Sprint's Palm Pre Experience

On June 6, 2009, Sprint proudly launched their latest flagship product - the Palm Pre. While numerous reports have lauded the success of the launch and the phone itself, a more important storyline is the strides that Sprint has made in their overall customer experience. Sprint's customer experience problems have been well documented. Their ability to effectively address those problems may be the one thing that will make or break the company. Although Sprint's recent performance with the Palm Pre had its pro's and con's, Sprint appears to have done this one right.

Sprint obviously has a lot riding on the Palm Pre. Over the past few years, Sprint's customer satisfaction woes have been well documented and new CEO Dan Hesse has made it clear that improving customer satisfaction is priority number one. While Sprint has been making strides on fixing their problems, no one seemed to notice. Sprint needed to grab the stage - even if for just a short period - to demonstrate that things had changed. The Palm Pre has provided that stage and Sprint's performance is sure to be closely scrutinized. Dan Hesse went so far as to refer to last weekend's launch as a "coming out party" for Sprint.

THE TOTAL CUSTOMER EXPERIENCE

While some may look only at the launch day to determine if Sprint is truly different, a more important barometer should be the overall customer experience. The experience began when Palm and Sprint unveiled the Pre at the Consumer Electronics Show (CES) in January. There had obviously been a lot of pre-work done (pun intended); Sprint had established an exclusive arrangement with Palm to create the most innovative new device since the iPhone. This exclusive partnership alone highlighted Sprint's innovative roots and placed it squarely in the spotlight to deliver something special.

The pre-launch buzz began to build from that point forward. Special blogs were created, tweeters were tweeting, and rumors abound. If Sprint and Palm wanted the spotlight, they surely got it.

How Sprint and Palm would perform in the spotlight would be an important part of the overall customer experience. Fortunately for Sprint and Palm, they performed admirably.

ATTRACT

Building upon the success of the CES event and the subsequent interest in the Palm Pre, Sprint and Palm responded by launching special web pages to try and quench a seemingly unending thirst for Palm Pre news. While Sprint and Palm web sites offered little to any additional information regarding the Pre, the blogosphere was kicking into overdrive.

Hundreds of smart phone enthusiasts began to sleuth every possible angle to learn more about the Palm Pre and its eventual launch date. It became almost a game; the dearth of information from Sprint and Palm only fueled more speculation about pricing, features, and availability. Most companies would pay dearly for such successful viral marketing.

Eventually Sprint launched its own series of 'Now Network' ads that seemed to tease the audience even more by showcasing the Palm Pre at the end of each ad. Even though the phone had not yet been released, the ads whipped up even more anticipation for the eventual launch.

QUALIFY

With the bait firmly set, it was now up to Sprint to determine how to best land as many prospects as possible. In a very smart move, Sprint launched a Palm Pre landing page that contained a simple prompt: "Sign up to be notified when the Palm Pre is available."

It was a simple and brilliant way to allow prospective customers to self qualify themselves for Sprint. As a result, Sprint was able to collect a highly qualified list of prospects that could be used for target marketing to ensure that the prospects were converted to customers when the Pre became available.

That's exactly what they did.

INTERACT

Prospects that self-qualified themselves, as well as existing Sprint customers, received regular email newsletters that informed them of special offers, accessories, new plans, and other products. This simple but effective interaction helped to keep prospects engaged during the waiting period between the CES product announcement and the eventual product launch on June 6.

Unfortunately, the majority of these email newsletters provided few additional details about the Palm Pre. Perhaps the lack of Palm Pre related information was part of their strategy of secrecy, but this is one big opportunity that Sprint may have missed. If they had provided more juicy tidbits through this channel, perhaps they could have significantly grown their prospect list as more and more people were clamoring for information.

Although many people get annoyed with companies that overload their email inboxes, this is a case where I believe that additional and more timely communications would have been welcomed.

SPECIAL TREATMENT

As part of Sprint's drive to improve customer satisfaction, they also have begun to more actively utilize a loyalty program called Sprint Premier, which rolled out in February of this year. Once again, Sprint did this right. Long time Sprint customers were automatically enrolled in the program and notified via email and or direct mail that they were being recognized for their loyalty.

The loyalty program includes perks and privileges like most programs of its kind. For example, one direct mailing included a special $25.00 coupon that could be used to purchase any accessory. Unfortunately, this excluded Palm Pre accessories - at least during the launch weekend.

