Daniel Burstein

Why You Should Consider Customer Service to be 1-to-1 Marketing

November 7th, 2014
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Some retailers only see customer service as an expense.

They view it as a cost that needs to be ruthlessly cut to the bare minimum by incentivizing call center reps to get the customer off the phone as quickly as possible and push customers to self-service portals instead of providing easy contact information.

Yet, a major challenge retailers face is that many are resellers and the products they sell are commodities.

 

If a customer can buy the product in many places, why should they buy from you?

Since the products are the same, retailers need to create a unique value proposition for their store.

One unique element of value can be your store’s customer service. According to data from the MarketingSherpa Ecommerce Benchmark Study, customer responsiveness correlates with success.

Stop thinking of customer service as a cost center and start thinking about it as an investment in one-to-one marketing.

Let me show you what I mean by using a customer journey as an example.

In this case, the customer journey is one I intimately understand since it was my own. (Please Note: I am overdramatizing it for effect and to highlight different decisions that go through the buyer’s head. In reality, some of these journeys may happen in a matter of minutes and many happen at a subconscious level for the customer.)

 

My customer journey

In my hometown of Jacksonville, Fla., it has been raining and hot and cold and dark and bright and buggy and all sorts of other excuses I could come up with for not going running. I needed a fool-proof method for exercising.

After doing some pain-point-level research, I discovered a recumbent exercise bike would be the solution I was looking for, since I could comfortably catch up on HBO Go while exercising – just the motivation I needed. Some product category research led me to the Marcy ME 709 Recumbent Exercise Bike.

Now that my product search was complete, I had to decide where to buy it. This was a commodity product with the same exact model available at many retailers. A quick foray into a shopping search engine identified 38 online stores that sold the exact same bike.

 

One-to-many marketing

There were price differences, and that helped with store selection. But another factor that helped with store selection was one-to-many marketing.

With so many selections, there were various stores I trusted thanks to their overall advertising and branding campaigns, print ads, newspaper circulars, content marketing, a physical presence in my hometown and many other tactics I would consider one-to-many marketing.

This branding, combined with my overall experience with these stores in the past – even excellent branding can’t outweigh negative customer experiences – caused me to prefer some stores over others.

However, there were still many stores to choose from.

 

One-to-few marketing

During this product search, I was identified as someone in the market for an exercise bike, and particularly, the Marcy ME 709 model. I started to get stalked around the Web – er, I mean, targeted – by advertisements aimed at my interests.

I also proactively engaged in one-to-few marketing by visiting the aforementioned shopping engines and looking for specific keywords and content aimed at someone interested in buying a recumbent exercise bike, often the specific model I was looking for.

With so many choices though, I had to find a true differentiator of where I should make my purchase.

 

One-to-one marketing (#fail)

I’m a tall drink of water. From reading online reviews, I thought it would be a good idea to actually try the bike out before I bought it (although I was pretty darn sure this was the model I wanted).

I knew it would likely be more expensive at the brick-and-mortar retailer, but the approximately 20% markup was worth it to me to be able to actually test the bike and take it home right away.

So I emailed Marcy, and asked about stores in my area that sold the bike. I found two that were in my neighborhood, and emailed those stores to ask if they had a display model.

Now, keep in mind, I am asking about a specific product in a specific store. I am a customer that is pretty far down the funnel with a clear intent to buy at this point. Here is how they responded:

(I’m anonymizing the actual company names. Hey, no one is perfect. My intent is less to slam them than to provide examples for other marketers.)

 

National Retailer #1: Our IT systems stink

National Retailer #1 was candid about their limitations – “We do not have the ability to monitor the inventory levels of our land-based retail stores. We only have access to the inventory count of our online store.”

They advised me that “you would need to contact that particular retail store.”

While I appreciate their candor, and many companies have a similar need to develop cross-channel customer visibility, as a customer, I don’t really care. I just want my problem solved.

 

National Retailer #2: Beats me

Most of the email responses I received from National Retailer #2 was the ironic customer service boilerplate.

The messaging stated that they care about me, even though their response shows they’re clearly not trying to solve my problem: “We value your relationship with National Retailer #2 and hope that you will continue to make National Retailer #2 Holdings your choice for quality and value.”

(By the way, the only thing more corporate and non-relationship building than stating a fake care for the customer is to use the word “Holdings.” Is that the brand you are investing marketing dollars to build a relationship with the customer? A holdings company?)

At least National Retailer #1 had an actual explanation and displayed candor and transparency by admitting to the problems with their IT systems.

