Saturday, December 27, 2008

Calcified relationships are useless

I recently wrote about leaving T-Mobile for AT&T. I did it largely because I want to get an iPhone, although my employer's significant discount with AT&T definitely helped.

But I've been thinking about why I left T-Mobile and what they could have done to keep me. As I wrote in my last post on this issue, the customer service rep was really nice when I called to tell them I was switching. The language he used made me feel special. He talked about what a great customer I had been for 7 years and how if I chose to come back, they would really take care of me.

It got me thinking: where were they for all of those years when I wasn't calling to tell them I was leaving? I will admit that I have noticed - over the past year or so - that when I call them, the experience is quite pleasing. But that isn't really enough. The problem is that my relationship with them never changed. I put in more years. I remained loyal, but they never acknowledged that in any way. Only when I called to dump them, did they express their love and show appreciation for my loyalty. Too late.

Think about it. Relationships either change or they end. The change doesn't have to be dramatic. But long lasting relationships often get the feel of a very comfortable old piece of clothing that gets softer with age. Where you know its every wrinkle and it seems to know just how to fit itself onto your body. Or an old bottle of wine or an aged whiskey that doesn't radically change flavor but seems to settle into its existing flavor with more grace and dignity over time.

The value of a long-lasting relationship is huge (when the relationship doesn't suck). But only if it acquires some greater breadth or depth. Otherwise it is calcified and its uselessness screams out until you fix or end it.

My relationship with T-Mobile never changed. They never acknowledged my loyalty in any way. They never behaved differently towards or with me when I was a 7 year customer than when I was a new customer. What that says is that they don't care. It's not a real relationship.

How could they have created a real changing relationship? Here are just some ideas:
* An "anniversary" present on the anniversary of my joining T-Mobile with a gift that increased in value every year
* Every now and then just sending an email, a text or calling me and letting me know - for no apparent reason - that they really appreciated my x years of business
* Giving me a special customer service line, good for long-standing customers only
* Having special in-store events for long-standing customers

And so on. See, this is not hard. And some of these ideas are really cheap. But they would have made me feel really good. I don't know if they would have been effective at stopping me from getting an iPhone. But if they had really cared about me and really showed it, I probably would have gotten an iPhone and unlocked it for use with T-Mobile.

Relationships where one or more of the parties is human, change. Period. If you are a business and you want to have a relationship with a human customer, you should have a plan for this. How will you evolve the relationship over time? I think, perhaps, that many businesses either don't think about this issue at all, or, worse, think of customers as equipment that depreciates over time. But the opposite is true. Customers get more valuable over time. So make sure to have a customer lifecycle plan for managing this incredibly valuable asset.

6 comments:

Terry said...

A special customer service line, good for long-standing customers only is genius!!!

Jer979 said...

Just want to say that I appreciate you very much...

jdub said...

Nothing personal, Adam, but part of the problem I have with what you and Jeremy are positing is that most of these goods and services are essentially commodities. I could care less about who my cell phone carrier is, as long as I don't have problems. As commodities, I look for two things: price and quality. The nature of the relationship is irrelevant to me. I want my coffee to taste good and I don't want to pay too much for it. I want my cellphone/cable/whatever to work and not cost too much.

I only care about the other things if (1) i'm going to spend a large amount of money multiple times (e.g., suits for work, need a few new ones every few years) or (2) healthcare. Otherwise, do the job, don't charge too much, and leave me alone.

Perhaps a dog or small rodent in a cage would provide the love and companionship you are seeking from Tmobile . . . (j/k)

Adam said...

jdub:

I can't disagree with you. That's how you feel. But all I can do is tell you how I feel. I suspect there are others out there like me.

Look, I need the cellphone to friggin' work. Every time. (We're not there yet.) And I care about price. So I pretty much care about what you are about.

But the fact that these are commodities is not a law of nature, it is the result of marketing actions or inactions. In a sense, you have described the problem. Cellphone service doesn't have to be a commodity. Carriers can differentiate themselves by offering something extra (assuming that they meet the category antes of price and quality).

In the end, you have chosen one cellphone carrier despite the fact that they are commodities to you. Well how are the carriers competing for your business? I guess they're largely trying to shout louder. I am proposing that they try something else. For me, I want companies to appreciate my business and to demonstrate their appreciation in a manner that is meaningful to me. Again, they still have to deliver the basics.

I don't really like pets so your suggestion probably won't work. But I like the way you're thinking. I was thinking something more human and female might work. But not in a cage. Unless that's her thing. And she agrees to clean said cage.

jdub said...

I'll continue to disagree. They are commodities not because of marketing actions or inactions, but rather because that is how the market treats them. I think we're arguing chicken and eggs. You are saying they have become commodities because of the companies' collective marketing decisions and I am saying the marketing decisions have been made because most folks, i.e., the market, have decided that cell phones are commodities. In other words, you feel the marketing decisions drive the market and I feel it's the opposite.

Adam said...

jdub:

I'm not sure you've understood me yet. First of all, companies (and their actions) are part of the market. A small point, but your allusion to the contrary vexed me.

Now on to the main point. There are no chickens and eggs anymore. It is well nigh impossible to tease out cause and effect amidst the soup that is marketing and consumption.

I am not saying that marketing decisions drive the market (I assume from the context of your paragraph that "market" to you means the consuming public). But I am saying they are an influence. I'm not really going to debate this with you. There is too much evidence that marketing can influence purchase behavior as well as desires.

But I do recognize that companies also come to a table that already exists. And they must deal with this fact.

Having worked in marketing across 4-5 industries, I can tell you that marketers spend lots of time looking at the market and trying to influence it.

Hopefully you can agree (or at least stipulate) that marketing can influence consumers' thoughts and behaviors, and that marketers explicitly attempt to do so.

So now we come to commodities. A commodity is a product that is undifferentiated from its competitors on everything but price.
You are arguing that cellphone service is a commodity. Perhaps. But there is no law of nature that says it must be so. You only care about quality and price for your cellphone service. Well not everyone is like you. I, for one, am not. But I will stipulate for the time being that everyone is like you. Even so, cellphone service does not have to be a commodity. If it is, it only is because companies have not given consumers anything to react to other than basic function and price. That isn't to say that they couldn't.

Think about quality for a moment. What does that mean? Well for cellphones, calls have to go through and not be dropped. And the sound must be good enough for people to have a conversation. Is that it? What if a carrier developed a technology that made calls sound perfect all the time. Like you were in the same room with the person. If that technology were patented and if at least some people were willing to pay more to have those better sounding calls, then suddenly cellphone service is not a commodity.

My initial post was about customer service. I used the word "relationship" which is, perhaps, a bit more touchy-feely than I really want to get with my cellphone company. But I am telling you that I want better service. I want companies I do business with to recognize and reward my loyalty. If they do, they will be differentiated from their competition and presto, no commodity.

Commodities are not commodities because consumers don't see a difference between the products. Well, OK, they are by definition. But the root cause is that marketers have not done anything (or not done the right things) to differentiate their products. I'll leave you with one example: paper plates. Hefty came out years ago with a paper plate for kids called Zoo Pals. Paper Plates. Pretty commoditized. Well Hefty found a consumer insight around eating as a fun activity for kids. And they made a product that meaningfully addressed that consumer insight. No more commodity. It can be done. It is done all the time.