Dear Ace Tickets: Is the customer always right or are you never wrong? Pick one.

Net: Ace Tickets refunded skateboarding tickets we overpaid for through our own ignorance, yet refused to refund “pole view” tickets at Fenway Park they assured us were unobstructed.  Sur La Table re-funded a four year old purchase without a receipt on a product they no longer carry. Both have solid customer ID technology, one used it to build loyalty, the other to damage it. Which one are you?

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Hotels.com uses Web 2.0, great service and rewards to score a Collaboration Evangelist trifecta

Net: Hotels.com provides great consumer value, excellent web and phone customer service and has one of the most rewarding loyalty programs I have seen.  The company shows how applying the philosophy and applications of Web 2.0, good customer service and a well designed and implemented rewards program can create customer loyalty.  Why book anywhere else?

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Customer service disaster non-recovery; Kimpton’s Hotel Monaco doesn’t get Web 2.0, earns first CHU “Un-recommends”

Net: Despite the fact that user generated ratings and reviews have been a mainstay of the internet since at least 1999, many large businesses fail to provide an easy way for customers to provide feedback and do not monitor and respond to customer comments on the Web.  I recently experienced this first hand from the Hotel Monaco in Washington, D.C. It is the first experience bad enough to earn a ” CHU Un-recommends.”

In our page Six Web 2.0 Imperatives for All Businesses, we emphasized the following points under Imperative Four: Build, Activate and Support your Communities:

• If you don’t provide a place on your site for customers to ask questions, it is highly likely that at least some of them will go to a third party site where they will be prime targets for your competitors’ marketing efforts.
• Whatever you do, make it incredibly easy for employees, business partners and customers to provide feedback. And go the next step by proactively asking for feedback. Then, make sure you authentically respond to their feedback.

A few months ago in the post “A car for a car, a coffee for a coffee, $10 for free porn?” I wrote about several positive experiences where businesses seized the opportunity to turn service failures into brand building recoveries.   This post is from a different perspective.

A few weeks ago my wife and I were planning to attend Rhodes Scholar and Oxford University reunions in Washington, D.C.  I went to Hotels.com to find a hotel room for the weekend.  They had what looked like a great price on the Hotel Monaco, a Kimpton Hotel in a perfect location.  I have stayed at other Kimpton properties and always had good experiences, so I booked the hotel.  [Hotels.com is a great business and will be the subject of a future post.]

I flew to Washington early in the day so I could take my fellow alum and Microsoft uber-lawyer Steve Crown to visit Year Up, the innovative work force development program founded and led by Gerald Chertavian, for lunch.  We had a wonderful tour and Steve had a great session with several students, sharing experience and advice from his years of success and answering all of their questions.   After our visit to Year Up, I went to check in at the Hotel Monaco.  My wife Patty was arriving later in the evening.

The Hotel is in a beautiful historical building that used to be a famous Post Office and appeared to have all of the usual Kimpton features – cool lobby, interesting bar, water bowl for dogs, etc.  I checked in and went to the room.  Although we had reserved a “deluxe queen,” room, it was very, very small.  It felt like there was less than 12 inches of space from the side of the bed to the window or the wall and a small desk was crammed into an alcove.  The room was a fraction of the size of the rooms we have had in other Kimpton properties.  Not exactly the venue nor the ambiance I had envisioned for a romantic weekend in DC without our kids.

 

 

No problem, I thought, I’ll call the front desk and get a better room.  All seemed good when the desk staff offered to move me to a “deluxe King” on the “first” floor.  It turns out that the first floor is subterranean, i.e. it’s the basement.  My initial concern was that the room would be noisy, being so close to the street.  The front desk clerk assured me that they were quite quiet, and it turns out that is true.  But as I descended the stairs to the “first floor” I started to notice a bad odor.   Despite my attempts to simultaneously act like a two year old and ignore the smell and try to convince myself that Patty wouldn’t notice, it was clear the first floor smelled like a damp basement with a mildew problem.  Nonetheless, I powered on to the room.  The room was actually nice, with a huge bed, high ceilings, decent bathroom, and more room for the desk.   The architect had done a great job making the half-windows to the sidewalk seemed larger than they were and let in a lot of light.  Best of all, the room was not noisy at all.  I thought I could still smell something but rationalized that the odor was just coming from the hall.  I cranked the AC on high, ran around the corner to get some candles to complete the romantic ambiance I was determined to create, and took off for the Rhodes event.

