Fussy Customers – the New Business Op
A growing cadre of "fussy customers" – shrewd, tech-savvy and hard to please – is making Taiwanese companies pay heavily for mistakes, but some cagey enterprises understand that cracking these tough nuts may be the best path to success.
Fussy Customers – the New Business OpBy Benjamin Chiang
From CommonWealth Magazine (vol. 426 )
Taiwan's online shopping sites have been plagued recently by costly mishaps, but companies have reacted to them in markedly different ways.
At 11 p.m. on June 25, the popular online shopping website mobile01.com shattered the calm of the night with the announcement that brand-new Dell 20" LCD monitors with three-year warranties were being offered on the Dell website for only NT$999. Thousands of MSN users quickly set their nicknames to read "Dell LCD for just 999," and fellow Internet surfers joined the bandwagon in capitalizing on the fortuitous news.
In reality, Dells ludicrously cheap price quote was a mistake, which the company quickly removed from its site – but not before the word spread like wildfire across cyberspace. In just over nine hours, 100,000 orders had poured into Dell's official website.
In this era of online commerce, Taiwan has quickly developed a new consumer movement. The ability to rifle messages around a virtual sales channel unlimited by brick and mortar boundaries has spawned a group of "high-tech fussy customers" who are far more challenging to deal with than the typical fussy customers of the past.
Thirty-year-old Kaohsiung resident "Tom," who has a master's degree from a public university, is seen by his friends as one of these annoying customers who takes advantage of the system. When news of the Dell monitor deal emerged, for instance, he ordered 50 of them.
Tom is a typical high-tech fussy customer, skilled at using the Internet to compare prices. Looking for a refrigerator for the new home he recently moved into, Tom spent two days online comparing prices and ended up homing in on one home appliance outlet. Aside from aggressively bargaining down the price, he also finagled a free electric fan from the deal. On the day the refrigerator was to be installed, the worker arrived half an hour late because of the many deliveries he had to make. Tom immediately demanded a NT$2,000 deduction on his unpaid balance.
Controversy over Dell's pricing mistake continued to simmer on the Internet. The top 10 discussion topics on the mobile01.com website at the end of June all featured criticism of Dell's pricing mistake by the high-tech "troublemakers."
Dell waited until July 2 before publicly announcing a compensation plan to avoid filling the orders, but it only sparked another round of consumer backlash. Even more angry techies banded together to counter Dell's influence.
Vendors have developed a love-hate relationship with the Internet and its immediate and broad impact. According to a consumer behavior survey conducted by CommonWealth Magazine and online polling company EOLembrain, 81.1 percent of respondents in the 20-25 age bracket said they resort to blogs, MSN, BBS and other online tools to convey their dissatisfaction with a retail vendor, while only 34.3 percent use more traditional consumer complaint channels.
"The biggest damage to vendors comes when a litany of complaints becomes a huge negative force of resistance that they don't even know about," said Chia-chi Chang, an assistant professor in National Chiao Tung University's Department of Management Science.
Service companies have long stressed "word of mouth" marketing. "But now, ‘word of mouth' has become ‘word of mouse,'" Chang says, and the mouse's impact far exceeds the impact "mouths" ever had.
The power of online consumers' word of mouth rivals that of an erupting volcano. When the eruption occurs, vendors do not have time to react and make adjustments.
"Good customers will tell three people about a good experience. But bad experiences will be relayed to 8 to 12 people. In the Internet age, a bad experience may be passed on to more than 8,000 people," says Yan Hsin-yung, the general manager of Ours Service Management Consulting Co., Ltd.
Getting the Tough Nuts on Your Side
Consumers have grown even more shrewd and calculating during the recession, demanding "super value" in every purchase. Companies compete based on who has the fewest flaws. As a result, pressure from difficult customers who identify those flaws has turned into a force that can actually drive corporate growth, and many companies now see harnessing that force as a key to success.
"There is no reason for customers to have any loyalty. They vote with their wallets every day," says Li Pei-fen, secretary-general of the Taiwan Chain Stores and Franchise Association.
One well-known seafood restaurant that made its name in the Gongguan commercial district in Taipei is an example of what happens when customers are ignored. The restaurant gained fame in the highly competitive district because of the owner's emphasis on the freshness of his seafood and culinary artistry. The restaurant recently relocated to the more affluent Sogo area, but business has not lived up to expectations.
Li recently took three friends to this prominent seafood restaurant and discovered that it had gone downhill. The owner had overemphasized high-end ingredients to the detriment of his dishes' overall taste and developed an aloof attitude toward his customers. Allowing his own sense of expertise to hem him in, he was unwilling to listen to customers' complaints.
