Showing posts with label customer service. Show all posts
Showing posts with label customer service. Show all posts

Friday, July 14

Comparing Customer Service: A Tale of Two Experiences

About four months ago, we bought a Whirlpool range from RC Willey. After a few weeks of use, the oven's computer board inexplicably rendered the oven inoperable. No big deal. These things happen, and it's under warranty.

Except, Whirlpool currently has a parts issue. The technicians could not get the needed parts, and Whirlpool was unable to provide an estimate of when these parts would be available. So we cooked on the stovetop and used a slow cooker for a few days. Then it became a few weeks.

After a month, with no foreseeable repair in the future, my wife decided to call RC Willey. She didn't expect a solution but wanted them to know about the issues related to selling Whirlpool products. RC Willey wouldn't have it. They immediately sent out a new range so we wouldn't have to wait anymore. 

Wow. That's customer service. And this is why we shop at RC Willey. 

Earlier this year, I was introduced to Pixellot, which focuses on AI-automatic video and analytics for sports. As a high school softball coach, I was interested in capturing player performance during games. 

Pixellot talks a good game. Even though their AI sports camera is not available for softball, they said they could set me up with a stationary camera solution with multiple angles and their VidSwap application. 

It was a pricey proposition with a three-year lease, but I decided to give it a go — even when they told me the analytics portion was not included in the camera lease. No big deal. I was already sold that this could somehow be better than a GoPro. It wasn't. 

For two months during the high school season, I lugged three heavy suitcases and two tripods to the fields. The setup of two angles took about 20 minutes (not five minutes, as I was told), plus an additional 20 to 30 minutes for the system to boot up and establish a connection (when it established a connection). On two occasions, the cheap plastic mounts that connected heavy metal cameras to heavy metal extension arms broke. The wind took the system out twice, one time blowing the tightly clamped arm clean off the fence and another time knocking over a tripod. 

Their software lacked too. It required me to strip my iPad of most other apps and content (to free up space for the footage), which would then be uploaded to the VidSwap platform. Overall, the capture-transfer success rate was about 20 percent with one angle and 0 percent with two angles. 

The first time I decided to leave Pixelott behind and film a game using my GoPro (and extended battery pack), it was a relief. I knew I would never unpack the Pixelott equipment again. I zip-tied the suitcases.

While Pixelott wouldn't hold me to the lease beyond the first year (I was still in the trial phase when I canceled), they weren't interested in extending any refunds on the unused analytics portion of the contract. I didn't expect it, but their explanation lacked. When I purchased the analytics, they charged me as an individual. But when considering the refund, they claimed the purchase belonged to my school. It also took a month to receive refund labels, which didn't correspond to the equipment I had to send back.

Wow. That's not customer service. And this is why I have nothing good to say about Pixellot. 

As owners and managers, we must always remember that customer service is a choice that directly corresponds to the choices that customers make in the future. More than that, it directly corresponds to what we tell other customers, too, and the overall reputation and brand of the company. Choose wisely. 

Wednesday, January 21

What To Do When Your Captive Audience Craves Escape

While prevailing marketing and public relations theories believe frequency and duration are among some of the best objectives in communication, car dealerships are learning the limits of a captive audience. According to AutoTrader Dealer Sourcing Studies, customer satisfaction is at its highest within the first 90 minutes on the day of a purchase and then steadily declines. 

Car dealerships that take longer than 2.5 hours to complete the transaction lose out on customer satisfaction. Dealerships saw customer satisfaction dip below average at the 2.5-hour mark. 

In fact, according to a Cox Automotive study, the amount of time it took to complete a purchase has taken the top spot in car buyer frustrations. It beat out negotiations, fair trades, salespeople, and even financing options. People, more than ever before, are equating customer satisfaction to time.

Time has become a priority in reducing customer friction. 

The sentiment isn't confined to car buying. It creeps into every consumer touch point. While email, for example, is still one of the most effective means of delivering content to people, nearly 60 percent of consumers won't read or open an email unless they are certain it contains relevant content.

Facebook has always been sensitive to this issue too. It developed its EdgeRank algorithm with relevancy in mind. How people react to the content you post determines how often and likely they will appear in your news feed. If people ignore or complain about the content, page managers begin to see a diminishing rate of return unless they pay to push their exposure.

That in itself makes for a standalone discussion, but the point for this post is clear: Customers don't want to waste their time. They want relevant on-demand and/or intuitive content, compressed purchasing cycles on everything they buy, and post-purchase communication with an emphasis on multichannel personalization over calendar sales and email spam.

Car buying provides an extreme example for marketers in every industry. 

As part of the cited white paper, Cox Automotive also conducted an in-depth analysis of four distinct dealerships to track actual cycle times across key processes and better understand the disconnect between customer expectations and the dealership experience. What they found is not only enlightening for car dealerships, but also every industry that cares about customer satisfaction.

• Sales Process. The average time it took to complete the vehicle sales process was nearly 53 minutes – more than half the desired ideal total customer cycle time of 90 minutes.

• Purchase Negotiation. It took an average of 21 minutes and a maximum of 41 minutes, making it potentially the most time-consuming variable in the vehicle sales process.

• Vehicle Appraisal Process. The average time it took to complete the appraisal process was 43 minutes, nearly half of the total desired customer cycle time of 90 minutes.

• Appraisal Negotiation. It took an average of 16 minutes and a maximum of 39 minutes, making it a significant time-consuming variable in the appraisal process.

• F&I Process. The average time it took to complete the F&I process was nearly 61 minutes – two-thirds of the desired length of the ideal total customer cycle time of 90 minutes.

• The F&I Paperwork. The process is often lengthened by requiring signatures on multiple paper forms, and filling out these forms took an average of 21 minutes and a maximum of 44 minutes, making it a significant time-consuming variable in the F&I process.

When you add up the amount of time that each process requires (including negotiations), it becomes clear that most car dealerships are unintentionally designed to deliver unsatisfactory experiences that don't meet customer expectations. But before you simply nod in agreement based on your own personal experience, ask yourself if your company is any better.

What steps have you made to ensure promotions are not only relevant, but also efficient in leading customers to a specific point of purchase? How easy is it to find a product, make comparisons, and complete a purchase? How easy is it to place an order on your website (or shopping app)? Has your company minimized any additional steps that elongate the purchasing process? How likely will customers have to re-enter, change, or update stored data for future purchases? Does your company have any appropriate/personalized post-purchase communication planned (without being intrusive)?

Ultimately, the car dealership study provides excellent insight into how time can influence customer satisfaction throughout the car buying process. And, along with that, it creates a framework to help other companies start asking questions about their marketing plans and purchasing cycles too.

The simple truth of it is that customers know their time is too valuable. And since they don't want to be held captive anymore, maybe it's time to invite them in and then let them go. They'll appreciate it.

Wednesday, November 19

Word Of Mouth Doesn't Distinguish Between Online And Off

The decade-long era of marketers attempting to distinguish between online and offline word of mouth is over. As consumers have adopted small screen mobile technology and social networking tools, few people make the distinction. Most don't even remember when or where the conversation occurred.

All they remember is that the recommendation came from a friend or family member. The details of its delivery (text or network, phone call or in person) is largely lost to them. All they remember is someone close to them (not an "influencer" based on popularity but an "influencer" based on proximity) had something to say about a particular product, service or solution.

Word of mouth directly accounts for about $6 trillion in consumer spending, online and off.

And it is these conversations, which are personal and person to person, that account for as much as 13 percent of all consumer sales and as much as 20 percent among higher price-point categories. And the division between online and offline conversations just isn't there. It's no longer relevant.

This finding and others were recently published in a study organized by the Word of Mouth Marketing Association (WOMMA) in partnership with AT&T, Discovery Communications, Intuit, PepsiCo, and Weight Watchers. The study is based on the econometric modeling of sales and marketing data provided by participating brands (on a confidential basis) and conducted by Analytic Partners.