The event to honor Sir Collin Marshall, who was retiring as the Warden of Rhodes House, was held at the British Embassy and it was wonderful.  By the end of the event, Patty had arrived, checked into the hotel and met me and several of my classmates at a Georgetown restaurant.  The food was great, the company even better and we stayed at the restaurant until almost midnight.  On the way back to the hotel Patty said, “Did you notice our room is in the basement of the hotel, the hallway smells like dog pee and our room like mold? ” I briefly considered returning to my two year old mindset, but chose to say something like “maybe a little, but I bought a lot of candles” and quickly change the subject.

 

The candles and the AC helped cover up the smell, and we decided to not try and change rooms again given that the front desk told me the hotel was sold out with two wedding parties.  The next day, Patty discovered there was mold on the bottom of the shower curtain.  A definite first for me in a “four star” hotel or for that matter, any star hotel.  In addition to the smelly hall and room mold problems, the on-demand movies in our room were very fuzzy and the engineer on duty could not fix the problem.  And whoever cleaned our room on Friday night forgot to remove the mold, but did remove our wine glasses and did not replace them.  All in all, a pretty bad experience. [Read more]

A Christmas Eve shout out to two dedicated, empowered employees putting customers first

At one of my final annual all-company meetings as CEO of The Loyalty Group, I showed three clips of Michael Jordan, one of my all time sports heroes.  The MJ trait I loved most was his tremendous work ethic.  He was truly one of the most gifted athletes of all times, but he was also one of the hardest working.  One of the clips I showed was from a 1997 NBA finals game, where Jordan played despite being incredibly ill for most of game day.  Although he kept making shots, you could see how painful it was for him to play that game and he nearly collapsed at the end.  The example to our employees – when you believe in yourself, your team and your opportunity to win, push yourself – even when it hurts a little.

Monday night I was doing my usual last minute mad dash otherwise known as Christmas shopping and closed the Chestnut Hill Mall near my home, being politely ushered out of Bloomingdales at 9:55 PM as they were closing at 10:00.  A few minutes later, I was driving past a local Barnes & Noble store.  Although a few minutes past 10:00, the lights were on and I could see customers still in the store.  Excited by the chance to continue my late night shopping, I pulled into the lot.  As I entered the front doors of the store, I realized an employee was holding open the inner door and letting customers out.  I asked if they were closed, and she replied, “yes, but you can still come in.”  Appreciating the opportunity but not wanting to abuse it, I quickly grabbed a couple of tennis magazines for my wife and a “Nun Bowling” stocking stuffer game for my daughter Jordan, who was playing one of the Nun’s in the Boston Children’s Theatre’s production of The Sound of Music.

As I checked out, I told the employee who let me in how much I appreciated her staying late for customers.  She told me the store had needed to close early a few days earlier due to the severe snow storms and she knew many people were running out of time.  What I knew was that she, like almost anyone who works in retail the week before Christmas, was likely exhausted and dying to get home to her own family.  Not hurting as bad as Michael Jordan in the 1997 Finals, but she pushed herself a little further than others when it would have been easy to call it quits for the night.  Her name is Kim, she is an Assistant Manager at the Chestnut Hill Barnes & Noble and a great example of an empowered employee putting customers first.

One more quick example before I go back to wrapping presents.  This morning, my nine year old son and I went to our favorite snowboarding shop, Mothership in Lincoln New Hampshire looking for a new snowboard and bindings.  Myles had outgrown his original board and was ready for a new one.  Trevor, who runs Mothership (a store within the lager Rogers ski and snowboarding shop) helped Myles pick out a very cool Nitro board in UP black and white colors.  He then did something I found impressive. He told us that the bindings on my son’s old board were “better than anything we have in his size” and suggested we simply move them to the new board.  As Mothership’s prices are great, and Myles had gotten a ton of use out of his old setup, I would have gladly bought whatever new bindings Trevor recommended.  But he put us first, passed up the sale and increased our loyalty to Mothership in the process.  (By the way, Lincoln is twenty minute drive from our ski house – we go to Mothership despite having alternatives at our local mountain and another ten minutes from home.)

In a recent For Immediate Release Podcast discussing the Forrester research that found a low level of trust for corporate blogs amongst those who read them, host Neville Hobson posed the question, “How do you define trust?”  Although I didn’t feel the panel ever answered this important question, I have been thinking about the definition of “trust” in the context of Web 2.0, customer service and loyalty.  One of the ways I believe businesses and business people build trust with customers is to resist the urge to oversell them.  I always appreciate it when a salesperson says “you don’t need that” as I wrote about in an earlier post about my experience buying the Dell E6400.

