August 7th, 2010
It may be controversial to say it, but I am fed up with being accosted by smiling students with too much “Charity branded” clothing, trying to part me from my money on behalf of a good cause.
It’s not that I am heartless. I am as good or bad as the next man. It’s just it all smacks of large bureaucratic organisations spending too much money on marketing themselves and behaving like a well funded Corporate instead of a humble fundraising charity. And it doesn’t happen once a day, I get it to and from work, irrespective of the time of the day.
In fact administration costs in charities vary from as little as 2 or 3pence in the £ to as much as 50 pence in the £. This difference is inexcusable. Surely a charity that spends more than 20% of its revenues on administration should lose its charitable status? In fact the Charities Review Council recommends that Charities shouldn’t spend more than 30% of their funds on administration, but I would like to be tougher.
Why is the level of administration costs so high? Well too much money is spent on “marketing” the Charity and competing with other Charities rather than just focusing on fundraising. And then there are lots of people to organise the organisation.
These days there is still too much marketing money spent on “talking” and “broadcasting” messages to audiences whether willing or not. This is at a time when the consumer gets ever more reluctant to engage with this type of communication. The solution we are told, is to spend more on communication but just make it Social Media. That may be marginally more interactive and it may be a two dialogue and that’s good, but it’s still yesterday’s marketing.
No, these days there is no excuse for marketing that doesn’t add genuine customer value at the same time as it is educating and informing. The future of marketing is about influencing prospective and existing customers by providing added value services - digital services. In other words don’t preach at me, show me how brilliant you are by making a difference to my life with a new service.
Now I know that there are some great communications campaigns out there and you have to applaud Old Spice and others for what they are doing. It is memorable. It’s just not as memorable as when you provide me with something that adds value to my life. When people talk about the old advertising model being broken, it’s an oversimplification. Good communications and good advertising still works and always will, but when you provide value in a service you can create a different type of bond and lasting impression with your customer.
Every day now there are thousands more applications being produced by clever developers. Some are paid for and some are free. Many are brilliant. I think it’s time that Charities started behaving more innovatively. It’s time they started developing services that people will pay them for. I know I am not alone in being cynical about where my money goes when I donate to a Charity, but if they started focusing on building revenue generating services and not just marketing at me, then I might well be more generous. The days of shocking me into action are over.
So why not put those nice smiling students to work coming up with new services and applications that I might value enough to pay for, instead of making them bang their dustbin in front of me in the street?!
Tags: applications, charity, digital, services
Posted in Service marketing | No Comments »
October 23rd, 2009
The recession and the parlous state of government finances is leading a number of councils to consider adopting a low cost airline model and charge for access to a range of services, in a bid to drive up revenues. One of the first to do this is Barnet Council. This has been dubbed the “EasyCouncil” business model by some national newspapers. And as the pressure mounts on the new Government to get a grip with public finances, we are likely to see an upsurge in local councils following this trend.
However, it isn’t just local councils that are introducing tiered models for service now. In fact most Corporates are increasingly looking at how they can make their least valuable customers service themselves and then make higher value customers or those who want to upgrade pay for faster access to customer service or support. This is most explicitly seen in the IVR systems that all large companies now use that drive customers through interminable walls of questions and redirects on an automated basis, to try to limit real human intervention. I see this with my own bank, Barclays, who charge me to be a Premier customer, but don’t really offer any better service. In theory I get faster access to customer service and I have a personal account manager, but the reality is that the Premier Manager only talks to me when he thinks he can flog me some more products!
There are a few exceptions amongst the bigger brands with John Lewis consistently coming out well in customer service reports. The 2009 UK customer satisfaction report also put Waitrose and M&S in the top 3 companies for best customer service.
But in general the trend in bigger companies is to make more of their customers pay for more of their overall costs in some way. Conversely while many big brands are stripping out their free service, a host of smaller companies are offering better and better service. Why does Pret a Manger continue to be voted so positively for its customer service? It has built it into its culture and its business model. Companies like ASOS and net-a-porter get voted so positively because they provide a high value product combined with great customer service.
The web is also seeing the increasing rise of companies that give power back to the consumer and in turn make the company do some of the work and offer a good service. This true of a start-up like Aroxo, which allows the user to name the price that they will buy at. It’s also true of other companies like Maxbips where you can auction your savings to the highest bidder and a free concierge service from You Wish.
The recession is likely to accelerate the divergence of company behaviour with more and more large companies driving towards a tiered model, where you get a basic service for free and pay to upgrade for better service, while smaller newer companies offer better and faster and more innovative service. This will make for more interesting choices for the consumer, something the British people love. So maybe the recession will be a positive force for change in the end!
Tags: Add new tag, ASOS, banks, Barnet Council, customer service, Easy Council, free concierge, IVR, Net-a-porter, Pret a manger, services
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July 3rd, 2009
Banks don’t like us. By that I mean banks don’t like their customers.