Perhaps most important to the customer experience, Sprint sent a special notification to Premier members that invited them into stores one hour before opening time on launch day to demo and purchase the Palm Pre. While others were planning overnight camp-outs to be the first in line to get the Pre, Premier customers got special treatment.

Overall, it was a nice touch and a great way to reward some of Sprint's most loyal customers.

BUY

June 6th was an anxious day for everyone. Sprint and Palm were nervous for obvious reasons. Prospective customers were also anxious in light of the rumored short supplies of the Palm Pre. Although some out of stock situations were reported, the supply situation over the launch weekend did not appear to rain on the parade.

Personally, I arrived at a local Sprint store around 10:30am, nearly 2 and a half hours into the launch day feeding frenzy. I arrived with low expectations; I had resigned myself to the fact that I would probably be greeted by long lines and news of inventory outages.

However, my experience was surprising. Upon arriving at the store, I entered my name into a customer waiting queue. If you haven't been in a Sprint store in a while, they've revamped the store environment as well, capped with a large flat screen monitor that shows your place in the waiting queue in real time.

Overall, the in-store experience was good. I waited only 20 minutes to be greeted by a Retail Consultant, who quickly started the purchase and activation process. While the activation process was underway, he successfully up-sold me on a few accessories for my new Pre. The sales and activation process was lengthy, but largely overshadowed by the anticipation of getting my hands on the shiny new Palm Pre.

SUMMARY

The new phone has worked almost flawlessly on the Sprint Network. Although I have experienced a few glitches, the overall experience has been fantastic. The experience started with growing anticipation since the January 8th introduction at the Consumer Electronics Show and has culminated with the launch of the Palm Pre on June 6th. Daily usage of the Palm Pre, which so far has been great, will only expand upon the overall experience.

While many people will look only at the launch day or even certain characteristics of the phone itself to gauge the experience, Sprint and Palm have done a great job of managing the total customer experience over the past 6 months. Although not everything went perfectly, I give the overall customer experience at grade of 3.75 out of a possible 4.0 experience.

Time to Rethink Customer Loyalty

Most businesses understand the tremendous value associated with highly loyal customers. That is why businesses of every size and shape have implemented loyalty programs to keep their best customers coming back again and again. Unfortunately, this traditional loyalty model has grown tired and provides little differentiation in the market today. As a result, it’s time to rethink customer loyalty.

The Loyalty Flood

Unfortunately for many businesses, any advantage that was originally gained through loyal programs has quickly eroded. While airline, hotel, and car rental agencies were the pioneers of mainstream loyalty programs, other businesses were quick to jump on the loyalty program bandwagon. The result is a business environment where every restaurant, gas station and pet store has some form of loyalty card or program.

As a result, having a loyalty program is no longer a competitive differentiator. It has become a mainstay of a business environment where loyalty programs have become a commodity and a potential detractor to the overall customer experience. They get in the way of business efficiency - often requiring an additional step in the customer experience process. They have become nothing more than another way to offer a price promotion. Loyalty programs can also create disdain for customers that can’t receive the benefits or special pricing offered exclusively to program members.

When Loyalty Programs Bite Back

Some loyalty programs miss the point entirely and can actually drive customers away. Hilton Hotels, for example, has a long-standing loyalty program called Hilton Honors that accumulates points based on the number of overnight stays at their network of hotels. For a career traveler, these loyalty points may continue to accumulate over a 10 or 20-year time span.

On the surface, Hilton’s loyalty program appears simple and straightforward; The more a customer stays - the more rewards they will receive. In certain circumstances, however, the fine print can really bite back. If changes to a customer’s travel habits keep them out of a Hilton property for 12 consecutive months, the customer will lost ALL accumulated points and privileges. This policy, in effect, erases 20 years of loyalty and any associated rewards or benefits.

The customer may have been loyal and may even have been an advocate for Hilton. Penalizing a loyal customer for lack of activity for 12 months will certainly damage any good will that may have been accumulated over the prior 10 to 20 year time span.

It’s time to rethink customer loyalty

If companies want to reap the benefits of true customer loyalty – it’s time to rethink what customer loyalty really means. Customer loyalty is not obtained by holding a card, accumulating points, or redeeming rewards. Furthermore, loyalty can not be measured simply by customer longevity, frequency, or purchase volume. Customer loyalty is not a one-way street; it cannot be determined solely based on what the customer has done for the company.

