The old adage “time is money” rarely hits home harder than when we need to pay for some costly service. Chances are you’ve had to shell out for one or more of the following: computer repair $25-$50/hr.; professional gardener $35-45/hr.; plumber $45-$65/hr.; auto mechanic $80-$100/hr.; appliance repair $100-$200/hr.
Although some of these service rates may seem unreasonable, people need to be paid for their time and receive compensation commensurate with their expertise. Likewise, supply and demand dictate that if many consumers need appliance repair, but few professionals are willing to provide it, that service will cost more than others.
What happens, however, when roles are reversed and it’s the company that consumes the customer's time? You may be wondering what I mean, yet you’ve probably had such an experience when, through no fault of your own, you’ve had to take significant time to resolve an issue that was due to a business’s blunder.
Over the years, I’ve had many such experiences. Let me tell you about one that just happened . . .
Like many people, our family uses autopays for certain reoccurring expenses: rather than writing a check every month, the approved companies automatically charge our credit card. One of those reoccurring charges is for orthodontics—a privilege of parenting!
In the last billing cycle, we noticed a significant extra charge on our credit card statement from the orthodontist office. I first called the credit card company to confirm, then spoke with the orthodontist to see what happened. After some investigation they called back to explain: an employee who handles their billing had inadvertently posted another family’s charge to our account, in addition our own.
Of course, I was a little upset to have been charged several hundred dollars for some stranger’s braces, but I was glad that the office took ownership of the mistake. I also was relieved when they told me that the incident helped them identify a way to avoid such errors in the future.
I thought the orthodontist office might make amends for their mistake by offering some small concession, but they didn’t, which was fine. Resolving the issue hadn’t taken very much of my time, and I appreciated their sincere apology, as well as the promise that their billing procedure would now be better. I also reminded myself that everyone makes mistakes, and I’ve appreciated when others have forgiven mine. This, however, was not the end of the story . . .
I then needed to call the credit card company a second time to confirm that the errant charge had been removed. They told me it had not, but not to worry because the returns often a few days to post to accounts. I asked the representative in Disputes if they could contact me when the transaction went through, and she said they would.
A week later there was still no word from the credit card company, and our payment deadline was fast approaching, so I called the company again. I listened to the automated message system read our statement balance, and it was the same as before, i.e., apparently the charge still had not been removed.
I asked to speak to a “representative” and was routed to an agent who listened to my concern. He told me that the orthodontist office had removed the second charge, and the corresponding credit had been posted to our account; however, the credit would appear on our next billing statement, not the current one. In other words, in order to pay-off our account in full, we would need to remit an amount that included money we had been erroneously charged.
I thought to myself, “This isn’t fair. Why should we have to pay an amount we don’t owe this month and wait to receive the offsetting credit next month when the credit has already been issued?” Yes, we could pay the extra couple hundred dollars ahead if we needed to, but what if the errant charge had been several thousand dollars? I felt sure I was on the right side of this issue, so I pressed my point further, and the agent asked me to hold while he transferred me to a more senior representative.
After explaining my case again, the second agent told me almost immediately that my argument was accurate and that we could pay our current statement balance less the amount of the errant charge. I thanked him, and he sounded ready to end the call, but I wasn’t.
I had just had a third lengthy call with the credit card company. Granted, the initial problem was not its fault; however, they hadn’t handled well what should have been a routine issue. Furthermore, I had been forced to argue my position for about a half hour on the current call, not to mention the time I had spent on the two previous calls.
I expressed to the representative my concern, saying in so many words that my time is valuable and I felt the company had unnecessarily spent a significant amount of it. The agent seemed empathetic. He asked me to hold, and when he returned he said that they would credit our account for an amount equivalent to the card’s annual fee. I thanked him and said how I appreciated the gesture. He told me he was glad to keep me as a satisfied customer.
The money the credit card company offered us was meaningful, but just as important to me was the company’s recognition that its customers’ time is also valuable. Too often we see examples that infer the opposite, like cable companies that say they’ll send a repair technician between 1:00 and 5:00 pm, or professionals who keep us waiting for 45 minutes or more before the start of our scheduled appointment times.
As I suggested above, there also are times when companies make mistakes and act as if all should be well if they just give us eventually what we payed to receive much sooner. For instance, if you’re eating out with a group of coworkers and the restaurant messes up your order, it’s not enough for them to bring your entrée 15 minutes later. By then your party has endured 15 minutes of awkwardness (some people eating while others are not), and your coworkers have to wait for you to finish. The restaurant should do
something extra to compensate for that lost time, which also might allow it to keep you as a satisfied customer.
Again, everyone makes mistakes, and consumers shouldn't seek to milk companies' missteps for all they can, much like we don't want companies doing that to us. It is refreshing, however, when an organization, like my credit card company, treats us fairly by showing us proper respect and recognizing the value of our time. Such a restorative response represents "Mindful Marketing."
Cold temperatures and snowstorms recently caused many of us in the U.S. to wake-up wondering what time of year it was. Our confusion was further compounded by what we found in our inboxes: a couple of emails announcing “Black Friday Sales.” “How long have I been sleeping?” some of us thought.