So, as you wind down 2008 get ready for the New Year, are you empowering, recognizing and rewarding your employees for extraordinary acts of customer service to maximize long term loyalty or are you pushing them to oversell customers and extract maximum short term profits?

Don’t abuse your best customers Part I: Amazon Case Study

I have a love-hate relationship with Amazon.  Love their product selection, user reviews and especially the ease and price savings of Amazon Prime.  Hate the fact that for some reason Amazon refuses to use the data they have about their own customers in the most simplistic “pre-web 1.0″ ways.  We wrote about this in the white post “The 4 R’s,” but here’s an even better example.

I love the Amazon Kindle (e-newspaper, blog, magazine and book reader) so much that I recently sent my own glowing review of the product to everyone I know, something I had never done before, despite my genetic need to tell people about great products and services I encounter.  My wonderful wife bought me a Kindle for our August wedding anniversary and within days I had uploaded 5 newspapers, 10 blogs and 4 books. I am clearly one of Amazon’s better customers and even became an “Amazon Associate,” so when friends buy a Kindle after reading my review, Year Up, my favorite nonprofit, gets a 10% rebate.

Despite all of this data that Amazon has telling them I am a Kindle owner/maven, look what Amazon greets me with when I recently logged to their site:

Amazon is using perhaps their most valuable online real estate – their home page – to tell me what a Kindle is.

But wait, there’s more:

What happens when you don’t use the data you collected to recognize and reward (or at least don’t abuse) your best customers.

A few weeks after I received my beloved Kindle, I fell asleep reading it.  When I turned it on the next morning, the screen had several thin lines running across the top.  At certain points, the cumulative effect of the lines was to block out almost ½ inch of text.  Up until this point, I had good experiences with Kindle customer service: their number is easy to find; the service agents speak English well; and they had been able to answer several questions, including helping me find an AC adopter in NYC when I forgot mine on a recent trip.

So, I called Kindle service with high expectations.  I volunteered that I had fallen asleep with the device and most likely rolled over on it and damaged the screen.  I asked if there was a program to replace, repair or offer discounts to “clumsy customers.”  To my surprise, the agent responded:

“We have many customers who have slept on, stepped on and even dropped their Kindles in the bath tub.   Amazon used to have a program to replace damaged Kindle’s, but we are not running that right now.”

Somewhat stunned, I asked for clarification, asking something like;

“Are you saying that if I had broken my Kindle at another time earlier in the year, Amazon would have replaced it or at least offered a discount?

He confirmed this was the case, but went on to say:

“If you would like, I can have your name added to our email list and if we bring back that program, we will contact you.”

Only then did he ask for my email address, which could have and should have alerted him to the fact that I am heavy Kindle user and also spent over $10,000 on Amazon last year for business and family purchases.

So, despite having the data to identify me as a very good Amazon customer, the customer service agent was not instructed or trained to use that information to at least recognize and thank me for being a loyal customer.

Not only did Amazon fail to recognize me as a good customer, they added insult to injury by telling me that I had to spend another $350 to replace the Kindle, something other – and presumably less profitable customers – did not have to do, due entirely to the unfortunate timing of my clumsiness.

In the white post “Amazon, Facebook, Eons and the 4 R’s of Relationship Marketing,” we introduced the concept of the 4 R’s using a hand written version of this virtuous cycle:

We believe that companies who collect information about customer purchases through their direct sales businesses, reward programs, or “convenience” programs like Amazon Prime or Hertz Number 1 (see Part II) need to recognize that they are rewarding both the purchase of the good or service and the sharing of information by the customer to the business.

Customers are sharing information about what they buy and when they buy it.  We also believe that customers know businesses are collecting that information and will increasingly expect those companies to recognize and reward them for their loyalty.  At a minimum, they will expect to be treated as well as other, less profitable customers or will become highly susceptible to being poached by a competitor.

Questions:

• What data do you have on your best customers that you are taking advantage of today?
• Are there similar examples of “best customer abuse” happening in your company?

Case Study: Another Dell misfire demonstrates why Web 2.0 and customer service must be linked

I have been an IBM ThinkPad customer since 1991, about the year they starting making them, but the extremely poor customer service I experienced from Lenovo regarding my X61 Tablet forced me to look at other manufacturers. Although I have never been a fan of Dell laptops, I was attracted to the ads for the new latitude E6400 model and decided to give one a trial.