Instead, customer loyalty should be turned upside down. Perhaps more companies would get it right if they measured loyalty in terms of the degree to which the COMPANY is loyal to the customer rather than vice versa. Companies should strive to remember repeat customers, address them as individuals, call them by their name, and treat them special.

Think about the simple lesson of customer loyalty that was demonstrated each week on the 1980’s sitcom “Cheers”, the bar where everyone knows your name: At the beginning of each show, the bar’s best customer, ‘Norm’, would enter the bar and proceed to ‘his’ barstool. There was no loyalty program, no card to scan, and no ‘platinum’ level required to gain entry. Everyone indeed knew his name, he had his own seat at the bar, and the bar owner knew exactly what he wanted to drink. ‘Norm’ was indeed loyal, but the establishment was extremely loyal to him as well.

In order to create a competitive differentiation, companies should begin to rethink customer loyalty:

Old School: “What has the customer done for me lately?”
New School: “What have I done for my most loyal customers?

Summary

Individual customer loyalty is a simple concept that is often overlooked in today’s business environment comprised of multiple touchpoints, channels, and markets. When businesses get large and complex, the customer becomes nothing more than a number, a body, or an inconvenient commodity. When that happens, it becomes increasingly difficult to treat truly loyal customers differently.

With the overabundance of loyalty programs today that offer nothing more than price discounts, it’s no wonder that customers are becoming decreasingly loyal to any one brand.

With so much at stake, it’s time to rethink customer loyalty.

Inside Jobs, July 31, 2008

Invasion of the Loyalty Cards

Loyalty cards have invaded and have taken over our lives! It all started innocently enough. It seemed like no big deal when airlines and hotels embraced the ‘frequent’ traveler rewards programs. We consumers embraced the idea of earning rewards for our travel.

Little did we know that loyalty cards would band together and plot to overtake our lives! The momentum built slowly so that we wouldn’t notice. First we had one airline and one hotel loyalty card stowed safely in our wallets. Soon, we added other cards to make sure that we took advantage of our travel activities on all airlines and hotels that we might visit. Then, as if we wouldn’t notice, rental car reward cards snuck into our wallets. As we added airlines, hotels, and rental car cards, the number of loyalty cards that we held crept into the double digits.

Other businesses eager to cash in on the loyalty card phenomenon were quick to respond. One by one we added loyalty cards from restaurants, grocery stores, department stores, gasoline stations, coffee shops, video stores, and pet stores. Colorful plastic cards that beckoned us to use them more and more soon overwhelmed our wallets.

The invasion was on! Our wallets were completely overtaken and could take on no more new plastic cards. Like an aggressive parasite, loyalty cards looked for new areas to invade and quickly found our key rings an inviting target. Like something out of a science fiction movie, loyalty cards spawned a new breed of key fobs that crept onto our key rings and multiplied like rabbits. Seemingly overnight, plastic fobs overtook our key rings.

The quiet invasion of the loyalty cards continues today. New businesses enter the fray every day. Book stores, doctors offices, eyeglass stores, veterinarians, and home improvement contractors add to the mountain of loyalty plastic. I fear the day that my lawyer or doctor issues a loyalty card for proctology exams.

I know that I have reached the point of saturation; there is no more room in my wallet or key ring for even one more loyalty card. The overflow of loyalty cards that won’t fit have now assembled together and have begun an assault of various desk, kitchen, and dresser drawers in my house.

We could fight back by throwing them all away, but that’s like asking a life long cigarette smoker to quit cold turkey. Loyalty cards don’t necessarily encourage loyalty – they create a sense of guilt. When a shopper buys at a store without their loyalty card they feel guilt; guilt for not saving a few dollars or not earning their reward points. Loyalty cards are like an addiction; they’re hard to give up.

Loyalty cards are popular with businesses because it can help them to identify their customers, create a sense of exclusivity, and reward their best customers. The mountain of loyalty plastic, however, is creating a burden on today’s consumer to carry – and remember to use – their loyalty card.

To stop the invasion, businesses need to increasingly implement loyalty programs that allow the consumer to self-identify without the need of a physical loyalty card. For online businesses, this is easier to accomplish with cookies or simple online account management capabilities. For brick and mortar businesses, the challenge of consumer identity management is the holy grail of customer relationship management. Until then, the loyalty card invasion will continue to be well engrained in today’s business environment.

