While customer satisfaction is at the heart of any successful retail business, in the era of social media, developing a culture of care, being open and honest, and paying attention to “demon customers” are vital.
By Claire Sowerbutt
So says Kyle Murray, Professor of Marketing, Winspear Senior Faculty Fellow and the Director School of Retailing, Alberta School of Business, in an overview of research into customer management and how it plays out in the pharmacy sector.
“Customers come into a store and they have an expectation. If their experience meets that expectation, they are satisfied. If it doesn’t, they are dissatisfied,” Murray says. However, contrary to what has become implied wisdom, retailers don’t have to constantly exceed customer expectations, because in the process of caring for their customers, they are building relationships with them. “So we go from the initial model – is this the best we can give, and have I exceeded customer expectations – to the distribution of satisfaction.”
The distribution of satisfaction is a slightly more sophisticated way to think about customer satisfaction. In short, it’s a bell curve – with the “angel customer” on one end and the “demon customer” on the other. In the middle is the moderate customer. “Your angel customers generate 150% of profitability, but that number doesn’t make sense,” Murray adds. “We looked at this and found that your demon customers destroy that 150%. So they cancel each other out, and you’re left with moderate profitability being generated by the moderate customer in the middle of the curve.”
Social media as your early warning system
What has become more obvious now, in the face of social media, is that retailers should be focusing on the demon customer. This means dealing with customers’ complaints. While minor incidents may not be the end of your customer relationship, major incidents can be. “If people are telling you they are unhappy – they are probably more unhappy than they are saying,” Murray says. “They will tell their friends, which in the face of social media can mean telling 500 of their friends on Facebook. “
Murray cautions that a pharmacy business must also be aware of the possibility of a critical issue occurring at some point. Citing the tainted Tylenol case of 1982, he explains that when the incident occurred, Johnson & Johnson owned it, despite the fact that it was not of their making. As a result, while they initially lost market share, they had, within the year, gained it back and simultaneously become the textbook example of how to handle this type of crisis. “They came back because people trusted Johnson & Johnson,” Murray says. “Companies that should have learned from this include GM on the latest recall, and even J&J later on.”
But social media can also be an early warning system. “Your Facebook and Twitter accounts are where you will see customer dissatisfaction surfacing long before it shows up in your market share,” he notes. Because negative experiences have a greater impact than positive ones, negative sentiment gets the momentum and snowballs with social media, he explained. “If other people experience the same kinds of things – long lineups for example – it will snowball.”
Murray also cautions about potential privacy issues. “They are going to come up more frequently going forward, and could be a big issue for pharmacy,” he says. It could be as simple as handing the wrong prescription to the wrong patient, or worse – a data breach. “You can deal with these issues if you have a plan and the corporate culture in place,” he said.
In short — be open and honest, take accountability for what has happened, and think long-term. Negative incidents provide an opportunity to build and strengthen your branding. And, always take the long-term focus on relationships over short-term profitability.
Top tips to develop a culture of care
1. Learn to recognize your “angel” customers and your “devil” customers.
2. Deal with customer complaints quickly and efficiently.
3. Don’t let minor complaints turn into major beefs.
4. If there is a problem, own it and make it right.
5. Mind your social media for early warning signs of customer trouble.