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The Power of Frugal Wows

Posted by FredReichheld on Jun 22, 2010 7:05:27 AM

During the recent London NPS Conference, a number of companies reported creative methods of delivering “Wow!” experiences to customers in an economically responsible fashion.

 

David Speakman of Travel Counsellors, for instance, described the “Golden Habits” that his most effective agents employ—inexpensive but thoughtful acts of kindness such as thank-you notes and welcome-home phone calls. By building these frugal wows into its IT systems, the company makes it easy for all of its counsellors to remember and implement the practices. Where a typical travel agent touches a customer several times each year, the Golden Habits help Travel Counsellors’ agents touch their customers far more frequently, and in ways that bring delight.

 

Rackspace does some similar things. One Racker described the company’s practice of sending a mini-Racker T-shirt to customers who are welcoming a new baby into the family. Another Racker said that, when a customer is pulling an all-nighter, someone from Rackspace will call a local restaurant and have a pizza delivered, so that the night is a little less arduous.

 

Listening to these creative ideas for wowing customers, I got to thinking about my daughter Jenny’s recent experience when she moved to a new city. We had long been loyal Lexus customers, and I advised her to stop into the local Lexus dealer whenever she had problems with her car. It turned out that the first problem she faced was the transfer of license plates. One of the screws that our own Lexus dealer had used to attach the old Massachusetts plate would not budge.

 

The new dealer told her that fixing it would be no problem, but that the cost would be $200. Jenny gave me a call because she was astonished—think negative wow—by the price. I agreed that it seemed outrageous, and advised her to grab her new plates and get out of there. She then drove to the corner garage that her new roommate had recommended. When the mechanic saw the situation, he assured her that there was a simple fix. He drilled out the old screw and had the new plates installed in a matter of minutes. When she offered to pay him, he refused to accept any money. He told her that he just wanted to welcome her to the neighborhood.

 

She was so pleasantly surprised that she has told this story dozens of times to friends and neighbors.  And you can imagine how much of her business—and how much of her friends’ and neighbors’ business—will be going to that garage compared to the Lexus dealership. In fact, after buying six Lexus autos in a row over the past decade, we recently defected to Audi. That distant bad experience may have been the last straw for us.

 

Anyway, back to my daughter. By investing just a few moments with her, that mechanic created a memorable and welcoming wow experience. And he built the foundation for a long and profitable relationship.

 

The question that I hope more business leaders will be pondering is this: How can we ensure that front-line employees are constantly looking for innovative ways to wow customers without spending too much money? When they do that, it energizes a company’s growth. Frugal wows are not only highly profitable, they are also inspirational, for customers and employees alike.



Jun 24, 2010 8:32 PM mpons mpons    says:
Did the mechanic set an unrealistic expectation that future work will be done for free? Nobody likes paying for auto repair.  Was this really a "frugal wow" for the mechanic?  Is the emphasis when the story is told by your daughter and recommended to friends, that "I've got a mechanic who does free work. You should try him." Lexus and Audi's are sophisticated automobiles. Fixing cars is the core function of corner garage's business. Do they give so much free work away that they can not afford to buy the sophisticated computerized tools to work on Lexus. Would the corner garage still be the same hero if they had charged $100 and given your daughter a t-shirt. My point is that your previous examples were about thank you letters, pizza, and t-shirts. None of the examples include the businesses giving their core services away for free. Businesses that provide a great experience need to be sustainable so that they can share that great experience with lots of customers. I think it's dangerous to encourage customer obsessed behavior where you give your services away versus customer centered behavior where your work is properly valued and you provide great service.
Jul 8, 2010 10:42 AM NicholasC NicholasC    says in response to mpons:

I think most reasonable people will recognize that taking a few minutes to help someone in need and not charging for the service is not license to expect free services in the future.  I had a somewhat similar expereince over the weekend.  I was lost driving through the mountians of northern Georgia when  I stopped to ask for directions at a Petting Zoo/Horse Riding Stable.  After the woman gave me directions she said, "Come back and ride with us sometime."  The mechanic probably did something very similar; he helped a young lady out and said, "Come back when you need your car repaired or an oil change."  The focus is not on the free, but the service.

Aug 6, 2010 4:37 AM SARiver SARiver    says in response to mpons:

The mechanic was probaly using spare resource that cost little to create a lasting impression of something like: "I won't be ripped off here" and "they will respond rapidly to my needs without a fuss" together with a sense of connection ( part of the same community). They might just have been a nice person doing what comes naturally but they sure got a nice revenue stream as a result. Shows the importance of aiming to create a brand image that attracts the business you want then living it at every opportunity

Aug 6, 2010 4:02 PM mweaver mweaver    says in response to mpons:

I don't think that the mechanic set an unrealistic expectation.  Our accountant is great, if we have a question that she can answer in under 15 minutes she won't charge.  I enjoy calling her and bringing her questions, because she won't charge for the easy stuff, I'm more than willing to pay for good information and more likely to call her because I know that she isn't out to get me. Funny thing is I'm actually happy if it is a question she bills me for.

 

Contrast that with a computer consultant we used on our information system that charged for literally everything, literally.  Every phone call to them came back with an invoice, the straw that broke the camels back was when we got a bill for over $100 to change an IP address that we could have done ourselves if they had given us the phone number to do it.  So we don't use them any more. We won't use them anymore and any time we deal consultants that are resellers for our system we bad mouth the previous consultants.

Feb 16, 2011 6:08 PM wincustomer wincustomer    says:
I wonder if "frugal wow" is in essence the same or similar as "delighters" (as used in the Kano model)?