The results of the study may change the way some marketers think about paid and earned exposure, with about one-third of sales attributable to word-of-mouth conversations acting as an "amplifier" to paid media such as television. In sum, consumers spread advertised messages one-third of the time.

The rest of the impact is independent of advertising and tied to other influencers such as product or customer service experiences, public relations, owned and earned digital content, referral marketing, and related activities. These influencers work in tandem to shape overarching brand perceptions.

Other key findings from the study underpin the power of word-of-mouth marketing.

• Word-of-mouth impressions drive at least 5 times more sales than a paid advertising impression.

• Word-of-mouth impressions for higher price-point items are as much as 100 times more impactful.

• Word of mouth impacts tend to influence consumers closer to the time of purchase over media.

• Word of mouth amplifies the effect of paid media by as much as 15 percent.

"Intuitively, we know that a consumer recommendation is going to be a powerful contributor to brand sales, but this is the first time a rigorous study has quantified that impact across a range of product and service categories," said Suzanne Fanning, president of WOMMA. "We hope this research will lead marketers to elevate the role of word of mouth, both online and offline, in their marketing plans."

This study also reinforces the idea that marketers who are more inclined to communicate a clear contrast between their products and services will be more likely to have a message that consumers are not only able to remember, but can also readily share with friends and family members. And considering that the average consumer can only recall one to three messages about any paticular product or service (not all of which are written by marketers), it had better be something clear and compelling.

Friday, July 20

Marketing Choices: Does The Customer Come First?

You can read any number of articles about it. Fast Company has three ways to put your customers first. KONE in the United Kingdom made it part of its mission. Goldman Sachs frequently said it too. Customers come first.

But do customers really come first? If you ask most companies, they are all on board. Nobody ever says they put their customers last. No one readily admits that customers are a necessary evil. Few people ever come straight and say that almost every business decision they make is all about sales and never about customers. Or maybe they do.

Ten Ways Companies Say Customers Come Last.

1. Rewriting return policies for products to include a restock fee.

2. Selling sales data to third-party marketers without oversight.

3. Employing aggressive telemarketing firms to sell.

4. Rewriting the terms of service to fit the needs of the company.

5. Delaying customers just to sell plus service with no benefit.

6. Creating hidden fees in order to advertise at a lower price.

7. Loading up websites with pop-ups and email capture forms.

8. Engaging in black hat SEO tactics to boost search engine relevancy.

9. Making promises on the front end and renegotiating on the back end.

10. Cutting staff or corners that directly improves profits while diminishing customer service.

Companies make decisions that put their customers last every day. So why do they insist on saying they put customers first? It's bad enough most companies don't care. It's worse when they lie about it daily.

If you really want to put your customers first, make sure every decision you make starts with putting the customer first. Otherwise, all you are really doing is lying to your customers on top of putting them last. And while that might work with a wink and a nod for awhile, one day they won't be your customers anymore.

Wednesday, April 11

Shaping Experiences: Why Every Contact Counts

If you want to appreciate how important the customer experience can be, consider the airlines industry. Despite noticeable improvements in overall airline quality performance as measured in the 2012 Airline Quality Rating, consumer impressions of the airlines industry continue to lag and even falter.

The reason is evident. The global view of the industry is shaped by the collective past experiences of all customers.

"Consumer perceptions are shaped by past experiences," said Dr. Dean E. Headley, associate professor of marketing in the Department of Marketing at the W. Frank Barton School of Business, Wichita State University, and one of two co-researchers who head the project. "Small, often unnoticeable, outcome improvements do not get included into consumers' mindset very quickly."

Specifically, every time a customer has a negative experience related to an airline, it reinforces their personal negative perception of the airline and potentially the industry. In turn, disenfranchised customers share their experiences with friends and family, who immediately remember their own negative experiences or become hypersensitive to negativity if they will be traveling soon.

That's too bad, especially because there are countless stories and studies to confirm that negative experiences tend to be shared more often and remembered much longer. And while this phenomenon is not confined to the airlines industry, the industry is unique in being one of a handful of industries with an abundance of indistinguishable brands.

It's also unique because the industry invites (or is required to invite) third-party interruptions into the experience, which is exacerbated by fragmented teams who are more departmentally loyal (and sometimes location loyal) than company loyal.

There are about 16 points of contact, of which the airline can only manage half.

• The airline's individual marketing efforts and online presence.*
• Online booking agents that sell price-based fares.
• Reservationists and customers service phone lines in lieu of third parties.*
• Airport parking and traffic flow for arriving/departing flights.
• Self-serve kiosks that present new fees beyond the ticket price.*
• Ticketing agents, with less empowerment because of self-check in.*
• Airport security, interrupting the experience between ticketing and gates.
• Gate seating and a new team of passenger service agents to assist.*
• Airport and weather conditions that may or may not impact the flight.
• Baggage handlers, working to load the bags on the plane.*
• Flight attendants, who sometimes serve less and push product more.*
• Flight crews, with pilots who have varied degrees of styles and experience.*
• Other customers, who are extremely varied in how they interact.
• Destination airport, which presents new conditions into the mix.
• Baggage claim, which introduces any number of new experiences.*
• Airport parking, traffic flow, and car rental companies, indirectly.

Again, the oddity here is they are only responsible for little more than half of the experience in reality. But from the perception of a customer, the airline and the airlines industry experience begins the moment they arrive at the airport and ends with when they leave the destination airport.

One would assume that any company knowing this would work that much harder to ensure the areas they are responsible for create pockets of positive experiences where customers feel protected. But the truth is that most do not, with a few exceptions.

Specifically, Southwest Airlines continues to promote a service-oriented message and consistently scores the highest in passenger friendliness for consumers as a result (it is ranked fifth overall). AirTran, JetBlue, Hawaiian, Alaska make up the top four airlines in terms of quality, overall. (Virgin was not included in the Airline Quality Report, but would probably make the top five if it was included too.) Conversely, most airlines are not so cohesive.

Many set themselves up for negative experiences on the front end. 

Among some of the most common complaints from customers are delays at ticketing, hidden fees, extra charges for bags, and agents who forward standard service questions (like seating changes) to gate agents. All of these prime the customer for a bad experience before they ever reach airport security, which most consider unpleasant.

By the time people arrive at the gate, any additional negative experience can create an overall negative experience: a lost bag, flight attendant having a bad day, delays, missed connections, uncomfortable flight, etc. Generally, such experiences are only salvageable when customers stumble into one of those employees who genuinely champion customer causes or concerns. But even if these employees can salvage the moment, most cannot transform a soured experience into a positive experience.

Instead, the abundance of negative experiences only set expectations to be a negative experience, which is almost always easily confirmed and never suitably addressed. Until every individual airline elects to make changes, the industry will continue to falter — which is good news for the few that have brands that transcend being lumped into the industry.

A little more about the Airline Quality Rating survey.

The Airline Quality Rating survey measures on-time arrival and departures, denied boardings, mishandled baggage, and customer complaints to score each airline. Before the Airline Quality Rating, there was effectively no consistent method for monitoring the quality of airlines on a timely, objective, and comparable basis. Anyone can participate online.

The research is headed by Headley and Dr. Brent Bowen, professor and head of the Department of Aviation Technology within the Purdue University College of Technology. Their body of research is recognized as the most comprehensive within the airlines industry by the American Marketing Association, American Institute of Aeronautics and Astronautics, Embry-Riddle Aeronautical University, the Travel and Transportation Research Association and others.

The most interesting aspect of the research right now is that "more than 50 percent of frequent fliers say air travel has gotten worse for them in the past year, despite the fact that overall airline quality performance has risen as measured in the recently released Airline Quality Rating."