I just hope they solve the problem soon. I can’t carry any more loyalty plastic…

…and I shudder at the thought of loyalty cards invading my underwear drawer.

6 Laws of Customer Experience

Customer Experience Management - like any new exciting business concept - tends to attract a lot of attention. Unfortunately, too much attention can lead to excess noise and confusion as different people and organizations publish different - and sometimes conflicting - perspectives.

To help you cut through the clutter of customer experience management, I recommend that you download and read Bruce Temkin's free eBook titled "The 6 Laws of Customer Experience" that he published on his blog this week.

In "The 6 Laws of Customer Experience," Mr. Temkin identifies 6 fundamental truths about customer experience management which I think you'll find both enlightening and provocative:

1. Every interaction creates a personal reaction.
2. People are instinctively self-centered.
3. Customer familiarity breeds alignment.
4. Unengaged employees don't create engaged customers.
5. Employees do what is measured, incented, and celebrated.
6. You can't fake it.

Download a free copy of "The 6 Laws of Customer Experience."

Find Your Torch Points

Without a doubt, Customer Relationship Management – or CRM – has become a mainstay in current day business vernacular. Business professionals now talk effortlessly about touch points, customer experience, customer segmentation, and cross-channel integration. CRM has come a long way since its early days, but there’s still a lot of room for improvement.

Despite the maturing of this once nascent business capability, companies continue to struggle to consistently deliver seamless, effective, and meaningful customer interactions. It’s no wonder that customer satisfaction can be elusive for so many companies.

Although most companies will proudly tout their CRM capabilities, the true measure of success is customer satisfaction. The stakes are indeed high; in a competitive market, the ability to build and nurture customer satisfaction can make the difference between success and failure.

Too often, however, even the best of CRM intentions can miss the mark; promotions can miss the mark, cross-channel experiences can be inconsistent, and call center navigation can be inconvenient. When issues arise, they create a torch point; a defect in the CRM process that can leave the customer wanting or frustrated. The severity of each torch point can diminish customer satisfaction or lead to outright defection.

Finding the torch points in your business requires an unrelenting focus on quality, a heavy dose of process discipline, and an industrial strength measurement capability.

Consider the automotive industry; manufacturers were taught a costly lesson that defects and lower quality led to rapid erosion of customer satisfaction, brand perception, revenues, and profits. Automotive manufacturers responded by developing an unrelenting focus on quality; they managed process quality, measured every minute detail, and developed robust product testing capabilities.

In our automobile example, defects are easy to spot; when the car won’t start, the transmission fails, or the air conditioning goes out – it’s pretty obvious that there is a problem. In the CRM world, however, the torch points aren’t so readily evident. Businesses have to look closer to see where their customer relationship capabilities might be breaking down.

CRM torch points can occur in a variety of situations or interactions. Here are just a few examples that seem to occur too often in today’s business environment:

1. Account number fumble: When a customer contacts a call center they are asked to enter their multi-digit account number. Yet when they get transferred to a live customer service agent, they are asked for this information again.
2. Promotion defect: A consumer products manufacturer or retailer runs a promotion on Father’s Day weekend for 20% off a particular item. Some customers snap up the deal but forget to bring their coupon or specific promotion code. If and when the customer returns with the coupon to collect the 20% discount, the store won’t honor it since it is now past the promotion period, even if the customer has the receipt to prove the date of purchase.
3. Sorry, wrong channel: A customer visits a web site only to find that they can’t find the product they were looking for unless they visit the store. Conversely, they visit the retail store only to find out that they are out of stock and are directed to the web site to see if it’s available online.
4. No card, no benefit: Many businesses utilize the ever-popular loyalty card to dispense rewards or discounts. An extremely loyal customer drops into their preferred store without their loyalty card. Despite being an extremely loyal customer, the store refuses to dispense any rewards or discounts without the physical loyalty card.
5. Feel the pressure: Cross-selling and up-selling can be lucrative for many businesses, but applying pressure sales to get customers to buy more can often have a negative impact on the customer experience. A customer that is ready to complete their shopping experience is confronted with a pressure sales environment trying to get them to ‘buy more.’