I first called Dell a few weeks ago and was pleased to be able to talk to Bernard, a sales rep. Three pluses for Bernard:

1. He speaks flawless English and is  located in a US service center.
2. He was very knowledgeable about configurations, listened to my needs and helped me understand why I needed a 7400 RPM hard drive.
3. He never tried to oversell. I know this because I would have paid more for options I asked about, but he didn’t believe I needed them.
4. He gave me a direct phone number where I could call him back.

All good. I also learned that he was on commission and told him I would call him back soon. Last week, I was ready to call Bernard back and close the deal. But before I did, I wanted to do a final check for user reviews of the E6400 (It is a new model and although CNET had a positive editors review/video, there were no customer reviews the first time I checked).

Fortunately, there were 5 reviews on the Dell site for the E6400. Unfortunately for Dell, 2 of the 5 were very negative:

In all fairness, the other 3 reviews were glowing, but these 2 did cause me to re-think my decision. I was also very surprised to learn that Dell did nothing at all to respond to these negative reviews on their own site. Back to our 6 Web 2.0 Imperatives for All Businesses. Dell gets the imperative to support customers by enabling and encouraging users to talk about their products and services on the web. But this alone is necessary and – as this case shows – terribly insufficient. You must (a) listen to what they are saying and (b) authentically interact. Where is the E6400’s product manager’s response????

But wait, there’s more…

No problem, I thought. I’ll just call Bernard and he will be able to address these customer concerns quickly and move on to close the sale and earn his commission.

So I called Bernard, who answered the call himself. (More bonus points for Dell, or a sign of the slowing economy?) I told him I was ready to buy, but had read the negative reviews on the Dell web site and was concerned about making the purchase, especially given the comments about speed – a huge issue for me as I often work with 20MB+ presentations. To my incredulity, this is what happened next:

• Bernard had no idea that there were negative comments about the laptop on the Dell site.
• Obviously, he had not been made aware of these concerns as he had no credible answer, saying “What’s fast for some users may be very slow for others” or something to that effect.
• He could not pull up the Dell Web site to read the review. I had to email it to him.

So here you have a Dell employee (or an employee of a Dell contractor) who had no idea that customers were complaining about the product he sold and no ability to even see the complaints. What’s happening from a 3C 5 Sphere perspective:

• Bernard feels less than thrilled about not being aware of or able to respond to these Dell enabled complaints. Poor/no technical capability = decreased employee commitment.
• I am less confident about buying the product. Failure to respond to customer reviews and equip sales agents to address them decreases the probability of a Dell purchase that could result in a long term $20-30,000 customer.
• The call took longer than it should have and most customers would have thought more about it before purchasing, if at all. Increased costs.
• I am writing this blog post and sharing a negative customer experience with everyone I know.

Some of you may be thinking, “If Dell isn’t going to address these types of customer complaints, they shouldn’t provide a forum for them on their site.”

This would be the exact wrong response. The more ubiquitous and easy blogging and other forms of customer generated feedback become, the more the probability that negative customer reviews about defective products will reach your potential customers will approach 100%. If Dell didn’t enable customer feedback, I would have found them on CNET or other sites.

Listen, ask, and authentically respond and act. It is not enough to stop at the second step.

Better yet, fix your quality problems.

Full disclosure note: despite Bernard’s inability to answer these customers concerns, I still ordered the laptop after being assured that Dell has a 30 day money back guarantee with no restocking fee (unlike Apple). No waiting for delivery. Stay tuned.

Facebook, Amazon and the 4R’s of relationship marketing

When 2 former Bain consultants and one recently minted Harvard MBA started AIR MILES Canada, we knew a lot about the economics of customer loyalty and how to quickly understand and model the profit drivers of almost any business. We also knew almost nothing about database marketing other than a few buzzwords one of us picked up from a girlfriend.

One thing we knew for sure was that if we could build a broad based coalition of leading Canadian companies who committed to market the program to their customers, we would have the opportunity to create and utilize one of the world’s best marketing databases. All of our friends got that as well; and every one of them thought we would “make a ton of money selling the database.” What they didn’t get was our founding principal of not selling the “list” to businesses outside of the Sponsor coalition (i.e. the companies who paid for the points. We believed we could create the future of database marketing (although we didn’t have a clue as to how we were going to do that), but only if we developed a relationship with our Collectors built on trust.