Friday, March 16

Being Wrong: Banco Popular Customers

When banks sell loans, you really never know what to expect. And with some banks, you never know what to expect from month to month. Popular Mortgage a.k.a. Banco Popular is much like that.

About a year ago, our small home improvement second was sold by Bank of America to Popular Mortgage, a subsidiary of Banco Popular, which is a subsidiary of Popular Inc. Ever since, the experience has been a comedy of errors, apparently ours.

The customer is always wrong with Banco Popular.

The first time it was our fault was because we received a statement two days before the due date. We sent the payment straight away. But their processing department is slow. So the payment didn't post until the day after their collection department called, two weeks after the due date (but still within their grace period).

Not wanting to take any chances with our credit rating, we made a payment over the phone (you can't pay via the Internet as they don't accept online payments). Meanwhile, the missing check posted the next day. They had it for more than a week, but didn't know it. No big deal. The extra payment was applied to the principal, and we offered remedies that they rebuffed.

The second time it was our fault started out as a mystery. The collection department called on Sunday but didn't leave a message. When we called to find out why they had called, we were greeted by a message that said their offices were closed. (They can call out, but you can't call in.)

In the interim, we checked with our bank. We had sent the check the same day that we received the payment (Feb. 21), they processed it on March 2 (the day after the due date), and it cleared our bank on March 5. This time, their collection department called even earlier within their grace period (March 11).

When they returned our call on the next day, "David" said he would open a ticket and research it. The practice is pretty standard in the banking business so I thanked him. What isn't standard is that he called back a few minutes later and told us to research it and send evidence of payment, with urgency.

We sent a copy of the check the same night, but found out it wasn't so urgent. After I didn't receive confirmation that the email was received, I called. He had the day off.

He never did confirm receipt of the email, but he did call the next day. He called to say we were wrong.

"The issue they had was because you didn't put your loan account number on it," said David, much less accommodating than in our previous conversation.

What happened was that they received the check (which carries the address of the home with the second) and statement coupon, but they were confused which account to apply it to (even though we only have one account with them). So, they cashed the check and set the money aside until someone claimed it.

I didn't know what to say. Apparently, I was wrong again. All I could do was chuckle and accept it.

You can learn a lot about investments by working with prospect companies. 

While we do business with several banks — various business and personal accounts — I have only ever invested in one. And I would never invest or willfully do business with Banco Popular. Why?

Three reasons. 

• Its operational structure is lopsided to account for the deficiencies it creates (e.g., its payment processing is overburdened or incompetent, which slows down their process and gives their overstaffed collection department more cause to be zealous, calling high credit score customers on days that they are closed even if the customers are well within grace periods).

• It violates its own stated values and creed (e.g., it claims to obtain customers' satisfaction and loyalty by adding value to each transaction but places the burden of research and evidence on the customer).

• It works too hard to prove itself right and the customer wrong (e.g., interactions frequently seem to bear it out, given the emphasis is always about discovering what the customer did wrong rather than addressing how they can fix their shortcomings).

I'm happy to admit I'm wrong with Banco Popular. But every now and again it pays for a company to work harder to make their customer right, at least as hard as the customer works to make them right.

The first time we experienced a problem, we had requested they send their statements out earlier (25 days out is relatively standard, but they said it wasn't their policy). We requested a payment book if they could not send them earlier (they refused because our account was an acquisition). And we asked about making payments online (they said they offer no such service).

They did suggest direct withdrawals from our bank account, but I don't believe in giving deficient companies that kind of access. Instead, we feel crummy every time they send a statement, paying it as quickly as possible and hoping for the best. It usually arrives between two and seven working days before the due date, which gives them a chance to prove us wrong every month. Go figure. It's their policy.

The policy seems to be working for them too. Here is an analysis of investor recommendations. Yikes.

Wednesday, June 22

Considering Civility: Does It Matter?

customersWeber Shandwick and Powell Tate, in partnership with KRC Research, recently released the results of their second annual "Civility in America" poll, which asked 1,000 American adults to assess attitudes towards civility online, in the workforce, in the classroom, and in politics.

According to the survey, Americans are trending away from uncivil behavior and rude treatment, especially among companies and politicians. Even more compelling, consumers are increasingly likely to share uncivil behavior with an expressed intent to sway others away from the offender.

How Civility Affects Buying, Behavior, And Other Choices.

• 69 percent decided not to purchase from a company after an uncivil experience (up from 56 percent).

• 69 percent re-evaluated their opinion of a company because the tone was uncivil (up from 55 percent).

• 67 percent said that they would not vote for a candidate who they believe is uncivil (new question).

• 58 percent advised friends, etc. not to buy products after a rep was rude or uncivil (up from 49 percent).

• 49 percent have defriended someone on Facebook because their behavior was uncivil (up from 45 percent).

• 38 percent have stopped going to a site after they concluded that the tone was uncivil (no change).

• 27 percent have dropped a community or forum after the tone became less civil (up from 25 percent).

• 20 percent have quit a job because the workplace was uncivil (new question).

• 11 percent have transferred their children to a new school because of uncivility (new question).

The survey also found that more than one-half of Americans believe that civility in America is getting worse (up from 39 percent last year). Workplace leadership is blamed for a decline in civility (65 percent) in the workplace, with most respondents believing their bosses set the wrong tone during the recession. Fellow coworkers aren't far behind, with 59 percent of respondents blaming coworkers for the increase in bad behavior.

Workplace competitiveness and the economy were significantly lower, perhaps signaling that people recognize that uncivil behavior is a personal choice. As a consequence, respondents said that there is a greater need for civility training in the workplace.

civilty"Asked about the civility of social networks, nearly one in two (49 percent) say that they are uncivil, an increase from 2010 (43 percent)," the report states. "However, Americans are much more inclined to name other sources besides social media and the Internet as uncivil — political campaigns, pop culture, media, government, the music industry, and the American public [for example]."

Chris Perry, president of Weber Shandwick Digital Communications, suggested that digital conversations are meant to engage and foster multi-dimensional dialogue rather than demean others or be hurtful. However, the survey indicated that nearly 7 in 10 Americans believe that cyber bullying is getting worse, especially among teens.

Along with growing uncivility in schools, online, and workplaces, a previous study conducted by the firm indicates that politics has become significantly less civil, increasing from 59 percent to 74 percent since 2008.

Discourse over diatribe.

I've always maintained that there is a healthy difference between criticism and cynicism, discourse and diatribe. With either word combination, the difference is that one tends to try to make things better while sticking to the topic; the other tries to tear things down, including the topic, subject, and anything nearby.

Over the last few years, the public (at least in this survey) seems to be recognizing that the difference between the two has all but evaporated. Nowadays, it's not only about winning but also making the other side lose and lose badly. Where some people might improve is taking a more objective view in that both sides (not just the other side) are driving the uncivil attacks.

Personally, I sometimes theorize that politics tends to set the tone of the country. Beyond politics, these same people also set the tone for government, which spills into business leadership and the greater workforce with un-customer-centic leaders creating hostility between employees and the consumers they need to keep the doors open.

But that's only a theory. It's equally true that each of us has a choice of what we engage in, criticism or cynicism, regardless of tone. Communicators are best advised to find the middle ground, listening carefully and thoughtfully to criticism (as opposed to ignoring disagreement as some social media experts have recently adopted) while not falling prey to cynics that will never be satisfied.

Sometimes it's best to let those people vent publicly, because they say more about themselves than your company as long as you remain civil. Because more than any other issue, civility obviously matters.

Friday, May 20

Operating Budget: How To Lose A Customer

Budget
When we returned the rental car to Tucson International Airport, we were feeling pretty bullish about Budget Rent A Car. The attendant who checked us in had even adjusted our contract because we brought the car back with a full tank, even though we had prepaid for the gas. As I mentioned before, that never happens.

