurus of the past century. The World Technology Network named her as “an innovator most likely to create visionary ripple effects.” In addition to her work at Peppers and Rogers Group, Martha is an Adjunct Professor at the Fuqua School of Business at Duke University and co-director of the Duke Center for Customer Relationship Management. She is widely published in academic and trade journals, including Harvard Business Review, Journal of Advertising Research, Journal of Public Policy and Marketing, and Journal of Applied Psychology.

She is also a friend of mine and was more than happy to spend time talking to me about her answers to the following questions:

1. There is a lot of talk today about being “laser focused” on customers. How would you define “customer focus”?

2. We are obviously in a challenging economy right now. Do you believe that a renewed emphasis on existing customers will make a difference to a company’s growth in this environment? Why or why not?

3. Where should the use of social media fit into today’s marketing plans?

Click here for the podcast interview: Experts Corner with Martha Rogers.  Note: this will take you to a white page where the audio interview will stream.  Click the back button to come back to this post.  You can also right-click the link above to download it to your computer and play it offline.  (PS – If anyone knows a more elegant solution to play the podcast, please let me know!  I am a podcasting newbie.)

Are you an expert who would like to be part of Expert’s Corner here at Customers Rock!, or do you have one in mind you would like me to interview? Drop me a note in the comments or send me an email, and let’s make it happen

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This post is Part 1 in a series on using social media to build strong customer relationships.  Parts 1 and 2 discuss some of the top reasons to use social media for customer retention.  Part 3 discusses how to get started.

If you have customers that are actively using social media, there is a potential to use that communication channel to deepen customer relationships.  Social media tools are especially effective at building two-way conversations with customers, either consumers or businesses.  There is certainly a lot of talk about marketing with social media!

I teach a class at UC San Diego called Marketing via New Media, and we just kicked off a new quarter this week.  We discussed the top reasons that businesses should consider using social media; I have summarized two of them for you here. 

• Social media marketing strengthens customer relationships.  Customers don’t want a relationship with a company or organization.  They have relationships with the people that work for that company or organization.  Social media tools such as blogs and Twitterallow customers to get to know the people inside the company.  They get to see real people with real personalities.  Tara de Nicolas from the Washington Humane Society shared with me that the most popular part of their website is the link to their Flickr photo stream!  Their clients and donors love to see the faces behind the operations, and they seek them out when given a chance to attend a face-to-face event with them (such as a fundraising dinner).  Friendships are formed online and brought into the offline arena!  Customers that have positive interactions with the people in the company feel a stronger sense of trust with that organization, a key factor in building customer loyalty.

• Social media marketing is great at keeping customers informed and involved.  While traditional media is also good at keeping customers informed, social media excels at getting customers involved.  Nearly one year ago, we had devastating wildfires here in San Diego.  One of my students this quarter works for the San Diego Zoo, and she shared that zoo members and other San Diegans greatly appreciated the zoo blog updates on how the fire had impacted the park.  It allowed them a “look inside” to see how animals had been affected, and people’s passion for the animals drove additional public involvement to support the zoo’s efforts in caring for the wildlife.  Customers that are more involved and engaged tend to have longer and stronger relationships with organizations.

There are many other reasons as well, which will be covered in this series.  My panel this weekend at BlogWorld Expo addressed the above reasons and some issues, including customer retention programs, customer service, and changes in customer expectations.  There was great information on how to do it, as well as some areas to consider, from my expert panelists Tony Hsieh from Zappos.com, Frank Eliason from Comcast, Brian Solisfrom FutureWorks, and Toby Bloomberg from Diva Marketing.  Part 2 of this series (to be posted later this week) will review the implications we discussed with respect to customer service expectations resulting from tools such as Twitter.  Be sure to come back to hear their answers, as well as answers to the questions you, my readers, asked before the conference!

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I was recently reading an annual report for a successful company, and, as always, I looked at the words used about customers.  Some reports are only about a company’s internal products, services, and processes.  They may even include awards the company has won in the past year, in addition to all the necessary financial information.

A Customer Focus

In this report, I looked for more.  Specifically, I looked to see how much customer focus there was in the report.  As a company providing services, their business depends on building strong client relationships.  This is reflected throughout their report!  

On each page where they showcased big wins or achievements in certain industries, there was also a story about rapport with clients and trusted advisor relationships.  These relationships, as it is told, were key to cementing ongoing business with existing clients.  The proactive nature of the client managers was apparent in other stories shared about resolving problems before they became big issues.  On another page, they shared a client success about one who moved on to another job but was anxious to keep the relationships going by doing business with the same people they had been working with for years. 