Surprised. No of course you aren’t. But it really is true.
I have sat in too many meetings with people working in retail banks to know that. They will always pull out their customer satisfaction ratings to show me how happy their customers are, but I think that is a bit of a con. I mean I often get asked by the person in the banking call centre whether I am happy with what they have done and generally i say yes. This is not because I am really delighted with what the bank does overall for me, and more because they have been pleasant and courteous and I know that they can only do their job within the confines of what is allowed. These customer satisfaction studies are very misleading and the banks know it.
Banks make more money the more products I hold with them. The average product holding score is a critical metric to a retail bank’s success and yet it still amazes me how poorly banks service us to try to improve that score. I was speaking to my bank, Barclays, the other day enquiring about better interest rates. I have banked with Barclays for 27 years and have a personal and a business account with them. I have made them tons of money through overdrafts and general silly behaviour. And yet when i ask for a decent rate for a sum of money i have, all they can offer me is 1%. It’s ridiculous. But they don’t care because they know that I won’t move my current account, because I am too busy and can’t be arsed. If they really valued me they would look at me as one customer and take into account what I am doing with my business and my personal life, and they would offer me a better rate because I am worth it. But they don’t. They are quite happy for me to move my money to another account.
Not that other banks are any better. I mean I have some money in ING but they give me an appalling rate and save up the good rates for new customers. The truth is that they can do this because again they think i won’t be bothered to move the money. Well that may or may not be the case with a savings account. The trouble is they don’t need to care because they make money off our collective lack of power.
It’s time that customers worked together to make banks take us more seriously and reward loyalty. I am fed up with being taken for granted by a large organisation. Watch out for the interviews I shall be doing with banking customers in the month.
More to come!
thanks
Chris
Tags: Add new tag, banks, barclays, current accounts, customer satisfaction, customers, ING
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June 18th, 2009
Yesterday I sat in the audience at a ”future of marketing” event presided over by the great and the good of the media world. The discussion was all about what would happen to marketing budgets in the future. It was an irony that the person next to me and I were the only 2 people in the room who ever blogged or used Twitter! (Not that I would classify myself as a god of either!) And yet here we were debating the future of marketing.
The panel went on to extol how traditional media including TV and radio continue to have enormous reach and penetration and digital does not. There was much talk of the power of all these old media formats and of the importance of lead generation for marketers. Yet strangely little discussion about what the web was doing, even though the future of marketing is undoubtedly changing before our eyes. The role of Twitter in Iran shows us this.
The truth is that the world is divided into 2 now -between those in power who often can get away with ignoring what is happening on the ground and the new generation of people who expect to be listened to and to have a voice on what happens in the world around them. The chasm between these 2 forces is sometimes extraordinary.
However, if one looks at the way the world and marketing has changed in the last couple of years let alone the last 10, information technology is giving people a remarkable power that the world has never seen before. We should expect many more upsets in governments around the world as transparency comes to the fore. How much better it would equally be if companies were as transparent. If companies actually were more honest with their customers. It’s time for a more equal relationship and it’s coming faster than many realise.
Equally surprising was the perennial comment from agencies of how they need to educate clients to what is going on. In defence of those budget holders, I think that agencies underestimate the skills and knowledge of most clients these days. The truth is that many of the clients who supposedly need education, just don’t value what the agencies are pedalling or suspect, often rightly, that the agency has a specific agenda in mind.
Plus ca change!
Chris
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May 28th, 2009
The web has made companies lazy. They expect people to do all their own work, finding, selecting and buying with minimum intervention. This saves companies money. And indeed in many cases it saves people money. But in most cases this is because people are buying commodity products. The moment this stops and the purchase choice is more difficult then these assumptions fall apart. The reality is that people buying services whether looking for childcare or holidays or beauty services take time to make decisions. They need time to scope things out and ensure they are making the right choice. They often don’t have time to do this all in one and so might get some initial feedback and then disappear for several weeks. This does not mean that they are not interested but merely that they may want to research several things and also get input from other people along the way. This is not a linear process.
Yet companies find it hard to accept that purchase processes are not linear and that there isn’t some activity or piece of communication that can’t help steer the customer to a rapid decision. In the extreme examples like cosmetic surgery, this can take years before decisions are made. The reason being that it is so hard to get the right answers, to ask the right questions, to talk to people in the know, to get brochures and even consultations before even getting close to parting with any money.
Now that the recession is hitting us and the famous “W” recession is highly likely, this may be a chance for better businesses to demonstrate that they do have the patience to stay with their prospective customers and invest in the service that some services require. What is also true is that the amount of research into the buying cycle for complex services is incredibly poor.
Long live patience and long live companies that understand the full range of their customers and are prepared to serve them properly..
Tags: beauty, childcare, cosmetic surgery, health services, recession, Service marketing
Posted in Service marketing, Uncategorized | 4 Comments »