The Third Time

An Englishman, a Frenchman, and an American walk into a bar.   The Englishman says something unremarkable.  The Frenchman’s words or actions are mildly amusing.  When the American takes his turn, it’s hilarious.   This is a common pattern in humor, and it doesn’t matter at all what nationality, religion, race, or species the three characters are – you can swap them out and the joke still works.  But it’s always the third guy who delivers the funny, and the audience chuckles even if it’s a very corny joke.

The same pattern is evident outside of humor, in rather serious situations: the first affront or insult is shrugged off, the second one rouses anger, and the third can lead to an outburst or violent altercation.  The first time a customer is disappointed he shrugs it off, the second is an irritation, and the third elicits a hostile reaction that terminates the sale and possibly even the relationship with the brand.

That’s not to say that a single misstep will never cause an explosion, though it generally has to be something quite egregious.   Likewise, the second misstep might be seen as blowing a second chance, but again the error has to be fairly serious to result in drama.   But no matter how mild the offenses, three-in-a-row will almost always result in a dramatic emotional reaction.

Generally speaking, brands are attentive enough to avoid making the single egregious error that immediately terminates the relationship.   Errors of this kind tend to be so obvious that no-one would cross that line (except maybe an individual who’s socially maladroit, having a very bad day, or both at once).   They also seem to be largely attentive to the two-strike errors for which customers will give the firm a second chance (but not a third) to recover.

But the three-strike mistake is the kind that many brands still make, because individually each of the errors seems rather minor and they expect to be forgiven – and because they will be forgiven the first time and even the second they tend to treat these problems as statistically insignificant anomalies that can be addressed at their leisure.   And when they do serve up the third misstep, they dismiss upset customers as being unreasonable and hot-headed and continue to ignore the problem.

As markets become competitive and an increasing number of suppliers deliver increasingly commoditized goods, it’s no longer wise to be so nonchalant about seemingly “minor” service issues.   All it takes is three of them, no matter how trivial they may seem, to send customers into a tantrum that fractures their relationship to the brand.

Brand Turnaround

I recently read Karen Post's book about salvaging a damaged brand: when crisis (inevitably) strikes and the mob turns against a once-trusted brand, how do they recover their esteem and regain the trust of their customers? The answer is quite simple: accept responsibility, clean up your act, and prove that you have done so.

I don't have the sense this is anything revolutionary, or anything that should need to be said - but if you look to the past three decades of debauchery in the corporate, nonprofit, and political spheres, it becomes fairly clear that people in positions of responsibility still have the hubris to assume that they can get away with the most gormless and/or heinous acts, even under the constant scrutiny of a watchful society.

But in all fairness, there are very few instances in which people conduct themselves as comic-book villains, seeking to spread harm and destruction for the sheer joy of it. Most times, it's trying to cover up a minor error by making a bigger one; or ignoring the side-effects while pursuing a worthy goal; or clinging to business as usual even though the market and the culture have changed.

And all in all, people tend to be forgiving - perhaps a bit overly so - when a mistake made for whatever reason is followed by a sincere apology and an earnest effort to rectify a problem. There's some comfort in that, but it should never outweigh the discomfort at the prospect of failure. Sometimes, that's all that keeps us on the right path.

Burned Customers

As vendors tune in to the notion of relationship marketing, the focus seems fixed on the future - and while I accept the notion that the past cannot be changed, no use crying over spilled milk, and so on, to completely ignore past interactions with a prospect or customer is to overlook barriers to forging a future relationship that must be addressed before the relationship has any chance of moving forward.

The list of individuals a company has "burned" is of little consequence to the mass-media marketing approach: it's generally accepted that a mass-broadcast message is going to reach a large portion of people who are not going to be receptive to the message - whether it's because they have had a negative experience with the advertiser, they find the advertisement itself to be offensive, or do not have the need for the product or the means to purchase it.

However, a one-to-one marketing approach, enables communication to be tailored to the individual (through live sales representatives, telemarketing, direct mail, and new media), companies have the ability to control what they communicate (and decide whether to communicate at all) to each person they intend to reach.

At that level, campaigns can be segmented to the key audiences: to eliminate those who are not prospective buyers, to seek to gain the business of a qualified process, and to seek to improve the relationship with an existing customer, with an eye toward expanding breadth and frequency of purchase.

The list of burned customers should not be lumped into the individuals who are not prospective buyers. Because they once purchased from the advertiser, it's clear that they have the need for the product and the means to obtain it - and as such, they should be considered as attractive a market as any other qualified buyer.

And it's worth noting that not every former customer is a burned customer: some of them have simply taken their business to another provider who, at least for a time, offered a better price or desirable features that were unavailable with the original provider. There's much to be learned from former customers - but that's beside the present point.

Burned customers are an entirely different species: they weren't lured away by a better offer, and I suspect that in many cases they have accepted an inferior one, because their motivation was not to seek out a better relationship, but merely to get out of a bad one.

My sense is that winning back a burned customer is a topic that authors and theorists avoid because it's a very touchy situation, and very difficult to negotiate when you're starting from a disadvantage. But it's also my sense that, if you can get this "right," restoring your relationship can do much for your overall reputation.

At the very least, making amends with a burned customer will decrease their incentive to spread negative word-of-mouth, but it's also akin to a service recovery, and I suspect that if you can manage to win back a burned customer, they will become a very good customer and a staunch advocate.

I'll keep my eyes out for an article or book that examines this phenomenon. I've not seen one to date, and I expect that, since companies are new to relationship marketing, there are still many low-hanging fruit among the population of customers they have not yet burned. But as the practice expands, and the crowd of prospects who aren't already engaged to a competitor becomes thinner, there will be greater interest in pursuing this segment.