Amazon MP3 Store, ITunes and Strategy
Wendy Davis writes today, “Around 90% of the people who purchase MP3s from Amazon have never used iTunes, according to the NPD report, as per Ars Technica. Additionally, the stores are attracting different customers, with men accounting for 64% of Amazon buyers, but just 44% of iTunes buyers.”
She notes that the good news for Amazon, MySpace and other existing or new digital music stores because the market has plenty of room to grow. True. She also mentions the DRM-Free debate which is a whole other but related subject.
What I found noteworthy about the NPD finding that the digital music market is bigger than the current ITunes demographic is the lesson about strategy, targets, and technology. Not that Amazon needs a lesson in where to fish or strategy; just that it seems to illustrate the importance of having a strategy, defining a target and introducing technology that is appropriate for your target and your strategy.
Although the NPD data on the subject was not available first hand and the data reported by ArsTechnica didn’t really say what percentage of Amazon MP3 users were Amazon customers, I think that it can be implied that they most likely were a significant percentage. Amazon has been built on consistent customer focused strategies.
A recent Fortune article quoted Jeff Bezo as saying, “Customers want three things: the best selection, the lowest prices, and the cheapest and most-convenient delivery. ” OK, you start with book, lots of books at low{er} prices, ship quickly (quick, even with free option), great experience design and service which brings a satisfied loyal customer base. Expand from there.
The Amazon MP3 Store is an alternative version of the “fish where the fish are” strategy; Amazon fishes in their own customer pond ( CDs, book buyers) but stocks it with different kinds of fish.
As quoted on Ars Technica, NPD analyst Russ Crupnick said, “Based on US CD sales, Amazon is among the largest sellers of physical music and boasts a substantial and loyal buyer base—many of whom may not be in the iTunes market sweet spot.”
“90% of those purchasing MP3s from Amazon have never purchased from ITunes” sounds like a positive outlook to me. Extremely positive. Conventional wisdom might have said that Amazon would be competing directly with ITunes because that’s where the pay for tunes crowd is.
But maybe Amazon focused on their own customer and applied their “three things”model and their strategy went something like, leverage Amazon Brand equity and offer DRM-Free music downloads to current customers who
visit Amazon.com because of positive past experiences or new customers who heard about Amazon mp3 through positive word of mouth.
As Bezo said in a Business Week Interview in 2004, “We work hard at being very customer-obsessed and expressing that through innovation…we see our customers as invited guests to a party, and we are the hosts.” Amazon is able to expand the market for digital music downloads because people trust Amazon and want to do business with them.
And let’s not forget the strength of the Amazon recommendation system, “recommended because you purchased X”, “people who bought X also bought Y”, “You may also like”….this is behavioral targeting personified. Of course they also have peer reviews, ListMania, author blogs and product picture uploads. And if you are an Amazon customer you have an Amazon profile page. The elaborateness of it and the privacy settings
are up to you. But Amazon is a social place; by design. Which brings me to the strategy, targets and technology lesson I mentioned earlier.
Marketers seem to know that they are supposed to have a copy strategy to create advertising and objectives and strategies to build a marketing plan. Yet, it frequently seems that when it comes to social media, the strategy rules are not applied; not necessary. Wrong! Scott Donaton at AdAge courtesy of Ted Defren’s blog called it the GMOOT (Get Me One Of Those)Syndrome…a desire to do something in new media, strategy not required.
And I have met too many marketers; some of them are clients (I am reasonably safe in saying this because although they want a blog, they don’t want to actually read one even though I tell then people are talking about them on line) who take the GMOOT path to social media….aka Ready, Fire, Aim.
Charlene Li and Josh Bernoff write about their P.O.S.T method for building a social strategy on their blog and in more detail in their book, Groundswell; POST stands for people, objective, strategy and technology. It’s “Ready, Aim, Fire 2.0″.
