Exhausted undefined person

I’ve had an exhausting week at work. There’s an exciting project that I’m trying to sell internally. If I’m successful with my internal folks, half the battle will be won. I love to be busy on challenging innovative tasks so I’m not complaining. However, my body is tired. After catching two 6.30am flights to London this week, my eyes can hardly stay open.

It’s great that tomorrow is Friday. I’ll just chill out, probably leave work early (shhh!), watch the rest of my Brothers & Sisters DVDs and sleep. Just as I’m settling into the weekend ahead, I’ve opened my email and found probably the worst ever email marketing blunder.

“Hi undefined,
We thought you might be interested in the offer of a complimentary….”

Ouch! It’s a good thing that I’ve had a relatively successful week, otherwise I meant take being called “undefined” rather personally. Needless to say, I’m not interested in the complimentary offer… I’ll lie down now.

Have a great weekend :)!

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What’s in the price?

It’s on countless products in the grocery store: 99p, £9.99 etc. That’s psychological pricing. They want you to think the product is cheaper so you see 99p and you think: ‘Wow, it’s less than a pound! Well, my current problem is quite the opposite.

I have been working on increasing sales of a particular software product through aggressive selling but the efforts are not equalling the results. What I’m finding increasingly shocking is that my customers think the product is too cheap and would rather buy the more expensive products! Actually, it makes sense.

Imagine that after several months of awaiting the iPad, Steve Jobs put a price tag below any net book out there, for instance. The effect would probably NOT be more sales! Loyal Apple customers want quality so a low price may well signal low quality, whether real or perceived. So this is the plight of my product. I want to take a page from other industries like gaming, retail and even the car industry. In gaming, it is becoming popular to get certain games e.g. Tap zoo or Farmville for nothing. Then if the customer wants the accentuate their experience by adding more features or add-ons, they pay. A similar structure applies in the car industry- you get your ride at a base price and then pay a premium for add-ons like sat nav, alloys and heated seats for. This structure keeps the price sensitive customer but still attracts that customer looking for quality and is willing to pay more for it. I do this myself when I go shopping. I don’t like to buy the absolute cheapest item but tend to buy the mid-range. I too associate “cheap” with poor quality. Marketers concur that,

“Many consumers use price as an indicator of quality.” Kotler (2009)

But is this always true? Can a company not enter the market selling at rock bottom prices and go on the win market share? Maybe. It depends I think on the type of market. For instance, if it is highly competitive like retail, price sensitivity becomes very high and many customers will for buy at Asda not Sainsbury based purely on price. Of course, it’s not only price that matters. One should consider customer service, quality, support, ease of returns etc. Also there’s this strange thing about wanting to do what everyone else is doing….. What brands are my friends buying?

Anyway, for my dear product, I will need to roll my sleeves up and do the following to arrive at a plausible pricing strategy.

Segmentation analysis. Classify my customers. What is their behaviour and attitude towards my product? Who among them are promoters? Are their any detractors that will not repurchase or refer others to me? Why? Does it have anything to do with price or is there much more? How can detractors become promoters?

Competition analysis. Look at what the competition is charging and then evaluate market share distribution. How low is my price compared to the average price paid by customers?  Is it really about price or is the competiton actually just…better (ouch!)?

Communication, communication, communication. I can’t increase price without telling the customers why. And it has to be done right! There are a dozen ways to do this e.g. through sales ads, conferences, press releases, exhibition, free trials etc. Most importantly, there has to be an internal positioning statement that tells employees what space in the market this product is occupying. This bit is tough. It will also cost MONEY……. There has to be a budget in place, maybe based on % increase in sales anticipated from the price increases but they are other ways (Kotler et al (2009) has some ideas).

Engaging the team. People are your assets. If they don’t engage and empathise with customers to make this happen, you’re screwed. I’m screwed. Incentivise, give bonuses whatever- just make it happen. Many times it’s a chicken and egg scenario. People don’t want to put in the effort because they don’t believe it will yield great results. But if they don’t put in the efforts, there will be NO great results!

