The NPS Conundrum

bythom nps

NikonRumors is reporting that NPS staffing in the US and Canada was cut recently. If true, this would be the third round of NPS staff layoffs in recent years I'm aware of (NR suggests current staffing is 5 in the US, while it was 14 two years ago). Meanwhile, earlier this year Nikon began charging for NPS in the US, at least for the equipment loan, clean and check, and discounted repair portions of the program. 

Those two things seem in direct dissonance. Most of us in NPS were hoping that the new paid membership plans would increase communication and service, but if staff is being cut, I sincerely doubt that will happen. NPS still feels like a shell without a center to me. It seems unlikely that I'll renew a paid NPS plan next year if things continue as they have. I paid for the new NPS program over two months ago. Not a peep out of Nikon since (let alone the promised but unspecified "welcome gift"). Now a downsizing?

I just logged into my NPS account again and found things to be pretty much the same as before: earlier this year the site changed so that it is mostly about clicking buttons to submit requests. I'm not sure what's "premium, dedicated, priority, enhanced, or elite" about that (Nikon's description, not mine). While there is an NPS phone number you can call, clicking on the "contact" button still says "A member of the NPS team typically responds within 3 business days." 

Nikon needs to come to grips with what it means to have customers. They still don't seem to have figured out what it means to be in a consumer-facing business (as opposed to business-to-business, and even there The Economist once reported that Nikon didn't know how to do that, which is one reason the Precision division lost customers to ASML). Nikon's stated goal is to mostly serve the enthusiast/pro levels of the camera market. That's exactly where outreach programs and "membership" is generally most effective, and NPS could and should be an effective tool in that regard. 

Meanwhile, this week I got two different emails from recent Nikon camera purchasers who described a "problem" they thought that they had, and which Nikon customer service answered incorrectly about. This has been a common thing during the entire digital era, but it feels like it is starting to get worse again. 

One of the things that happened in the tech industry that I disagreed with when I was still running such operations was the trend to monetize or de-cost customer support. The bean counters started looking at the costs associated with good customer support and either asked to curtail it or have it bring in income. Neither is the correct answer. If you have a high support volume, then something is wrong with your product and your selling process. High customer support costs tell you that you need to fix something in the product, the way it is documented, or the way it is sold. But when you separate out support from development, as most tech companies keep doing, all you end up really doing is endorsing bad product decisions. Seen any bad product decisions from the camera makers lately? ;~)

We've seen a lot of customer-facing changes out of Nikon as their Imaging business contracted. Lens warranties are no longer International, but regional, for instance. The impact of virtually every one of Nikon's continual changes is that the customer is worse off, but Nikon thinks they've saved some yen. The customers look at these changes negatively and buy less, which promotes another round of cost cutting that again will directly impact the customer. This then becomes a slow downward spiral that at some point can't be recovered from. 

As much as I believe Nikon engineers are excellent and will continue making better and better products, that's going to become irrelevant at some point if the current trend towards backing away from customer interactions continues. Nikon needs more customer interaction and communication, not less. Moreover, automated interaction isn't actually interaction.

My criticisms and complaints about NikonUSA over the years have had a consistent undercurrent: since job promotions and salaries have a clear bottom and top limit in the way the subsidiary is constructed and managed, I'm not sure that NikonUSA employees have ever felt that exceptional effort would get clearly rewarded. Meanwhile, the head of NikonUSA, Bo Kajiwara, was just promoted to a corporate VP position in addition to his current job. So the cost cutting gets acknowledged with a promotion of a Japanese executive, but what's happening at the customer level isn't improved.

My guess is that NPS has a year to prove itself under the new paid-tier program or else it will have to change substantively. The start so far seems like that we're now just paying for what may end up less. That's not going to work. Nikon is on record as saying they want to sell mostly to enthusiast/pro type users. Their actions don't really line up with that so far, and I'd place them more on the enthusiast side than the pro even then. Moreover, trying to play the influencer game at product launches is sort of the opposite of true enthusiast/pro interaction; these users already know what it is they want and how to evaluate that and want more direct communication.

As much as every action Nikon makes seems to get reported and amplified by the Internet, other companies are quietly downsizing their staffing and programs, too. So don't think this rumor represents a Nikon-only problem. It's just not getting reported as quickly or loudly. 

Which brings us to a discussion no one wants to have: what's the solution? 

At its most simple: produce lower volume, sell at higher cost, provide better customer connection. 

But think about that; downsizing your pro support program (and not disclosing that, or the reason for doing so, let alone what it will actually mean) is a dissonance to your need to escalate price paid for a product. A typical reaction I'm getting these days is "they want me to pay more and give me less help?" 

Yes, that's exactly what the camera companies would really want. The question is whether that would be sustainable. I'd argue no, and a strong no at that. And again, this is not just a Nikon problem, it's a Canon, Fujifilm, OM Digital Solutions, Panasonic, and Sony problem, too. I've seen variations lately on the "staff winnowing and restructuring" from all of them.

Quite frankly, a few extra million dollars put into proper, well managed, and carefully amplified customer communication and support would stand out like a sore thumb in today's camera market, and be incredibly well received to the point of boosting sales. As bad as things have been, we're still talking about a US$6.2b (that's billion) overall global market in 2020, and likely to grow in 2021 if the pandemic does die down as expected. I thought Sony Kando was going to be the example to point to in terms of customer involvement, but going virtual in 2020 sort of broke that spell.

Personally, I'm willing to pay a higher price for a better product, but "better product" includes better documentation and support. I'm pretty sure the Nikon engineers will make a better product, but it's what happens after they complete their work that worries me.

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