With the POST method you begin building with People; by determining where your target customer is on the social adoption curve or the social technographics ladder. In other words, in which pond should you fish.
O means you need to have objectives such as you want your customers who are already in the Amazon pond and who are interested in music, have an MP3 player or who are currently buying one, and therefore tech savvy enough to download music at the Amazon MP3 store even though they are not necessarily downoading at ITunes. The Strategy will be about enhancing the relationship with your customer; in Amazon’s case by offering a huge selection of MP3 downloads with Technology that is easy, quick, less expensive than ITunes and DRM-free.
I think their strategy completely explains why Amazon will grow the digital download market. They have the pond. The fish are ready to bite and the bait is of the highesy quality for the lowest price; and no DRM. And 90% is about as big as you can hope for. So aim. And read Groundswell.
You can buy it at Amazon….and review it, tag it and get other recommendations based upon its purchase.
Hotel Allegro Chicago Scores High on Customer Satisfaction
While attending BlawgThink! in Chicago several weeks ago I stayed at the Hotel Allegro. We had 2 issues with our stay. Last week a customer satisfaction survey arrived in my email. I answed it.
My 12 year old son Sam had come with me to Chicago. The concept was that he wanted to hang out in the hotel room Friday and Saturday, sleep late, watch TV, play PS2, order room service, and generally just chill until dinner time. When we were finalizing our plans, he thought the room description of the flat screen TV and stereo CD sounded like it would work with his plans. On Sunday we had planned to check out and spend the day at the musems.
Well, the TV and the stereo CD did not exactly live up to their description. Bigger problem was that the TV did not work consistently. We had the maintenance guy in our room at least 6 times in 2 days. He was very helpful and pleasant but the equipment was just not working.
On Sunday, we checked our bags in the morning. When we returned to retrieve them in the afternoon there was a long line of people at the bell stand but no bellman. The people at the front desk essentially ignored the increasing line and when I asked them to locate the bellman, they reluctantly called him. When asked to help get the bags, they said they didn’t have a key. When finally, the bellman appeared, no one from the front desk lifted a finger to help speed along the process. I was astounded at their indifference. I definitely had those never staying here again thoughts.
A few days after I filled out the survey I got an email from the hotel manager apologizing for the problems and accepting responsibility; also he offered me $50 off my bill. It was an unexpected gesture. Having filled out many of these kinds of surveys, I have never once been contacted to follow up by anyone. I have had worse stays at hotels, complained on the spot and been argued with or been reluctantly apologized to. When taking my son to camp in Chattanooga, the Marriot we stayed in had a myriad of problems; the next morning the hotel manager offered a very generous compensation amount…but off our next visit. Two weeks later when we went to pick him up, we chose another hotel.
The $50 off THIS bill at the Allegro spoke volumes. There was a problem with THIS stay; we will compensate you for this stay and you don’t have to spend anymore with us to be compensated. Those never staying here again thoughts melted away
A "no excuses" apology and compensation for the inconvenience right then are 2 important ingredients for turning a situation of bad service around. And if you are going to send a survey….follow up if it is negative. I would stay at the Allegro again. I also have another suggestion for hotels….if a guest is staying multiple nights…find out how it is going before they leave and there is still time to repair the damage. Also, if there is a complaint, such as the TV…follow up afterwards to see if the problem was resolved. It tells your customers that you care and want this experience to be pleasant.
Technorati Tags: BlawgThink, Chicago, Hotel_Allegro,
Client Expectations and Satisfaction Surveys
This post is about customer experience, this time from the vantage point of a client satisfaction survey…specifically law firms client satisfaction surveys.
Rees Morrison of Law Department Management asked the question,
"Does asking clients to assess the department raise their expectations
for the future?" His answer was "Yes." He went on to say that customer
satisfaction surveys may raise the bar for performance expectations for
the future. Further he writes,
Social science researchers recognize that when you ask people about
a feeling – “How satisfied are you with the responsiveness of the law
department?†or “To what degree do you feel the law department meets
your needs for professional development?†–respondents over-rate their
feelings. In large measure, the respondents never give a moment’s
thought to the question, and when they do focus on it, they inflate or
distort their views, thus the focusing illusion.
