Matt Powell this week takes a look at the importance of customer satisfaction and going the extra mile.

“Delighting customers inevitably adds costs” – one of the three reasons suggested as to why some companies are averse to delighting their customers, by Steve Denning in his “Is Delighting The Customer Profitable?” article for Forbes earlier this year.

Of course, the type of statement above would usually be one quite heavily engrained in a company’s culture – a company that, being fairly successful, is perhaps content to deliver good service; much as the type of company that would say the opposite – “delighting customers is what we do, it helps our profits thrive” – would have such an idiom engrained in its culture (see Apple, Google, Amazon, Zappos, etc).

There are a couple of examples that I would like to highlight in relation to offering a ‘good enough’ service, and offering a service that delights. I was initially going to offer a comparison of just two companies and their approach – Netflix and LOVEFiLM. However, there is also a third company, a very well know company with perhaps a graver warning of a company taking its market for granted, which I will touch upon shortly.

LOVEFiLM and Netflix,are the leading film rental services in the UK and US (respectively)and serve as good examples of companies that ‘wow’ and companies that, arguably, rest on their laurels.

A couple of personal experiences I have had recently with LOVEFiLM have fed into the writing of this article. Sometime last year I decided to cancel my LOVEFiLM membership that I had had for around a year but had not used for 6 months. When I made the call to LOVEFiLM to cancel my contract, the customer service representative asked what my reason was; when I explained it to him, he said that they would be happy to keep my account open for the next 6 months free of charge. I had been braced for the standard struggle that comes with closing accounts of any kind, and was ready to decline the inevitable last ditch attempt to retain my custom, but this offer took me off-guard – and was indeed a ‘no-brainer’.

Their plan worked and I became an avid and happy customer. More recently, I had to contact customer services again, this time due to an error on LOVEFiLM’s part. I had been working my way through a DVD box-set, when LOVEFiLM missed the next disc they were due to send me, and sent me a later disc in the series instead, thus skipping out three episodes of vital HBO drama. I called LOVEFiLM, and knowing their good customer service from the past, I expected the next disc to be sent straight away. LOVEFiLM did offer to send the next disc –but they also said they would be sending two extra discs to apologise for the mistake. Yet again, they had caught me off-guard and surpassed my expectations. Needless to say, I hold LOVEFiLM in quite high regard following these moments of ‘delight’. I understand that they have also had their fair share of problems in the recent past with third-party sales agencies, which will not have aided their mission for improved customer satisfaction, but if these moments of delight filter across the customer base, the future could indeed be bright. And bright it will have to be, if LOVEFiLM is to weather the upcoming assault from Netflix as it opens up its service to the UK market in 2012…

Netflix, is an interesting example of how taking customer loyalty for granted can be quite problematic. Netflix had witnessed very rapid growth in terms of its number of subscribers in the past few years (its number of subscribers grew from 857,000 in 2002 to 20 million in 2010 (whilst operating in North America alone)). However earlier this year it dropped quite the clanger – Netflix took the decision to spin off its DVD mail-order business, and its online streaming offering into two separate businesses. With such a strong position in the market, Netflix assumed that its customers were so delighted and loyal that they wouldn’t mind either paying the same fee for half the current service, or twice the fee for their current service. The customers did mind. Subscriptions plummeted, as did the value of Netflix shares. After much board-level scrambling and a deluge of negativity from (ex-) subscribers, Netflix canned the idea and reverted back to its original offering, but not before a significant amount of damage had been done to the brand and revenue.

Now for the third company in this tale – one which is very pertinent to these two examples: Blockbuster Video. Once the market-leader (following a steamrollering of local video stores in the 90s), Blockbuster spectacularly collapsed in the US earlier this year . Quite a case of laurel-resting if ever there was one. Blockbuster ignored the rising trends in the market of online rental and ordering, and continued to deliver a service that it deemed ‘good enough’ – until a few years down the line (and too late to remedy), that service became not good enough as customers fled to more appealing pastures, and Blockbuster was left floundering.

The approach these companies adopt in their attitude to ‘delivering extra’, or indeed to delivering what is ‘good enough’, can be split into three distinct categories that are indicated on the pyramid below:

Hygiene factors are the elements of a service or offering that are expected. They are not issues that will increase satisfaction, but they are areas where satisfaction will drop if they are not delivered.

Nice to haves are elements of a service or offering that can influence satisfaction. These are elements of service that are not necessarily expected and can drive satisfaction higher if delivered effectively. Over time, nice to haves can become hygiene factors as they become expected.

DifferentiatorsThese are the delight issues – the things that customers do not expect; the examples of going one step further, of exceeding expectations. These are the things that set companies apart from their competitors. Despite their impact and value to customers, these can sometimes be easy and inexpensive to implement in b2b markets (such as a monthly call from an account manager, or a thank you letter after a particularly large sale).