Had Budget had its way, however, any savings could have been erased. Budget Rent A Car spoiled customer satisfaction by claiming we damaged the car three weeks later. You can read all the ugly details about what happened right here: It's why Budget sucks. Worse, we now loathe them and their company, with our resolve being to forgive and forget them permanently. Well, sort of.

Today, I'd rather talk about what might have happened. There are solutions on top of solutions.

Scenario 1: Assume Fault. Budget Rent A Car would have never lost a customer for life had it never sent us a claim letter. Please don't misunderstand me. Had we damaged the car, I would have paid for the repair. But we did not.

Had the car been damaged while it was in our possession, the attendant (per Budget policy) would have notified us at check in.

It is just as likely that any damage, which Budget later defined as "minimal" to the rear door, could have been done by the people who pulled up to us once the car was checked in. Or, maybe it was the attendant who had left the doors open. Or, maybe is was whomever is responsible for washing it. Or, maybe, who knows?

It's a sorry story to think that same attendant who wanted to "save" us money also tried to "stick" us with their mistake. But the solution here is obvious. Budget Rent A Car should have assumed their company, not the customer, damaged the car.

Scenario 2: Ask, Don't Tell. Conversely, maybe Budget Rent A Car wants to be operationally thorough. And upon discovering "minimal" damage to the rear door, wants to know if their customer might have noticed something.

Instead of sending an unsigned impersonal accusation form, they could have sent a letter. They could have included photos. They could have included a detailed description of the damage and asked had we noticed anything when we checked in the car.

Customer inquiries as opposed to accusations can go a long way. I practice the same resolve at my company. If an invoice comes due without being paid, we don't automatically demand copies of their bank statements. We find out if the check was lost in the mail. Of course, in this case, we wouldn't have been able to help because there was no damage when we left.

A phone call might have worked too. Paper is expensive and not always very responsible.

Scenario 3: Expedite Service. Even if the ineffective operational policy and procedure did not work, it would be prudent for Budget Rent A Car to provide a phone number that could be reached at their customer's convenience and not their own.

At minimum, even if nobody wants to work weekends at the Budget Investigation Unit and portions of their customer service department, at least give the working people enough information to answer basic questions. You know, like "What the flip are you talking about?"

The customer service crash was the worst display of general ineptitude that I've ever had the misfortune to experience. Even the customer representative who took ownership didn't keep his promise to call by noon. According to him, it took all morning to get any information from the Budget Vehicle Damage Control Department.

Seriously? I can't fathom how long it would have taken me. Is damage running so rampant at Budget that not only do they have an entire division dedicated to bilking customers, but they also have special divisional "units" to handle all of the details? Are they so busy that it takes half the day to respond to someone in their own company?

Scenario 4: Suck It Up. Budget Rent A Car accepted that they broke their own policy, admitted the customer service was shabby, and ultimately "waived the claim." Two representatives have promised to send formal letters of apology. And one offered a customer service certificate for the lies and runarounds we experienced with their staff. (I'm satisfied with the apologies.)

However, never once did the company acknowledge one of their employees or another customer damaged the vehicle. It's a small consolation, but one their customer service representative couldn't even grasp. He thought I would be appreciative that the claim was dropped.

And that's the rub. Budget Rent A Car maintains we were at fault and they are being gracious in all of their benevolence.

It's not about me anymore. It's about possible fraudulent insurance claims practices.

Since Monday, I have had several productive phone conversations. It seems that state legislators may be very interested in drafting consumer advocacy legislation for the State of Nevada.

At minimum, the legislation will require car rental companies to perform a walkaround with any customer before accepting the rental vehicle to prevent pass-on damage liability. Among other ideas, it may also include a non-insurance attribution process to ensure the abundance of car rental insurance claims do not drive insurance rates up, which impacts people who rent cars or not.

While my personal experience originated in Arizona, consumer advocacy laws also have a tendency to be passed from one state to the next. As soon as we can get a bill up in Nevada, the draft will be forwarded to legislators in Arizona and surrounding states.

As the bill passes, Budget and its parent company, Avis, will likely have to staff more personnel to accommodate, cutting into their recent profit surges. It may also help curb the recent consolidation of the car rental industry. Currently, Avis is attempting to work around anti-trust laws to acquire remaining competitors. There are only four national companies left.

Personally, I'm not very keen about regulatory oversight. But when companies "try harder" to screw customers, they earn it.

Monday, May 16

Cashing In Customers: Budget Rent A Car

ArizonaCombined, Budget Rent a Car and its parent company Avis Rent a Car generate about $4 billion in car rental revenues. The company is doing well enough that it has put in a bid to purchase Enterprise or Dollar Thrifty, once it gets past anti-trust hurdles.

And yet, the company known for its long-running tagline "We Try Harder" and its subsidiary closes customer service on the weekend. Well, maybe. It depends on who you talk to.

Does Avis still try harder? Apparently, not under the Budget banner or on the weekends.

When you receive an unsigned form requesting insurance information from the Budget Vehicle Damage Department as part of an accident "investigation" without any other information — description of damage, evidence, police report — it's something you want to resolve immediately. You feel a sense of urgency, because you know there was no accident or damage.

The form, dated May 6, was received May 14, approximately three weeks from the time of the rental. We know there wasn't a problem because, until May 14, I would have described the rental experience as better than smooth. The attendant who checked the car at the Tucson airport didn't cite any damage. In fact, he adjusted our contract because we brought the car back with a full tank, even though we had prepaid for the gas. Trust me. That never happens.

Any semblance of good will quickly evaporated, not on receipt of the form, but in trying to resolve it. When my wife called the number on the form, she discovered that department was closed. She tried the customer service department, which was also closed.

Then she tried another number, a separate customer service number if you want to extend your rental period. After 20 rings, someone answered. They transferred her to roadside assistance. Roadside assistance was as perplexed as she was about why she was transferred to them.

Since my wife was frustrated, I set my deadline aside to send customer service an email, letting them know I think it sucks that a billion dollar company that provides services on the weekend would shutter up its customer service department during operating hours.

Tip 1. Don't force customers seeking private resolution to look for public customer service.

Believing I would not get a response until Monday, I sought the attention of the person staffing Budget's Twitter account. She immediately offered to help, asking me to follow Budget so we could send direct messages. It's a standard social media tactic that doesn't work unless they can actually help you. This one could not.

The primary goal is to move any complaint away from a public forum not help the customer. Still, the Twitter representative requested various numbers — with each message piling into my DM thread at a rate of four to one. I gave her the information. And within seconds ... she told me customer service was closed on the weekend. Sigh.

Tip 2: Don't castrate your social media reps by limiting their ability to provide customer service.

Customer Service FailI wrote back a cheeky reply and un-followed Budget. With the conversation public again, Twitter monitor Ashley retorted that (sic) "As mentioned, customer service is closed but I would've liked to help w/ the resolution to ur issue when they reopen on Monday."

My thought about social media is pretty clear on this point. If you empower employees to manage Twitter, they ought to be able to manage customer service. And shortly after that comment, I received an email from Budget's customer service department.

Customer service was suddenly open. He instructed to me to call the Accident and Damage Claims Department (a different department and number than the Investigation Department on the form). They would be open on Monday.

I responded that I thought it was ironic that a customer service department that was supposedly closed would refer me to another department that is supposedly closed. To me, a resolution at this point would no longer be sufficient. An apology was in order.

Tip 3: Don't silo your operations to the point that nobody knows what they are doing.

While I was musing on Twitter that I wondered how many tweets it would take before Budget realized its customer service issue was becoming a crisis communication scenario (about 30 tweets, in case you were wondering), my cell phone rang. It was Budget's customer service department.

The representative told me that they had recently decided to extend their customer service hours. Obviously, somebody forget to tell their social media team.