Strong Relationships

These strong client-company relationships are the foundation of the success of this business.  The annual report is written in such a way as to bring out this focus and showcase it as a competitive differentiator.   These types of client relationships definitely help to create a barrier to exit for the company.  The only improvement I would love to see in these reports is to start indicating the existing customer base as an asset to be measured!  (For more on this concept, see the book Return on Customerby Don Peppers and Martha Rogers, PhD.)

So Where are Your Sales and Marketing Efforts Focused?

When I do speaking events, I have quite a number of people come up afterwards to say they realized they have left the nurture of their existing customers to chance.  They have been so busy going after new customers, they have left the “old” ones to their own devices!  Unfortunately, in this difficult economy, this is often the case.  I just saw a Tweet (that is the term Twitter uses for a message) from Eric Brown, founder of Urbane Apartments (who is also a frequent commenter here at Customers Rock! – thanks, Eric!!).  Here is what he indicated in his 140 characters:

“Six of our eight stabilized properties are 100% leased! We are NOT participating in a poor economy”

I Tweeted back that I was not surprised by this as Eric and his company have a very strong customer focus!  You can see for yourself here on his website and blog; additionally, Eric will be guest posting for us soon and will share his story.  For Eric and Urbane Apartments, Customers Rock!

4 Key Questions to Improve Your Focus

You can bolster business by expanding sales and marketing focus to include existing customers.  In order to do so, there are some critical questions that each business should ask themselves.  I have listed the top 4 as follows:

1. How many customers did we keep from last year?  Do you know?  Many businesses find that they are good at tracking new customers but lose track of those that slip out the back.
2. Why did we lose customers?  Ideally, this analysis is done each time a customer leaves.  At that very moment, you need to reach out to them and find out what went wrong.  If you do this religiously, it is possible to salvage some of these valuable relationships.
3. Why do our best customers keep doing business with us?  Ask them!  Find out whether it is your offerings, your service, your people, or all of the above.  It will help you prioritize where to focus for improvement, as well as understand which things to keep on doing.  It may also highlight potential areas of concern for certain clients.
4. How many of our retained customers can help us sell more?  Customers can do this for us in many ways: buying additional products or services themselves, specifically referring us to others, and sharing great testimonials about us.  When is the last time you asked a customer for a testimonial?  Make it a regular part of the way you do business!

Do you have other key questions that you use to evaluate and grow your repeat business?  What have I left out?

Winning the Game

Your existing customers want to be loyal to you.  They want to be recognized and thanked for their business.  When a business creates a proactive customer strategy to retain and grow their current customers, everyone wins.  Customers feel appreciated and, in turn, buy more and refer you to others.  The company grows their business with fewer resources.  Sounds like a great way to beat the current economic woes!

(Image credit: olivier26)

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Part 9 of the ongoing ReExperience Starbucks project with Jay Ehret from The Marketing Spot.  Don’t forget our survey, which is still open, at the end of the post. Please tell us what you think about the changes at Starbucks!

How does Starbucks create customer loyalty?  John Moore at BrandAutopsy said this a few years back:

“For years, Starbucks Coffee has used high-touch methods to build and maintain a loyal customer base. In his book, “Pour Your Heart in It,” Howard Schultz, in supremely succinct fashion said, “If we greet customers, exchange a few words with them and then custom-make a drink exactly to their taste, they will be eager to come back.” That is the true description of a high-touch way retailers can connect with customers to build enduring loyalty. “

John was writing this post to contrast the approach of high-tech methods of building loyalty with high-touch methods of building loyalty.  Which approach is Starbucks using today?  Let’s look at what they have been doing lately to improve customer loyalty and the customer experience.

Customer Service

Starbucks closed all of their US-based stores for a few hours earlier this year to conduct partner (employee) training.  Right after the training, it was observed that Starbucks partners were making it a point of asking for customer names again (something they had moved away from) when taking drink orders. They also seemed pretty cheerful and upbeat.

Fast-forward to July 2008.  At my most recent experience in a Starbucks I regularly frequent, there was no recognition or asking for names.  My mother-in-law was with me, and she pointed out how “grumpy” one of the partners seemed to be.  I had noticed this before with the same person.  I did notice signs on the wall, directed at partners, which pointed out how to manage fresh bananas (a key ingredient in their new Vivanno smoothies).  

I have also noticed a quieter, more subdued attitude from employees at other Starbucks I have been to lately (including my most commonly visited store near my house).  I wonder if a combination of store closing news and the introduction of new, time-consuming drinks has weighed-down our barista friends.

