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Even Mr. Popular needs to focus on retention

By Ryan Sniatecki
October 23, 2007

What do Apple and Comcast have in common?

At first glance, not much. One is incredibly popular and prides itself on providing a unique customer experience, while the other continually struggles to make customers happy. Both have recently had to back-pedal and issue public apologies. They aren’t alone.

80 percent of companies say they provide an excellent customer experience but only 8 percent of their customers agree.¹ The rest just disappear, although a vocal few can cause big problems for companies that, intentionally or unintentionally, offend. Apple has felt the sting of wildly popular YouTube videos in recent years, and a South Carolina woman recently smashed up her local Comcast office with a hammer because she was tired of waiting for her triple-play service to be activated.

Apple risks losing touch with customers as it quickly expands beyond its core of loyal fans. Comcast, like any cable company, is synonymous with bad customer experiences. Marketing campaigns for both companies are ubiquitous, but spending all that money to bring customers in the door doesn’t make much sense if they go right back out again—although, if armed with hammers, it may be better to let them leave.

38 percent of companies say customer experience will play a critical competitive role in the next three years, and 47 percent say it will play a very important role.² Putting those words into action means evaluating every facet of the customer experience, trying to see your company through your customers’ eyes. That may be especially difficult for Apple, which seems to assume that all customers are already fanatics.

Regular people attracted to cool gadgets like the iPod and iPhone have a different set of service expectations than the typical, fanatical Mac-head who is both more-tech-savvy and more willing to accept the occasional iMistake. Steve Jobs and company need to continually reach out to this rapidly expanding customer base and make sure that their customer experience matches their expectations.

Comcast, on the other hand, needs to pour more resources into guaranteeing a positive experience for customers so it can escape crisis mode. Faced with new competition from satellite TV and increasingly vocal online detractors, Comcast can’t afford another “sleeping cable guy” video.

Customer retention efforts, based on an excellent experience, don’t just help a company avoid bad press. Increasing retention by just 1 percent can increase customer value by 5 percent.³ Long-term, loyal customers profit a company more over time than customers who buy once, then leave unhappy or uncommitted. Effective marketing can attract new customers, but strong retention efforts convince them to stick around and spend their money.

Apple certainly doesn’t lack new customers, but risks alienating them down the road if it doesn’t recognize that not all customers are automatically fans for life. Comcast can entice customers with triple-play packages, but shoots itself in the foot when it can’t even activate those packages on time. Stronger customer retention efforts would benefit both companies in the long- and short-term.

Interested in learning more about Apple and their recent troubles?

Ryan Sniatecki is a Copywriter at Vox, Inc., a customer experience research and consulting firm. Contact him through the feedback form on our Contact Us page. Copyright 2007 Vox, Inc. All rights reserved.

¹ Managing the Customer Experience
² Forrester’s Q4 2006 Customer Experience Peer Research Panel Survey
³ Extreme Management

http://www.cbsnews.com/stories/2004/01/03/eveningnews/main591182.shtml

http://www.nytimes.com/aponline/us/AP-Cable-Customers-Revenge.html

http://www.youtube.com/watch?v=CvVp7b5gzqU

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