J.C. Penney just lost a community of 3 Million Facebook fans. Where’s the Strategy in that?

JCP Facebook transitionBowing under pressure, and trying to bring customers back into the stores, CEO Ron Johnson announced last week that J.C. Penney will be bringing back sales. I guess Mr. Johnson’s about-face was as a result of the 50% slide in the stock price over the past year.  Clearly, J.C. Penney has not been listening to its customers.  Yet, the writing was on the wall – Facebook’s wall, that is.  Almost 3 million people are “fans of”/”like”  J.C. Penney’s Facebook Page.  That’s quite the community, wouldn’t you agree?  A following that takes years to build, yet can take less than a day to destroy.   Here’s the message they posted this past Friday on their Facebook wall:

JCPannouncementNew Facebook page everyone!  Time to rebuild.  Time to wipe the slate clean.  New name “jcp”, new gray logo, and best of all… “We did it for you”!   Hmmm, do companies really think their customers are stupid?

As you skim the  posts about the weak brands that J.C. Penney now carries, the bare new look of the stores, and the pricing changes, it’s clear that customers are very disappointed with the Penney transition.  Clearly, the negative comments far outweigh the positive ones.  But every now and then you read a post from a Penney loyalist who’s supportive of the company, advocating on their behalf.   So like most communities, there’s internal discussion going on; people engaging with others from similar “tribes”; agreements, disagreements.   A lot of loyal customers voicing their concerns on the site.  Yet what’s glaringly absent are comments from J.C. Penney itself.   No one from the company is engaging with its followers.  Maybe the brand is listening, but the Facebook fans sure wouldn’t know it.

...the Voice of the Customer

…the Voice of the Customer

One has to wonder if the digital community mirrors the brick and mortar.

Perhaps the new corporate culture, that includes ignoring customers, has trickled down from the top.   At a time when Ron Johnson should be listening to his customers, with the company having lost $4 billion in revenues during his tenure, he may feel he knows better.  After all, few believed that his Apple store concept would make money for the consumer electronics giant. He proved them all wrong.

More likely though, the business probably has so many internal silos that no one realizes the value of the customer data they’ve built up over the years.  They may just think of Facebook as a digital sandbox; a time-waster where people who have nothing better to do post useless comments and try to ruin the reputation of brands.  It’s likely that the J.C. Penney Facebook community isn’t even on any of JCP’s leadership’s radar screens.  At least that’s how it looks from the outside.

More likely though, the business probably has so many internal silos that no one realizes the value of the customer data they’ve built up over the years.

Why change the siteWhat other explanation for shutting down a community with almost 3 million subscribers, and starting fresh?  To re-brand under the new “JCP” acronym?  To rebuild the community under the JCP brand hoping to wipe the slate clean of any negative sentiment?  C’mon…wake up J.C. Penney!  You’re going to piss more people off, and lose a ton of opportunity in the process.

We have to give credit where credit is due, however.  J.C. Penney could have deleted all the negative posts and comments on their original Facebook page.  Instead they chose to ignore customer complaints, they chose not to engage in conversation, and they chose to miss any opportunity to show support for what few advocates they had, and start fresh.

New JCP Facebook page

Link to new JCP Facebook page

Much has been written about the psychology of service recovery; i.e., how resolving a customer complaint is an opportunity to create a stronger relationship with the customer than if the service failure had never occurred in the first place.  Service recovery is an opportunity to build loyalty.  One needs only to Google the term “service recovery paradox” to read the various scholarly articles, white-papers, and blog posts about it.  But customer outreach and engagement needs to be done on a one-on-one basis and it needs to be part of an organization’s overall business strategy.  One might have expected this to be the reason for the new Facebook page, but alas, we are still scratching our heads.

…customer outreach and engagement needs to be done on a one-on-one basis and it needs to be part of an organization’s overall business strategy.

Great customer service is clearly not on JCP’s list of strategic objectives.  Or if it is, some people are pretty good at paying lip-service to the initiative.  And you can be sure that when they considered what the overarching Customer Experience should “look” like, JCP didn’t bother to ask their own customers what was important to them.

Companies pay megabucks to research firms to build consumer panels that they can dip into for opinions on an ongoing basis.  And they pay big bucks to collect customer feedback, typically through surveys pushed out after a transaction is completed with the brand,   All of this is part of a “Voice of the Customer” (VoC) program.  You can be sure that J.C. Penney has this type of program in place.  All big retailers do.

You think the VoC team even knows that a Social Media community exists?  If they do, do you think they’ve even put two-and-two together, and have considered pulling in feedback from the Facebook community?  Social Communities and Social Media Customer Care provide non-invasive, truly unbiased environments for collecting Voice of the Customer feedback.  The sad part is, in many large companies, people don’t communicate very well across departments – the VoC team probably doesn’t talk to the Social Media team and vice-versa.