Customers Rock! Take: Keep focusing on your employees, especially when things are difficult.  They are your brand ambassadors to the outside world.  Customers will notice the change in customer service right away!

New outside seating!

Customer Experience

 

 

 

 

 

I am not sure if this is happening at other Starbucks, but one of our local stores has put in nice, comfy seating – outdoors!  Now if they can just 1) keep the tables cleared of trash and 2) put some more cushioned chairs inside, we might have a winner.  (Note – that is my Passion Iced Tea on the arm of the chair…)

Introducing… New Products

Starbucks has really been focusing on the introduction of new products in their stores these past few months.  First came Pike’s Place Roast, a new blend of coffee meant to hearken back to early days when Starbucks was a true coffee experience.  Although it has had mixed reviews, the idea of grinding in the store has helped boost the coffee aroma (which was sorely missing before).

Most recently has come Vivanno smoothies (mentioned earlier), the Orange-Mango Banana and the Banana Chocolate.  These two new smoothies are high in protein and fiber, and not horrible with respect to calories (compared to the Frappuccino).   Reviews of the Vivanno so far have been mixed.  One interesting thing I noticed in the comments to the blog post Starbucks’ Vivanno vs Jamba Juice was how customers felt like it was out of place to order “smoothies” at a coffee store!  Others who are comfortable with the use of protein powders really seemed to like these drinks (see comments in this BusinessWeek post on Vivanno).  Personally, I would rather stick with my iced tea and get smoothies somewhere else.

Customers Rock! Take: The Pike’s Place Roast has been a good way to try and re-focus on being a coffee store.  It still needs some work, but they are on the right track.  The smoothies are a good option for someone coming to Starbucks looking for something nutritious to drink.  However, is this really why people come to Starbucks? 

Does It Make a Difference?

Here are the real questions to be answered.  Do these new smoothies help Starbucks get back to the “third place” experience?  Does the Pikes Place Roast bring in new customers?  Does the Starbucks Loyalty Card bring back loyal customers?  So far, the reviews are conflicting.  It takes more than new drinks, free WiFi, and comfy chairs to retain customers.  It is not just about high-tech vs high-touch approaches.  It takes building relationships, one customer at a time. 

Starbucks has the opportunity to do so through many channels, both high-tech and high-touch: the daily interactions with customers, the registered Starbucks Reward cards (they have yet to try to interact with me, and I have three cards registered), and their site MyStarbucksIdea (which is heading in the right direction but lacks a true dialogue between customers and partners).   However, it just hasn’t really happened yet.

Starbucks, I would like to see you be successful in re-inventing yourselves through the customer experience.  It would set new standards for other companies who know they should be more customer-focused.  It would make your existing customers happier.  It would help insulate you from your competition, and they are charging up fast. 

There is just one thing you still need to do: look at your stores truly from the customers’ perspective.

What do you think?  Fill Out Our Survey!

Jay and I have put together a short survey to see what you, our readers, think about Starbucks and its “re-Experience” project.  Please take just a minute to click on this survey link and fill it out.  You could even win, what else, a gift card to Starbucks!  We will be report results on our blogs shortly.

(Photo credit: TAlex)

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I heard a very interesting observation from a 14 year old young man the other day.

“Why don’t they sell swim trunks in July?  That’s when I need them.  Seems like stores aren’t very focused on what their customers need!”

Now, I know all you folks out there in retail-land have your reasons for why this occurs.  Seasons for the industry are not the same as the seasons for consumers.  Inventory needs to be cleared out for next season’s merchandise.  I am sure you can share more.

However, let’s look at this from a customer’s perspective.  It took driving to 6 stores and over 50 miles (total) to find a pair of swim trunks that fit.  This is due to the fact that most swim trunks are no longer in stock.  If we had wanted to find a winter outfit, or something for back-to-school, we would have been set!

Putting Customers First

There needs to be some type of balance between the needs of the business and the needs of the customer.  Sure, it is difficult when a whole industry is set up to operate on a certain schedule.  However, our next generation is looking for a new, practical approach to business.  They want to feel important, like they matter to companies.  This will be key in building relationships with them.

We can build all the cool social media sites we want, connect with our customers on Facebook and MySpace, and even get them to spread our message virally.  But if they come into our shops and retail spaces and we don’t have what they need, that creates shaky ground for any relationship already built. 

Organizations need to stay in tune with what their customers need, want, and desire.  One of the best ways to do this is with ongoing customer conversation.  Keep in touch, remind them you are there, and meet their needs.  These steps will help strengthen any shaky foundations that may have developed due to thinking more about ourselves than our customers.