To the extent this distortion operates, it undermines the validity
of client satisfaction surveys, employee morale surveys and value
questionnaires and other instruments that collect feelings and
perceptions.
Is Mr. Morrison suggesting that attorneys shouldn’t ask their
clients for feedback for fear that they may have to live up to their
client’s expectations? Or that by asking for feedback it might be
implied that attorneys upon receiving feedback might feel obligated to
improve their performance? Surely not.
But, a client satisfaction survey is market research. As such, the design of the research question is critical to the value of the information that is received as a result of asking the questions. I believe this is very analogous to for instance the questions asked in a cross examination. The meaning of the words in a satisfaction survey has to be exactly what the operational definition of the words specifies.
Ask a question about responsiveness and unless you have defined responsiveness, or operationalized it, to mean something specific to the client, such as returned phone calls, then collecting "feelings" will be useless information because you will not know how to improve responsiveness….or as Mr. Morrison notes, the validity will be undermined. Set up your client relationship with specific satisfaction promises, perform to those promises, measure the specifics of the performance by a survey and then you will understand the meaning of the feeling of responsiveness.
Remember Humpty Dumpty from Alice’s Adventure in Wonderland? He tell’s Alice that, "When I use a word, it means just what I choose it to mean…nothing more nor less." Alice asks him, "whether you can make words mean so many different things." Humpty says, "The question is, which is to be the master, that’s all." Master the operational definition of what you are measuring and the precision of the survey will increase its value. To carry the Humpty Dumpty analogy a bit further, if you and your client do not have the same understanding of responsiveness for example, then expectations will never be met and if your survey attempts to assess the situation based upon ambiguous words then…"all the king’s horses and all the king’s men will not be able to put Humpty back together again."
Client experience is a marketing issue. Measuring it is market research. The client experience is really the operationalizing of your marketing. Operationalization means specifying the exact operations that defines the marketing promise. A client satisfaction survey is research. If your marketing states that you "use technology to be a better lawyer" your clients should be able to experience tangible evidence of the technology.
If a satisfacion survey is used to evaluate how well the firm met a client’s needs in terms of technology, the client and attorney should have all ready agreed on the technology to be used on their case, e.g. to exchange cell phone numbers, be updated via Basecamp, and have a Power Point Presentation presented at the trial. Then a client can be truly asked about and assessed for "satisifaction". The latter is best practices for research design.The design of research is critical to its value. Ask the wrong question
and you will get the wrong answer….and you may never know why you lost you client.
Don’t blame your client for "over rating" their feelings. Establish
specific functional elements that will result in positive or negative
feelings and then assess those. Instead of asking, "to what degree do
you feel the law department meets your needs for professional
development" begin your relationship with the client by:
- Determining their needs.
- Agreeing on how those needs will be met.
- Set measurement standards.
- Then assess satisfaction by surveying performance versus those standards.
- Meet their needs and their hearts and minds will follow…as will high ratings onsurveys.
The Greatest American Lawyer, an attorney genuinely concerned with providing excellent customer service, recently posted that he was sending out his first client survey and posed some interesting questions regarding client surveys in general.
- Will client’s respond at all; if so will they provide constructive criticism that can really help improve service.
- Will the survey serve a marketing function….a reminder to clients.
- Will the survey produce surprises…provide feedback regarding issues we were not aware of or mistakes that we didn’t know we made.
It will be interesting to hear the results of his survey. If the first time a client feels like they are being asked about the quality of the service provided is by a satisfaction survey and they feel like they have received poor service, it is my experience that client’s will either not respond or you will receive criticism that goes beyond the constructive variety. If the foundation of the client relationship is based upon clearly defined and agreed upon service needs and goals, and the relationship is nurtured along the way, then the client will be more likely to answer the survey and feedback should not produce unexpected results.
