Live from NCOF: Why Good Service Is Good Marketing

Orlando, FL—Marketers who see no need to concern themselves with operational or customer service issues, take heed: Good marketing cannot compensate for a bad customer experience. Or as Debra Ellis of Wilson & Ellis Consulting put it during her Wednesday session at the National Conference on Operations and Fulfillment, “Customers remember the experience more than the marketing that leads to the experience.”

Which is why the marketing and operations teams need to, at the very least, communicate on a regular basis. Case in point: When Ellis was the COO of furniture cataloger Ballard Designs, the company order several hundred Star-Struck Santa decorations for the Christmas season.

Several months prior to December, Better Homes & Gardens magazine decided to feature the product in its December issue. The marketing team didn’t bother passing this information to the ops team, so when the magazine hit the stands, and instead of receiving several hundred orders Ballard Designs received some 2,000, it was unable to meet demand.

The marketing staff also needs to realize that in this era of social media, the order-takers, service reps, packers, and other back-end staff, all of whom are critical to ensuring a positive customer experience, are also critical to ensuring positive word-of-mouth.

Originally, Ellis said, the goal of the marketing department was to get the order. Now the goal is to get the order and get others in the marketplace to talk about the order positively.

“They’re looking at the product. They’re looking at the service. That’s what gets people talking,” Ellis said. “The marketing department is just like the operations department: You’re both packaging things. Marketing is packaging ideas. Operations is packaging products.”

To prove just how effective good service was as a marketing tool, Ellis shared some statistics from one of her clients. For its top customer segments, the company enjoyed a 10.7% response rate, a $73.47 average order value (AOV), and a $663.43 average lifetime value (LTV). Of those customers who’d had multiple problems with their orders that were not resolved satisfactorily, response, AOV, and LTV were, not surprisingly, significantly lower.

Among these top customers who had had no service issues, the response rate was 9.4%, the AOV was $72.38, and the LTV was $534.16. But of those who’d had issues that were resolved, the response rate was 12.9%, the AOV $82.54, and the LTV $1,125.02—all appreciably higher than the averages for even customers who had not had a problem with the company in the first place.

The point: By taking care of problems quickly and to the customers’ satisfaction, the company had proven itself trustworthy to those customers while making them happy. “And it’s really hard to get people to change [companies] when they’re happy,” Ellis said.

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