The old idea that all customers are created equal and that one-size-fits-all was ripped apart by Peppers and Rogers in their seminal first book The One to One Future1. Since then, product design and product marketing teams have become incredibly creative producing hundreds of different plans or product variations to suit micro-segments, maybe even “one to one”. Along the way, customer support has determined how important it is to treat customers differently, e.g., VIP or high spenders vs. chronic complainers vs. customers who threaten to cancel their contracts or operations.
However, very few companies have figured out that new customers have very different needs than experienced customers and that new customers complain or ask questions three to five times higher than experienced customers. Why is this? First off, think back all the times that you have been a new customer… driving off the dealer’s lot with your 1st convertible, taking home the hot new iPhone, downloading Vimeo, adding the latest adapter to your solution… and how you felt: Excited, a bit nervous, slightly confused, but eager to put it to the test.
Unfortunately, the sales promise often is far different than initial usage and customers get upset very quickly: They complain to friends, fire off email messages or try to call the company for help, try to crack open the users’ manual (not much help there!), and they often place multiple contacts before they get the help that they sorely need. If they’re in a usage plan or under contract, often the first two invoices are not the same, nor do they compare what they thought they had purchased in the first place or “what’s covered” and “what isn’t covered” is often a shock.
Experienced customers have at least survived this initial break-in period and somehow learned how to navigate the company to figure out how to use the products or services, or create workarounds. They have established a network of reliable sources to help them when they get stuck (often peers or social connections), or maybe they know how to contact the right person at the company to get the answers needed. On the other hand, experienced customers often become very frustrated when they learn that new customers are offered better deals or tools than they can obtain even if they complain or threaten to leave.
How can you treat your new customers differently than your experienced customers while also treating your experience customers more like your new customers? Here are five insights that to help you along the way:
- Analyze customer interaction reasons or intents for new customers versus your experienced customers.
- Recognize that many of your new customers are digitally savvy and will require very different approaches than many of your more experienced customers.
- Create an on-boarding checklist and follow it step-by-step.
- Prepare your new customers for their first key moments of truth experiences with you.
- Offer new deals to your experienced customers before promoting them to attract new customers.
Let’s break down each of these five insights with a few examples.
In order to “Analyze customer interaction reasons or intents for new customers versus your experienced customers” you need to convert customer interaction reasons or intents using the customers’ language to make it easy for customer-facing employees and/or your speech and text analytics platforms to collect them. It’s best to extract your customers’ emotional context using unstructured analytics. Companies that create fewer than 60 reasons or intents have shown the greatest success differentiating between new and experienced customers complaint patterns and be able to address those complaints far more quickly than companies mired with hundreds of reason codes or possible interaction reasons using “company speak”. We covered this in our 1st book The Best Service is No Service2 and there’s more in one of my earlier CustomerThink posts3.
In order to “Recognize that many of your new customers are digitally savvy and will require very different approaches than many of your more experienced customers” it is essential to know the prior and current experiences of your new customers in order to shape the right product, program, and support offerings for them. For example, if your new customers are digitally native or 20-year Costco members they will have a heightened expectation for personalized offerings and self-service. I have always called this “Last Contact Benchmarking”4, far superior to comparing your performance with companies in the same industry. Some of your more experienced customers might be less comfortable with digital solutions such as chatbots and prefer, if not insist, to speak to a customer service representative, and you will need to decide how to handle these situations.
In order to “Create an on-boarding checklist and follow it step-by-step” you should follow the tried and true practices in hospitals ensuring tight compliance with surgical procedures and testing regimens (based on B-17 bomber checklists from WW2)5. This means developing precise steps that your sales teams must follow whether as sales representatives in a contact center, retail sales clerks, field sales staff, or automated order-taking systems. Of course, this means a potential reduction in sales productivity metrics but this is offset by reducing complaints and customer churn because customers start off understanding more clearly what to expect. We covered this in our 2nd book Your Customer Rules6 and in my earlier CustomerThink post7. Experienced customers will also benefit from detailed checklists when they are offered new features or a new plan, essentially becoming new customers all over again.