These are just a few simple examples of torch points that can occur anywhere in the customer experience lifecycle. Even the best of CRM intentions can sometimes miss the mark; promotion policies can create buyer’s remorse, cross-channel experiences can be inconsistent, and call center navigation can be inconvenient. When CRM torch points arise they can leave the customer wanting, frustrated, and unsatisfied.

If your business smells CRM smoke, it might be time to put out the torch point fires.

Do you know where your CRM torch points might be?

Airlines Miss The Point Of Loyalty

If you’ve picked up any newspaper or business magazine over the past several years, then you know the pain and suffering that the airline industry has been experiencing. Rising fuel costs, aging fleets, employee strikes, price wars, and most recently - maintenance controversies – make for turbulent times. Just ask any of the airlines that have filed for bankruptcy recently.

In the midst of this ugly environment, airlines must do everything in their power to attract and retain customers. Their primary weapon in this never-ending battle for the customer is the embattled frequent flier rewards program. Every airline has one, and each has it’s own set of advantages and fatal flaws.

Apparently, airlines believe that the mere presence of a reward program is enough to get customers to stick around – even when the next price war wages around them. Certainly it works for some customers; there are those neurotic frequent fliers that will schedule their entire lives around their ability to keep their reward miles climbing with their favorite airline. However, I would argue that betting the health of your business on a group of neurotic customers is a shaky strategy.

Airlines simply miss the point of customer loyalty. They do a poor job of attracting the next generation of frequent fliers and do a poor job of catering to former frequent fliers.

New to our airline? Go to the back of the plane please.

First, most airline rewards programs penalize new fliers. If you are a young professional just joining the throngs of frequent fliers – then you have no preferred status with the airlines. That often means loading last, sitting in the back of the plane, and often being relegated to a middle seat that always seems to situated between two unpleasant individuals (feel free to use your imagination here).

“Just keep flying with us for about 25 more segments and you’ll get preferred status,” a smiling airline representative would say to these newbies. After surviving several experiences like that, it’s a wonder that people stick around to get their preferred status at all.

Haven’t flown with us for a while? Go to the back of the plane please.

Being on the other end of the frequent flier spectrum doesn’t work all that well either. I was a notorious frequent flier for nearly 20 years. During that time, I racked up miles and achieved preferred status on several of the major airlines. Specifically, I attained ‘Platinum’ status on American Airlines and was a proud card caring member for most of that time.

I learned recently, however, that my loyalty to American is not reciprocal.
Let me explain. I recently had to travel to Chicago on business and, as a loyal American Airlines customer, I booked a flight on American. But guess what? Despite being a great and loyal customer for years – I now have no preferred status. None. Apparently, since I quit traveling to start up ClearBrick over the past 2 years, I am no longer a loyal customer. American’s rewards program seems to be based on the ‘what have you done for me lately?’ principle. So it’s back to square one for me; back of the plane, last to load, middle seat misery.

“Just keep flying with us for about 25 more segments and you’ll get elite status,” a smiling airline representative would say to me.

Nurturing Commodity Behavior

What most airlines don’t realize is that the rewards programs that are intended to instill loyalty are having an unexpected side effect; they breed commodity behavior. Customers with no preferred status with any airline will tend to exhibit commodity behaviors; they’ll look for the lowest price or wait for the next promotion, then choose the lowest bidder.

As we’ve learned, attaining and retaining elite status with an airline can be difficult and fleeting. Take the rewards programs out of the picture and the customer is left to decide which airline to fly based on a number of very commodity-like attributes. Most airlines fly to and from the same cities, operate the same aircraft, and serve the same snacks and soft drinks. In addition, more and more airlines are merging to attain operating efficiencies, leaving the customer with fewer differentiated alternatives.

Why wouldn’t the customer simply choose the lowest cost option and continue to exhibit commodity behavior?

Breaking the Cycle

Certainly a few airlines have been able to break away from the crowd. Southwest tries to make flying ‘fun’, JetBlue adds amenities, and MidWest offers all first-class seats and a warm chocolate chip cookie. These few outliers seem to get the fact that they need a differentiated experience in order to compete for the ever-important customer.

A truly loyal customer base is not built on elaborate rewards programs or hard to attain preferred status. That’s a point that many airlines seem to miss. Rather, true customer loyalty is built over time – by delivering a unique customer experience.

With no preferred airline status anymore, I guess I’m free to choose any airline for my next flight.

First class seat and a warm chocolate chip cookie anyone?