What would you say are your company’s hygiene factors, nice to haves, and differentiators? What do you think your customers would say they are? Many differentiators are so simple; sometimes they can be the fundamental elements of a service offering that no company in the market currently does well, where providing an exceptional service can really set a company apart from the competition. Research into customer loyalty can have great value in highlighting these elements and identifying unmet needs, or in indicatingthe disconnect between a company’s perception and the customer’s perception of its offering.

In the case of Blockbuster, the company perceived it’s offering to be good enough to meet the needs of its market. Blockbuster felt, I am sure, that it had elements of its offering that covered all three tiers on the pyramid, and did not see Netflix’ new offering as too much of a threat. However, over time Netflix’ ‘online and mail order’ differentiator gradually matured to become a market hygiene factor – one that Blockbuster did not offer. With Blockbuster not providing its customers with a fundamental hygiene factor, its proverbial pyramid had no foundations to support any ‘nice to haves’ or ‘differentiators’, and the company sadly failed.

US business and coaching guru Tony Robbins has an interesting analogy when it comes to ‘going the extra mile’, and not accepting what is ‘good enough’:

If, when training, a successful athlete is told to do ten lifts of a particular weight in the gym, which of those ten lifts is the one that makes all the difference?

The eleventh.

So when thinking of where the elements of your service offering and products sit on the pyramid, think about how your company can go the extra mile and to add differentiators – or even improve any current differentiators to exceed expectations. But do be wary of assuming that what is currently being delivered is good enough – it won’t be for long.

Following on from the successful opening of a London sales office last year, B2B International is delighted to today announce the opening of a new central London office, on Euston Road, to better service clients in London and the south-east of England.

Research Manager Matt Powell will head up the new office. Matt joined B2B International in 2004 and has spent time in the Manchester (UK) and Beijing offices. He has worked with numerous clients in many industry sectors, including: ADT, Ashland Chemical, Autoglym, BRUSH, Centravis, Friedland, Interxion, JLG, John Wiley, Microsoft, OCR, Travis Perkins, UK Hydrographic Office, Vodafone and a number of universities.

Matt Powell this week draws some interesting conclusions between his parallel lives as both a market researcher and an actor.

As some of you may or may not know, as well as my career as a market researcher I am also a keen actor, and have been ‘treading the boards’ for some years now. Over the years that I have been immersed in the industry of research and marketing, I have noticed that much of what we deal with as researchers in our day-to-day job is particularly relevant to the job of an actor – from research techniques that come in useful when researching a role, to certain useful business and marketing models. For this Thursday Night Insight I have decided to look at a couple of the similarities between the job of an actor and the job of a researcher.

Due to our business-to-business focus at B2B International, many of the research projects that we conduct incorporate a number of research methodologies that complement each other in order to answer the overall research objective(s). Indeed, many of our questionnaires and discussion guides are much longer than the typical consumer research project. Many projects can include a phase of desk research, followed by in-depth interviews, followed by an e-survey or a quantitative telephone survey. The data from these individual phases are then analysed and a report developed that is presented to our client upon completion of the project. That, of course, is a very brief summation of the job, but I mention it in order to highlight the point that for most research projects, we have a huge amount of varying types of data that need to be analysed and distilled into the few slides where our recommendations are made.

As researchers, when presenting the findings from a project, we may sometimes feel the need to display the results for every question, as much of the desk research as possible, and as many quotes as we are able – sometimes we feel we need to show that we have indeed gathered the data that we said we would. Of course, we always try to steer clear of this – the presentation, in the end, is our means of communicating to the client our answer to the research objective, and therefore the more concise it is the better.

Whilst working as an actor, I have noticed how similar the processes of a research project and bringing a role from script to stage can be. By the time an actor takes to the stage, or steps in front of the cameras to perform a role, he or she will have done huge amounts of work in order to bring the role to life. Hours, days and weeks will have been spent on absorbing the text, researching particular areas of interest, and rehearsing before the actor even steps onto the stage. As well as learning the lines for a part, an actor will also conduct large amounts of research on elements such as: historical period in which the play/film is set, specialist trades of a character, accents, cultural trends, technologies used, and many more. This research enables the actor to deliver a role that is grounded in truth, and ultimately believable to the audience.

This process struck a chord with me recently as I realised the similarities between how an actor delivers a role onstage following an extensive phase of research and preparation, and how the findings from a research project are delivered to answer a specific objective. In both instances, the final outcome (whether the research presentation, or the actor’s performance that an audience sees) is only the tip of the iceberg. As an audience in a theatre we do not wish to see an actor’s heavily annotated script, their rehearsal process, or the large amounts of research that have been done – we want to watch the performance. Indeed, with market research, the final presentation that we see is simply the tip of a much, much larger iceberg – we know there is a huge amount of data that has been gathered, but we do not wish to see a chart for every question, or a quote slide for every open-ended question; we wish to see the information that is relevant to answering the research objective. As researchers there may be questions that influence our decision and choices for recommendations, but in many cases (as with an actor’s research portfolio) we do not need to see these – the bigger picture is what counts. However, I hasten to add, without the information that is not seen – the main body of the iceberg, if you will – we are unable to fully make our recommendations or draw our conclusions. Likewise, an actor would not be able to deliver a believable, truthful performance without his or her unseen work.