He asked me to detail the experience, because other than the note his manager gave him to call me, he had no knowledge of my grievance. I started over, being mindful not to allow a rant to overshadow a resolution.

At that point, he assured me that it was Budget's policy to inform the customer of any damage at the point of drop off. He said that although he had no access to claims records, he would advocate my issue on Monday (today) by noon. He gave me his direct number.

BudgetWhile I wasn't really satisfied, I could accept his course of action.

About a half hour later, customer service emailed me, saying they would gladly provide a formal apology letter and would like to also include a customer service certificate. I told this second representative, who identified himself as an Avis customer service representative on the second email (same person, different company), that if a customer service certificate is a discount, I would still be leery of renting from a company that claims an accident when no accident occurred, three weeks afterward.

I am, of course, very interested in receiving the formal apology. I might even post it in the follow up.

Tip 4: Effective customer service saves your company time, money, and heartache.

Primarily because of the silo-heavy operations and faulty internal communication of Budget, along with Avis (since some operations are apparently shared), five different representatives worked on an issue that they were not able to resolve. Of the five, only one took real ownership (no resolution, but a course of action) and another took partial ownership (no resolution, but the promise of an apology). All of it could have been avoided had the initial customer service department picked up the phone.

But more than that, there were several points of contact that could have taken ownership. None of them ever did. And none of them, despite having the same rental agreement number, knew what the other representatives were doing.

Tip 5: Even minor investigations have a nasty way of uncovering some facts.

Unlike Budget, our small local insurance company and our attorney can be reached to provide customer service on the weekend. What they told my wife was difficult to believe. They both said that with increased frequency, Budget and other car rental companies have started to treat normal wear and tear on vehicles as damages that customers are obligated to pay for.

In fact, had we done as requested — provided insurance information without specific knowledge of any damage or any evidence of damage (keeping in mind there was no damage) — it would have been akin to admitting an incident occurred and that we were liable. They believe, adamantly, that is what Budget was hoping we would do.

They even recommended that we copy and cc the state insurance commission all written correspondence. The problem is that severe. There are state investigations into these fraudulent practices.

Given a car rental company charges rental rates that can pay for a car five times over in a month plus retain the resale value of the asset, it seems almost impossible to believe they would subscribe to such a tactic. However, it's more common than you think.

budget sucksOther stories, including those that cite Budget specifically, also say that many companies have reversed their old policy of having agents perform a walkaround with the customer prior to accepting the vehicle. The cursory walkarounds used to be standard practice so customers agreed with the condition of the car before leaving the lot.

Rental companies do not staff enough people to do so anymore; some of them even have parent companies man empty service desks part time. Many people have requested a pre-checkout walkaround and have been denied. We certainly didn't get one.

Worse, the general feeling from our insurance representative was that rental car companies specifically target individuals who do not subscribe to the fear marketing that rental companies use to solicit additional insurance and roadside assistance fees. That would include people like my family. We have double coverage when we travel — private insurance and travel insurance from our credit card company — and maintain AAA membership for roadside assistance.

Still, it leaves me to wonder what would happen had we bought additional insurance. Would a claim have been filed without our knowledge, possibly marring a perfect driving record? Maybe so. It's hard to say, especially because if the car was damaged it happened well after we turned it in and and well after we flew home. It's even harder to say because the so-called insurance doesn't insure anything anyway.

Preliminary conclusions about the social media customer service issue with Budget.

To date, I don't even know what the supposed damage to the vehicle is. And based on the perfect return, I don't believe for a minute that we damaged the car — let alone were involved in an accident we can't remember.

Regardless of the resolution and pending apology, I still don't think I would ever rent from Budget again. What I do think is that I will be forever compelled to take pictures of a rental car well before we leave the lot. We can call this disorder they cause Budgtophobia, a severe and overwhelming fear of car rental scum.

Kidding aside, I do advise taking pictures of any rental. From everything I've read on the topic, the only people who successfully see faux claims of damages waived are people who make the issue public or take it to the press. The goal of the company seems to be to look like a hero as they overcome the problems they create and to avoid the rigor of investigative reporters.

All of this is a recipe for mistrust of the company and the rental service industry in general. That's not so easy to do. To earn such a distinction, you really do have to try harder.

Living case study ahead. The follow-up post on Friday, with a growing list of improvement points for Budget Rent a Car.

Monday, August 23

Countering Negativity: Flip The Thinking

A survey by Zillow helps put public sentiment about the economy in perspective. Homeowners are more pessimistic about future home values than they were in the last three quarters.

Specifically, 33 percent believe housing prices will fall further; 38 percent believe they have already reached bottom. Few people anticipate a real estate turnaround in the near term. Most believe any increase in home valuation could be more than one year away.

Worse, more homeowners are lining up to create a self-fulfilling prophecy. According to Zillow research, more than 4 million owners are ready to put their homes on the market in the next six months. If they do, increasing surplus could drive prices lower.

"Our forecast remains largely unchanged: We're in for an L-shaped recovery that will likely keep annualized home value appreciation very low for the next three to five years," said Dr. Stan Humphries, chief economist at Zillow. "Given this sentiment, we're surprised so many homeowners believe their market has already bottomed."

As recently as last March, the Obama administration had reworked its troubled $75 billion plan to prevent foreclosures. The idea was to give people a three-to-six-month break on their mortgage payments until new jobs materialized. Unfortunately, jobs didn't materialize, at least not long-term private jobs. The rush to push forth any plan didn't work.

Rethinking Customer Communication Can Improve Outcomes.

The question more organizations need to be asking is how they can help consumers as opposed to helping themselves. Sure, in a robust economy, traditional marketing works because it's based largely on either innovation (creating need) or out positioning the competitor (more common). In a down economy, organizations that aren't innovating need to find other ways to add value.

After all, it doesn't do any good to have the best marketing proposition for a product no one is buying. And marketing needs to consider this in their communication. What specifically are they offering consumers? But more importantly, what is it that consumers need that they might offer?

This falls right in line with some of the best performing Web sites. The Wall Street Journal offers information on business and finances. Lower My Bills provides a place to compare long distance services. Federal Money Retriever provides government grant advice. Facebook offers a popular way to stay connected with friends and family. Google is the most popular search engine for helping people find information they are looking for. And the list goes on.

What does your company's Web site do? If you're like most organizations, your site is not designed to do anything for the consumer. It's designed to help your organization. If it has a blog, it's probably written to sell products or share company news. If it has a social media presence, it's probably designed to attract new friends and followers. Perhaps it includes promotions and coupons, as if discounts somehow add value to something that has no value.

A 5-Second Solution Using Home Improvement As An Example.

Lowe's and Home Depot provide a great example. In the second quarter, Lowes posted an earnings increase of 9.6 percent. Home Depot rose 7 percent. Both have employed a business-as-usual marketing stance.

Home Depot will have a Labor Day sale with gas grills. Lowe's is asking people to imagine new appliances. Meanwhile, consumers are asking themselves whether they will be in the same home next year, negating the need for big home recreation items that won't move with them.

It's mostly the same on Facebook. Home Depot is telling people to do more (grill more, paint more, garden more). Lowe's was telling people to organize their life. Recently, however, Lowe's switched to "Back 2 Campus" ideas, except they aren't ideas as much as they are posts about one discounted product. The latter idea is close to being helpful, but falls short without a choice.

Imagine what might happen if Home Depot or Lowe's did more than justify cautious consumers are a reason for on par sales. If they did that, maybe they would focus on simple renovation projects that can lift homeowners' spirits or, even better, increase the resale value or home valuation of their homes.

Thursday, August 12

Selling Offsite: Delta Airlines

Delta Ticket WindowWhen it comes to social media, Delta Airlines is ready to go all in. Today, it launched the industry's first social media 'Ticket Window,' which is a fancy way of saying you can now book tickets on the Delta Facebook page.