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I always encourage my clients to listen to their customers using a variety of mechanisms.  One of the best ways, however, is to listen to or read customer verbatims.  In other words, listen to customers tell stories about your company in their own words.

So of course, I am very interested in this new project put together by Pete Blackshaw.  He is doing it to help promote his new book, ”Satisfied Customers Tell Three Friends, Angry Customers Tell 3000″.  Over at his book’s blog, you can find a series he is starting up showcasing consumer interviews .  These feature various consumers talking about both good and bad experiences from companies.  I listened in on a few, and here is a line I liked from a recent consumer interview about Southwest Airlines.  Mike, the consumer, said this about one of the reasons he likes Southwest:  I feel as though they see me as a person, not just as a ticket and a way to make cash.  Prompted by the interviewer, Mike then goes on to share a story about a Southwest employee that went out of her way to help him feel better about a certain situation at the airport.

Pete, this is a great idea!  I would love to see this sorted by good vs bad experiences, as you are doing with your feedback.  We all need to hear more good experiences -that’s why this blog was started over 1.5 years ago!

Check it out, and let Pete know what you think (and tell him I sent ‘ya).  Readers, talk to me, too.  How do you best listen to your customer’s pure, unfiltered voice?  Monitoring the internet?  Social media?  Reviewing feedback letters?  Surveys?  Focus groups?  Tell us how you do it either via comments or by sending me email to becky at petraconsultinggroup dot com.

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Here is a tasty tidbit for a Monday.  John Moore at BrandAutopsy Twittered me about a store with a great customer experience, Mighty Fine Burgers in Austin, Texas.  Here were some of John’s comments about them: ”…friendly front-line faces, all food prep in full-sight (incl. grinding/hand-forming patties), simple decor, upbeat vibe.”

Here is what I like about them, in addition to their simplicity and their friendliness: FISH.  No, not the seafood, but the customer service philosophy of Mighty Fine Burgers.  They have taken advice from the book called Fish! (if you have never read it, you should check it out), which suggests that the way the Pike’s Place fishmongers deal with customers is a good lesson in how to have the right attitude at work (and in life):

• Make Their Day – Look for ways to create memories for guests and co-workers.
• Be Present – Make every guest feel they are the most important person when you talk to them.
• Choose Your Attitude – Learn to love what you do, even if you aren’t doing what you love.

Living in California, I can’t easily experience this attitude at Mighty Fine for myself, but I will take John’s word for it!

This reminds me of another burger joint out here in the West, IN-N-OUT Burger, which, according to their website, created California’s first drive-thru hamburger stand in 1948.  The menu at Mighty Fine is very similar (simple, meaning basically fries, hamburgers, and shakes), and Mighty Fine has the same “everything is fresh, and you can even watch us making it” behind-the-scenes window to watch food prep that they have at IN-N-OUT.  Let’s hope Mighty Fine are as wildly successful as their Western counterparts have been!  My guess is they will be if they keep up the simply good food and service.

Drop a comment if you have been to either one of these establishments here in the USA, and let us know what you thought about the experience!

Update: I just found a great blog post on Doug Meacham’s NextUp about Five Guys Burgers and Fries; check out the Thank You Customers sign he included.  You rock, Doug!

(Photo credit: khz)

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 I have seen restaurants with their “customer wall of fame” before, but I think this one takes the cake!  Lighthouse Ice Cream and Yogurt is located in Ocean Beach, CA, just down the street from the Ocean Beach pier in San Diego.  I just happened to wander towards the back of their cute shop and noticed several sheets of white poster board hanging from ribbons, plastered with photos.  As the boards were unlabeled, I asked the lady behind the counter what they were.  She explained they have been taking photos of their customers for the last 10 years and posting them on the boards for all to see.  Then she took our photo and told us where it would be placed later in the month!

This is a quick and simple low-tech idea (she used a disposable camera – not digital).  It gives the impression that this ice cream shop has many, many fans.  In addition, it is a “feel good” for customers to have their photo added to the display.  As San Diego is such a dog-friendly community, there is even a “pet board” with photos of customer pets who have come in (the ice cream shop keeps a doggie water bowl outside the door for thirsty pups).

I love this display of customer recognition.  One way they could take it further would be to use a digital camera (or have the film developed onto a CD) and create a flickr or Facebook group of fans.  That way, anyone who visited there could interact, and it would raise their visibility on the web.  Maybe one of their local customers could even do it for them!

Either way, this is a fun way to let people know that you love your customers.  People want to frequent establishments that care about customers, and every little bit helps these days!

You rock, Lighthouse Ice Cream!