The bigger the enterprise, the easier it is to fall into the trap of arrogance. Therefore, big companies must actually be more humble when dealing with customers face to face.
Preventive Action against Complaints
The reason customers turn adversarial is usually because goods or services fail to meet their expectations. But most Taiwanese consumers are too mild-mannered.
"Most (Taiwanese) are silent consumers and are not very willing to file direct complaints," observes Consumers Foundation chairman Tien-jen Hsieh. Taiwanese consumers simply grin and bear it, and at the very worst don't ever return to the store again.
To deal with these many silent consumers, vendors should take the initiative to ask them their opinions, and "proactively find out what may spark customer complaints," says Wei-Nan Chiu, vice president for customer service and logistics at consumer electronics chain E-Life Mall.
Most customer service departments at big companies are passive, waiting for customers to call. But E-Life Mall developed a service center four years ago that actively calls customers, in order to unearth potential problems. E-Life Mall president Alex Tsai pays close attention to every complaint. "He looks at and discusses every one of them," Chiu says.
At biweekly meetings of company executives, Chiu lists all of the formal complaints received, and the employee who is the subject of the complaint must be present, as Tsai himself leads the review. The complaints are then handed over at regional store manager meetings for further evaluation, instilling a sense of accountability at every level.
E-Life Mall's service center makes at least 1,400 calls a day, asking customers for their opinions, but that's not necessarily their primary motive in maintaining the operation.
"We call all customers who had a product repaired or maintained. There's no reason to wait for the customer to show up at our store and complain," Chiu says with a smile. The calls not only inquire about the quality of the work done, but also if the repairmen performed the work quickly enough and did their jobs with a smile.
Making 1,400 calls a day costs a lot, E-Life Mall spokesman Hsieh Wei-hsiung admits, "but we're not making the calls to hear customers express their satisfaction. We're making them to root out the one or two complaints."
The Best Marketing Campaign
Consumers tend to get pickier in difficult economic times, which makes getting the "fussy customers" on the company's side more important than ever. "If you can get good reviews from a tough customer, it's far more effective than spending a lot of money on a marketing campaign," stresses Kobayashi Optical CEO Eric Chu. Because tough customers are seen as smart consumers by friends and relatives, Chu says, "if you can bring them around, then their friends will believe their word-of-mouth even more."
Even if companies don't make sales, they still want to at least secure a few good words from these fussy customers.
Helping to Improve Processes
The older a company, the more it should draw on these fierce critics to check if their operating processes still have flaws, and to tighten up any loose screws.
Fuji Xerox, which has been in Taiwan for 39 years, has long dominated the domestic market for big, multifunctional business machines. But two years ago, a cooperative venture with 7-Eleven convenience stores gave Kingjack Hung, Fuji Xerox's technical department assistant manager, a major shock.
"I learned that the normal operating processes we've been used to for almost 40 years can still be constantly improved," he said.
Fuji Xerox installed neighborhood mobile business centers in the convenience store chain's more than 4,600 outlets. Although Hung has been in the business for almost 40 years, "there was a demand for many new applications that we had never thought of before. Pushed by customer demand, our machines reached their full potential."
The customer requested that Fuji Xerox's business machines incorporate a stored value card payment system, and that the first image users see be completely customized. The company's standard image and interface design had to be modified to incorporate the Taiwanese 7-Eleven logo.
Just getting the first image to read, "Welcome to XXXX," gave Fuji Xerox technicians a headache, and it took them a year designing new customized interface software. "The Japanese parent company, the Taiwanese customer and Taiwan Fuji Xerox held more than 500 meetings," Hung relates.
Ironically, the convenience store chain's demands inspired a new fighting spirit within Taiwan Fuji Xerox's organization. It took Japan's Fuji Xerox more than 2,000 engineers six months to replace the more than 9,000 business machines it had in Japan's 7-Eleven stores, but with only one-tenth the manpower, it only took Taiwan Fuji Xerox seven months to install new machines in the chain's 4,600 stores. "Even our customer was surprised at how efficient we were," Hung says.
"Marketing hooks the customer the first time. Service keeps the customer coming back," observes Yan Hsin-yung of Ours Service Management Consulting. "There are no bad customers – only wrong attitudes."
Indeed, wily, persnickety consumers only serve to keep businesses lean and competitive. And if we look close, there may be a little of the fussy customer in us all.
Translated from the Chinese by Luke Sabatier