After the page slurps your Facebook profile data and is able to secure a private connection, a process that takes a considerable amount of time, you'll be able to book flights off Facebook. How long? I started this post while waiting and quit waiting after I finished this post. Clearly, there are some bugs to be worked out.

More importantly, however, the concept kicks dust on the rented land cautions. When there is money to be made, companies don't care.

Facebook is only the beginning. Delta plans to expand its Ticket Window to other sites, including online banner ads to allow full booking capabilities within the airline's advertisements and without requiring you to leave the site you are on. Delta also has plans to provide a fully functional app that does everything its Web site and the Ticket Window can do.

Who Cares? It's An Airline.

This idea is a leap forward, because despite shortcomings, the company is doing something few have thought of — it bypasses the quest to drive visitors somewhere other than where they are. It creates an opportunity to skip the sales funnel and move directly to outcomes.

It's hard to say whether people will book flights while reading an article on The New York Times or playing Farmville, but there is a non-linear quality that can't be ignored. It demonstrates just how far social media will transform not only how we communicate, but how we sell, shop, and share.

That is not to say everything is all roses for the airline industry. Most still struggle with their basic brand promiseds. Added-value on-time flights without additional charges and some assurances nobody is busting up your luggage on the tarmac. The actual flight experience is where some innovation needs to be made and Delta still has some communication rough spots.

Communication Rough Spots.

For as much investment in the concept of a mobile Ticket Window, it's difficult to find the official Delta page on Facebook. Enough so that I had to visit the site to get the Facebook page, which defeats the purpose. Add another problem.

Delta Facebook logoFor creative flair, Delta altered its logo on the Facebook page (pictured left). I didn't recognize it. Sure, the new look launched earlier in the week was a step up over what most airlines offer online. (Most have websites like their service. Lacking.) It's a nice, simplified and streamlined site. However, it didn't include a new logo.

Over time, I suppose people will be able to distinguish the Delta logo no matter how they fly it onto various communication pages. But in the interim, it's disruptive in a negative way. It also assumes the airline has a huge following of fans. Maybe they do. The press release sure made it sound like they are on par with Virgin, Southwest, and JetBlue.

"Our customers are spending more time online and are looking for new ways to connect with us," said Bob Kupbens, Delta's vice president - eCommerce. "We're now delivering technology where our customers are - from our own website to our Facebook page to Internet news sites and beyond."

Like many airlines, they seem a little bit stuck on themselves. It was also a little spooky that they decided to launch on Facebook because "We already know Facebook is the most used website by inflight WiFi users on more than 2,000 Delta flights every day."

Nitpicking aside, the real thrust here should send any marketer's or communicator's head spinning with ideas and applications. While making every ad a storefront could diminish branding applications, there is something to be said for being able to book flights, buy products, or even line up speakers with customized topics wherever your landing page happens to be.

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Tuesday, May 25

Losing Bounce: OfficeMax Customer Service


Last year, a customer service issue left me with the resolve to always visit Office Depot before OfficeMax. The issue was a small thing.

When we were loading my car with new office chairs, I noticed they were brown and not black. They were out of black, said the employee who spent 30 minutes looking for the chairs in the back room. No problem, just take them back, I said.

"It's the same model," he blinked. "I'll have to wheel them all the way back into the store."

"Seriously?"

I led the way.

Yesterday, our phone system had a meltdown. So I drove over to Office Depot. Unfortunately, they didn't have enough handsets for the system that met our needs. No problem. I didn't have time to check other stores; OfficeMax is one block away. Beside, nowadays they have rubberband balls as the symbol of customer service.

OfficeMax had the same stocking issue. And since the employee didn't offer to check other stores, I found another system that was obviously in stock and still met our needs. All in all, a better customer experience. Except, that is, for one small thing.

After the transaction was complete and the phones were carefully double bagged, the employee asked me to wait. He walked over to another register, came back, mentioned a 14-day return policy, and then stamped my receipt in red ink. For any reason, he added, pointing down to the stamp.

"15% Restocking Fee On Any OPEN Technology."

It's another small thing, but I still have to wonder. Are these the last words you want to leave with a customer?

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Wednesday, March 3

Changing PR: Customers Are Media; Complaints Are News


Never mind all those customers on your company's Facbook page. Don't forget the customers standing right in front of you.

That seems to be one lesson learned by the vice president of Evergreen Entertainment LLC, which operates St. Croix Falls Cinema 8 in St. Croix Falls, Wis. His chain of five theaters is now the target of a Facebook BOYCOTT page that has drawn 5,100 fans and counting, after he wrote the following response to a complaint (* are mine):

Sarah,

Drive to White Bear Lake and also go fuc* yourself. If you dont have money for entertainment, get a better job, and don't pay for everything on your credit or check card. You can also shove your time and gas up your fuc*ing a**. Also, find better things to do with your time. This email is an absolute joke. We don't care to have you as a customer. Let me know if you need directions to white bear lake.

Steven
Steven J. Payne - Vice President


Payne has since apologized, but the apology came too little too late. It seems other customers have had complaints about the theater, but never had a forum to complain. From our viewpoint, they represent the most dangerous loss of revenue for a company —customers who never complain but never make another purchase.

Not everyone who comments on the boycott page is sympathetic to Sarah Kohl-Leaf of Taylors Falls, Minn. They say her original letter was the catalyst for the response. I cannot agree with that. Retail customers write impassioned letters all the time. Her complaints:

• Lack of an ability to pay with a credit or debit card.
• An ATM cash machine that was out of cash or service.
• A movie interruption to check ticket stubs against the count.

Payne didn't need to be offended by the complaint. They are all valid, and might explain why more customers are not visiting the company's establishments. Sarah deserved a thank you more than she deserved a fu*k off letter.

Everyone has the potential to be the media.

As the Facebook boycott page takes off, mainstream media is starting to pick up the story, including The Minneapolis - St. Paul Star Tribune, Consumerist, and The Sun in Osceola, Wis.

A few customers are even concerned that the theater chain might not survive. While larger operations might fire an employee for such an infraction, this chain seems to be a family-owned theater.

Three other takeaways to consider: Customers do not have to be celebrities like Kevin Smith to gain traction. The lack of a social media presence may one day come back to haunt your company because you won't have any loyalists to lift you up like Toyota, which did far worse than Steven Payne. And, as always, the initial mistake (with the exception of gross negligence that affects public safety) is never as impacting as how we respond to it.

Ergo, we might not be reading this story today if Payne had accepted the criticism and offered up a free popcorn. And we might not be reading about it today if it wasn't for social media. But nowadays, anyone can become a publisher and every manager has to wear a public relations hat now and again.

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Friday, January 22

Improving Performance: The Weekend Effect At Work?


A new study, published in the January 2010 issue of the Journal of Social and Clinical Psychology, noted that people experience better moods, greater vitality, and fewer aches and pains from Friday evening to Sunday afternoon. Called the "weekend effect" by Richard Ryan, author and professor of psychology at the University of Rochester, the study found that even people with interesting, high status jobs tend to feel happier on the weekend.

"Our findings highlight just how important free time is to an individual's well-being." Ryan said. "Far from frivolous, the relatively unfettered time on weekends provides critical opportunities for bonding with others, exploring interests and relaxing -- basic psychological needs that people should be careful not to crowd out with overwork."

Among the most interesting findings from the study that tracked the moods of 74 adults (ages 18 to 62), was the distinction of whether people felt controlled or autonomous in the tasks they were asked to perform at work or on the weekend. Participants also indicated how close they felt to others present and how competent they perceived themselves to be at their activity.

The results supported a self-determination theory, which suggests that a person's well-being depends largely on autonomy, a sense of competence, and relatedness to others. The takeaway from the weekend effect for business leaders is simple. Affording employees more autonomy and nurturing emotional connections between co-workers could contribute to a greater well-being, competence in performance, and increased productivity.