Before long, we began to talk about the 4 R’s of Relationship Marketing and sketching this diagram on napkins and tablecloths around Toronto, Montreal and Calgary:

We described our thinking about building relationships like this:

1. If we recognized that when people showed their AIR MILES card at a retail Sponsor we were rewarding them for both their loyalty to the Sponsor’s business and the fact that they were sharing information with our company (by purchasing the good or service and identifying themselves as an AIR MILES Collector, they were telling us when and where they made the purchase, if they were responding to a targeted offer or coalition promotion, etc.), and…
2. If we respected the information Collectors shared with us – including demographic and shopping intention information millions shared with us in return for bonus miles – and didn’t sell or give that information to anyone outside of the AIR MILES coalition (and not even other Sponsors if so requested), and…
3. If we used the information to present relevant offers to Collectors based on their shopping habits, needs and interests (if a Collector was turned down for an AIR MILES Mastercard, we wouldn’t send them additional bonus offers to apply for one; if we knew there were only guys living in a household, we wouldn’t send them offers for women’s magazines; no car, no Goodyear offers, etc.), then…
4. We would create higher open, read and respond rates to both our basic offers as well as our targeted specific offers and bonuses, which would – in turn – give us the opportunity to reward both loyalty and the sharing of information.

If you think about this simple model, it doesn’t just apply to relationship marketing, but also to basic human relationships as well. If you begin to develop a relationship with someone and share something personal and confidential with them, that relationship will be short lived if they share it with others or otherwise don’t respect your confidence. Likewise, we tend to develop relationships with people we have at least something in common with – some point of relevance – be it kids, snowboarding or web 2.0. If these 2 elements are present, the potential for a relationship exits; without them, one probably won’t develop.

This model, along with a lot of other parts of the AIR MILES model, appears to have worked fairly well as the program now has over 70% (that’s 9 million) Canadian households as members. More pointedly, while I was CEO, we had open rates for our (snail mail) direct marketing programs of over 70%. Although AIR MILES doesn’t share specific data on email response rates, my understanding is that the company enjoys high open and click through rates for their email marketing programs.
Which brings me to Facebook, Amazon and Eons. Like Jeremiah and many others, I was amused to be served up a banner ad on Facebook last spring for “Thirty Plus and Single” when on the same page I clearly listed my status as “married.”

Facebook was clearly not getting the relevance part and I don’t need to go into all of the respect angles of Beacon. Business Week had a good article on the social networking sites’ challenges with developing advertising.

Like many, I use a separate email account for marketing emails. Last week, as I was cleaning them out, I found 2 other examples of online businesses not getting the 4 R’s from Eons and Amazon.
John Della Volpe, the founder of SocialSphere, always thought one of the challenges facing Eons was that many people over 50 aren’t really excited about standing up and telling everyone, or joining a social network for those over the hill. Do people really like to say, “Hey, I’m old?” Partially because I’m in the business, partially because I know Jeff through our work with Year Up, and partially because I was eligible (even before they lowered the age threshold) I joined Eons. But I never really got the value proposition. At least AARP’s mailings tell you right up front about discounts and other offers they bring. Not terribly hip, but getting a deal on anything will always be relevant to me.
So imagine how jazzed I was to open an email only to be greeted with an offer to “get pictures of your grandkids” or something like that. Surely, they have some way of knowing I am probably a couple of decades away from being a granddad. Not relevant and not the kind of email someone like me would open again.

Then Amazon, who has many features I dearly love and admire (Amazon prime may be the world’s best loyalty program – more on that in a future post) sends me an email with a recommendation to buy a case for the flip video I recently purchased.

So what’s wrong with that? Take a look at the user ratings – 2 STARS! This one stood out to me because I had already checked out the product and new it was a dud. Amazon served up the “people who bought this product also looked at these” content when I was purchasing the flip. After seeing the 2 stars and reading a couple of reviews (e.g. “This pouch is really cheaply made, hard to use, and not worth the money at all”), I didn’t bite.

Back to our core principle – building a relationship built on trust. As John Lederer, the longtime leader of Loblaws supermarkets often said, “the consumer has given us their trust to select products for them to be available in our stores.” Although Amazon sells many products through third party retailers and clearly lets you know they are not being sold by amazon.com, it’s one thing to sell products you have little control over and another thing completely to send an email to a highly active customer recommending a product other customers have given a 2-star rating. I have come to trust that Amazon will offer great products and extraordinary service. I have been less enamored with their recommendations and – given this latest example – am less even likely to look at their recommendations or open their emails.

The more time I spend in this space, the more I realize that on-line community builders and advertisers can learn a lot from those of us that also spent time in the traditional direct mail and loyalty space. In true web 2.0 fashion, combining the best of both models will create the most effective strategies.

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