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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