According to Cusick, CEO of Vox, a customer experience consulting firm, companies that emphasize gaining new customers rather than satisfying their current customers do so to their own detriment. He reveals how a focus on customer retention would significantly reduce marketing and sales costs while dramatically increasing overall profitability. A brief overview of behavioral psychology elucidates seemingly irrational customer behavior and lays out appropriate strategies. Cusick is adamant that the ability to speak to a customer's emotions-best gleaned by direct observation, rather than through surveys or focus groups-is the key to a better business model, and by redefining "customer satisfaction," companies can take advantage of the newfound power that consumers hold in sharing their experiences through social networking sites and word-of-mouth. The upbeat tone and detailed examples of companies that get it right-Zappos is a particular favorite-lend much-needed verve to an overworked subject. While Cusick makes his point well, he is repetitive and his advice will be familiar to most readers. (July)Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.
All Customers Are Irrational: Understanding What They Think, What They Feel, and What Keeps Them Coming Backby William J. Cusick
Tap into the secret of connecting with your customers on an emotional level-and keep them coming back to you again and again. See more details below
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Tap into the secret of connecting with your customers on an emotional level-and keep them coming back to you again and again.
“The upbeat tone and detailed examples of companies that get it right…lend much-needed verve to an overworked subject.” -- Publishers Weekly
“Read the customer experience transformational book…Your customers will be happier and your business will become much more successful.” -- Blog Business World
“…cogent analyses and insightful observation…there is a lot of common sense applied liberally…” -- Package Design
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First, let me clear something up. We’ve all seen what we think are truly irrational customers. It’s the guy at the front of the line at the fast food joint yelling at the teenager working the counter because he asked for no onions on his sandwich. Or the woman in the shoe store screaming at a wincing salesperson simply because the size she needs is not in stock.
That’s not what we’re talking about in this book.
While stories about crazy, zany customers are entertaining, they don’t make for a particularly useful business book. They don’t tell you how you can improve your own business. Instead, we’re discussing all customers, including you and me, and how we all think about and act in the world around us. What we’ve learned over the last few years is that we are all, in fact, irrational. And irrational isn’t all that bad. In fact, it could be the key to a better business for you.
Based on a wealth of research and some surprising new insights into how our brains work (and how they don’t work),
it’s now clear that companies have been approaching customer ser vice and retention the wrong way. Those who understand this and embrace new methods of attracting and keeping customers have an opportunity to create a game-changing customer relationship, one that could have an exponential impact on their profits.
While companies have traditionally taken a logical approach to gathering information about their customers, and have made “logical” assumptions about what their customers want and how they might act—and then have tried to fulfill those customer expectations—the reality is that customers don’t really know what they want, and cannot predict (or tell you) what they will do anyway.
I’m a business person (I have a law degree too, but don’t hold it against me). I help companies become more profitable. I do this by “showing them the light” regarding the value of their customer relationships and customer experience. For the last twenty-three years I’ve been involved, in some capacity, in customer experience issues, and through that experience I’ve seen the good, the bad, and the ugly in terms of how companies attract and manage their customers. One thing I’ve found is that, what many companies see as “best practice” regarding customer research, product design, service, and processes was more the result of custom or perhaps even ignorance, than insight. And that led me to move beyond the traditional business disciplines to more fundamental questions about how the brain works.
So in this book we’ll look at recent research, and we’ll delve into neuroscience and behavioral psychology. But, unlike some of the brilliant authors in this area of inquiry, such as Dan Ariely, Daniel Dennett, and Timothy Wilson, who are much smarter about these things, we’re not going to focus on simply the idea of an irrational subconscious, or how we really absorb and process information. It’s interesting stuff, to be sure, and I’m fascinated by it. But my concern is how these findings relate to your business generally and to your customer behavior specifically. How do you take this new information about how your customers think and transform your business research, products, services, and processes to maximize desired customer behavior?
There was a hot dog place in my hometown called Little Louie’s. I’d stop there as I was biking home, sweaty and sluggish, from my summer job as a caddy at a local country club. Little Louie’s sat, slouched really, next to the village green in the center of our suburban town, just north of Chicago. To grab a shake or a hot dog, you would open the squeaky wooden screen door and stand in the un-air-conditioned heat of the claustrophobic storefront. Little Louie’s was always crowded, hot, and noisy. A group of anxious customers, jockeying for position in front of an old wooden counter, faced forward with mouths open and eyebrows up, trying to catch the attention of either Ed, one of the founders, or Louie himself. There was no line, but more of a mosh pit; it was up to you as the customer to compete with others to get noticed.