You think the VoC team even knows that a Social Media community exists?

And so we can only shake our heads in disbelief, as we watch a powerful brand, with a deep-rooted American heritage,  make a decision that makes no strategic business sense whatsoever and throw the baby out with the bath water.

Has your CEO heard the news? Big Companies are Abandoning Social Customer Service!

Great media headlines have a knack for pushing the right emotional buttons and leaving people with strong negative or positive feelings, especially when they haven’t read the rest of the article. And in today’s world of 140 characters and digital media inundation, many of us, including me (I must confess, at times) are guilty of only reading the top line. So it is with this headline that hit the digital press Friday morning: “These Big Companies Are Abandoning Twitter And Facebook For Customer Service“. Wow, sounds pretty dramatic! Oh, and to add to the drama, the featured image in the post is a picture of Joaquin Phoenix in “Gladiator” garb, giving the thumbs down.

So now imagine your CEO, SVP Marketing, SVP Store Operations, etc., getting this headline forwarded in an email from a personal friend or relative over the weekend, or seeing the image below when they click on the link.

ThumbsdownDo you see what they see? A headline and a metaphor of themselves, a leader, saying “not a chance”. The rest is a blur. That’s the message that will register with them. That’s the memory they’ll be left with. And it’s a shame, but that’s the reality for too many busy executives. What may seem important for someone who works in Social Media, or Digital Media, or Customer Support, may be but a blip on a CEO’s radar screen. And they’re often looking for cracks in the wall to discount all of these peripheral requests for extra funding.

So, before they or someone else at the Senior Executive level, ridicule Social Customer Service in the days and possibly weeks ahead, because of this article and any subsequent noise it stirs, let’s spend a bit of time with the details.

Two companies are mentioned in the post. That’s it.  Charter Communications, and Wegmans.  Temkin 2012 Customer Service Ratings Charter is the fourth largest cable provider in the US with 5.2 million customers across 25 states. Wegmans is a supermarket chain in the northeast US with 81 stores. And they’re both big companies. But here’s the difference. Charter sucks at customer service. In fact, according to Bruce Temkin, Managing Partner of the Temkin Group, a highly respected research and consulting firm, in the 2012 Customer Service Ratings study completed by his firm (which covered 174 companies from 18 industries and polled 10,000 US customers), Charter ranked at the very bottom in terms of Customer Service (I’ve added a red box to highlight Charter’s position, in the table on the left). Isn’t cutting out Social Customer Service in line with them being Customer Service bottom feeders? Need we say more?

Charter ranked at the very bottom [of the 2012 Temkin Customer Service Ratings] in terms of Customer Service

Now Wegmans is at the other end of the spectrum for service and Customer Experience. First off, Wegmans just ranked number 5, last week, on the Fortune list of best companies to work for. And research shows that happy employees make happy customers. Fortune best companies to work forMichael Hess of CBS Moneywatch, in an article published in late 2011, asks the question: Could this [Wegmans] be the best company in the world?  As it happens, it was only a single one of their 81 stores (though the largest in New England) that shuttered its use of Social Media for Customer Service. Does anyone really care? Does it really matter to a single store of a brand that is so customer-focused? Come on!

Wegmans just ranked number 5, last week, on the Fortune list of best companies to work for.

So, “Big Companies abandoning Social Customer Service”? I think not.

Given this background information, would you not agree that the premise of the Business Insider article is suspect?  But it’s clear there’s still fear out there about using Social Media. And the author is playing to the fear of Senior Executives.  So given that many CEOs and their leadership team may be fearful of this new medium, because they don’t quite understand it, how might we help reduce the risk for them? Why should they care about Social Customer Service? Perhaps if we try to answer this from a Senior Executive’s point of view. What’s in it for them? What’s in it for the business?

