Posts Tagged customer segmentation
You Gotta Make Noise to Get Satisfaction from T Mobile
Posted by Cordi in Practical Advice on May 25th, 2010
Below is a wonderful blog by my good friend, Craig Miller, of PeakPerformance peakperformanceshow@gmail.com
You should take three things away from this blog –
- The squeaky wheel gets the grease
- But, sometimes even the grease, can’t quiet the squeak
- T Mobile’s business model increases Customer Churn which is always bad for the Bottom Line!!!
The squeaky wheel gets the oil. We all know this to be true but all too often we give up way before we get satisfaction. Those in power, bank on this fact and purposely orchestrate a process that is intended to make you give up before they have to give in. This couldn’t be truer then with the cell phone companies. Do they believe in customer service? Yes, if you make enough noise and make it to the right people in the company. However, most of the time you get entwined in their intentional system of outsourced individuals reading from a, “what to do next”, sheet. It can be like falling into Alice’s hole and trying to get help from the Mad Hatter.
Recently, I fell down this hole while trying to get help from T-Mobile. We moved and the T-mobile coverage in our new house was spotty at best. Most of the time it was non existent. When I first called about this problem they filed service tickets and said they would look into it. They said they would call me back and of course they didn’t. I called them back multiple times and was told that the specific area that I moved into is a known dead area. They then said our area was a priority and that they were working on it. They would not give me a time line for how long this would take. Why pay for a service you can’t use I thought?
Because the T-Mobile service was insufficient where we moved I felt I had no choice but to cancel my 2 accounts. Since coverage is T-Mobil’s fault I was hoping I could cancel without being charged $200 per line for a total of $800. Yet, I was told by the customer service representative that if I canceled I would be charge the entire amount. Then the rep told me he could upgrade our phones for free to phones that could connect to the wireless router in our home. Then, do to the poor coverage, the call was lost and I was never able to get that rep back. I called back 4 times and every time I asked for a supervisor I was put on hold and then the call was cut off. Every time I called back the representative told me there was nothing they could do and then I was cut off. This lasted almost 2 weeks.
When I had experienced enough frustration I decided to take matters into my own hands. I did some internet research and located over 15 e-mails and phone numbers for T-Mobil executives. I wrote an e-mail detailing my experience and sent it off. Within 48 hours I was contacted directly by a T-Mobil executive and was told that they would cancel my contract as long as I sent the phones back. It is amazing how quick you get results when your “squeak” is loud enough and the right people hear it. I could have been stuck in Wonderland hell for a long time but instead I got my desired results and went back to a pleasant reality.
Customer Dissatisfaction Hurts Your Bottom-Line
Posted by Cordi in Practical Advice on March 25th, 2010
There are two absolute truths in sales and marketing that impact a company’s Bottom-Line Profitability.
- 20% of your customers are likely to produce 80% of your income
- It costs 4 to 5 times as much to acquire a new customer as to keep an existing customer
In the light of those truths it is hard to argue that excessive or unnecessary customer churn (i.e. customer turnover) does not hurt the Bottom-Line. And what single factor accelerates Churn faster than any other –? Bad customer service — unfulfilled expectations, promised benefits etc.. drive churn.
I was the principle consultant on a global telecommunications study a couple of years ago that demonstrated that an improvement in the customer service process and related technology upgrades could reduce annual Churn by 20 to 30 (depending on the country etc..). The longer credit worthy customers remain your customers, the more profitable their businesses become.
- Fewer sales people and more less expensive post-sales support personnel can better manage the business at a lower personnel cost
- More opportunities for service and product upgrades with a positive image of your company. Less pressure on existing prices.
- Fewer “loss leader” promotions
- More predictable revenue stream
- Equipment can be fully depreciated etc..
There have been hundreds of text and business books written on this subject but some consumer product household name companies have obviously never read them. High on my list of companies that just don’t understand how important managing customers’ churn can be, especially among their multi-year customers, is Direct TV .(]http://www.directv.com/DTVAPP/index.jsp)
I have been without cable television for two weeks now – despite the fact that I have paid Direct TV a monthly fee to maintain and service the required equipment for more than 5 years. Not even a threat to call Comcast could get a service technician out to fix(what they have already acknowledged is their) problem in less than 2 weeks. The long delay seems to be due to a backlog of new dish installations for new customers with a special introductory rate of 20% of what existing customers pay.
The only reason for such a steep discount is to maintain Direct TV’s market share in a competitive market place?
I think DirectTV is a great product. But I am going to be shopping for a new television services vendor just as soon as I finishing watching the 11 HD episodes of Fox’s series “24″ that I have recorded over the last couple of months. Only one simple reason to leave — their customer service and customer attitude are so poor!
Based on their currently advertised first year pricing, it will take 5 new customers to equal my one bill. Think of this as CHURN THEY CAN USE as an object lesson!!!
The Bottom-Line for Direct TV is either going to be insolvency or a hostile takeover – neither of which can be defined as a success!!!!
@CORDI AND ASSOCIATES – all rights reserved.
The Importance of Customer Segmentation
Posted by Cordi in Practical Advice on February 3rd, 2010
Washington Post Technology Page (2/3/2010) ran the headline “AOL posts profit, but subscribers dwindle”.
Disciplined customer segmentation and analysis will help a struggling company to reduce their operating expense by prioritizing their marketing and selling activities on the limited number of customers who produce the most revenue. The analysis may not provide an exact statistical 80%/20% breakdown but it won’t be far different.
When a company focuses on its most valuable customers it accomplishes two things:
Improves customer loyalty and, potentially, wallet share
Creates a model for increasing the total number of high value customers
$50M companies that aspire to be $1B companies need to build processes to continually monitor who their key customers are and why they are key customers