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I was on the Citibank site this morning and happened to notice a new product being offered: the Ultimate Savings Account, with an APY of 4.65%. I found this interesting as I have an eSavings Account, which was Citibank’s new product last summer as it moved to be compete with the likes of ING Direct’s and Emigrant Bank’s eSavings products. Right now, Citibank’s eSavings is paying 4.5% APY.

After a quick review of both products, they appear to be almost identical, although with the Ultimate product you don’t need to have a Citibank checking account. So why offer the new product versus, rather than say just raising the eSavings interest rate? And as a customer, why wouldn’t I open a new Ultimate account, move all my eSavings money to this new account, and then just close the eSavings account after that?

But then I took a second look at these products and here’s the rub: To open an Ultimate Savings account, it must be as a stand alone account. Apparently this means it’s the only Citibank account you hold. If you have checking, MMA, etc. accounts with Citibank you’re only eligible for the eSavings. This really perplexes me. Why is Citibank telling me as an existing customer of eight years that I matter less than someone only looking to maximize their online savings return?

I think this another case of a bank showing that they speak of customer retention ‘til the cows come home, but in reality they just don’t get it. I’m not going to leave Citibank over this particular .15% APY difference, but the bank’s message sticks with me loud and clear and will influence the future of my relationship with them. That five-year CD I was considering – well, maybe I should hit bankrate.com before deciding what bank to purchase it from, or that mortgage re-fi? Maybe a trip to guaranteedrate.com would be more fruitful than a visit to my local Citibank branch…

If banks focus new product strategies solely to rate-of-return bargain shoppers, then maybe it’s time we all just start behaving that way.

I just returned from San Francisco where I attended what I’ve been calling the Lalapalooza of the internet, aka Web 2.0 Expo 2007, where industry leaders mixed with rising stars of the wide web world to discuss and discover emerging trends and technologies, show off, promote new ideas, connect and to some extent try to figure out what it all means and where it’s going.

I think we’ve reached the point where we know what Web 2.0 is (user/community driven sites and products, widgets, wikis, blogs, mashups, tagging…phew) and now we can move on to figuring out what we’re going to do with it. And I think that was a refreshing theme throughout the Expo.

The general buzz is there is a Web 2.0 wave to be ridden and there is no shortage of tech companies eager to ride that wave. There was a lot of talk about technology at the Expo, which is certainly a crucial factor, but I think the larger message of Web 2.0 is something that we here at Vox have been talking about for a long time: listen to your customers, build a community and engage them in a meaningful way. Don’t just attack them with features and marketing programs.

Oh, and I saw a really cool video by Michael Wesch, “Web 2.0 … The Machine is Us/ing Us”

Here’s a good lesson to everyone that deals with Customer Experience: Learn from your mistakes.

I know it seems obvious, but people usually confuse “acknowledge mistakes” with actually learning from them.

These are some examples:

• The company recognizes that something went wrong, but is unable to pinpoint the real problem
• The company recognizes that something went wrong, identifies it and brushes it under the carpet before anyone in the company can notice
• The company identifies what is wrong, apologizes and/or rectifies the past occurrence, but doesn’t prevent future problems
• The company identifies the problem, apologizes, researches possible permanent solutions and, after facing unclear or too numerous long-term options, gives up and decides on a quick-fix
• The company identifies the problem, apologizes and researches a permanent solution, but then deems it unachievable or too expensive–and just forgets about it

What should happen: The company recognizes the problem, identifies its cause, apologizes and immediately corrects the situation. After acting appropriately and getting feedback from its customer base, the company looks for more permanent solutions and quickly implements them. After learning from the experience, the company should never repeat the same mistake (at least not in the same way) again.

It is easy to know that you have a problem, but not so easy to identify where the root of the problem resides. And it’s hard to react well, even harder to correct and quite unusual to actually prevent the same thing from happening again.

Well, unusual—but not unheard of. In fact, some companies are not only able to learn from their mistakes but can also benefit from them. Facebook’s recent redesign is an excellent example of this.

Recently, they had a security related problem that actually revealed more personal information than wanted by their users. After getting a negative reaction from hundreds of thousands of their customers, Facebook’s quick response and whole approach to the problem rewarded them with an explosive growth on their membership, jumping from 7.5 million users to 18 million after the crisis.

Facebook’s example proves how valuable (and cost effective) this approach can be, and makes me wonder why most companies still refrain from implementing it every day.

The irony couldn’t have been more evident–the day after Menu Foods Income Fund announced a nationwide recall of over 95 brands of “cuts and gravy” pet food, my veterinarian told me I now needed to feed my elderly cat canned food.

