One area of business which always interested me is the lengths to which companies go to ensure patronage of their customers.
Quite often, companies are more than willing to shell out millions of dollars to not only woo new customers/subscribers to their establishment, but also maintain the loyalty of their existing customers. The previous statement cannot be generalized though. Sharp differences exist between industries & based on geographies.
In the electronic industry space, especially the smart phone industry, ensuring customer patronage is limited to listening to the “Voice of Customer” and creating “cool” gadgets, which are at least marginally better than their competitor’s product or the previous version of their own. The retail and hospitality industry though are subject to multiple factors such as target audience, consumer demography etc.
I, myself had extremely different experiences in various establishments of the same organization in different cities across the country. Though not a planned exercise, but these different experiences formed the way for my two experiments to understand the demographical influence on Customer relationship and how organization try to shape their influence on consumer.
One such unplanned experiment came to what I call as the “Missing Tazo Story”. It was a month ago when I bought a packet of Pepsico’s Corn based snack – Cheetos. The cover of product mentioned a surprise “Tazo” inside each pack. The “Tazo” is a circular disc which can be used in combination to form small games. But in my case as you might have guessed by the title, the “Tazo” was missing. On a normal day, I would have dismissed this as a normal packaging error, but on the same day I was working on a “Customer Loyalty Program” project and this seemed to be the perfect experiment. With a bunch of pictures of the packaging and batch information, I drafted my first but boring, customer complaint email to the address mentioned on the back of the package. Then the wait started.
I knew the chances of even getting an email response was remote, considering a packet of “Cheetos” cost just 10 rupees and I would be forming the smallest possible customer for an establishment like PepsiCo.
To my amazement, not only did I get a response within 8 hours of my mail, the executive went ahead and send me 10 of those “Tazos” to my office address. Now, this was not something I had expected. My own project ensured calculating the “Return on Investment” (ROI) on any spending involving “Customer Relationship Management. Here I was given an example where a company spends 3 times the cost of their product (30 rupees approx.) on postal charges to appease a disappointed customer.
With ever increasing competition, organizations have realized that they need to do all what they can, to ensure they have an edge over their competitors. As I observed, quite often organizations do spend more than the cost of product itself, because a calculated risk, would ensure not only a returning customer, but more of their friends/colleagues with them. Maybe, it is not true for all the industries yet, but in retail and services, customer still dictate the terms and hopefully its infectious.
(PS: For the Tazos send to office, I and my colleagues send back the following picture back to the PepsiCo Executives)