All posts by 356319sl

Create positive WOM through post-consumption e-mails

“Selling a car to someone is not hard, getting them to come back years from now and buy a second one is the challenge.”
– Employee at Bluekens, Roosendaal.

This is a quote I’ve heard a few times when I went along with my parents when they were getting a new car throughout the past fifteen years. Over the last years I learnt that the man who told me this taught me a very important marketing rule: once you’ve got the sale, your work has only just begun.

Colin Shaw (2013) noted that it costs a company, on average, six to seven times more to acquire a new customer than to retain an existing one.  Therefore, companies can save a lot of money by creating an experience that makes customers want to come back and tell others about your company. The post-purchase period is an important point in the customer’s journey and is just as important, if not more important, than the actual sale. As an illustration, Marketing Metrics found that the probability of selling a product to an existing client lies between sixty to seventy percent, whereas the probability of selling a product to a new client lies between five to twenty percent.

As there are many methods of post purchase engagement, I will take a look at post-purchase e-mails in this post. When used correctly, these e-mails will create a better consumer experience, resulting in a stronger customer loyalty. This will lead to a positive word of mouth which may refer new clients to you. Furthermore, it may lead to more repeated purchases and, most importantly, establish a strong connection between customers and your brand. So, what would these e-mails require in terms of content?

1. Order confirmation, tracking and support.
First of all, it is important to give your customer the security that the order was successfully processed. An example of such an e-mail can be seen in the picture below. When Bed, Bath and Beyond receives an order through their website, the e-mail that is sent contains a simple statement regarding the confirmation of your order and the tracking information.
Confirmation email

2. Discount offers to incentivize future purchases.
Other than experiencing a good post-consumption process, consumers may need an extra incentive to make a future purchase. By sending discount offers days after someone made a purchase, you might trigger a new purchase. Take for example Pottery Barn. About a week after making a purchase at Pottery Barn, customers receive a mail with a code to get free shipping on a future purchase. As consumers have enjoyed a good experience, this discount is the icing on the cake to let them make another purchase.

Discount email

3. Thank your customers
Make your customers feel appreciated. A thank you page after an order is not enough, as they may feel everyone can see this. When dedicated in a mail, consumers may feel more personally engaged, which will increase their post-purchase experience.

I believe these companies show great examples of ensuring consumers enjoy a positive post-purchase experience. Although each of these suggestions contain only small things, I do believe they have a huge impact on how a consumer experiences a purchase. Remember, the purchase of a product is not the end of a relationship with a customer, it is merely the beginning.


The Contrasting Effects of Negative Word of Mouth in the Post-Consumption Stage

Have you ever had bad experiences with a product or service? Nowadays it becomes easier to spread your experiences through word of mouth, as there are many forums and web pages to talk about them. In this article, the effects of negative word of mouth (NWOM) is explored in the post-consumption stage (i.e. after experiencing it).

Think of the following scenario:
You are a post office to send an important letter. You expect it to only take a few minutes. There are a number of people ahead of you and the service is very slow. Furthermore, you notice that only three out of eight counters are open. You end up waiting thirty minutes before you are finally served.

Chan et al. demonstrate that, although you have gone through this bad experience, NWOM can have a negative (aggravating) effect on dissatisfied customers, but NWOM can also have a positive (alleviating) effect. For example, when you talk about your experience and your friend tells you “Again? Last time there were only two counters open and the clerks were extremely slow” we speak of an attribute-based NWOM condition. As two dissatisfied consumers exchange information, the dissatisfaction will increase.

However, imagine your friend responds with “Well, if you think that is bad, the last time I was there I had to wait for over an hour and I missed my soccer training because of that.” Here we speak of an experience-based NWOM condition. When this happens, you compare yourself to your friend and his situation, realizing that your situation could have been worse. This in turn leads to a decreased level of satisfaction on your behalf.