…the author is playing to the fear of Senior Executives

  1. Social Customer Service helps drive greater revenues/more profitability – Social Customer Service is all about listening and responding to Customers through the Social Channel. It’s about managing customer service issues through Social Media. Most organizations recognize that price-competition isn’t a long term strategy. It’s great if you want to sell commodities, but this is not going to make the business profitable. In order to differentiate your products and services from your competitors, you need to provide great experiences for the people who buy from you, so that they spread the news; so that they tell their friends. Average experiences are boring; they’re not an option. Your customers view your company as a single brand; not a bunch of individual channels. But because your customers can choose to engage with you across the channel of their choice – in-store, Call Centre, web, mobile, Social – the experiences that they have with you need to be consistent. Social Media is simply another channel. Trouble is, you don’t control it. It’s just there. Ignore it at your peril; especially if you’re a large, well known brand. Embrace it. Don’t fear it. Using Twitter and Facebook for Customer Service provides an opportunity for the brand to create unique experiences that your customers will want to tell their friends and family about, and it can serve as an amplifier for word of mouth advocates for your brand. Word of mouth advocacy builds loyalty, engages more customers, keeps them longer, and enables you to charge a premium for your products and services. In short, it helps your business drive greater revenues and profits. As simple as this sounds it’s the essence of a Customer Experience Strategy, that smart companies are realizing they need to develop and execute in order to survive in today’s commoditized world.
  2. Social Customer Service helps manage the brand’s reputation – Social Customer Service is about responding quickly to negative feedback that has the potential to grow exponentially and “go viral”. It requires active listening skills, the ability to empathize, and the ability to provide thoughtful responses very succinctly – often with 140 character limitations. Depending on the volume of service issues you’re responding to, it might also require routing of the issue to various people in different departments within the organization. It’s also about building community and creating advocates that will come to your defense if people talk negatively about your brand on Social Media. Consider these examples of real life events that have actually happened in the past year:
    1) You’re in the travel business, and a couple who are to be married Sister's original postbook a honeymoon travel package with you, but two days before the wedding, the husband gets killed in a freak accident. A customer service agent follows policy and refuses to refund the bride-to-be for the couple’s travel fees, so her sister goes on the company’s Facebook page, that has over 62,000 fans, and seeds an outpouring of negative comments towards the company.
    2) You’re a very respected brand in the high-end food service business and someone notices a mouse scurrying across the floor of one of your stores. They tweet a warning out to their 14,000 followers. The story goes viral and hits the mainstream news media.
    3) You’re a major financial institution and your ATMs and access to personal account information go down for 2 days nation-wide because of an Information Systems glitch. Irate customers take to Twitter and Facebook to voice their anger.
  3. Social Customer Service is an Insurance Policy for protecting your brand’s reputation. In all three cases above, smart leadership, fast action, and the right messaging with customers helped circumvent brand reputation damage. Social Media gives a voice to your customers that until now was one-to-one with the brand – think about a phone call with a Call Centre Representative, an email to Customer Service, a problem in a store or a branch.  These are typically private conversations between a customer and an individual in the company.  However, with Social Media, a single customer’s voice can now grow to reach thousands of people within a day; hundreds of thousands within a few days. And the Social channel is not like a valve that Marketing or Customer Service can simply shut off. You can choose to ignore the Social noise about your brand, and risk tarnishing your reputation, or take the route of engaging with the noise-makers, giving your brand the opportunity to take back some control.

What else might be important to your Senior Leadership team in terms of positioning the virtues of using Social Media for Customer Service?  What do you suppose the author of the Business Insider article was hoping to gain from positioning his post the way he did?  What does your own company think of Social Customer Service?  Do your Executives get it?

Should you be investing in Social Customer Service? Have you asked your Customers?

My eye caught a couple of interesting tweets the other day at lunchtime. They were snippets of a Twitter chat that was streaming across my screen. In or out of the context of the chat dialogue that was running in the background, these two tweets raise some interesting questions about the importance of investing in a Social Customer Service strategy.

First tweet: “The “right” social channel depends on where your customers hang out. You party where the party is happening” and then second tweet: “…it makes little sense to be on Twitter if your customers don’t use it despite its popularity”.

Putting on my Customer Experience hat (because that’s my current lens), when we think of the various touchpoints where customers interact with a company to resolve service issues, Customer Care, the Call Centre, the IVR channel, the corporate website often come up in Journey Mapping exercises. However, we’re starting to see Social Media, and in particular, Social Customer Service, coming up as a touchpoint that people want to delve into in more depth in the mapping process.

Whether brands like it or not, customers are forcing their hands to use Social Media to communicate with them. Because customers can now control the message, they have the power to generate their own negative groundswell about a brand. Now whether this will impact a brand’s success depends on the brand strategy; i.e., consider the fake RyanAir Facebook page created by angry RyanAir customers. RyanAir has made a conscious choice, as a deep discount airline, not to engage with its customers on Social Media. Will the fake account impact sales? Probably not. But if a fake Twitter or Facebook account were set up to spoof a more mainstream or premium brand and was used to create negative buzz, or if an avalanche of negative comments went viral in Social Media, it could have some reputational damage for the brand.

Because customers can now control the message, they have the power to generate their own negative groundswell about a brand.

