Tuesday, August 27, 2019

MBA in a Nutshell #3 - Marketing : Customer Service and Customer Focus

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As we continue with our exploration of marketing, we are now dealing with some key issues of customer service and customer focus.

a) Most customers are decent and honest 

This follows research that most customers are decent and honest. While I agree with this statement, I am mixed on how to follow up on this recommendation. Singaporeans are fairly astute life-hackers and I would not rely on the good faith on others when conducting a business.

For months we had to keep tuning our money-backed guarantee program to prevent abuse. One classic champion customer asked for his money back and then continued to badger me for advice on what to do after making it clear that he acted on what was taught in the class.

This is why we can't have good things and I've learnt a lot about running an education business from people like this.

b) It is easier to retain and up-sell to existing customers than to get new ones.

It costs five times more money to acquire a new customer so it is a lot more effective to sell to existing customers than to find new ones.

This insight would work if I can come up with an advanced investing course as my students already speak the same language. Right now, however, I am still a rookie who has just about to complete his first year. The other issue is that it's difficult for me to launch a new course unless I can invest with my own money on what my students produce - this means a longer incubation period to discover and test a new way to invest.

I am slowly gathering feedback from my community on what would they like to learn. Maybe marketing people should focus less on squeezing their customers and spend more time engaging them first. 

Right now, students are clamoring for regular meetings to get updates. I'm not too sure on how to get the itinerary and the price point right.

c) Customers will ignore your shortcomings if they perceive you as caring for their well-being

This is called idiosyncratic credit in educational sociology. Students will ignore their teacher's flaws if these teachers show that they care.

This is no longer optional in financial education. Whether a trainer treats his students as a recurring source of revenue or as a bunch of friends will show from the way they engage customers in social media.

I actually think that I may have broken ground here. More idiosyncratic credit can be gained when the teacher has his well-being tied to his student !

d) A company must contend for the customer's attention before they can sell to them

Another really dumb and common sense idea is the concept of permission marketing. In order to sell to someone you must provide value to them first to earn the right to do so. This should be common sense - I started previewing my course and designing a 2 hour workshop before planning for my course is even complete.

Recently however, it came a shock to me that not every salesman follows this approach. A friend shared to social media that real estate agents have been going around ringing their doorbells and hawking their services to them. As my condominium has also reached the minimum occupancy period, my mailbox has also been inundated with letters from these pests. 

I don't understand how the reputation of these agents can be maintained by stealing our attention without offering somethings useful. To date, I've also started to throw the free fridge magnets from real estate agents away.

In summary, I am unimpressed by these marketing insights I read about.

Right now I imagine an army of MBAs channeling these insights from dated social science academic papers into figuring out how to get more eyeballs when common sense tells us that, basically, if you want anything from someone, find ways to add some value to them first. 

The more value you add to them, the more they will add value to you.

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