Three Wrongs Make a Right 11-06

Three Wrongs Make a Right

By Ryan Sauers | 

Today I was eating at a restaurant with my family and it was one we had never tried before. As it turns out, it will be the basis of this week’s blog post. The server does not come to our table for 10 minutes after we were seated. Wrong #1. So, I had to go ask someone who our server was and then he magically appeared. We told him we were ready with our drink and food order if that made it easier for him. (Yes, we were hungry.) Oh yeah, and before I forget, this restaurant has one of those Coke machines that can make tons of variety flavors of drinks. So, we order a few like Cherry Coke Zero and then a couple of iced teas (yes Kelly Mallozzi, and John Foley) sweet tea. OK, back to the story...

So, the server disappears for quite a while and finally comes back and has the drink order entirely wrong. Wrong #2. He went back to fix this once we told him. Third, the manager comes out to ask if we ordered only two food orders (there were four of us there today) instead of four food orders. We said no and she apologized and said the server put in all the food wrong as well. Wrong #3.

The server never told us it was his first day or we might have been more understanding. This was just a lack of good communications on his part. However, the manager did everything right. She rushed to get all the drinks fixed, took care of our table herself, offered us a free appetizer, and then explained all the options with each meal (which we did not get the first time). You see, she took a situation that was quickly getting bad and fixed it. So my experience was not great today, but it would not stop me from going back. Why? She cared and communicated she was sorry and explained the truth as to what was going on.

She was honest, did not make excuses and simply took care of the problem. Is this not something we can all learn from and apply to our business? There are times when it might be appropriate to explain “why” something went wrong to a customer. However, in many cases the best policy is to say we have “dropped the ball” on this and we will do whatever it takes to make the situation right. This is what the manager did for my family at lunch. Little does she know I am blogging about this on an international blog. 

Customers do not like mistakes. However, my most loyal customers were earned based on how I make bad situations “right” for them. Once a customer knows you will go the extra mile and do what is right, you have reached an entirely new level in your relationship. You make them feel important and they know that you will stand behind a problem. Thus, you create more than a loyal customer...you make a raving fan.

So, as the title states...sometimes three wrongs can make a right!

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Wharton Professor Eric Bradlow unveils a new metric for marketers to determine customer lifetime value. 11-06

SIX STEPS TO A CLUMPIER CONSUMER

Wharton Professor Eric Bradlow unveils a new metric for marketers to determine customer lifetime value.

Professor Eric Bradlow, W’88, HOM’00, shares an epiphany from his latest marketing analytics research: how one data point could help marketers better identify their customers with the most promising customer lifetime value (CLV).

It’s called “clumpiness”—a measurement of how binge-y a shopper is. Clumpy shoppers—those that shop in spurts comparable to the behavior of binge drinkers and binge sleepers—are more valuable in the long run than nonclumpy shoppers, according to data collected by Bradlow, who serves as Wharton’s K.P. Chao Professor, vice dean and director of Wharton Doctoral Programs, and co-director of the Wharton Customer Analytics Initiative.

Your options are to watch the full webinar to gain a greater understanding of clumpiness, or read our six takeaways, presented below.

Better yet, you could do both—read this blog and watch the full webinar.

1. Does clumpiness apply to business-to-business customers? “I have no empirical proof,” Bradlow told his remote webinar audience. “I am willing to bet a lot of money that clumpy B2B is worth more in the future,” he said, adding that if any B2B marketers would like to share their data sets, he would be happy to test his hypothesis on them.

2. Bradlow will offer links to the two research papers that explain his new finding, as well as an Excel spreadsheet to demonstrate how to measure the clumpiness of your customers, on his Wharton homepage  .

3. Digital consumers seem to behave more clumpily. In his analysis, 40 to 50 percent of Hulu, YouTube, Amazon and eBay customers are clumpy. Shoppers of traditional products—like toilet paper, for instance—tend not to be clumpy.

Prof. Eric Bradlow

4. There are two types of clumpy—visit clumpiness and purchase clumpiness. Shoppers who are visit clumpy are not necessarily purchase clumpy and are thus not necessarily more valuable. Purchase- clumpy shoppers tend to have that long-term value.

5. Female shoppers, younger shoppers under 30, loyalty program members and customers with wish lists tend to be clumpier.

6. The traditional framework of CLV and customer segmentation is RFM: recency, frequency and monetary value. This framework is lacking without a fourth attribute: C for clumpiness.

For others—and those Wharton community members who want as much of Bradlow as they can get—please watch the video below of Bradlow’s Wharton Lifelong Learning master class on “mining for gold in marketing.”

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