The study also seems to provide real insight into why the right corporate culture can propel companies forward or how organizational leaders, internal communicators, and individuals can make a difference in the workplace.

Defining The Organizational Culture

• Organizational Clarity. Almost every successful model works toward establishing a vision, mission, and values to produce such clarity. However, where companies sometimes undervalue the mechanisms that contribute to the brand or corporate culture is that they forget to make every member of the team part of the planning process.

• Decision Making. As the study suggests, increasing autonomy across all positions can contribute to a better sense of well-being within a company. Generally, the biggest barrier for companies to overcome is eliminating the fear of failure, especially when employees are concerned about their jobs. In developing organizational charts, leaders might want to clearly define areas where employees can empower themselves within the workplace by allowing them to make decisions after any mandatories are complete.

• Organizational Communication. Earlier this week, there was an article that revealed almost 90 percent of UK councils block employee social media access (hat tip: Shel Holtz). The blocking often stems from fear that social media could reduce employee productivity. However, social media and social networks can be employed differently. With guidance, they can be used to bust silos (isolated departments) and help reestablish the free flow of information between employees.

• Management Style. We've been integrating leadership communication into the mix for the better part of two years. In doing so, many posts reinforce a concept that some companies seem to have forgotten: leadership moves people forward; management tends to regulate. In other words, authoritarian styles tend to be counterproductive, especially among younger generations that grew up with a greater sense of autonomy.

• Human Resource Development. If there are any trends that we would like to see developing out of the recession, it would be an increased effort to break down any barriers between human resources and corporate or internal communication. Whereas human resources can host development workshops, corporate and internal communication departments could develop joint communication projects that benefit workers between such sessions. The goal here, once again, would be to create a corporate culture that encourages autonomy, a sense of competence, and relatedness to others.

Of course, I don't subscribe to the concept that individuals should wait for employers to lead. So in looking over this five-point list, it seems some individuals might find ways to adopt these principles on their own.

In other words, individuals can improve their own sense of performance and well-being at work by defining their role within the company; making decisions based on how they react and respond to their environment; reaching out to colleagues in other departments when the need arrises; adjusting their own outlook to take on leadership qualities in dealing with others; and pursuing their own professional development sessions outside of work.

In that case, even if the work environment doesn't feel changed, individuals can improve their outlook or perhaps prepare themselves for a more rewarding experience at a company where such traits are admired. The choice is yours.

Tuesday, December 1

Opting Out: American Greetings


"... but what if people don't want to opt in your content? Wouldn't it be so much better to ask them to opt out? What do you think?" — Valeria Maltoni

Maltoni already knows the answer to the question she posed on her much more substantive post "Lists, Permission, and Content Marketing." American Greetings Corporation does not.

In 1996, at about the same time American Greetings launched its first site, AmericanGreetings.com, it also launched Egreetings.com, and Bluemountain.com, concepts that were designed to capture consumers from different demographics. The classic marketing strategy seemed to be working. Between the three sites, the company boasts two million paying subscribers.

To help put that in perspective, the subscription rate for Bluemountain.com is $15.99 per year. However, to really understand the presumed success of the mom and pop vignette e-card shop identity propped up with American Greetings cash, you have to look below the surface and under a few rocks. It does not rely on quality content as much as sleight-of-hand marketing.

The enrollment process requires customers to provide all payment information prior to receiving a "free" 30-day trial. If you have any concerns, BlueMountain.com borrows the VeriSign Secured brand and Better Business Bureau (BBB) brand, pointing consumers to this BBB page.

However, if customers search the BBB on their own, BlueMountain.com leaves a different impression. The BBB processed a total of 301 complaints in the last 36 months (from people willing to take the time over $15.99). And of those complaints, only 198 were closed in the last 12 months. In fact, the subscription trap scheme was so disingenuous, the BBB contacted the company in April and sought cooperation in addressing the underlying cause.

The company responded in May, promising changes to be implemented by June. The BBB took the company's response in good faith, never realizing that American Greetings didn't fix the problem but rather elongated the process. No follow up by the BBB has occurred. So we followed up.

The American Greetings Subscription Trap Scheme

This morning, I received notification that BlueMountain.com would extend my membership for another year, at the new rate of $15.99. I originally subscribed to BlueMountain.com on a trial basis to evaluate its system and, like many consumers, failed to opt out in time because there was no prompt that the trial membership was expiring. No worries. I decided to stay with the system a year, promptly forgetting about it until receiving notification this morning.

To ensure that you enjoy uninterrupted access to the heartfelt cards your friends and family have come to expect from you, we'll continue your eCards Membership for the next year at $15.99 as your current eCards Membership was scheduled to end on 12/15/2009 00:00. It's automatic -- we'll simply use the payment method we have on file, unless we hear from you. The charge will occur on the date of your expiration noted above.

It went on to say that if I wanted to cancel my membership, I could find the instructions in their Help section or simply click on the link. It seemed easy enough, even if I had to retrieve a long-forgotten password. Here is what the Help section said:

To request a cancellation of a subscription, please contact our membership support center by calling 1-888-254-1450, Monday through Friday from 8:00 a.m. until 8 p.m. EST

Since customers outside of the U.S. and Canada are allowed to cancel online, I decided to submit an online complaint and cancellation request anyway. Within minutes, BlueMountain customer support sent me notification that said "For security reasons, we are unable to process cancellation requests via email," which was followed by Terms of Service outlining customer obligations.

The explanation defies logic.

American Greetings wants consumers to believe that an online service enrolling members online and accepting payments online cannot accept membership cancellations online for security reasons. But more than likely, American Greetings wants to prevent cancellations. And if there is any doubt, the call confirmed it.

Customers hoping to cancel their memberships are greeted by an automated recorded call service with voice recognition technology. My first thought was that the technology belongs to a union, given the set hours of operation.

My second thought was that it is disingenuous that the recording requires a membership number, last name, and the original phone number to verify the identity of the caller. (BlueMountain.com doesn't tell customers to have any of this information prior to calling.)

If you miss any of the questions or if you do not speak slowly enough for the machine, you cannot proceed or cancel your membership. If you do answer all of the questions, your name is likely added to a marketing list that will be sold at some later date. We suspect that to be the case because once you answer these questions, you are transferred to a live scripted customer service representative who has to verify the identity of the caller.

The scripted customer service representative then asks for your membership number, last name (to which she verifies the first name), and a mailing address before asking why you are calling. Except, the customer service representative is not interested in helping you. She has a script to read.

The script is designed to prevent your cancellation, offering a reduced subscription rate or reward. And, even after the cancellation is confirmed, the representative asks you to hold for a bonus offer. A bonus offer for canceling? As tempted as I was to play along for this post, even I couldn't justify wasting another five minutes for what seemed like a 20-minute process.

Twenty minutes is longer than most customers will sacrifice for $15.99. American Greetings knows it.

Does The American Greetings Scheme Pay Off?

It's a valid question given the brand value. How can American Greetings, even if it is hiding behind the BlueMountain.com brand, justify the considerable risk associated with a subscription trap scheme for $15.99 per year? Or, perhaps more appropriately, was this the model Jacob Sapirstein, a young Polish immigrant, envisioned when he set out to achieve the American dream with ambition, ethics and hard work?

That seems doubtful. It doesn't even seem to be what shareholders expect since the company's first public offering in 1952, but it does seem to fit the pattern of progress since Zev and Jeffrey Weiss were entrusted to oversee the varied brands in 2003.

Since 2004, American Greetings seems to have headed in the wrong direction, delivering an increasingly diminished return when compared to the S&P 400 and its own self-defined peer group. Last year, in fact, the company experienced a net loss of $227.8 million. It was the worst performance in the last five years of diminishing performance.

