Archive for February, 2010
When it comes to keeping your best customers, what methods do you use? The fact is, in a sluggish economy, cutting back on purchases and spending is what most consumers do first. Companies, on the other hand, figure they can afford to trim back their sales force, customer service staff, and their marketing budget. Those companies assume, without the support of sound statistical evidence, that they can manage search engine marketing, display advertising, and email retention programs in-house. They think they can handle it all themselves. Numerous case studies indicate otherwise while demonstrating that it is more cost effective and profitable to out-source to companies that specialize in a particular service.
We have been warning our friends, fans, and followers for a long time about the information they post on Facebook and Twitter. Facebook was created a way for Harvard students to communicate, socialize, and track each other (my 94 year old Uncle has a Facebook page. Yikes!). Twitter was created as a way to send text messages to groups of people. People still use these networks as intended but now the reach is in the billions (factoring in that search engines spider and list your Facebook page and Tweets). And along the way very smart people have figured out, and are working on figuring out, new ways to make money from all of the great, personalized content that you freely give them. The money isn’t in the ads Facebook runs by you, it’s in the content you give them, which they can, and will sell, to among others, the medical and insurance industries.
Real Age is a great example of what Facebook could do. Real Age takes the user through a form of health and lifestyle questions and at the end gives that person their “real age” as opposed to their “biological age”. The user feels they’ve benefited from their participation. And Real Age has a form of medical information that they sell to the medical community at about $50 a pop. However, participation in the Real Age process is anonymous. The information you offer up is not.
Below is a link to an article written by Helen A.S. Popkin that we thought would be of interest to you, Your Facebook profile: An open invite to crime?
Genesys, with research firm Greenfield Online and Datamonitor/Ovum analysts, measuring the cost of poor customer service in the U.S., found that enterprises in the U.S. lose an estimated $83 billion each year due to defections and abandoned purchases as a direct result of a poor experience. Nearly two-thirds of consumers said they had ended a relationship due to customer service alone. The survey participants said that when they end a relationship, 61% of the time they take their business to a competitor.
The $83 billion overall cost of poor customer service in the us came from:
* Business abandoned and lost to entire industry, $32.4 billion
* Customer churn and defections within industry, $50.6 billion
Furthermore, the problem has become more complicated as customer interactions move beyond the contact center. According to numerous industry researchers, more than 90% of all transactions initiated over the Web are abandoned before any transaction is completed. And virtually no researchers have accurately measured the value of customer service across communication channels, says the report.
Across 16 key economies (countries), the total loss for poor customer service in US dollars is $338 billion annually or the average value of each customer relationship lost to a competitor or abandoned of $243. In addition, 86.4% of consumers would welcome extended offers or help during self-service transactions.
The biggest losers at the industry level are in cable & satellite TV, financial services, and consumer products. Nearly one quarter of consumers in the US said they abandoned a cable/satellite company in the past year, resulting in over $12 billion in lost revenue. And financial services companies suffered more than $10 billion of losses alone. Industries that were previously safe from competition, such as utilities in deregulated regions, are also feeling the pain, with $1.75 billion in lost revenue.
According to the February Consumer Reports Index, though consumers spent more than they planned to this past holiday season, they aren’t planning to open up their wallets again anytime soon. The Past 30-Day Retail Index for February, which reflects the purchases consumers made in January, is 10.9, a decline of 23% from the previous month says the report.
The Next 30-Day Retail Index, which represents the number of electronics, appliances, and yard and garden equipment consumers said they’re planning to buy in February plummeted to 6.9 from 8.9 the prior month. That’s the lowest level it has been since August of last year.
The hesitation to spend money is not the result of personal financial hardships, however. The consumer Reports Trouble Tracker showed real improvement. It declined to 53.4 in February from 58.2 in January. The top difficulty reported in February: the inability to afford medical bills or medications (14.7 percent, up from 12.7 percent in January).