How Customer Relations Programs Work

Most retailers rely on repeat business.
Most retailers rely on repeat business.
Photo courtesy Dreamstime

Poor customer relations could not only cost a business millions of dollars, but good will as well. After New York consumers complained that AOL customer service representatives either ignored service cancellation requests or made it difficult to cancel, AOL agreed to pay $1.25 million to the state of New York. It also agreed to reform its customer service procedures. [source: CNet News.com].

Most retailers and businesses rely on repeat business. They look for ways to bring customers back. This includes informing buyers of the latest products, specials and sales. Technology has made it easier to stay in touch. Besides radio, TV and print ads, companies use e-mail newsletters, text messaging, online ads and other tools to keep customers informed. The first Internet mailing list began in 1973, according to The Center for Interactive Advertising, and 1994 was the first year of online banner ads featuring AT&T and Zima. Since then, Internet marketing has exploded, with more than $2 billion in online ad sales in 2004, up 42.7 percent from the previous year.

Customer relations also offer customers a way to reach the company. Do you have a complaint about a recent purchase? Do you need to make a return? Do you want to write a review of a product you just purchased? Successful companies have long recognized customer relations as a two-way street, and customer relations technology has improved greatly since the early days of the "Complaint Window" at the local five-and-dime store.

Case studies like the one by TowerData.com show retailers are interested in participatory customer relations programs like e-mail newsletters and surveys: every message sent goes to a customer who wants the information. Heidi Cohen, president of Riverside Marketing Strategies, tells retailers to respect the two-way street of customer relations by paying special attention to customer needs, especially when it comes to returns, complaints and e-mailed questions. That advice may seem obvious to some, but according to a 2006 E-Consultancy.com report, nearly half the retailers surveyed admitted to a failure to respond to e-mailed customer questions. Retailers who do respond have a much better chance to keep those customers coming back.

In this article, we'll explore specific examples of how customer relations programs work from company-to-customer with e-mail, account registration and other services. We'll also examine how customers can provide valuable feedback on their experiences, write product reviews and take advantage of company chat rooms and forums for product help and advice.

Customer Relations Programs and Incentives

Customers can sign up to receive early sale notices.
Customers can sign up to receive early sale notices.
Photo courtesy Dreamstime

Did you know companies often offer price breaks, coupons and special deals to buyers who sign up for e-mail newsletters and catalogs? These incentives aren't just limited to companies such as Buy.com and Target; restaurants, bars and even concert venues are turning to customer-relations technology to develop relationships with customers.

Most retailers use opt-in, weekly or monthly e-mail newsletters to offer early notification of new products, discounts and special offers. A good example is Wal-Mart.com, which offers e-mail notifications and newsletters, including a Wal-Mart Entertainment newsletter focused on the latest releases in music, movies and games available online and at the store. You can sign up for these e-mail newsletters at the company's Web site.

Signing up is usually simple and requires only a valid e-mail address. It's common to get a confirmation e-mail asking you to click a link or respond to the confirmation message before you start receiving e-mails. This protects you from being added to the mailing list against your will. Some sites like MusiciansFriend.com offer incentives for signing up for its newsletters. One MusiciansFriend.com contest featured a $600 merchandise credit as a grand prize for someone selected from its e-mail newsletter mailing list. Some sites offer the opt-in e-mail newsletter as a standalone product, while others connect them to creating new accounts, preferred customer accounts and other customer service options.

Site Registration

Many retailers offer a registration feature on their Web sites. Home Depot, for example, lets you create a permanent account allowing you to store your credit card and shipping information, but it also gives you optional access to a special weekly Home Depot e-mail advertisement, unadvertised sales and the Home Depot print catalog. Registering requires the following information:

  • Home address and phone number
  • Credit card numbers and expiration date
  • Creation of a username and password
  • E-mail address

JC Penney calls its stored payment and shipping system a wallet. Amazon.com has a similar option, but goes a step further, offering multiple profiles with combinations of payment methods and delivery addresses. Offered over secure Internet connections, these services require logins and passwords to use for each shopping visit.