The difference between the situation is the context in which it is described. In the first situation, you talk about the actual service delivery of the company, whereas in the second situation you talk about experiences you’ve had with this service delivery. Furthermore, the authors found that dissatisfaction increases when consumers are in highly comparable situations.

It is important to realize what effects word of mouth can have on purchasing behavior. When told about negative experiences, consumers in the pre-purchase stage may be discouraged to finalize their purchase. But those that are dissatisfied in a post-consumption state, might be alleviated when finding out other consumers had worse experiences. This in turn may increase their repurchase intent.

The authors conclude that in a post-consumption state, a social-comparative process, rather than a product-evaluative process may be predominate in determining the repurchase intentions of dissatisfied consumers, by either aggregating or alleviating the past experiences. There is a growing consensus that WOM can be used as a marketing tool. There are studies on how to manage online forums and referral programs. Therefore, firms can learn from these experiences to know where they have to improve.

I personally don’t fully agree with the findings of the authors. They state that repurchase intent may increase after hearing other consumers have had it worse. However, when I would experience bad quality of service (or a bad product) and I hear I am not the only one, and my situation is not even the worst, I would definitely not repurchase anything at the firm.

Chan, H., Cui, S. (2011) The contrasting effects of negative word of mouth in the post-consumption stage, Journal of Consumer Psychology, Vol. 21, pp. 324-337.

Excellent customer involvement by Xiaomi

On April 6, 2010 Xiaomi Corporation was founded: a mobile internet company focused on the research and development of high-end smartphones. However, the fans (i.e. customers) of the Xiaomi Corporation play a very important role in the company’s development. They are the core value of Xiaomi. Xiaomi interacts with fans in multiple ways.

As they are focused on the Chinese market, they developed an interface that makes it much easier to use their smartphones for Chinese users. Furthermore, they update their software on a weekly basis at the best possible price. However, the part of their strategy I would like to emphasize is the treatment of their customers. Xiaomi acknowledges all feedback with gratitude. The founder and company executives spend time on social media every day to personally interact with the customers (usually over 100 comments on a daily basis). Xiaomi adds functionalities based on the feedback they receive from their customers. Feedback regarding modifications can be about anything: shape and color of the phone, the quality of the camera, but also modifications such as delivery speed and the ease of the ordering process.

On top of the integration of their customers in the developments of their products, Xiaomi classifies fans in grades in terms of participation, number of comments and level of importance of services provided to other fans. These grades grant fans different permissions and incentives. Users with high grades are often asked to try out new products. Some have even been recruited by Xiaomi to work for them full time. The grades in turn motivate customers to participate actively in the Xiaomi community. Fans often help each other out with problems, which has resulted in the establishment of a large community.

Another thing Xiaomi Corporation does to show fans how important they are, is organizing various gatherings for Xiaomi fans. Think of fan festivals and reunions in cities, where fans can meet and share experiences. The highlight every year is the fan festival. As part of the program, Lei Jun (the founder of Xiaomi) reports the latest results and activities of the company, and he introduces new products. Furthermore, those users that have contributed the most throughout the year receive ‘the best feedback gift’. The reunions in cities are usually organized by fans, however, Xiaomi Corporation provides the venue and gifts in support of the reunion. Fans can select their location and the corporation will pay for it (if the idea is approved of course).

Xiaomi offers customers to provide them feedback and helps them customize the products to match their needs. For example, one user mentioned he wanted to record the times at which he answered the phone, so a few weeks later this functionality was provided.

Through the customer involvement, Xiaomi has created a community in which their customers are the key factor to success. I believe that Xiaomi involves their customers in an excellent way. The products are adjusted to their needs, resulting in very satisfied customers, as they receive exactly those products they want. This story is a great example of the two-sided positive effects good customer involvement can lead towards.

Shih, C., Lin, T.M.Y., Luarn, P. Fan-centric social media: The Xiaomi phenomenon in China, Business Horizons, Vol. 57, pp 349-358