The walls were hidden under dozens of paper plates, each listing a scrawled, faded menu item–some still available, some not. Tacked among the paper plates were assorted autographed black-and-white photos of unknown vintage, many showing older Chicago sports figures like former Blackhawks, Cubs, and Bears, smiling with Ed or Louie.
“You!” The shout was always shocking. If you weren’t paying attention, you could get passed over in a micro-second when Louie yelled and pointed at your gape-jawed, confused, 14-year-old carcass.
“Hot dog, no peppers, and a chocolate shake,” I’d mumble.
“Speak up!” he’d scream over the din. I’d repeat, louder, a nervous adolescent squeak in my voice. Occasionally, you’d hear a first-timer, usually a guy in a suit, ask for ketchup on his dog, and the customers would all shut up and stare, waiting. “Ketchup?” Louie would start. “What are you talking about? You don’t put ketchup on a hot dog!” (Hint: When in the Chicago area, you traditionally don’t put ketchup on a hot dog. Yellow mustard, a kind of neon green relish, and sweet and/or hot peppers, maybe some sauerkraut, though that’s more for a Polish, but not ketchup.)
Banging out the screen door toward the shade of the park across the street, sipping on my shake in its misbranded cup (Louie’s never printed its own cups; they just bought overruns), grasping the crumbled plain brown bag with the dark grease stain spreading along the bottom (from the fries dumped inside, which you didn’t order, you just got), I was a happy camper.
I loved that place, and so did a bunch of other folks. (In fact, there’s even a Facebook group sharing memories of experiences at Little Louie’s.) But why? Nothing about the experience I’ve described was in line with any traditional guidelines around a quality customer experience. They weren’t particularly nice to their customers, they didn’t appropriately brand their business, the food was a commodity. But there was something deeper, more emotional at work—something that’s hard to put your finger on.
Compare that to another restaurant in Chicago my wife and I went to recently for a special anniversary dinner (I won’t mention the name). The price of an entrée ran about twenty or thirty times the cost of a meal at Little Louie’s. Chairs were held out in synchronized fashion for us as we sat down. The food was meticulous, strange, and delicious. Every time I took a sip of water out of my crystal goblet (we’d requested simple still water), two waitstaff would step forward from either side of the table, mirrors of each other, and formally fill our glasses from exotic-looking bottles. I pictured the waiters disappearing into the kitchen and walking over to an industrial sink to refill the bottles out of the faucet. For many friends, this restaurant, food, and service were the ultimate. Why was that? What is it that customers are really responding to? Did the water, sipped from expensive stemware, taste better than back home in your kitchen? Is it the product, the level of service? Certainly that’s much of what keeps us all coming back to certain businesses. But there’s more, and it has to do with how we think, and the power of our “irrational subconscious.”
The truth is, we don’t think the way we think we think. The prevailing wisdom had it that the subconscious handled some of our more primal processing, with just our most basic motives and fears lurking in the “subconscious, irrational” shadows, only to be accessed through various forms of psychotherapy. On the contrary, more recent research and studies show that the lion’s share of our more sophisticated thinking and reasoning occurs at that deeper, so-called irrational subconscious level than previously assumed. Among other findings, research has shown that what we thought were conscious decisions and actions are, in fact, processed in the subconscious, with the small (5 percent) conscious portion of our brains often being notified after the decision has been made. Given that, the reasons we act the way we do are much less clear than some might assume. It can even be opaque to us.
The stakes in this effort have never been higher for you. A better understanding of how your irrational customers think can help you reshape how you do business regarding customer acquisition and retention. Every customer you keep has a powerful impact on your bottom line: Retaining a customer typically costs as little as one-tenth or less of the cost to acquire a customer. That translates into a significantly higher profit. Further, there is the surprising cumulative positive effect of keeping more of your customers. By bumping your retention up just slightly, you create a “compounding interest” for growing your customer base. In short, by increasing retention, you significantly reduce your marketing and sales costs while dramatically increasing overall profitability. Isn’t it, then, worth the effort to better understand exactly how your customers perceive the world, process information, and behave?
Achieving that “irrational” connection with customers is the key to business success, and the answers lie within this fantastic puzzle box of our subconscious. And that’s what this book is about.
Excerpted from ALL CUSTOMERS ARE IRRATIONAL by William J. Cusick. Copyright © 2009 by William J. Cusick. Published by AMACOM Books, a division of American Management Association, New York, NY. Used with permission. All rights reserved. http://www.amacombooks.org.
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