Living in trouble

How the Verizon Wireless 'Smart Rewards' Program Backfires, Erodes Customer Loyalty

For our family wireless service, we switched from AT&T to Verizon several years ago, and we've found them eager to provide reliable, high-quality service. So we've been loyal. A couple of months ago, I ran a price comparison and found that Verizon remains a superior value.   IStock_000019396853XSmall

So when Verizon launched their Smart Rewards program, I expected it would offer good value to its customers. Since we'd been customers for a few years, we started the program with over 100,000 points, and I spent a couple of hours trying to find a way to spend them for something we'd really enjoy. 

I was very disappointed. Most rewards require us to spend a substantial amount of our own cash. Freebies are very hard to access. And how come they can't let us convert even a small part of the points to paying off our bill, the way American Express does? Or maybe we could use it to get more data for special occasions?

So then I started searching to see what other people thought and found others equally miffed. In fact, the whole program is more geared to Verizon collecting data rather than rewarding customers. All of which contributes to their soaring profits. 

When rewarding our customers we have to look first at two big issues: 1) What benefits do our customers look to use to provide? 2) What values do we share with our customers? 

Ad Exchanger: Verizon Rewards Program Draws Customer Ire, Putting Mobile Data Sharing at Risk, 2015-Nov-5 by Allison Schiff

Many Verizon customers perceive that the company's Smart Rewards loyalty program – which, it should be noted, requires users opt in to be tracked for advertising purposes through Verizon Selects [emphasis added]– leaves much to be desired. As one Redditor commented in September, “It mostly exists to con you into buying things from partners at prices that aren’t particularly competitive.”...

It’s an aggressive move into digital ad monetization, a space typically populated by Facebook, Google, et al, and the opportunity for advertisers is clear. As Gartner research director Martin Kihn put it in a previous interview with AdExchanger, Verizon is creating “a mini-Facebook killer for mobile sales.”

For its part, Verizon is framing its intentions, as least to consumers, as a help-us-help-you sort of play. An email received by some Verizon subscribers in late October pointed to an explainer page claiming that the combination of the Verizon/AOL data sets “will help make marketing you see more personalized and useful to you across the devices and products you use.”...

All users start out with at least 10,000 points when they join, with the chance to win [emphasis added] additional points for doing fairly easy, run-of-the-mill stuff like paying bills, opting for electronic payments or upgrading devices. For example, participants can get 10 points for every dollar spent.

Although points can’t be applied to a phone bill [emphasis added], rewards run the gamut from the chance to enter sweepstakes to discounts off Verizon products, meals at local restaurants, travel and select merchandise.

Users can also put their points toward gift cards – say, 1,000 points in exchange for $10 off a $100 Denny’s gift card, meaning the customer is still responsible for shell out [emphasis added] $90 – or enter live auctions to win gift cards or merchandise.

The Motley Fool: Verizon Communications Inc. Earnings: Solid Wireless and FiOS Results Propel Shares Higher, 2015-Oct-20 by Joe Tenebruso

Verizon added 1.3 million new monthly wireless subscribers in the third quarter, which topped analyst expectations of only 1.1 million, according to Bloomberg. In addition, Verizon continues to show signs of strong customer loyalty, with its retail postpaid churn rate remaining low at 0.93%, a 7-basis point improvement from the year-ago quarter. That's impressive because it shows that Verizon is not only adding new customers, it's also doing an excellent job of keeping its existing customers....

More importantly, Verizon remains a cash-flow-generating machine. Even after adjusting for a non-reoccurring $2.4 billion gain related to the monetization of tower assets in the first quarter, operating cash flow increased to $26 billion in the first nine months of 2015, up from $23.2 billion during the same period of 2014. And adjusted free cash flow (excluding the tower sale) totaled $13.5 billion during the first three quarters of 2015, up from $10.5 billion in the year-ago period.

To sustain our business, we have to keep managing the relationships

When we discover a new customer and they really like us (really!), we may fool ourselves into expecting smooth sailing. While it's good to experience the sun shining on us, we have to keep steering our business by accepting responsibility to manage the relationship.  Tq150908bw

Years ago I was very upset when my partner wanted to resign an account that was ready to flood us with new business. I wasn't the one in charge of the relationship, and my partner was hearing that customer demand many changes to the terms of business. The customer was quickly becoming unmanageable. 

