I've written about good customer service in the past, highlighting my excellent experience with L.L. Bean. I've postulated that quality customer service is actually free, because the incremental sales more than make up for "excessive" talk time and refunds/credits granted by your customer service representatives.

Here's a trivially-observed example of what lousy customer service will cost you.  In this example, from Verizon, it's a minimum of $100.

The saga unfolds after the break.

We made the switch to Verizon FiOS in December, after waiting for years.  It's a terrific product, with great HD picture quality, and speedy and stable high-speed Internet access.  The installer was excellent and courteous and made sure everything was working perfectly before he left.

The ability of Verizon to handle an easy premium offer (the infamous HD Free TV offer)?  Not so much.

I've been working email and phone conversations with Verizon since January trying to get my $200 Best Buy gift card, which I selected in lieu of the 19" HDTV.  Since then, I've amassed a string of emails with the Verizon executive escalation team which have gone unanswered since January.

Finally, in frustration, I resorted to The Consumerist's list of Verizon executive contacts and sent an email to Ivan Seidenberg on Friday at 5:30.

Talk about quick reaction!

At Monday at 9:30, I received a call from a very nice young man who was very apologetic and who was clearly empowered to do whatever it took to make me happy.  He indicated that the $100 gift card I received in January was the first part of a win-back offer and that I'd get the other $100 in month 13.

The problem was that I never responded to a win-back offer.  I went for the FiOS triple play/free TV offer.  However, I didn't want to get something I didn't deserve, so I let the young man know that if they just sent me a $100 gift card, I'd consider us even and not to worry about anything else.

Of course, he had no way to give me just what was owed to me ($100 of gift cards) and had to resort to shipping out a $200 card.  I practically had to beg him not to FedEx it to me.

So Verizon will get stuck paying a $100 penalty for bad customer service, and that's not counting the time and effort expended via the forwarding of the complaint email from Mr. Seidenberg down the food chain and the inevitable executive escalation report that will be fed back up the chain at some point.

Now, want to take a guess what I expect in January or February of 2009?  Yep, I suspect the CRM systems of Verizon have been so fouled up by the free TV offer debacle that they'll spit out another $100 card for me.

The worst part of the whole experience actually took place yesterday afternoon.

I received a very uncomfortable call from one of my prior executive escalation contact's supervisor.  The supervisor apologized to me for her employee's lack of follow-up to me, and let me know it would be "handled appropriately" and that the person would be "reprimanded."  Yecch.  It felt like one of those unconfortable visits when your neighbor's kid hits a ball through your window and they come over with the kid's ear in a vise grip and make them apologize.  I couldn't get off the phone quickly enough and couldn't believe that Verizon was treating its employees like this--both the supervisor, who clearly wasn't comfortable making the call, and the employee.

Can you imagine how this employee--who's a grown adult, with a mortgage, family, etc.--must feel? I wonder how far he/she will deviate from the Verizon manual going forward and actually even try to use their brain?

I also wonder what brand of bureaucratic punishment will be exacted.  Banishment from the department bowling team?  Six months of replenishing the floor candy bowl?

All it would have taken was for Verizon to have a system in place that let their employees solve customer problems the first time, even to the extent of spending a little bit of money to address the root cause.  This one resolution must have cost them in total the price of 2 or 3 TVs; multiplied by thousands, it's got to be one of the all-time promotional disasters.

What are you doing that's L.L. Bean-like?  What are you doing that's Verizon-like?  More importantly, what are you doing that's more of the former and less of the latter?

photo credit: Daquella manera

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When it comes to creating an emotional brand experience, forget copy, taglines, imagery and brand iconography.

There's nothing like touching and feeling a product first-hand. Tasting the product is even better.  Especially when that taste is vaporized rubber and burning brake pads.

Of course you have to be a gearhead, enjoy automobiles and love driving.  That's why Audi's Driving Experience is perfect in terms of targeting and likely a big success in generating sales.