Tom Collins, at morepartnerincome talks about applying Six Sigma to law firm practice. He insightfully writes, "It must place the client’s wants and desires first. It
must believe to its very core that when the firm improves the success
of their customer, it improves the law firm’s success as well. It must be willing to honestly determine what its clients want and be prepared to deliver it." Determing the client’s wants and needs should mean in conjunction with the client. Also, agree on the specifics of delivery. Then measure against specifics, not feelings.
I have one final thought about "raising the bar for performance expectations in the future" as mentioned by Rees Morrison. Expectation is what is considered the most likely outcome. It is based upon past experience as well as what standards are articulated for the future. In many ways, achieving customer satisfaction is setting the bar too low. As providers of customer service, we should seek to exceed customer expectations. If our clients express that they would be satisfied with phone calls being returned within 24 hours, find a way to exceed the expectation and return calls within a business day even if the return call is just to set a time to discuss the issue the next day.
When we provide our clients with a list of "frequently asked questions" this is a helpful service….add a list of "frequently not asked questions" and you will be able to really differentiate your service and expertise. When someone says to me, "Is there anything you would like to ask me about this?" I am limited by my own knowledge of the situation or problem. When someone says to me, "You haven’t asked about…" and then proceeds to tell me something that exceeds my knowledge of the situation, then the value of the relationship is enhanced and my expectations are exceeded.
Technorati Tags: customer_satisfaction, client_experience, customer_service
Expectation and Customer Experience
This post has two purposes. The first is to discuss expectation and our overall customer experience as determined by customer service or tech support. Probably that is the experience you are expecting based upon the title. The second, is to test what I have now called, the Mystery of the Technorati Tags. The Technorati Tag Mystery does ultimately relate to expectation theory and customer experience, as those of us who have needed tech support from Typepad or Technorati understand.
Businesses seem to forget the value of the post-purchase experience where frequently we make a decision to end our relationships with products and services. It is the customers most valuable recourse against a bad experience and should be viewed by businesses as such..ending the pain of customer/tech support hell is in in the hands of the customer. It can also end the relationship.
However,we are talking about the expectation of a bad experience not it’s value. So, simply put, expectation is what is considered the most likely outcome. In mathematical terms, expectation is expected value, which" is the sum of the probability of each possible outcome of the experiment multiplied by its payoff ("value")." This is usually demonstrated by a roulette wheel.
For customer experience, we formulate expectations of the experience based upon many variables such as previous experiences with the business, previous experiences with similar businesses, or things that we have been told or read about the business.
Our investment is our time and in the case of paid tech support, money. So, in a sense when we initiate the customer support encounter, we are rolling a roulette wheel where the odds of winning, problem solved, are based upon how many spokes (variables) give us reason to expect a positive outcome versus how many give us reason to expect a negative outcome. There are all kinds of different permutations of this…we expect a really bad experience and it isn’t as bad as we expected; we decide it was a good experience by virtue of being not as bad as we expected. However, rather than belabor this….my point is simply this: the expectation of a bad service experience influences the purchase decision. We weigh many variables in our purchase decisions but if we are at Best Buy looking for a new laptop and we have spent way too much time on the phone in the past with Toshiba with less than satisfactory results, that laptop is going to have to have many positive attributes to make me consider buying it. The most convincing trade-off is typically price. If the price is low enough I might devalue the expectation of poor customer service. If there is not enough to offset my expectations, I will purchase another brand. And, look at the inverse….I might even pay more for another brand based upon a positive experience that is now a positive expectation. For services, cell phones, cable, legal or our attorney, accountant, or even our therapist…negative experiences, post purchase make us receptive to competitive messages….our relationship with the brand or service who has put us into expectation high alert is a dead man walking; we might grant a stay of execution for a price but it will only be temporary.