The only line in the email response from National Retailer #2 that wasn’t boilerplate said, “We kindly ask that you contact your local retail store to have this matter addressed.”

 

One-to-one marketing (in an alternate universe)

So what could these national retailers have done differently?

Instead of sending an email that said they won’t help me and that I should contact their company’s store, why not contact the store for me? After all, that’s why I’m emailing them, right?

If it was a local store without disparate systems, they could have just answered my question.

If they contacted the store for me, they could email me back and let me know they do have a display model at the store.

Or, if they don’t have that particular model on display, they could find similar exercise bikes they have display models for, and entice me to visit and try them out.

I ended up buying the exercise bike online from Target.com. I contacted their customer service and asked if I could return the bike to my neighborhood store if I didn’t like it, and they responded quickly that I could. (And I rode 4.5 miles this morning. #SuccessSoFar)

 

The bottom line – companies overinvest at the top of the funnel and underinvest at the bottom of the funnel

So why didn’t these customer service departments help me buy an exercise bike from them when I contacted them and said, “I want to buy an exercise bike from you”?

While I don’t have visibility into their processes, the likely answer is money. It would probably be more expensive to have customer service reps take the time to do the legwork for me, and it would cost more to hire, train and retain customer service reps who would better serve customers.

The problem is, as I mentioned in the beginning, many companies simply view customer service as a cost center.

What if, instead, they viewed it as a revenue center? As one-to-one marketing?

 

Key takeaways for your company

Do you overemphasize ToFu at the expense of BoFu?

Both national retailers I contacted invest significant budgets in top-of-the-funnel (ToFu) branding activities, like national TV commercials.

One of them is still serving up targeted display ads trying to convince me to buy this exercise bike. What if they invested more of that money in customer service and treated it as one-to-one marketing?

They would be better able to sell to customers farther down the funnel (BoFu) who have a clear purchase intent, and even use this enhanced customer service as an inbound opportunity to upsell and cross-sell products using the human touch.

 

Could you use customer service as a differentiator?

Competition from ecommerce sites is fierce and many brick-and-mortar retailers are struggling to compete because ecommerce prices are often lower.

Brick-and-mortar can’t compete on price, but it can compete on value.

By providing better customer service through live chat, on the phone, through email, through social media, driving customers into the store, and better customer service in the physical store, could you create a value differentiator for your store in a sea of resellers offering the same commodity products?

Is customer service the key for brick-and-mortar retailers to compete with ecommerce?

 

Can customer service help with viral marketing and user-generated content?

Many marketing departments invest significant resources to try to make their marketing and content “go viral” and encourage users to create content about their brands.

Well, good customer service goes viral – see Zappos. But, bad customer service also goes viral – see Comcast.

Could you use exceptional customer service in your industry to generate online reviews, positive social media mentions and even earned media from your customers’ positive experiences?

 

Is it easy for customers to find ways to contact your company?

Can they contact you through whatever channel they prefer – email, social media, phone?

You don’t email customers in attempt to build a relationship with them, and then tell them not to write you back by using a “do not reply” email address or unmonitored mailbox, do you?

 

How much is your cost per customer acquisition?

I’ve talked mostly about using customer service as one-to-one marketing for customers who are very far down the funnel, but haven’t bought yet.

What about customers who have already purchased? Can you use customer service to improve the experience and increase the lifetime value of these customers to ensure you are getting a return on the investment you’ve made to acquire a new customer?

 

You might also like

Online Course: Value Proposition Development [Learn more about applying your company’s value proposition in every aspect of your marketing efforts]

Ecommerce Research Chart: Customer feedback and ecommerce success [Research Chart of the Week]

Why Social Media is the New Customer Service Hotline [More from the blogs]

How to Improve Your Customer Service Email Responses: 5 Solutions to Common Problems [How-to article]

Daniel Burstein

About Daniel Burstein

Daniel Burstein, Senior Director of Editorial Content, MECLABS, Daniel oversees all editorial content coming from the MarketingExperiments and MarketingSherpa brands while helping to shape the editorial direction for MECLABS – working with our team of reporters to dig for actionable information while serving as an advocate for the audience. Daniel is also a frequent speaker and moderator at live events and on webinars. Previously, he was the main writer powering MarketingExperiments publishing engine. Prior to joining the team, Daniel was Vice President of MindPulse Communications, specializing in IT clients such as IBM, VMware and BEA Systems. Daniel has more than 15 years of experience in copywriting, editing, internal communications, sales enablement, and field marketing communications.

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