On Saturday, I attended Audi's complimentary two hour session at Summit Point racetrack in West Virginia, as the the result of an invitation I received as a current Audi owner.  I thought it would be a great way to spend a few hours on the weekend and get a ride in the 2009 A4.

Instead, I experienced a great example of experiential marketing and even witnessed a prospective Audi customer turn into a likely purchaser.

During the session, we had the chance to run the new A4 on an autocross track against three competitive models: Lexus IS250, Mercedes C300 and the BMW 328xi.  All models were comparably equipped and all featured all wheel drive.  While I admit an Audi bias going in, I found the A4 to be the best drive on the autocross track, showing a great balance of power, handling and luxury.

I drove in the car with a couple who were in the market for an automobile in that class and I was able to watch their preference swing very strongly to the A4 after they'd driven the other three models around the course.  It was clear to me that after driving the cars head-to-head--and a lot harder than they would get the chance to in a standard dealership test drive--that this couple was off the fence and preferred Audi for their next car.

Of course, that's exactly what Audi was hoping for. What I experienced with my co-driver was probably exactly the way Audi and Emotive white-boarded it in the planning stages.

After the autocross, we had the chance to go out and drive the A4 at speed on the racetrack for several laps, following a professional driver.  Talk about a great way to end the day, and not even have to worry about tires, fuel and brakes!

Of course, Audi ensured that the experience was all true to the brand.  The signage was beautiful.  The complimentary continental breakfast in the lounge reminded me of a luxury European hotel.  And all the furniture, including stainless steel tables and chairs, and modern white sofas was brought in specifically for the day.  Nothing at all was left to chance, even the use of high-tech iPod Touches to capture the post drive survey and the very cool Audi caps handed out as thank you gifts.  Vorsprung durch technik indeed.

What should you consider when undertaking an experiential marketing campaign?  My takeaways:

1. Budget appropriately. In order to do this right, Audi spent a fortune.  From purchasing competitive vehicles, to detailing them (they were impeccably clean), to the furniture, food signage and impeccably-groomed young staff, everything was perfect.  When you're trying to sell $48,000 cars, nickels and dimes spent on the presentation do matter.
2. Don't be afraid of the competition. Don't hesitate to let your prospective customers compare your product head-to-head, especially when you believe your product can stand up.  Bring in a reasonable set of the products likely to be cross-shopped and let your customers touch and feel those products as well.
3. Don't be afraid to guide the conversation. While you can let people make up their own minds about your product in relation to the competition, Audi did a fine job in the pre-drive briefing letting us know how to test the cars and what to look for.  Of course, Audi was bound to do well in that comparison because we knew what to think about during the drives.
4. Sweat the details. Is the coffee good?  The pastries of best quality?  Is the upholstery clean?  All of this matters and all of this costs almost nothing to get right.
5. Have a plan. The logistics of having hundreds of people come through to drive the cars must have been mind-boggling (the presenter indicated they brought 70 cars with them).  Yet, everything ran very smoothly.  Clearly, Emotive (the group that put together the day for Audi) had a lot of experience and a very good plan in place.

How have your experiential marketing experiences gone?  Have you had similar good experiences?  Or ones that went awry?

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A recent article in the New York Times got me thinking about the psychology of marketing again, and how some basic principles are used or under-used in social media marketing.

"Warning: Habits May Be Good for You" explores how an anthropologist turned to marketing experts from CPG companies like Procter & Gamble to help increase the incidence of hand-washing with soap after using the toilet in the nation of Ghana to improve the health of children.  Obviously, this was an important effort and I was encouraged to see marketing practitioners as instrumental in helping achieve success in this endeavor.

As I was reading the article, it struck me that many of the techniques used are found in Robert B. Cialdini's classic Influence: The Psychology of Persuasion. I'd lent out my copy a few years ago and, thankfully, had to buy a new version which includes an epilogue written by Dr. Cialdini in 2007.  My re-read then triggered a few thoughts on social media.

If the social media crowd can stop navel-gazing long enough to do some quick research and scientific work, boy will money be made. [More after the jump.]