Indeed, the comparison between the job of a market researcher and an actor is also true when we think of the differences in how a research objective may be answered by one researcher compared with another. Of course, all competent researchers will be able to design a project that answers the research objective – though there may be many different ways of achieving this, different methods, and different means of presenting the data. In the same way, we know that if we see Ian McKellan performing Hamlet, the words spoken will be the same as the Hamlet that we would see Kenneth Brannagh perform. However, we also know that the performances will be very different.

There are many more similarities between the jobs of a market researcher and an actor that could be touched upon – however, these two seem to resonate quite clearly to me as good examples. After all, in both jobs we seek to fully understand a particular problem, issue or situation, before analysing what we know and then delivering a well informed interpretation of it. Just rest assured that the tip of the iceberg is usually, and I say ‘usually’, the most interesting part.

In his latest Thursday Night Insight post, Matt Powell reflects on his experiences working in our China office and the difficulties inherent in conducting business across cultural boundaries.

I recently saw a TV advert from one of the world’s major banks that professes to its excellent local knowledge in every single country.  Of course, this campaign has been going for quite some time now as the bank positions itself not as a sprawling, faceless mega-corporation, but indeed as a very localised and personal bank.  Whether or not the bank does in fact deliver upon its promise remains to be seen, but the importance of local knowledge cannot be underestimated.

There are many horror stories about corporations naively taking one product or brand that is successful in one country and launching it into a foreign market without first adapting the product or its branding to meet the local culture.  Pepsi and Coca-Cola give two sterling examples of ‘how not to do it’.

When Pepsi launched their cola in China, the company thought it would be sufficient to translate their slogan "Pepsi Brings You Back to Life" into Chinese and simply launch the product.  Unfortunately, the slogan was translated a tad too literally and instead proclaimed that "Pepsi brings your ancestors back from the grave."  Of course, the problem was rectified, but damage had already been done. 

Coca-Cola did something fairly similar when launching their product in China; they chose to launch their brand using Chinese characters that read phonetically as “Kekoukela”.  Of course, the phonetic spelling sounded similar ‘Coca-Cola’ to a westerner, but I imagine there weren’t many Chinese consumers looking to purchase a refreshing can of “female horse stuffed with wax”.  Surely, even just the smallest foray into market research would have highlighted these significant blunders, and saved the companies millions of dollars – let alone the damage done to the brands.  

Indeed, in many cases, the same message or piece of information can still cross hazy lingual and cultural boundaries.  I myself had an experience when on secondment in our Beijing office, where lingual barriers became slightly hazy to say the least.  Each day when finishing work I would order a taxi to where I lived, pronounced ‘Hua Mao’.  Every time I asked, the taxi driver would either laugh, shake his head, ask to see a map, or (in one extreme case) make a loud cat-like ‘miaow’-ing noise at me.  I knew I was saying the name of the location correctly, so although slightly perplexed at the behavior of the Beijing taxi drivers, I thought nothing of it… until, that is, one day towards the end of my stay when I took a taxi with some of my Chinese colleagues.  When I asked the taxi driver to me to my destination my colleagues burst into uproarious laughter – it turned out that for two months I had been saying the words correctly, but pronouncing them with the wrong tonal inflection – and, of course, was asking the taxi driver to take me to ‘cat with flowers’.  At least the miaow-ing taxi driver seemed slightly less disturbing after that.

Although it is an amusing story, it does indeed highlight the importance of local knowledge and just how critical the nuances of any language and culture really are.  To most westerners, what I was saying and what I should have been saying sounded fairly similar indeed, but (despite me always managing to get to my destination) the difference it made to the local person – the person who mattered – was huge.   

At B2B International we, like the large bank, recognise just how important local knowledge is.  Every country is different and brings with it a whole set of language issues and cultural traits.  We use ‘mother-tongue’ interviewers when conducting international interviews for this very reason; the cultural nuances are critically important in understanding information and indeed any subtle inferences that may be missed by someone who is not completely immersed in that particular culture or language.  Indeed, across our three offices we can span the globe from Asia, to Europe, to the Americas.

Our expertise can help our clients in many ways – from conducting multi-country studies in various languages, to conducting in-depth research and analysis in specific countries, to researching new markets to enter.  For more information about how we could help your Company, contact a member of research team at our European headquarters in Manchester, our Asian headquarters in Beijing, or our American head office in New York.