French Lessons

The problem is that while the French language is richly brocaded with concepts, customer service is not one of them… Thus, in the big anonymous department stores and supermarkets, the plight of the customer is desperate. Stay away from them unless your French is good and you’re lusting for a challenge. (Polly Platt, “French or Foe?“)

Come on, admit it. You love to hate the French. They have great food, paintings, poets, artists, and culture, and Paris would be heaven on earth except for all those… Parisians. Tales of French customer service, or the lack thereof, are legion. We in the United States mock French customer service in print and in advertisements and regale our friends with horror stories of service encounters in France.

But is it possible to learn about good customer service from the French? I think it is. Tom Kuegler’s recent ClickZ article on database marketing reminded me of my purchasing experiences in France. As a professor, I have led many university groups to France, and, in the process, I have spent literally hundreds of thousands of dollars on behalf of my students. Boy, could I tell you some nightmarish French customer-service tales!

But I could also tell you of customer-service encounters in France that far surpassed anything I have ever received in the United States. And it is those experiences that led me to understand what Tom Kuegler talks about. And if Andy Bourland can write an article about lessons learned from pro wrestling, I can certainly write an article about lessons learned from spending money in France.

Vivent les diffirences!

Let’s look at some important differences between France and the United States. Even though France is a huge market, it is not a mass market, at least not in the U.S. sense of the term. The retail distribution is mostly made up of specialized stores and boutiques instead of large chain stores. Large chain stores do exist, but they are the exception, not the rule. Thus, it is easier for a small shop owner to assess customer profitability and make retention decisions on the spot.

Relationships are for keeps in France. When you shop at the same bakery each day for years at a time, the baker gets to know you and assess your relative worth to the business. This is not the case with large French retailers, who cannot possibly know all of their customers personally.

In France, the most satisfying commercial transactions occur within “embedded markets.” In an embedded market, social relations alter market operations, empowering factors like mutual trust and obligation. In an embedded market, members of an affinity group build strong bonds of trust and, through mutual favors, a pool of social capital on which each can draw. The Parisian marketplace consists of a series of embedded markets where social capital is as important as money. Consequently, transactions can be difficult and unsatisfying for members outside of the embedded market but deeply satisfying for members within it. Ingroup members can be served so assiduously because resources of time and attention need not be expended on members outside of the embedded market.

Assessing Lifetime Value

Because of the nature of the French retail distribution system, I believe French businesses have been doing for a long time something that American businesses are only now just beginning to do: segment markets into customers with high lifetime value and those with low lifetime value, then concentrate on the former group.

In the United States, many customer-service policies reflect the mistaken idea that each customer has a high lifetime value to the business. This means that the business’s most opportunistic and worst customers may get a free ride on revenues generated by its best customers. And the best customers will receive good but not exceptional attention because customer-service resources are exhausted in a broad quest for excellence.

In France, customer-service practices seem to reflect a presumption that only a few customers have exceptional lifetime value. En masse, customers are generally treated with indifference or suspicion. They are not worthy of particular deference because they have not proven their worth. But over time, customers who have exceptional value to the business are identified and become part of the business’s affinity network. As part of an embedded market, they receive truly exceptional service. If free riding occurs, it is they, the most valued customers, who receive attention at the expense of outgroup interlopers.

Going Gallic

As American businesses master the use of marketing databases and acquire the ability to track customer value, they will likely begin to focus more attention on customers who have high lifetime value at the expense of customers who have low lifetime value or negative value to the business. And as they move in this direction, they will increasingly come to resemble their French counterparts.

Most of my purchasing experiences in France have been predominantly negative. Though I spent large amounts of money in Paris, I did so as a foreigner, as an outsider, who made most of his purchases across rather than within embedded markets. In France only temporarily, I have had little chance to acquire personal status within an embedded market. Such status as I did have was in my capacity as a university representative. My positive commercial experiences also tended to occur within the institutional affinity network that has been established over the years by my university. As a university functionary, I had high lifetime value for some of the businesses I dealt with. My purely personal purchases, on the other hand, were generally unsatisfying because there were no social bonds or obligations impelling commercial partners to take my best interests into account.

Much as I have been frustrated by my personal shopping experiences, I recognize that many of the French vendors I dealt with may have been well served by their commercial culture. My accent accurately marked me as an outsider, a temporary visitor who had relatively low lifetime value compared with the vendors’ countrymen. If I ever lived in France permanently and dealt regularly with a small set of French businesses, I could expect, over time, to receive the kinds of devoted and deferential attention I often received as a university representative. Why? Because I would have demonstrated my high lifetime value.

And that is what database marketing is all about.