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.

When does Social Media carry more clout than your Voice of the Customer program?

Drug store chain with over 1,100 stores

 

Last week, Shoppers Drug Mart, the leader in Canada’s retail drug store marketplace, saw the writing on the wall…its Facebook wall, that is.  No sooner had Halloween ended than the drug store chain began streaming Christmas songs over its in-store airwaves. By the evening of November 1st, the complaints started rolling in as negative comments on Shoppers’ Facebook wall.  One by one, customers shared their written feelings through Facebook, and by 3pm on November 2nd, Shoppers responded with a post of its own saying that they would suspend all Christmas music until further notice.

With over 7,500 likes, as of this writing, and over 5,800 comments, this music issue clearly struck a few bad chords, to say the least.  It also hit the mainstream media – CTV, the Globe & Mail, the Toronto Star, and others.

You have to wonder though, if Shoppers had taken phone calls from discontented customers about the music, or if people had indicated their concerns through the existing web and IVR-based Voice of the Customer (VoC) survey, would Shoppers have flinched?  Hard to tell.  Perhaps if there had been enough noise through these alternate channels, perhaps if some of the executives had listened to actual customer phone calls, or read written comments from the web survey, there might have been a response to the negative customer sentiment.

Having worked on VoC programs for about 8 years, what I’ve found is that unless a company’s culture is such that they have a sincere commitment and belief in the importance of the customer experience, the feedback they collect from customers tends to lose its priority behind operational or financial data.  Too many companies simply pay lip service to creating wow moments for their customers, or superficially try to improve their NPS (Net Promoter Score) because it’s part of employee job descriptions or compensation plans, or they want to move up from 4th place in the JD Power award for best in customer service.  VoC becomes another program, added to the stack of programs that people are working on.  And employees sense that VoC is complex because it relies on many thousands, perhaps millions of bits of information about customer perceptions.  When you look back at why so many VoC programs fail, some or all of these points were likely contributing factors.

Let me be clear.  I’m not insinuating that Shoppers Drug Mart is having problems with its VoC program or has failed in any way.  I’m simply using this incident as an example of how customer feedback through Social Media (through a Facebook page that has only been up for about a year) may have a stronger impact on change through customer voice, than a long-running VoC program.

Now it may very well be that at Shoppers, Social Media customer feedback is part of their VoC program for listening and responding to customers.  They also have a Twitter account @ShopprsDrugMart, that they use to field customer service issues across all of their stores, in addition to pushing out marketing messages.  I’d venture to guess that Marketing and/or Public Relations manages Social Media, and the Voice of the Customer program is managed through Customer Service or Operations.  Social Media is still finding its place within most organizations, and typically falls under the umbrella of the Marketing Department.  But the discussion of who should own it is great fodder for another blog post – many posts have already been written discussing the best place for Social Media to reside.

…what Social Media tends to do, if done right, is build humanity into a digital customer interaction

The point is, Social Media is sexy for most companies, and perhaps Marketing has made it so.  Social Media shifts control into the hands of our customers and prospective customers, and that creates fear in the minds of many corporate executives.  It also creates a permanent written record for all the world to see.  (Ooops, better get Legal looped in on this one.)  Finally though (of course there are many more benefits to Social Media, but being more intangible and harder to quantify means that the C-Suite would typically ignore these) what Social Media tends to do, if done right, is build humanity into a digital customer interaction.   Just look at the examples below, taken from Shoppers’ Facebook wall.

Three different people – John, Fiona, Barbara – real customers with pictures of their faces, sharing their emotions about the timing of the Christmas songs, and each is engaging other Shoppers’ customers who are providing their feedback, some for; some against the music.  These are not rows in a spreadsheet with a unique identifier; they are not written verbatims in a database; they don’t represent bars on a frequency-distribution chart.

for those of us in the Voice of the Customer world, not much has changed in the past 10 years

Let’s face it, for those of us in the Voice of the Customer world (we tend to work in silos don’t we?), not much has changed in the past 10 years.  The amount of customer feedback has increased, we have text analytic tools now to help us be more efficient at making sense of unstructured customer comments, but at the end of the day, the output is pretty much the same – spreadsheets, charts, graphs, scorecards, dynamic visualizations.  Nothing too sexy or exciting to look at that relate back to humans.  Nothing emotional to hook us in.  And as for IVR-captured responses, while we can hear the emotion of the respondents from the calls, these snippets of dialogue have to be listened to sequentially.  It’s a time-consuming process.  Generally speaking, it’s pretty boring output.

If I wanted to make a point to the executives in my company; if I wanted to get their consensus for changing a customer policy, I know which source of customer feedback I’d turn to.

The sad part is, most of us are sitting on reams of rich data about customer sentiment through our VoC programs.  Yet, decisions based on information from all of this data, that is actionable, may take weeks or months to implement.  We’re reading about and seeing decisions based on relatively fewer Social Media-based customer comments often taking less than a day to turn around.

I started by asking the question: “When does Social Media carry more clout than your Voice of the Customer program?”  Isn’t it time we incorporated Social feedback into our VoC programs?  The progressive VoC vendors have incorporated Social into their platforms.  But few companies seem to have taken them up on their offer.  Is it because the control of Social Media is siloed from that of Voice of the Customer?  Is it because Social Customer Service is so new that companies don’t know where it should be slotted?  Voice of the Customer programs are at a turning point.  It’s up to those of us who are practitioners in this space, to make sure that our VoC programs incorporate key Social channels that provide us with rich, humanized insights that support quick responses to our customers.