Dr. Cialdini's research caused him to identify six key weapons of influence:

1. Reciprocation
2. Consistency
3. Social Proof
4. Liking
5. Authority
6. Scarcity

Many of his examples focused on face-to-face selling or just plain interactions with others.  When I first read the book (originally published in 1984) for the first time in 1995 or so, I was struck by the fact that my company at the time was using all six of those principles, but in various offline direct response channels.

We didn't intend to use Cialdini's principles; rather, we evolved into using them through years of scientific univariate tests.

Which of the six principles is most important to a social media startup? From what I can see, it's the concept of Social Proof.  Jason Calacanis becomes a Twitter advocate and, because several of his followers also pick up on Twitter, it soon provides proof to a certain circle that Twitter is a good thing.  Boom, the product takes off.

What's the problem with the concept of Social Proof in growing social media? Try this:  Ask anybody over 40 who's not a regular reader of Alley Insider, Valleywag or Paid Content what Twitter is.  My bet is you get a blank stare two out of three times.

Simply relying on Social Proof can get you pigeonholed within a very select segment of people.  Now, for companies that provide great services to that limited target audience, it can be very good business indeed. (See how Rafat Ali made out with Paid Content.)

The key is how to use the concept of Social Proof to expand beyond that initial, lucrative target audience and become more ubiquitous.

Summary and key takeaways

1. What's "old" is new again. Go back and do your research.  Classics of marketing and psychology are relevant today, just as the concepts they cover were 10,000 years ago.  Plus, with Amazon, it's now cheap to really build your library of information!
2. Consider how humans are hard-wired. When building products, services and delivery methods for those products, think about basic human infrastructure and how you can find the path of least resistance to your ideas.
3. Remember that great psychology can't overcome a bad product. You can certainly fool some of the people some of the time using some of Dr. Cialdini's "click, whirr" discoveries.  But that's still only going to take you so far.  Start with great products.

I'll look at more of Dr. Cialdini's concepts in the future.

In the meantime, how have you applied psychology in your marketing?  Or, when have you seen good (or clumsy) attempts been applied to you?

photo credit: HeffTech

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Good marketing isn't about chasing after the corner case--that last possible customer who might be buying from you, but who isn't.

Overruling the veto vote to extend the reach of your brand often backfires.

Think of Starbucks and how they added breakfast sandwiches to the menu. It gave the customer who was considering a breakfast sandwich a reason to go to the local store instead of McDonalds.

The problem was that it made the stores smell lousy and more like McDonalds, which is a problem when you're trying to sell $4 cups of coffee, a decidedly un-Golden Arches price point.

Thank goodness wisdom prevailed and Starbucks has gone back to their roots (coffee) and nixed the breakfast sandwiches.

Now Baskin-Robbins is making the same mistake and trying to solve for the Least Common Denominator by adding soft-serve to their menu. Now B-R is going to move away from what they're known for (an interesting array of quality, scooped ice cream flavors) and start to compete with everybody in soft serve. So is Baskin-Robbins quality scooped ice cream or cheap soft-serve? My guess is the answer in the minds of consumers will be "neither."

It's always tempting to solve for the "veto vote" LCD or corner case to increase sales. Unless that's done very carefully, it results in a widening of the target audience beyond what is reasonable, addition of vaguely related products and an "everything to all people" branding effort. Not a great place to be and, like Starbucks, you tend to find yourself focusing back on your core business after you've confused the customers.

Always focus on your core audience and core business and expand away from them only after very careful consideration.

One way to think about your core business and core audience is to ask the typical targeting questions in reverse. Ask "who isn't in your target audience?" and "what don't you do?" I find those questions are often answered more easily than the same question asked in the affirmative and with more clarity.

Summary and takeaways

1. Be wary of "everything to everybody". Trying to negate the "veto vote" or adding product features to address a corner case are warning signs. Tread lightly.
2. Understand what you don't do. It can help focus your marketing efforts on the right audience and right target markets and cause you to put aside distractions to your branding efforts.

What do you think? Will Baskin-Robbins succeed with soft serve ice cream? Are there other solutions to their growth problems?

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