FedEx delivers to customer touch points
FedEx is looking to both operational and relationship touch points to drive customer loyalty.
Operational touch points like phone conversations, online interactions at FedEx.com and driver pickups are important, said Mark Colombo, vice president of strategic marketing and corporate strategy.
But relationship touch points are equally vital, if not more so. As an example, he cited that many people don’t want any contact with the company other than their driver who picks up and drops off packages.
“They don’t want direct mail. They just want a one-to-one relationship with a human being,” he said, noting that some drivers become such a big part of their route’s culture they end up running football pools for their customers. “That drives customer satisfaction and the brand.”
What matters at the different touch points differs with every customer. As Colombo told a laughing audience, for some customers, good service means no tire tracks on their packages. “When you move 6 million to 8 million packages, stuff happens,” he said. “It’s how you react to that stuff that matters to the customer.”
FedEx currently has USD27 billion in annual revenue and faces increasing competition not only from its stalwart brown rival UPS but new kid on the block DHL. Increases in loyalty do lead to higher revenue, Colombo said at the MIT Sloan CMO Summit in Cambridge, MA, last month. A one-point boost in loyalty translated to a 5.9percent increase in express user revenue, a 7.6percent hike in ground user revenue and a 3.3percent rise in revenue for customers who use both services.
Of course, you can’t make everybody happy.
While doing a customer service phone “ride-along” one Monday morning early in his tenure at the delivery company, Colombo heard a rep deal with a customer who was upset that his packages had not been picked up. It turned out he’d switched from air to ground service after being told by his rep it would be more cost-effective. It turned out the differences in pickup procedures hadn’t been properly explained to the customer.
“No matter what the (representative) said, the customer was not satisfied,” he remarked. “It’s much easier to give birth to a customer than to raise one from the dead.”
Later in the day, during a panel on building a brand that resonates, Midas CMO Rick Dow said bonds like the ones FedEx drivers create with their clients are vital “because there’s no ties in business these days.
“Clients who believe in emotional branding (help) us do our best work,” said Paul Tilley, senior vice president and group creative director at DDB Chicago. “When people buy Coke, they’re buying Americana. When they buy tickets to DisneyWorld, they’re buying magic.”
Having an emotional bond gives a marketer license to go places with a consumer where it wouldn’t be otherwise welcome, said Bob Wallach, senior vice president of marketing for the refrigerated division at ConAgra Foods. For an example, he gave the Walt Disney Co., which used the warm feelings the public had for its characters to make the leap from movies to theme parks to a myriad of other opportunities like cruise ships.
DDB’s Tilley agreed, noting that effective branding lets you make leaps because the consumer has an idea what to expect. If Pepsi opened an amusement park, he said, you can imagine what that would look like. Likewise, if Nike created a soft drink, you’d have some idea of what that might be.