Determining the perfect price... (freedigitalphotos.net, 2010)

Premature Preliminary thoughts are:

It may be that I need to hold back some features from the standard product and then sell them separately as add-on features like my gaming pals. This is what I’m really pondering at this moment. See? You’ve got me going on and on and on. Business addict! 😉

Related authors:

Kotler et al (2009); Marketing Management

Farris et al (2006); Pricing Strategies (in Marketing Metrics: 50+ Every Executive Should master)

Heskett et al (1994); Service profit chain

Customer Dis-Service

It has become impossible to hold back my annoyance with customer service! It’s not even funny anymore. Customer support is the only point of contact you really have with a company after you buy a product or service and hence should be taken seriously. My most recent experience with shabby customer service left a limp in my stride- seriously.

Phone

Mobile phone contract (photo from freedigitalphotos.net, 2010)

I had renewed my mobile contract after a very seemingly successful 18-month period. My new contract had free internet access which enticed me to stay on. I was convinced to get a new phone (from a manufacturer I had never heard of) and my contract was renewed at a lower monthly cost. Brilliant! Well….not really because shortly after, I got my first bill and noticed that my phone bills had quadrupled….I was being charged for all my internet access! I called and the excess was reimbursed and I was assured the problem was solved. The next month- same thing! This time, I was left on hold for almost half an hour. If this company checks their records, I probably called about 50 times over a 6 week period. Each operator said something different, claimed to have sorted it out and it never happened. One even said it couldn’t be fixed. Then I told him that I had a contract in writing that stated what I was entailed to for £20 a month. My God- I was livid. I know- 7,8 months pregnant, I was a little more emotional than I normally would be. But still! I remember being on the other end of the phone to this insensitive operator…

“I’m afraid your current contract does not appear to indicate that you should have free internet, Madam, “I heard.

“But I have a contract here and this is what-“

“Ma’am, you were already refunded….”

“Yes, but I need you to stop billing me for internet completely!”

“I’m afraid-“

You better be afraid. And on and on in meaningless circles. At one point, when I asked to cancel my contract early, I was told that it was a 3-year contract and that I’d owe over £500! I started to cry on the phone, begging the operator to do something (seriously, this really happened).

Anyway, it got fixed over numerous more calls but I stopped using the phone completely. I had a work phone which I just stuck to. It didn’t help matters that before these events, I was simply tolerating this mobile network. I had to practically hang out of the conservatory window to get any service. In any event, the phone ended up at the bottom of a very messy drawer for over a year.

At the end of 18 months, I called to cancel the contract. The operator said I was a valued customer and offered me “fantastic” deals. I started to argue with her at first but held back. After 2 to 3 minutes of some convincing persuasion, I basically said, “No, thanks”. My heart went out to her. Where was this helpful lady when I was crying, begging for a fix? Anyhoo, that was that. I wouldn’t continue with the contract even if it was free for the rest of my life (I can’t remember if I actually said this out loud but these were my exact thoughts). I do recall saying,

“I haven’t used this mobile phone in over a year. Are you saying to me that your network people didn’t notice this? It would seem to me that someone would notice a customer not using their phone, that is, no texts or minutes used at the end of the month. This should prompt a call to the customer to ask why and offer some help or address issues, right?”

Silence.

“Because, now I’m cancelling my contract, you are offering me heaven and earth when a call even 6 months ago may have helped tamper my irritation.”

“I understand, Madam,” she started to say. Poor lady, she was just doing her job. For all I know she may have just started last week. “Anyway, thanks for all your help. You were very useful.” Same as kissing a broken leg- not very helpful.

Poor customer service

Poor customer service (photo from istockphoto.com, 2010)

I wish customer service was taken more seriously. In fact, serious blunders are often an opportunity to go out of your way to win back a customer (almost certainly for life). But hey! What do I know?

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