Now, let’s discuss Typepad. or their full name, WaitingforTypepad. Typepad tech support is an oxymoron. Besides my own blog, I have several other accounts. Several clients and my son’s 7th grade parents’ blog. I have had questions and issues on all of them. My experiences with tech support has been uniformly bad. There seems to be an elaborate entire system designed to avoid fixing problems and answering questions. Easy or difficult…nothing gets answered in the first contact. I am totally in the expectation of bad experience paradigm and as soon as I find an alternative, I will leave the Pad. It is not my Type. Even the buy one year, get one year free offer, which initially made sense, is not enough to convince me that I should waste my time seeking service. I’ll pay month to month and wait for an alternative. Anyone listening? Didn’t think so…
And Technorati? Well, I guess their theory is that you can’t have a bad experience if you don’t have one at all. I am still waiting. My mystery of the Technorato tags? Well, I just tried another recommended fix. We shall see. Business Blog Consulting just posted that they are sick of Typepad. A non answer from Typepad was posted. LOW expectations!
Technorati Tags: Typepad, Customer_experience,
Hype, Buzz, Budget, Blogs, and Commodity Products
A great post at Crossroads Dispatches really gets to the heart of why the UpYourBudget blog is a perfect example of great hype but not of a blog as buzz, word of mouth, or business building. She says, speaking as a customer, that "You know you’re a commodity when I have to look for the rental
agreement jacket to remember which agency to return the car to at the
airport… give me a remarkable distinguishable service and experience, then you’re conversing."
The blog and the promotion are not conversations, more like screaming…usually what we feel like doing when at the rental counter. As far as the purchase decision goes, as License to Roam notes, one may begin the search for a car with Budget based upon the immediate hype…but the decision will be made most likely based upon price, availability convenience, and importantly how good or bad the last rental experience was or is remembered.
I think Budget might want to look at what their customers treasure, instead of sending them on a treasure hunt.
Technorati Tags: UpYourBudget, hype, buzz, blogs
Microsoft Tech Support Rocks!
I just got off a 1 1/2 hour tech support call with Microsoft and I am compelled to report that for the second time in about a month they were awesome. And this has to be in taken in the context of two factors:
#1 The fact that in reality, the 1 1/2 were wasted. The problem and the call were not on my to do list. That alone could be worth a rant.
#2 I am on tech support/customer service overload having had one bad experience after another lately. Typepad is a continuing tech support challenge but last week became a customer service nightmare, also. Although this made for low expectations, it did not lower my requirements.
So, what made it a good experience?
Empathetic attitude and problem ownership. If we believe that the basis for a positive customer experience is knowing what the customer wants, we can go a little further back and say that what we all want is to be understood. The problem that I called about what was my fault….I knew that, but I was never told that; fault didn’t matter. So many customer service/tech experiences begin with finding fault…if it is the customer’s fault, then frequently that grants permission to dismiss the customer with a "sorry but". Further, they apologized for the problem that I was having and assured me that we would resolve it. Computer problems are always frustrating but when there is that underlying fear that one is going to lose everything near-panic sets in…I felt better just because I was reassured that the problem was going to be fixed.
Throughout the long, long call an empathetic manner and determination to find the problem and fix it were the hallmark. I was not transferred to another department or told that the Outlook specific question was not in his purview. When the problem was resolved from my standpoint, the tech wanted to trouble shoot a little more…to make sure the problem was solved. He had more patience that I did with resolving the problem. When the call was over, he said he hoped that my experience had been a good one and he sounded like he meant it…when I told him that he had been great, he seemed genuinely pleased.
Well, now I think I will try and salvage the day…and just because things are resolved with Microsoft and possibly Typepad, maybe I will try those Technorati tags again….and a couple of trackbacks.
Technorati Tags: Microsoft, Typepad, customer, service, tech, support, tags
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