We can't control our customers, our luck, or much of our environment. The best we can do is prepare and decide what's good for our business, what our customers are allowed to expect, and what value we expect in exchange. 

The Likeable Expert Gazette: Fly the Friendly Skies, 2015-Sep-4 by Michael Katz

People who've never worked for themselves often make this same erroneous assumption about running a business: They think it will be a steady climb, when in fact, it's anything but.

In my experience, it goes something like this:

Up ... up ... down ... sidewayssssss ... up ... more up ... down ... down ... what the ... maybe I should get a job again ... oh look, leveling off ... AMAZING! ... sideways the other way ... AAArrrrggggg!!! .... down ... UP ... UP ... what the hell just happened?

And that's all before lunchtime.

My point is simply this: It's September, the time when we all get serious again and "go for it." Nothing wrong with that; I intend to do the same.

Just remember, no matter how long you've been at it, it's never a straight shot and there's always a lot of bobbing. And even if you have a couple (or several) bad months in a row, it's to be expected. It doesn't mean you're failing.

As they say in flight school (I'm assuming), no matter what appears to be going wrong, don't forget to keep flying the plane.

In complex sales, retaining existing customers may be TOO hard

If we have complex sales and/or business relationships, our salespeople may find renewals and upgrades of the existing contracts so difficult, they prefer signing up new customers. Typically, businesses which have this problem also have many other productivity problems relating to siloed business processes, lack of digitized contracts, etc.  IStock_000021848870XSmall

Even in small businesses, the founder may unconsciously hoard information about the oldest customers that cause sales people and customer service reps to avoid supporting them. Creating a CRM system is about establishing a place to share information so that the entire organization can help to customers from a unified position. 

Amdocs: What NOT to Do for an Effective Sales Process, 2015-Jun-15 by Anat Ben-Yaakov

Amdocs Research: Automation and the Salesperson: Pushing the Pipeline, 2015

While it may seem absurd, in many cases salespeople find that starting a new sales contract is far easier than up-sell. This is a direct result of working across multiple and overlapping systems, and the ensuing inability to trace the contract and pricing terms. Ironically enough, this could potentially contribute to the loss of existing customers....

In the ethos of sales as a whole, it is hard to believe that a salesperson would risk losing existing customers simply because the methodology and processes are so complex, and require so much extra manual work. However, this is the reality. A high turnover profession at the best of times, dissatisfaction in salespeople is well documented. Add to this cumbersome multiple processes generating unnecessary quantities of “grunt work”, and the likelihood of salespeople making such short-sighted choices as choosing to sign up a new customer rather than maintain and take care of an existing one, grows exponentially.

The customer experience of abandonment cuts both ways.

One of my most memorably bad experiences was in the service area of a car dealership. I was clearly not of the recognized regular customers. And I arrived in a bad mood, as a consequence of some problem with my car. The service manager punished me by overlooking me for all the other customers in the area. There was no queueing system that might have protected my turn.  IStock_000020658318XSmall

As I stood there and stewed, I had plenty of time to consider what I had done to contribute to the situation and how I wish things had been handled differently. If any of the personnel has made eye contact and said, 'you're having a rough morning,' I would have relaxed. If they knew I needed to wait they could have directed me to a place to sit and told me how long to expect to wait. None of that happened, and I never returned after that first experience. 

Customers do NOT want to school your employees. If we already have a great deal of loyalty, we may go to the trouble of asking or mentioning unfair treatment. Confrontations are draining, and if we don't have an investment to protect, why should we bother? It's your business, after all. 

LoyaltyOne: Dysfunctional customer experiences risk billions in retail losses, 2015-Jun-1 [emphasis added]

It may seem counterintuitive, but retailers should welcome the irate shopper who vents her frustration in an animated scene on the sales floor. That’s because it’s the mistreated customer who walks out the door in a silent huff who places the most revenue at risk, according to a collaborative study of dysfunctional retail touch points conducted by LoyaltyOne and Verde Group with Professor of Marketing and Psychology, Dr. Deborah Small, at the Wharton School of the University of Pennsylvania.