What I’ve discovered from working with clients at major brands across the country, speaking with colleagues, and just my own observations, is that companies are at different stages in the Social Customer Service life cycle.  And don’t kid yourself, these are early days for most. Companies are still experimenting with what works and what doesn’t.  While some companies have a strategy around how they’re rolling out Social Customer Care, others have just jumped into it in a “trial by fire” sort of way. Some are at a very early, very cautious stage with PR doing the listening; others have been at it for a couple of years and have a team of Customer Service agents engaging with customers. For many, Marketing is handling all the Social inquiries.  Some companies are listening and engaging 9 to 5, on week-days only; others, 24 x 7 and across the globe.

Rogers and TD Bank have multiple agents manning their Twitter accounts and engaging with customers about service issues. Flight Centre has multiple geographic accounts with multiple agents, so that it’s handling service issues 24×7. Canada Post is into the third phase of its recently launched Social Customer Service strategy (they just went live July 3rd) and is priming for high volume engagement over the Christmas season, according to Brian Beehler, their Director of Social Media. Interestingly, retailers in fashion especially, are quite diverse in how they engage. A quick scan of their Twitter accounts, while still marketing-heavy, show clear distinctions from zero engagement and one way push, to ongoing conversations and great engagement. One might intuitively think that fashion retailers would be pretty aligned in their Social strategies.  Yet just look at the low to high engagement continuum between The Bay, Holt Renfrew, Club Monaco and Aldo Shoes, respectively as you scan the activity in their Twitter profiles. Can you see how they differ?

Aldo does a great job with its Twitter profile

Others, like Town Shoes, doesn’t seem sure how they’re going to engage yet. So there’s a real mish-mash out there. Seems pretty random to me, but perhaps just a function of where the company is on the Social Media adoption curve.

In order to help build the business case for Social Customer Service and put it on the priority list, an important question companies should be asking is whether providing Customer Service via Social Media is a “Moment of Truth” (MoT) or not? In other words, will the interaction between customer and company at the Social touchpoint, be an event that helps define the customer’s opinion of the brand? Do we have an opportunity to leave our customer or prospect with a lasting memory of a great experience that they’ll want to share with their friends and colleagues?

In order to help build the business case for Social Customer Service…an important question companies should be asking is whether providing Customer Service via Social Media is a “Moment of Truth” or not?

At the company I work for, we have a methodology for defining “Moments of Truth” quantitatively. We define a “Moment of Truth” as a large gap (on a 100 point scale that’s relative to the size of the other gaps – usually over 30 points) between what the customer says is important to them and how satisfied they are with the touchpoint. [Note the red box around the Social Customer Service touchpoint, in the image below. The MoT gap is 36 points.] This “Moment of Truth” is determined by presenting our customers with a series of quantitative questions where they’re asked to rate the importance and satisfaction of various attributes about each touchpoint). So if customers are telling us that Social Customer Service is important to them, and they are highly dissatisfied with their experience at this touchpoint, this would suggest we have an opportunity to invest in and/or improve Social Customer Service and create lasting memories for them. We would prioritize this as a touchpoint we want to invest in. And by invest, I mean, not only to improve the experience through better tools, training of Social Agents, and interactions, but also to create an innovative approach that would differentiate us in the marketplace.

“Moments of Truth” help us focus in on what’s most important for our customers

Why are businesses investing in Customer Experience strategy in the first place? It’s to help differentiate themselves in a commoditized world. It’s to help them create lasting memories at specific touchpoints so that their customers want to share with their friends, family, and colleagues how they felt about banking at the newly-designed branches, experiencing the cool vibe at the restaurants, speaking to an empathetic, upbeat customer service rep on the phone about returning a product, getting a tweet about a delayed flight responded to positively within 3 minutes, etc.  The emotional rush that we get from an exceptional experience and the desire to share the story with people we know, is the essence of the Net Promoter Score a metric used by many leading organizations, it’s at the heart of Word of Mouth marketing, and it’s shown to have direct links to increased loyalty and increased profitability.

Why are businesses investing in Customer Experience strategy in the first place? It’s to help differentiate themselves in a commoditized world.

Let’s not forget that organizations have limited budgets. Social Customer Service is but a single touchpoint where our clients (depending on the business we’re in) can engage directly with us. Social Customer Service may well be worth pursuing; however, if we can’t build the business case for it, will our executives give us the funding to invest in the staff, training, and tools to make it a success? You may be able to show how an investment in Social Customer Care can offset some of your Call Centre costs (if you have a Call Centre); you may be able to sell it to the executive committee using fear as a tactic; i.e., if you ignore service requests on Social, it may lead to a PR nightmare. At the end of the day though, as organizations become more customer-centric in order to differentiate from their competitors, unless their customers are telling them that this is really important and the company is doing a lousy job at it, it’s probably going to be low on the priority scale for executive investment.

What do you think?  Do you think an investment in Social Customer Service is important for your own company?   How important do you think it is for your customers?