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5 Ways Marketers Alienate Customers - And How to Avoid Them

Posted on February 25, 2020 at 2:40 PM

4Ps. 5 Forces. 3 C's. Marketing professionals learn many frameworks in business school and beyond. One framework is missing, however - how to avoid alienating customers through marketing practices that can go wrong. As more companies move to subscription-based models, the lessons from poor customer experience in industries like financial services, cable television, and mobile phones can provide lessons in how to avoid bad customer experiences. Here are the five biggest areas where marketers need to minimize the risk of harming their customers.


1 - Penalty Overuse - Penalties for things like late payment serve a valid purpose to shape customer behavior. The ability to levy penalties also creates an "easy money" temptation for service providers. If you are relying on penalty fees for things like late payments for a substantial part of your profit, you are courting risk because you are creating incentives to impose penalties beyond their valid purpose. If you are charging a penalty fee to terminate an account, for example, that may be a lazy way to fight customer attrition.


Recommended Action - Look at two metrics - the percentage of your profits that come from penalty fees and the the amount of penalty fees your customer service reps are reversing. If those are higher than expected, that can be a sign that you are imposing too many penalty fees.


2 - Product Perplexity - As technology drives product innovation, it also can drive complexity. Complexity can be a good thing if it moves toward mass-customization, where everyone gets a product tailored for their needs. Product complexity can be a tempting cloak to sneak bad customer deals into a product too, though. If you bury changing terms, teaser rates, hidden fees, and other "gotcha's" into your terms and conditions, you are opening yourself to alienating customers down the road. If you make it hard to figure out that total cost of your service, you are asking for complaints.


Recommended Action - Monitor your customer complaints to see where over-complexity is driving an inordinate share of your customer complaints. Re-engineer those out of your product offerings.


3 - Channel Inconsistency - Marketing often means offering different products to different customers. But if you are not providing a consistent marketing experience as your marketing plan intends, you are also courting trouble. For example, if your call center reps have a lot of individual discretion in setting prices without adequate policies and procedures, you are opening yourself to risk of unfair or biased treatment of some customers over others. If you have lots of affiliates marketing your product without clear direction and supervision, you are opening yourself to having your product pitched in ways in your name that are "off-script." Multi-channel strategies can be effective, but they take work to ensure they are delivering on the marketing intent as designed.


Recommended Action - Create clear policies and procedures for all your marketing channels - especially third party affiliates. Train everyone involved and hold them accountable by regularly auditing their performance against those standards.


4 - Vulnerability-Based Targeting - Marketing 101 teaches us why supermarkets put candy and other impulse buys next to the cash register - they are hitting customers when and where they are most vulnerable while waiting to pay. It can be tempting for marketers to focus too much on customer's vulnerabilities instead of on their needs. Left unchecked, clever merchandising tactics can evolve into marketing practices described as "predatory targeting." If your market targeting starts to look like it is based on consumer vulnerabilities more than distinct needs - e.g., "going after" the elderly or those with limited English-language proficiency - you are exposing yourself to risks of being seen as a predatory marketer.


Recommended Action - Consider getting an outside, independent audit of your marketing efforts to assess your risk of being seen as targeting vulnerable populations.


5 - Incomplete Accountability - Sales incentives are core to marketing strategies because they work. Sales agents sell more because they are rewarded for doing so. Risks emerge when the incentives that sales agents see do not include the full cost of their actions. If a sales person isn't held accountable for customer dissatisfaction after the sale, they may have a temptation to go "off script" and say whatever they need to to close the sale. If your sales performance metrics don't include things about the resulting default rates, attrition rates, and customer satisfaction, you are asking for trouble. And this goes not just for your own employees, but for your marketing partners and vendors too.


Recommended Action - Assess your sales performance metrics and incentives to see if they are balanced to include accountability with customer satisfaction post-sale.


While not a complete list of risks, these are the handful of practices that probably drive the bulk of customer alienation today. If you assess and manage your risks in these areas, you should avoid a lot of pain in the future.

Photo by Moose Photos from Pexels

Categories: Transparency, Marketing, Financial Services