Yes, it is April and those are Black Friday emails. Ironically, two large retail competitors have independently and simultaneously selected the same out-of-season promotion: “Spring Black Friday.” The surprising advertising adversaries are Home Depot and Lowe’s.
When you think “Black Friday retail,” you might think electronics (e.g., Best Buy) or clothing (e.g., Macy’s). So, why are the two home improvement giants slashing prices on patio furniture in April? Well, the easy answer is they’re trying to move merchandise. Like any large, publicly traded retailer, they’re under pressure to meet projections for sales and profit. Analysts’ expect Home Depot’s earnings per share (EPS) for the current quarter to be at least 1.33, while Lowes’ estimate is a more modest but still challenging 0.84.
But why have both retailers turned to Black Friday sales in April? Won’t consumers reject the promotional ploy out-of-hand, just as they would if Walmart and Target offered back-to-school sales in May? The key is that Black Friday is often used to describe more than just the deep discounts the day after Thanksgiving. As most of us have noticed over the past few years, retailers have aggressively expanded the super sale’s timeframe from one day to Black Friday Weekend, Black Friday Week, and even an entire month of Black Friday deals.
Just as Pavlov taught dogs to associate food with a ringing bell, retail has conditioned consumers to salivate about amazing sales when they hear or see “Black Friday.” Does that mean that stores are treating people like animals? Although it's true that some consumers act wildly on Black Friday, the answer is “No.” There’s nothing inherently wrong with creating associations between disparate stimuli, especially if those associations simplify communication and ease the action that consumers want to take.
However, calling a variety of sales throughout the year "Black Friday" sales is not a sustainable approach to promotion. Pavlov could ring a bell every day, several times a day, without weakening the association between the bell and food because dogs continually need to eat, and Pavlov could consistently provide food to fully satisfy that need.
On the other hand, humans realize that firms cannot possibly offer their very best sales all the time. Even if we don’t have an accountant’s understanding of net income, we recognize that retailers need to make money, and selling products for ridiculously low prices is not a long-term path to profitability. Consumers don’t require routine, incredible sales on power tools and appliances in order to survive, but retailers need healthy profit margins most of the time in order to remain solvent.
So, if retailers extend Black Friday sales throughout the year, those discounts are probably not as deep as what we we’ve been conditioned to expect from the Friday after Thanksgiving. Consequently, people’s expectations of unbelievable purchases won’t be met and Black Friday’s powerful original association will be watered down and eroded. In other words, the more retailers ring the Black Friday bell, the less consumers will salivate about special sales.
It’s unlikely that the continual dilution of Black Friday, spreading the same name over more sales events throughout the year, will create significant stakeholder value for marketers or consumers. Does Spring Black Friday also compromise societal values? Probably not, provided that retailers don’t deceive consumers in any specific ways or offer shoppers unfair value for any particular purchases. Spring Black Friday, therefore, seems like a case of “Simple-Minded Marketing.”
“By the year 2030, there will be no more single adults in the United States, as the proliferation of on-line dating sites will make marriage happen for everyone.” Who’s the source of this crazy prediction? Me.
No, I don’t actually think that society will see the end of singlehood, nor do I believe that everyone must be married. It’s just that I am amazed at the increasing number of organizations that promise to place people in the perfect relationship. Some of the players in this burgeoning industry are familiar ones like eHarmony and Match.com, as well as several other formidable competitors such as Plenty of Fish, OkCupid, and Zoosk, all of which target the masses for matches.
What’s even more interesting is the ever-expanding set of smaller firms that aim to satisfy very specialized dating desires. Instead of targeting anyone with an internet connection, these niche firms have each identified a narrow segment of the market that has distinct relational preferences, which the firm feels it can uniquely meet. For, instance:
The end result is a textbook study in market segmentation and targeting. Not only are a variety of demographics (e.g., age, income, race) represented among the segmentation strategies, but so are a range of psychographics (e.g., lifestyle, values, religion). In fact, the market for online dating has been so thoroughly segmented that if you’re a middle-aged man looking for a woman who wears wool, there’s probably a dating site just for you!
What are the chances, then, that yet another competitor can carve out a niche in the crowded online dating space? Although the probability of success seems slim, one company’s reconceptualization of dating dramatically distinguishes itself from others. The new idea is an app called “Squad."
Unlike most dating apps, Squad doesn’t aim to make one-on-one matches. It strives, instead, to bring together teams, or “squads”--small groups of friends who would like to meet and spend some time with another group of friends. Using the Squad app, people put together their posse then look for another group that wants to get together.
Squad Founder and CEO Adam Leibman got the idea for Squad when he and three male friends were traveling in Montreal. They wanted to meet and hang out with some people, so he changed his Tinder profile picture from one of himself to one of him and his friends. Another Tinder user saw the picture, and she brought two of her friends to meet them.
Squad groups and gatherings can last for as long, or as little as the participants want. A Squad can be just a one-time team, pulled together for a particular place and time. Another night one’s Squad might have different members. Likewise, the group meetings tend to be much easier to terminate than typical one-on-one dates. After an hour or less, if two Squads decide to part company, it’s no big deal, plus people are still hanging out with their friends, so the fun doesn’t end.