In order to “Prepare your new customers for their first key moments of truth experiences with you” it is important to place yourself in the new customer’s shoes. Keep in mind that they are excited but also slightly confused and nervous. You will need to reach out to your new customers to alert them or provide time-sensitive advice, e.g., before they receive their first invoice; when their usage reaches a critical level; or when they need to update their personal information. If your customer has just bought a new mobile phone make sure that you don’t try to sell them another phone when they land on your website! Your new customers are probably seeking usage advice so personalize their pages to lead directly to relevant support pages. Experienced customers continue to have key moments of truth as they explore new ways to use your products, services, and support tools or add more products; as they approach renewal or warranty expiration; when you change your UI or sign-in procedures; or if you upgrade your systems and require different processes.
Finally, in order to “Offer new deals to your experienced customers before promoting them to attract new customers” you need to take a hard look at the resistance to down-selling (as covered in my earlier CustomerThink post8 and one of the 39 Sub-Needs in our book Your Customer Rules: “You treat me like a new customer all the time”6). Several leading telecommunication and credit card providers have brushed aside that resistance with impressive results: Their experienced customers express surprise and delight by being offered the hot new deals before they hear about them online or on TV; they then share broadly with their friends and family that “membership does have its privileges”; and they tend to buy more and remain loyal much longer. However, when most experienced customers encounter a better deal and inquire how they can take advantage of it, they almost always discover that these new deals are only available for new customers and their reaction is often quite agitated:
“So, if I quit and come back I can get the new deal, right?”
”Sorry, you have to spend at least six months away from us before you can take advantage of the new offer.”
What?! You can save significant customer service expense, customer frustration, and probable loss of their business, and secure terrific goodwill by marking down your product or plan pricing with the new deal applied to your experience customers. This is more than offset by fewer customer contacts, far less irritation, and greater retention.
In short, by treating your first-time customers differently than your experienced customers and treating your experienced customers more like your first-time customers, you will enable all of your customers to work with you more smoothly and for a significantly longer period of time.
1 The One to One Future: Building Relationships One Customer at a Time by Don Peppers and Martha Rogers, PH.D (Currency Doubleday 1993).
2 The Best Service is No Service: How to Liberate Your Customers from Customer Service, Keep Them Happy, and Control Costs Bill Price & David Jaffe (Wiley 2008). Based partly on my years as Amazon’s 1st WW VP of Customer Service, but also on “Best Service” providers around the world who have made it easier for their customers to do business with them, we proposed 7 Drivers that start with “Challenge demand for service”:
- “Eliminate dumb contacts”
- “Create engaging self-service”
- “Be proactive”
- “Make it really easy to contact your company”
- “Own the actions across the company”
- “Listen and act”
- “Deliver great service experiences”
3 “Applying Big Data, Skyline, and Snowballs for Contact Optimization”, accessed 30 April 2020
4 “Blurred Lines: Today’s B2B Customers Expect B2C Experiences”, accessed 30 April 2020
5 “A simple checklist that saves lives”, accessed 30 April 2020.
6 Your Customer Rules! Delivering the Me2B Experiences That Today’s Customers Demand (Wiley/Jossey-Bass 2015). Here are the 7 Customer Needs that Lead to a Winning “Me2B” Culture; each Need breaks down into a total of 39 Sub-Needs.
- “You know me, you remember me”
- “You give me choices”
- “You make it easy for me”
- “You value me”
- “You trust me”
- “You surprise me with stuff that I can’t imagine”
- “You help me better, you help me do more”
7 “Seven Customer Needs that Lead to a Winning Me2B Culture”, accessed 30 April 2020
8 “Treat Me Like a New Customer All the Time”, accessed 30 April 2020