Complex Devices: Greater Opportunity, Greater Risk October 15, 2008
Posted by OnProcess Technology in Asset Retrieval, Customer Experience Management, OnProcess.Tags: Asset Recovery, costs of returns, customer education, Customer Experience Management, customer frustration, digital tv, PDAs, smart phones, Steve Kirstein, wireless devices
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Summary:
- Complex devices such as “smart phones” and digital Pay TV services have steeper learning curves, leading to user frustration and higher-than-expected return rates.
- Costs of handling these returns, as well as training users, are high and getting higher.
- Opportunity costs of these returns are high as well, as anticipated revenues plummet and unanticipated costs escalate.
- Proactive customer outreach and training can mitigate these costs and keep per-customer revenue levels higher.
As our consumer technologies become more complex, the opportunity for wireless carriers, device manufacturers and Cable/Pay TV operators to realize higher per-subscriber revenues increases substantially. Data plans, bundled voice and data, digital programming and on-demand pay-per-view can enhance your customer’s experience while driving higher usage and, therefore, cash flows.
A casual sampling of our markets revealed that Sales of these newer devices have increased between 15 – 30% in ’08 versus the previous year.
The downside of this digital revenue bonanza, however, has begun to emerge. The promise of an enhanced user experience has been shattered by the reality customers are finding: steep user learning curves, overly complex menus, unknown feature sets and unrealized benefits of increased capabilities.
As a result, users are returning complex “smart phones”, downgrading digital TV converters and, in so doing, often expressing their frustration by changing carriers and providers.
Ironically, the more that these more expensive devices are adopted overall, the greater the exposure to companies in the areas of Capital Expenditure, Replacement Stock Management, and Lifetime Value per Subscriber. Have a look at this graph:
Smart Devices expose companies to ever-increasing return costs
In this example, we assume a typical wireless device, with an internal cost of about 1/3 that of a “smart” device, and a return rate of roughly half that of ”smart” devices. With an ever- increasing proportion of “Smart” devices as a percentage of total adoptions, the expense of returns of these devices increases substantially over time. Chances are, you have under-predicted the level of returns you are experiencing.
This makes the need for a comprehensive approach to both Asset Retrieval and Customer Experience Management so critical.
If your Reverse Logistics and returns programs aren’t completely buckled down and optimized, the hit on your Capital Expenditures will be much greater, due to the increased cost of the more complex units. In addition, if the Customer Experience is not proactively managed during this critical time of frustration and dissatisfaction, you can easily lose a customer instead of satisfying them.
Moreover, by proactively educating new customers and upgraders to a few key features and procedures on their new equipment, you can stem the flow of returns and realize those increased revenues you previously forecasted!
–sk
Asset Retrieval is Critical in This Difficult Economy October 15, 2008
Posted by OnProcess Technology in Asset Recovery, Asset Retrieval, OnProcess.Tags: Asset Recovery, asset retrieval, customer satisfaction, finding capital, reducing capital expenditure, Steve Kirstein, strategies for managing in economic downturn
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With lending and borrowing tighter, if in fact not available, companies will have to find ways to limit Capital Expenditures without hurting their operations or customer relations. As self-serving as it may be for us to mention, a well-run Asset Retrieval program can make a huge impact on operating expenses and reduction of Cap Ex.
If you can find all of your inventory in the field, and get it back faster, you can dramatically reduce expenditures on replacement goods. Returned items can be repaired, refurbished or otherwise returned to the field more quickly, keeping new equipment inventory needs down. A relatively small percentage improvement in return velocity and return rates can leverage a very large improvement in profitability.
Combining all this increased awareness and control of your warranty and end-of-life equipment with a proactive customer outreach will also mean you can maintain and even improve customer satisfaction, while reaping these very tangible financial benefits.
So, while you’re fervently hunkering down, contemplating cuts in Marketing, Operations, Personnel and so on, which will all impact sales and customer satisfaction, consider reviewing your Asset Retrieval operation as an important alternative that can bring financial improvement AND increased customer satisfaction.
–sk
Time to Appoint a Chief Customer Experience Officer? September 16, 2008
Posted by OnProcess Technology in Customer Experience Management, OnProcess.Tags: CE, Chief Customer Experience Officer, Customer Care, Customer Experience, customer feedback, CXO, Elana Anderson, implementing customer feedback, NPS, Steve Kirstein, turning research into action
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Here’s a germane article on this timely topic. Of particular interest to me was the statistic:
“…a Gartner study revealing that while 95 percent of firms survey customers to get feedback, a paltry 10 percent do anything with that feedback”
We see this phenomenon a great deal both in our Reverse Logistics and our Customer Experience Management engagements. When it’s no one’s full-time job to address an issue, it doesn’t get addressed.
Read the entire article by Elana Anderson of Unica (& ex-Forrester) here.
–sk
You’re only as good as your people. And processes. September 4, 2008
Posted by OnProcess Technology in Customer Experience Management, OnProcess.Tags: customer experience assessment, customer touchpoints, measure customer satisfaction, service quality, Steve Kirstein
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In businesses with many customer touchpoints, each of those touchpoints is both a threat and an opportunity. Huge companies with thousands of employees and hundreds of thousands of customers can spend literally millions of dollars on advertising for branding, new customer development and upsell. Yet, one bad customer interaction can sour the whole works. Multiply that by the number of these bad interactions and the opportunity cost is massive.
What makes this worse is that most companies don’t know where their touchpoints are going wrong. Feedback mechanisms are complicated and often don’t provide an accurate or complete picture. And for every customer that complains, there are likely a dozen (or more) who don’t.
Does your company know how well its customer interactions are received? You train and you train, but are there gaps in some areas? Do you depend on automated customer surveys to determine satisfaction levels?
We’re glad to learn what methods you are using to gauge the success of your customer touchpoints. We’ll also be sharing some high-level insights gleaned from our data-driven analyses with our many client companies. Stay tuned, and let’s hear from you.
–sk
Who are you, and what do you do? September 4, 2008
Posted by OnProcess Technology in OnProcess.Tags: Asset Recovery, Customer Experience Management, OnProcess, reverse logistics, Steve Kirstein
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Yeah, we get that a lot.
As we start to get this blog going, we’ll be answering those questions and more. It’s an interesting story, actually.
In addition, we’ll be talking about the issues we and our client companies deal with in general, because believe it or not there are a lot of folks who want to know about reverse logistics, asset recovery and improving their customers’ interactions with their people and equipment.
So stay tuned, subscribe if you want to our RSS feeds, and let’s see what happens.
–sk