If there is an e-card for karma, someone might consider sending them one with a bit of marketing advice. Q: Wouldn't it be so much better to ask them to opt out? A: Only if you want to follow in the footsteps of what used to be one of America's best-loved and most trusted greeting card brands.

Monday, November 16

Projecting Sales: Retailers Look To Black Friday


If consumer confidence is any indication of what retailers might anticipate this year, beginning with Black Friday, then the best they can hope for is: the fear of a worsening economy may have had a greater impact last year than living in one will have this year.

Most forecasts suggest a small gain in retail sales over last year. And most consider the smallest gain good news, despite consumer confidence indicators there is some validity to the concept that they will be more cautious.

Consumer Confidence Highlights From comScore

• About 75 percent of consumers across all income levels are more afraid of the economic future than ever before.
• 46 percent of over $100k households/65 percent of under $50k households are spending less on non-essentials.
• 42 percent of all consumers across all income levels are overwhelmingly concerned about unemployment/job security.
• Fear of unemployment/job security increased in October all among 100k households and under 450k households.
• 56 percent of all consumers think that unemployment will not begin to improve in 2010.
• 32 percent of all consumers across all income levels are concerned about rising prices, with 100k households also concerned about the devaluation of real estate and financial assets.

Five Tips For Retailers Attempting To Leverage Online Shopping

• Retailers hoping to drive incremental sales in physical retail locations need to develop reasons for consumers to add their store to their shopping route. Sales are not enough; consumers are shopping for an experience as much as they are bargains. For example, a book store that already has an online component can win with physical events like key book signings.

• Retailers that are already advertising across multiple channels this holiday season (digital and traditional) need to align their advertising messages so that one tactic naturally leads into the next. For example, digital advertising might include in-store discounts or promotions and in-store sales might drive return visits online, with a clear indication of why it adds value.

• Retailers mostly know which digital marketing tactics (search, display, email, etc.) are driving traffic to their sites, but most are struggling to convert visitation into sales. There tends to be an over-reliance on general conversation with little call to specific action. Unlike physical stores where customer service agents can answer questions and direct sales, online stores rely almost exclusively on a browse-and-buy shopper. Retailers with a mechanism to engage customers online tend to have more success with demand fulfillment.

• Retailers seem to think they are able to find their demographic online and distinguish which will visit a site, but they are struggling to determine where category buyers are online within that demographic. While it would be challenging to initiate consumer engagement online one week out from the start of holiday shopping, social media programs that engage consumers could readily provide retail outlets with a better understanding of browsers vs. advocates vs. buyers.

• Search spend investments during the holidays is difficult to validate because the reality is that search spend investments are almost a defensive marketing tactic. During non-holiday seasons, it is easier to validate. During a holiday season, it succeeds mostly at protecting against competitors in the pursuit of diverting would-be customers.

Overall, all of the most common questions being posed by retailers pinpoint the real challenge this season. In general, they are all succeeding in increasing site visitation, but most are not converting those visits into sales. Simply put, there are more people buying online but those people are spending less and making fewer transactions and fewer dollars per transaction.

It is not a surprise, as the majority of online marketers seem better quipped to entertain consumers online than selling products or driving physical traffic. So how do you change behavior when the U.S. jobless rate has climbed to 10.2 percent (and the boarder measure has risen to 17.2 percent)?

With 55 percent of consumers saying that they have less money this year than previous years, it is critical for retailers to provide engaging incentives to buyers. According to the comScore report, the most common ideas are to offer free shipping, provide layaway options, and increasing their use of social media. However, where retailers may falter is in how they employ social media — blasting holiday discounts across Facebook and Twitter are unlikely to differentiate their stores.

Any successful social media model will likely be those that engage consumers much like in-store personnel might, directing consumers to their self-defined interests. Isn't that what we always knew about advertising? It works to get people in the door, but someone or something else has to close a sale that delivers value to the lives of the consumer.

Wednesday, November 4

Disrupting Outplacement: RiseSmart


When RiseSmart first entered the recruiting industry in 2008, it set its sights on a specific niche. One year later, RiseSmart shifted its business model to include outplacement. The difference between the two places presents a case study in disruptive business.

RiseSmart is a provider of Web-enabled outplacement and job search services. The former helps laid-off employees find jobs faster. The latter helps professionals find jobs in the $100k market.

"Our initial thought was that we would need to make significant traction with a B2C offering in order to build interest in the B2B solution," says Sanjay Sathe, founder and CEO of RiseSmart. "But the moment we introduced Transition Concierge in the second half of last year ... we had an extraordinary amount of interest, and were signing up Fortune 500 companies almost immediately."

For RiseSmart, the timing couldn't be better. Layoff announcements had risen to 48 percent (U.S. Bureau of Labor Statistics) and U.S. job cuts were on pace to exceed 1 million this year (Challenger, Gray & Christmas). At the same time, 81 percent of employers were engaging help from external outplacement providers (The Value of Outplacement, Reed Consulting).

Why was the timing right? Traditional outplacement relied heavily on psychological testing, use of personality and skills assessment tools, hands-on career counseling, and the provision of an environment where an executive could feel comfortable while making networking calls. The newer model, called the "Market Model," included market research, proactive job/tech development, hands-on campaign management and skills training.

RiseSmart, on the other hand, applied its existing technology to outplacement in order to focus on the job seeker's most pressing need: finding a job. Not only did employees appreciate faster outplacement services, but employers also realized a significant cost savings by expediting placement over counseling or skills training.

The net result was $4.6 million in additional Series A financing, including $2.8 million from Storm Ventures and $1.8 million from Norwest Venture Partners (NVP). Since last year, the company has raised $8.85 million in institutional investments.

“RiseSmart’s Transition Concierge is disrupting the cost structure for corporate outplacement providers, while leveraging technology to deliver superior value to a growing roster of Fortune 500 clients," said Sanjay Subhedar, managing director of Storm Ventures. "The company has gone the extra mile to provide an excellent customer experience to both corporate clients and transitioning workers — and that has paid off in word of mouth and new business referrals.”

According to Sathe, the model is by design. As employees recently laid off by a Fortune 500 company have a positive transition experience, they are likely to tell others about the experience. From a marketing perspective, the B2B service not only disrupts existing outplacement sources, but it also provides the company a cost-effective approach to market its B2C service.

That's not to say the strategy hasn't had some challenges. Moving from a B2C-focused business model to a B2B business model means a smaller universe of customers and competitors.

"The biggest [challenge] is that many of these big players have very entrenched relationships with corporate HR departments, which can be difficult to overcome," says Sathe. "But the biggest positive is that it enabled us to become very focused on what we needed to do to differentiate ourselves from the big players; we have brought innovation to an otherwise stodgy industry that has introduced very few new ideas over the past 20 years."

The primary differentiation is that a 2009 survey Institute for Corporate Productivity showed that employers invest an average of more than $5,000 per executive or manager to provide external outplacement support for a period of three to six months. RiseSmart has succeeded in cutting those costs in half.

At the same time, while the compelling price point has helped RiseSmart open doors, the less tangible benefits for employees and employers establishes a reputation for excellence. Ninety-two percent of respondents expressed overall satisfaction with RiseSmart Transition Concierge service and 88 percent said it was likely they would recommend the service to friends.

The results are in stark contrast to the rest of the industry. The lackluster performance is understandable, with dissatisfaction increasing exponentially with every month those employees remained unemployed. In contrast, the RiseSmart Transition Concierge service is delivering the average worker 10.6 highly relevant job leads per week.

"Many of the jobs we screen are recruiter posted," adds Sathe. "We expect to expand our relationship with recruiters to enhance Job Concierge and Transition Concierge over time."

It also serves as a reminder that not all marketing measures include advertising, public relations, or social media. While communication assists business, the right marketing model can transform an entire business overnight. And sometimes, at least in the case of RiseSmart, those changes can disrupt entire niche industries.
 

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