Customer Relations and Feedback Opportunities

Customers can sign up for preferred cards to receive special rewards.
Customers can sign up for preferred cards to receive special rewards.
Photo courtesy CVS

Preferred Customer Clubs

Grocery store chains, such as Safeway, have preferred customer club sign-ups with regular discounts on everyday purchases. Safeway stores regularly advertise a preferred card price side-by-side with their ordinary prices on items such as peanut butter, breakfast cereal and produce. Safeway and CVS Pharmacy are two companies that offer preferred customer membership free of charge, but some retailers charge a fee to join.

At sign-up time, you usually have the option of joining a preferred-customer e-mail list. With some preferred cards, there are extra incentives for providing e-mail addresses.

Customers Talk Back

Retailers offer you many ways to tell them what they're doing right -- and what they're doing wrong. Many companies provide space for online reviews, suggestions, chat rooms and forums and customer surveys.

Amazon.com has a large number of customer reviews for its products, all submitted via Amazon's online review interface. One Amazon customer who was unhappy with his Casio G-Shock watch warned users of poor battery life and hard-to-reach customer service. Right next to his review were ones submitted by satisfied G-Shock customers. This kind of uncensored customer feedback is possible at many sites, but most require an e-mail address and other sign-up information before you're allowed to post.

Customer Service Chat Rooms

Customer relations at Internet hosting company Liquidweb.com include a chat room function. Using this function, they can talk to Liquidweb's sales team to resolve billing issues, open new accounts and request support information. Customers click on a "Chat With Our Sales Team" icon in the upper right corner of the screen, automatically opening up a chat window. Users type questions and receive answers in much the same way as on AOL Instant Messenger or other Internet chat services. Liquidweb.com doesn't require a customer username and password for chat, but if you need technical support, you'll be required to supply that information.

Community Forums that Foster Customer Relations

Guitar enthusiasts can trade feedback on the company's Web site.
Guitar enthusiasts can trade feedback on the company's Web site.
Photo courtesy Dreamstime

Guitar manufacturer Fender hosts a community for guitar players on its corporate Web site. The Fender Lounge Forum is an electronic bulletin board featuring advice from fellow Fender guitar owners, purchasing tips and social networking. Fender's guidelines explain the forums aren't a place to get customer service, and that complaints or kudos should be directed to the appropriate customer service agents at the Web site's support section. For example, you can use the Fender Forum for:

  • Learning about new upgrades, improvements or other news on a particular product
  • Social networking and making new friends with similar interests
  • Customizing a guitar or guitar accessory to suit a particular need

Company forums, like many other retail features, usually require you to create a user name and password to access the system. At Fender.com you're permitted to read forum entries without signing up, but unregistered users who click the "reply" button are directed to the login screen and asked to create an account.

Customer Satisfaction Surveys

Internet security company PGP Corporation offers an optional customer survey to get customer opinions on their experiences with PGP. The online form asks which products the customer used, which company representative worked on the account and other questions relevant to the PGP experience. Once the user submits the information, a screen appears thanking the user.

Companies also offer customer surveys on toll-free, 800-number customer service lines. Bank of America randomly selects customer service line callers for surveys. A recorded message tells callers they have been selected, and if the customer chooses to participate, they may take a quick phone survey by pressing buttons on the telephone keypad to answer pre-recorded questions.

What's in Store?

Industry trends include more customer service programs based on your participation, instead of unwanted messages or intrusive Internet advertising. The future of the industry can be summed up in the phrase opt-in. The Dec. 11, 2003, edition of the Washington Times reported that 37 percent of Internet users planned to curb their online spending during the holiday season to avoid unwanted spam e-mails. Retailers know it's a very crowded marketplace, with more than $250 billion at stake in a single year. Offering discounts, special sales and competitive prices is only part of the customer service picture; making those discounts and prices available in a user-friendly way is also a big part of customer service.

Industry trends for these opt-in services include hiring third-party companies to create informational products, tips and installation advice that can be accessed by download, cell phone, text-messaging services and other handheld mobile technology like PDAs. Some retailers dedicate sections of their Web site to product specifications and buying guides. The use of video and podcasting for this material is also growing. As this technology gets more sophisticated, easier to e-mail and embed into Web sites it will become a more widespread -- but voluntary -- part of the retail experience.

For more information about customer relations programs and related topics, check out the links on the next page.

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