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?

ING Direct’s FOR SALE sign needs to include: “…featuring an awesome Customer Experience”

Who will the “big fish” be?

“Some news to get while on Vacation!!” That was the reply I got from Jaime Stein, ING Direct Canada’s Manager of Social Media, when I sent him a direct message on Twitter last Thursday. Word had gotten out in the media about the Bank’s impending sale, and I was curious if Jaime had some inside information. “Nothing.” He asked me what I knew. “No idea”, I said. Jaime and I had kept in touch over Twitter since connecting at ING Direct’s first “Meet and Tweet” in Toronto [PIC] back in January 2010. (Jaime was Manager of Digital Media at the Canadian Football League back then). He’d only been in his new role at ING Direct for 5 months when he got word that his company was being sold.

If you haven’t already heard, ING Groep NV, the Dutch parent, is planning to sell off the Canadian Direct Banking unit in order to restructure and pay down a good portion of its remaining debt to the government from the 2008 financial bailout. The Canadian Financial Services market is abuzz with speculation.  Who will the buyer end up being?  National Bank?  Scotiabank?  Manulife Financial?  PC Financial?  You can be sure that a slew of Barbarians are just chomping at the Gate.

When you read through the various opinion articles, from both Canada and abroad, and the analyst predictions, the stories are about return on assets, book value, the impact on the banking sector, market share opportunity, predicted purchase price.  Nowhere is there any mention of the human side – the uniqueness of the ING Direct Canada brand, the transparency of Peter Aceto, the CEO, their involvement in building and supporting community, the unique culture created by the 1,100 employees, the Café experience, the high proportion of millennial customers.

Why is it that the human side is so often ignored in these stories of corporate acquisition?

Why is it that the human side is so often ignored in these stories of corporate acquisition? Aren’t stories of human interest, culture and people what make for engaging articles? Isn’t it the stories of great leadership and approaches to creating social good, that engage peoples’ interest?

ING Direct Teams ING Direct Olympic Event - Vancouver British Columbia Photos courtesy of WWF-Canada/Linda Lee and Kris Krüg, respectively, on Flickr

When I look at ING Direct, I see an organization that has employees committed to the brand, I see a CEO that has taken risks in such a regulated market and puts himself out openly and regularly on Social Media, I see a company that has taken very simple financial products and has bundled wonderful experiences around them, I see a Social Brand that has put its values proudly on display for all to see.  To think that ING Direct’s value proposition is about its direct online approach to delivering their product – they can offer lower fees and higher rates of return than the Big 5 because they don’t have the overhead of physical space – would be naive.  What’s really differentiated them in the marketplace is how they execute, how they build brand advocacy from within, how they’ve created an open organization, their leverage of Social Media as a tool of engagement and collaboration, and how they’ve developed trust with their clients.  ING Direct has built a brand that offers its customers unique experiences they don’t get with other financial institutions. The commoditized world in which we live would do well to learn from these guys.

What’s really differentiated them in the marketplace is how they execute, how they build brand advocacy from within, how they’ve created an open organization, their leverage of Social Media as a tool of engagement, and how they’ve developed trust with their clients.

When we think back to TD Bank’s acquisition of Canada Trust in 2000, it learned that it could differentiate itself on the retail side, through a focus on customer service, and doing it well would lead to increased profitability.  When they subsequently bought Commerce Bank in the US seven years later, TD learned how to offer unique branch experiences, and what that also meant for the bottom line.  TD Financial understood that banking services are highly commoditized; that the only way to offer something competitive in the market is to create unique experiences for their customers, and continually work to innovate and keep those experiences fresh and exciting.  And as a result, TD leads the market in customer loyalty.  It’s in an enviable position to hold.

Fast forward to this week. The Canadian Banking Sector is primed for a bit of a shake-up right now, with ING Direct’s “FOR SALE” sign out on the front lawn.  The almost $40 billion in assets or the return on assets are not all that’s at stake here.  (Consider that CIBC, the fifth largest of the Big 5 had assets of over $350 billion at the end of last year, and RBC, at number one, had assets of over $750 billion). I see the real opportunity as being among ING Direct’s almost 2 million loyal customers and its 1,100 engaged employees. ING Direct has a groundswell of advocates. And you know what they say about the value of brand advocates. The prospectus for this sale needs to highlight “awesome Customer Experience” as a key asset. It needs to highlight the human factors; the strong culture; the strength of brand advocates both within the company and among its clients.

The prospectus for this sale needs to highlight “awesome Customer Experience” as a key asset.

As we speculate about potential buyers, it’s possible that TD Financial may end up picking up ING Direct. Anything’s possible. Remember, it has to work both ways. If that happens, you can be sure they’ll win the JD Power award for highest in Customer Satisfaction for an 8th year in a row.  If one of the other big banks succeeds, they’ll have a better chance of dethroning TD, if they are prepared to learn from the ING culture and can think outside the hard asset box. If one of the smaller guys buys them, this could get exciting.  Word is, we’ll find out by the Fall.  Let’s hope for the best, for the sake of the employees and the customers of ING Direct.