(Photo credit: B Carroll)

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 All of us have days when things don’t go the way they should.  Companies have those days, too.  Service goes down.  Planes don’t take off when they should.  A chef doesn’t show up for work.  Someone slams a product on a blog. 

When things get tough, the company’s response to the problem can make or break their reputation – and their customer base.

The outcome often depends on what kind of relationships have already been built with customers before the problem occurs.  Has the company had a history of listening to customers and reaching out to them in their own language?  Does the company empower employees to take care of things when they go wrong?  Does the company respond to blog posts and other social media conversations?  Does the company build customer loyalty by understanding their customers, then communicating with them the way they want to be communicated with?  These are all part of a strong customer strategy which will help organizations weather the storms which inevitably come.

If a company does have strong relationships with its customers and has built a loyal customer base, customers may cry foul but will most likely tolerate the issues.  They may be very forgiving, even sticking up for the company when others are trying to pull them down.  The customer base will remain with the company – critical in slow economic times!

On the flip side, if a company is only focused on trying to squelch negative comments, if they only talk about themselves, if they forget to take the customer’s perspective – then any falter or trip can result in disaster.  Grumpy customers and their comments come raining down.  Customers spray their problems all over the place, then leave – and take others with them.

Which kind of company do you want to work for? 

If you work for the first type of company, kudos to you!  Let’s hear some of your great stories!

If you work for the second type of company, I know a good customer strategy consultant that can help you…

(Thank you to Brian Solis for the inspiration on this post!  Photo credit: ccaetano)

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 Part 6 in the ongoing Re-Experiencing Starbucks series in partnership with Jay Ehret at The Marketing Spot.

Update!  I was just at my local Starbucks and had the opportunity to speak with two Starbucks partners (employees) who were there to review that store and its customer experience.  I was very impressed by the questions they were asking their customer (me) about the experience, as well as how they were seeking out my opinions for improvement.  Kudos to you, Starbucks, that you have great people working for you like Kevin and Marcus who really care about their customers! 

Now, back to the post:

What is the latest on the Starbucks experience?  Let’s listen in to the Starbucks CEO, Howard Schultz.  Per Schultz’s latest Communication (#14),

I would like to reiterate that we are still in the early stages of our transformation and efforts to enhance our customers’ experience.  There is still much work to be done, but we will succeed.  Our summer, fall, and holiday promotional periods are coming up, which, I believe, will be enthusiastically embraced by our customers and partners.

I would tend to agree here with Mr. Schultz.  The Starbucks re-experience is still in its early stages as evidenced by the inconsistent execution of their revamped loyalty card program.  Now, my long-time readers know that I focus on the positive here at Customers Rock!, so I am reluctant to criticize.  However, I have not had good experiences with the new Starbucks card program, and I am not alone. Both Leslie Price at Racked and John Blue at InnovationCreation have recently blogged about some frustrating card experiences.

The main concern seems to be the process by which Starbucks partners (employees) apply the discounts that should be available to the owner of a registered Starbucks card.  According to the Starbucks website, benefits of a registered Starbucks card include free shots of syrup, free brewed coffee refills, and free coffee with a whole bean purchase.  I was pretty excited about this, since I like to add syrup to some of my coffee drinks.

However, I also discovered that, unless I inform the barista ahead of time that my Starbucks card is registered, the discounts are not applied.  In other words, the Starbucks card database is not tied to the cash register system.  In one case, I told the Starbucks barista that my card was registered before I ordered my sweetened Iced Tea, and her response was, “Well, it doesn’t make any difference with your order.”

I do know that if someone has a problem with their drink or transaction, Starbucks will fix it for you; often they will give you a free drink coupon for next time.  However, this doesn’t always make up for the inconvenience for the customer doing the ordering (or the customers behind them in line who have to wait).

Recommendations

As with any new program, there are always kinks to be worked out.  However, it does seem a little short-sighted to implement this type of program and expect the customer to take full responsibility for reminding the store about the discount.  For this very reason, it is always recommended to think through a new customer-facing program (especially a loyalty program) before implementing.  This should include goals for the program, operational details, the stages of the customer’s experience, and the measures of success.

I would recommend that Starbucks quickly have each barista ask a simple question of each customer using a Starbucks card: “Is this card registered?”  They may have a few people that sneak in, but for the most part, customers are honest and will do the right thing.  It would certainly make the customer experience much better.

Also see Jay Ehret’s blog The Marketing Spot for more Starbucks insight.

Related Customers Rock! posts in the Re-Experiencing Starbucks project series:

Re-Experiencing Starbucks

Part 2: Transformation Starting

Part 3: The Training

Part 4: Little Things

Part 5: MyStarbucksIdea

(Photo credit: mightykenny)

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