If you have no idea what I’m talking about, here’s the scoop: Melamine, a toxin, was discovered in wheat gluten, used to make canned and pouched pet food, purchased from a new supplier in China. To date, 14 deaths and roughly 8,000 illnesses in pets have been reported as a result of tainted food. Menu Foods initiated a “precautionary” recall, and is now performing extensive testing and consistently communicating with the public via press releases and press conferences (all which may be found on their website).

But back to my story—the vet only had a partial list of the recall, but was able to provide me with a website (www.menufoods.com/recall). I jumped on the computer as soon as possible. The link brought me to Menu Foods [Income Fund] – an unfortunate name during a crisis. The homepage was almost completely blank; the words “Recall Information” standing alone. Once selected, the page listed the brands of food affected by the recall. Most applaudable, a toll-free phone number appeared in large type at the top of the page.

The site only listed products that were a part of the recall (initially just a long list, they now sort into brand categories), and I was not able to find the brand I used for his kittenhood. Not willing to take any chances, I visited my preferred brand’s website. (I’m not sure why I didn’t use Menu’s toll free number; that would have worked, too.) I was pleased to discover a large article on the homepage explaining in simple language which brands were recalled and which brands were safe.

Curious, I checked out the sites of three other pet food manufactures and was surprised by what I found—or didn’t find. One of the largest manufacturers of pet food had a few links mentioning the recall, but provided more propaganda than useful information. The next company had a large photo and link for adopting pets; but only provided a link at the bottom of the page referring to the recall. The last company had no mention of the recall.

Reminiscent of the now-famous Tylenol scare in 1982, Menu Foods has done a commendable job updating pet owners and providing access to answers via their website and call center. Last week, a class-action lawsuit was filed alleging that Menu Foods knew about the problem and waited more than 3 months to act–but that’s a different blog post!

(by Lauren Dain)

As you may have noticed we’ve redesigned our website and it now incorporates our Customerspective Blog.

We still have plenty of Customer Experience Articles and you can still use our Customer Experience Calculators to see the impact increased customer retention can have on your bottom line.  We’ve also improved our navigation and added a Useful Resources page and a Media Room.

Let us know what you think of our new design.

Focus your efforts, resources and capital on acquisition or retention? That is a critical question in today’s B2C business environment and one that we at Vox feel the vast majority of firms answer incorrectly.

New customer acquisition is exponentially more expensive than retaining existing customers, but most business place the utmost importance on acquisition while placing minimal, if any, efforts or focus on retention. Guess what - not only is it more expensive to acquire new customers today, it is only going to get harder moving forward.

As people are inundated with marketing, messaging and communications from an ever increasing spectrum of sources and channels, we are all becoming attuned to just ignoring the vast majority of messages that “hit us” - just as was the case with the Subway Stradivarius - a perfect example of how people just don’t have the time or inclination to care about your messaging or marketing efforts even if you have the next best thing since sliced bread.

You may have the best product or service in the world, but if potential new customers tune you out it means nothing… Wouldn’t it be easier and more beneficial to focus your limited resources on the customers who are (for the time being) already listening to you? We think so… Check out our Customer Experience Calculators to see how Acquisition and Retention stack up against one another.

There’s no other real life indicator of how important customer satisfaction is, than in the hospitality industry.

It’s almost guaranteed; a satisfied customer in your restaurant or hotel is likely never to forget the warm, fuzzy and happy feeling that comes with superior customer service - almost always ensuring that 100% customer loyalty that most businesses strive for.

And it is cases like the ones noted in this insightful article by By Bill Huigens of HVS Hotel Management an independent third-party management service company, that make me wonder how such a simple equation can keep businesses wondering where they went wrong.

The question might seem glib, but really: who cares about customer satisfaction? As this entry from “Mystery Shopping Matters” blogger David Rich suggests, the concept of determining “satisfaction” is fundamentally flawed - it’s hard to conduct; it doesn’t endear you to customers; and, it leaves you with ambiguous results, let alone actionable steps to improve things.

Rich’s blog cites customer loyalty guru Fred Reicheld and his “Ultimate Question,” from the book of the same name. Reicheld believes (like we do) that determining satisfaction has very little to do with a number that really matters - customer retention. He suggests that - in place of long surveys - you ask your customers one simple question: “would you recommend us to your friends?” Reicheld attempts to make a strong correlation between that question and financial growth, with mixed success. His logic, however, is sound: loyalty rather than satisfaction is a stronger indicator of a company’s success and growth.

In his blog, David Rich recommends more mystery shopping to determine customer perceptions and experience. We feel that “walking in the customer’s shoes” is but one key to truly understanding customer experience. The others are included in our Customerspective Audit. But one thing is certain: customer satisfaction surveys are not “the Ultimate Answer.”