The March 2015 survey shows that approximately half of 2,500 U.S. consumers polled reported experiencing a problem on their last shopping trip. Of those customers, 81% decided not to contact the retailer about the issue. Among these silent shoppers, 32% said they were unlikely to recommend the retailer to friends and family, putting these shoppers at-risk of decreasing their spend with the retailer.

By comparison, the study shows that shoppers who did notify retailers of their poor experience and had their problem completely resolved were 84% less likely than silent shoppers to be at risk of decreasing their spend.

Good Data on Sales and Marketing Alignment from ChaiOne

Over at ChaiOne, they've designed a new "mobile sales enablement tool" called Game Plan that looks pretty cool. Fortunately for everyone, they've put out an infographic that sharing the research that led to the Game Plan project. 

The text is a little hard to read here, so head over ChaiOne to see their original. The most interesting perspective for me was how little patience sales people have for finding the right content that's already been prepared by marketing. I knew they hate data entry, but they also hate looking for content. So Game Plan might be right for your team.

ChaiOne, Sales Content Management Done Right, 2015-Jun-3 by Jacob VonCannon:




To Grow, We Have to Embrace Social Media

We all have our issues with social media. As soon as we get comfortable it changes. Unfortunately, that's an advantage! The tools are getting better in many respects. It's not a smooth road but it does lead to greater awareness.  IStock_000021700803XSmall

Anyone interested in growing a business, building a career, and developing strong relationships has no choice but to start paying attention and participating. Not constantly, but with a sense of obligation. Our friends and associates are out their sharing their experience and views and we have to acknowledge them. We can actually insult them if we don't. It's just the cost of having relationships these days. 

Hating social media is like hating healthy food. You can hate it but you can't deny it helps. 

RESET: Leveraging Social Connecting to Speed Growth, 2015-Jun-17 by Wayne O'Neill

I’m here to tell you that like it or not, social media platforms are proving to be unbelievable connection tools. And I’m all about finding more ways to effectively connect with my market and potential client base in time effective and cost effective ways.

I know that if I’m not keeping my fingers on the issues that are driving decisions in our target industries, and within our target clients, I’ll never be able to piece together solutions that connect with the things important to them.

Does the fact you have info about your customers' behavior change their expectations?

If you have a restaurant and customers use Facebook to announce their presence, do those customers expect the restaurant to notice? What if they are checking in frequently? Do they feel the restaurant should acknowledge them?  IStock_000021552541XSmall

We don't have good answers yet, but as this Harvard Business Review article points out, large chains like Starbucks now have access to this information and can integrate it into their loyalty programs. We expect that as customers experience such benefits at our competition, the customers will expect us to catch up at some point. 

Harvard Business Review: The Internet of Things is Changing How We Manager Customer Relationships, 2015-Jun-5 by Ric Merrifield

Now you can have visibility into everything. Not only can you tell that Customer A (who has a shopping app) went into a Lord & Taylor store to buy an expensive pair of shoes (which you could know with CRM). In addition, you can know how long they were in the store, where they walked, and whether they lingered or went straight to the shoe department and bought the shoes. Then, you can compare that visit to every visit to that store that Customer A has had (since getting the app), and you can at least infer what is most valuable to her. If she is always a get-in, get-out kind of shopper, speed of service may be her #1 thing. If she spends a great deal of time shopping, maybe price or product selection is her thing. If she buys a lot at the store, maybe she wants some form of recognition for her loyalty (whether it’s points or just a “welcome back”). If you compare online experiences with in-store experiences and weekend vs. weekday behaviors, your picture of the customer becomes three-dimensional very fast.

As exciting as it can be to talk about this and to see that it is happening right now in broad daylight, talking about how to assess customer experiences and how to engage customers differently when they have this information gets complicated quickly. The important thing is to acknowledge that the measurements of yesterday may need an overhaul, and to understand where your customers are on the acceptance-expectation path so you can try to stay with, if not get ahead of, them.  An increasingly common method for getting a handle on this is documenting the customer (and employee) experience journeys.