The best part of Squad, therefore, is that is allows people to meet others without all the pressure. Individuals can engage with several new people at the same time, with the support of one’s companions and without the worry of a potentially awkward pairing. In short, Squad recreates the way people most often and naturally meet others.
Of course, when it comes to on-line dating, safety in numbers also has another important meaning. There are potentially serious risks involved in going out alone with someone you don’t really know. Sure, those risks can exist in any dating situation, but they’re reduced in a group context.
But, creating a Squad and finding a compatible cohort takes time and effort. Who is willing to do that? The most likely demographic is Millennials, who are marrying later than any other generation and who like the idea of group dating. Also, given that Millennials are between the ages of about 20 and 35, they also are likely to be the most active daters.
In the saturated market for on-line match-making, Squad has identified a truly unique value proposition that aligns with the dating desires of many people, especially Millennials. As such, the app promises to create considerable stakeholder value. Meanwhile, Squad’s group meeting method also protects people in several important ways, which serves to uphold societal values such as respect. Taken together, these two create the perfect pairing for Mindful Marketing.
In the digital age, many things are easier than ever. With just a few taps of a smartphone we can order from Amazon, pay for Starbucks, and stream Netflix. Why, then, is it so hard to cancel cable service?
If you’ve ever attempted to close your cable plan, you know how agonizing it can be. The request seems simply, yet you’re forced to reassess and defend the decision as if you’ve asked to take a loved one off life-support. The manifold interrogation often unfolds as follows:
“Are you sure you want to cancel?”
“Why do you want to cancel?
“I need to transfer you to our customer loyalty department.”
“Why do you want to cancel?”
“Have you considered these other options?”
“Do you realize that if you cancel, you’ll lose . . . . ?”
“What can we do to keep you from cancelling?”
“Are you sure you want to cancel?”
The preceding paragraph may appear to be hyperbole, but it’s not. Unfortunately it’s easy to find on-line examples of how the Comcast, the nation’s largest cable company, has made life miserable for those wanting to end their agreements. For instance, a 66-year-old Minnesota man couldn’t get Comcast to cancel his contract even after his house burned down. Another excruciating example is an actual recording of a conversation that a Comcast representative had with podcaster Ryan Block, who repeatedly and rationally asked to have his service disconnected.
Equally telling, a new industry has sprung up in response to Comcast customers’ dilemma. For $5.00 Airpaper will “cancel your Comcast service for you.” Airpaper avoids the tortuous phone track by taking a lesser used approach to termination--a letter requesting cancellation that’s imbued with the customer’s information and mailed to the cable giant on the customer’s behalf.
In Californian people have become so agitated over Comcast’s resistance to canceling customers’ plans that one legislator has proposed a law that would force the company to significantly ease the path to exit. Los Angeles Assemblyman Mike Gatto recently introduced the bill, which “would allow Californians to cancel their Internet or cable services online with ‘one click.’” That’s right, select a single button and your subscription is stopped. The rationale for the law, as expressed by Gatto, is profoundly simple: “if you are able to sign up for a service online, you should also be able to cancel it the same way.”
Some have called the bill, which is officially known as AB2867, “Ryan’s Law,” because Gatto cites Ryan Block’s very unpleasant phone call with Comcast in the proposed legislation. The bill’s press release also quotes Block.
So, perhaps Comcast is over-zealous about keeping customers, but isn’t retention what every organization wants and needs to do? Companies can’t exist without clients, and experience says it’s more cost effective for an organization to keep the customers it has, rather than constantly onboarding new ones. Or, as the old saying goes, “A bird in the hand is worth two in the bush.”
Certainly customer retention is critical, but how it’s achieved is also very important. Consumers should remain in relationships because they receive value, not because they’re coerced into continuing. Whether it’s in a commercial context or a purely social setting, no one wants to feel trapped by psychological pressure or manipulation.
It’s a very bad sign when a company has to resort to such hard-handed tactics to keep customers. Such an approach suggests that the firm’s value proposition is inadequate, which is one of the most serious weaknesses an organization can have. Over the last few years, Comcast and other cable companies have experienced increased “cord cutting,” as more consumers realize that “$180 is way too much to pay for too many bad TV channels.” Such recognition has led to a mass exodus of hundreds of thousands of cable subscribers per quarter across the nation’s 13 top cable providers.
Of course, Comcast and its competitors want to stem that tide. Anytime organizations lose customers, it’s helpful to know why they leave—that information can potentially be used to make improvements that can increase value for everyone. Comcast already knows, however, why its customers want out. It’s tactics, therefore, are simply aimed at erecting higher barriers to exit, with the hope that fewer people will have the resolve to surmount them.
In terms of ethical fails, it doesn’t get much worse than when government needs to step in and create a law in order to stop a particular business practice. Comcast’s oppressive approach to customer retention certainly fails to create stakeholder value, and it violates societal values of fairness and respect. In short, the cable company’s practice is a clear case of “Mindless Marketing.”
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