BMW falls in the gap between consumer expectations and business engagement with Web 2.0

Net: The fact that 50% of all consumers are engaging with social media, but less than 40% of businesses are doing so means that some companies are leaving their customers exposed to competitor’s initiatives. BMW is one of many examples.

Last fall, I leased a new BMW X3 to replace my old one whose lease was expiring.The replacement X3 did not have the built-in navigation of its predecessor, so I decided to go online to search for a portable unit.First stop was BMW.com, where I expected to find an owners’ community where I would be able to ask others for advice.

When Underwood Partners conducts a Web 2.0 audit for clients, one of the outputs is a “heat map” that visually shows competitive and complimentary companies’ use of social media technology tools. The map is color coded: green represents a highly visible and useful application; yellow represents an application that is either buried deep in the site, poorly marketed or has a confusing user interface; red indicates that either the company is not using the application or we can’t find it. And given the amount of time we spend online, if we can’t find it, we don’t believe customers will either. [Note this graphic was first developed by Max Palmer when we worked together at Social Sphere.  Max claims it was called a “Palmer Map.” He’s a great analyst, but not so good on the marketing front!]

If we were doing a Web 2.0 audit of www.BMWUSA.com, the column Customer Forums would clearly be coded red.Although “My Account” has lots of information about how to make payments, pay off my lease early, order a new vehicle, etc., I couldn’t find any place to connect with other customers.So, I logged onto Edmunds.com, one of the pioneers of providing user reviews, customer forums, and other Web 2.0 applications in the automotive space.

On the Edmunds’ site, it was easy to find a BMW X3 Forum in their “Car Space” section where I was able to start an online discussion asking for help with aftermarket navigation systems. But as I was doing so, I noticed that Cadillac ads began appearing on the page. By not investing in Web 2.0 applications like customer forums, BMW literally drove me to a place where I was being served up competitors’ ads.

Some businesses delay developing a Web 2.0 strategy because they are afraid of “losing control” and fear their customers will post negative comments about their products on their own web sites. As this example shows, if you don’t provide an opportunity for customers to talk to you and each others about your products, someone else will. At best, you will have lost an opportunity for customer engagement, research and communication. At worst, you will be giving a third party the opportunity to monetize your customer through selling ads to a competitor. Which, at the end of the day, could ultimately cost you the customer’s business.

Web 2.0 ROI Must Read: EMC|ONE White Paper

Net: In 2007 EMC launched an initiative to develop a social media technology strategy because the company decided they should develop “social media proficiency” as a competitive advantage in their industry.  Despite the fact that the initiative did not have a specific financial return requirement, Chuch Hollis, the EMC executive who lead the development of their Web 2.0 strategy recently published a White Paper that estimates tens of millions of dollars of return on their sub-million dollar investment.

Last Thursday, I got up at an the ungodly hour of 4:45 am to fly back to Boston from Toronto to attend the Mass Technology Leadership Council’s Social Media Summit:  What’s the ROI of Social Media? (Travel note: in Canada you have to check in at least an hour – not 59 minutes – before flights to the US or have better selling skills than I to get through if you are late.)

Full of hope (and Red Bull) for more great case studies to add to my files, I arrived only a few minutes into the first speaker’s comments.  Danah Boyd, the brilliant and charismatic Fellow at Harvard’s Berkman Center for Internet and Society, was giving a very interesting presentation on youth engagement with various forms social media.  She was not – however – talking about anything remotely related to the “ROI of Social Media.”  Maybe I could have missed that flight and slept in?

Next up was a panel of corporate users and social media agencies, but they too seemed to be tip toeing around sharing hard numbers to demonstrate the financial returns of their investment in Web 2.0.  And then he said it. He was Chuck Hollis, EMC’s VP, Global Marketing CTO. More importantly, he was the executive tapped to lead EMC’s development of a strategy to utilize social media technology to enhance the company’s competitive advantage.  What he said was,

“…and we eliminated a multi-million dollar training budget by moving it onto our social media platform.”

Chuck went on to say that he had blogged about the experience over the past two years and recently published a White Paper, entitled EMC|ONE; A Journey in Social Media. Chuck and the other panelists, including Leslie Forde from Communispace, went on to detail a number of hard number savings, revenue increases and/or productivity improvements from relatively minimal investments in Web 2.0 technology.

If you only read one thing about the impact of social media technology applied to the employee sphere, I strongly recommend you read pages 26-35 of the paper, starting with the section “Impact and Measurements.”  You should read Chuck’s entire White Paper, but start here if you are a results junkie like we are.  Before sharing a few quotes from the paper, I need to first make sure you understand that Chuck went out of his way to downplay the financial returns of EMC’s investment in social media, partly because he believes the greatest impact comes from the more immeasurable benefits of improved employee and business partner engagement and collaboration and partly because, as Chuck wrote:

“The entire topic of measuring business impact is very controversial for these type of projects.  There is no consensus regarding generally accepted metrics for social media proficiency. Furthermore, this inherent lack of useful measurements and metrics can be used as an excuse to not undertake an investment in social media proficiency.

“A key part of any initiative is establishing general agreements regarding these success factors.  We ended up talking in terns of our ‘measurement philosophy’ rather than concrete measurements.”

That said, here are a few data points you will find inside the White Paper:

  • Accelerating time-to-revenue of multiple $100MM business initiatives by even a few months or even weeks results in substantial sums.
  • The group manager of EMC’s competitive group estimates his group is now 3x-4x more efficient and impactful by using the social platform.
  • EMC is now in the process of methodically complementing and/or substituting online community interaction with meetings in the physical world.  These efforts either result in costs savings (millions per year), better and more time interactions, or both.
  • A reasonable estimate of the combined value of EMC’s blogging capability (in terms of alternative investment) would approach 20-50 million dollars annually.
  • Putting a number on the business value of [EMC’s] open interrogation is difficult, but probably runs into the tens of millions of dollars annually.
  • Estimating the business value of tens of thousands of employees who are significantly and statistically more satisfied and engaged is a difficult task, but probably approaches tens of millions of dollars per year in terms of improved attraction and retention of talent, fewer costs associated with turnover and related aspects.

As impressive as these statements are, having listened to Chuck talk for a couple of hours last week and reading most of his White Paper twice now, I suspect he is most proud of this impact:

” In reality, all we have done is created a mechanism where people do what they already want to do – meet new people, discuss topics of interest, and help each other out.”

Our sentiments exactly.

I really don’t care what you had for breakfast – how social sub-network tagging can end irrelevance on Facebook, Twitter, etc.

Net: Facebook and Twitter updates are becoming increasingly irrelevant and brand diminishing as users broadcast information to their entire networks that are of interest to only some of their friends and followers. A relevance increasing solution could be the ability to selectively send and receive updates using social sub-network tagging.

I have written before about the importance of relevance; it’s one of the Four R’s of developing relationships.  We believe it is one of the most important elements of any effective communication – be it advertising or talking to a friend.  Relevant communications have a chance at being listened to.  Relevant messages that are interesting to the recipient have a chance at being acted on and looked at again.  Junk mail and spam isn’t necessarily something you didn’t request; it is most certainly about something you have no interest in.  I’ll gladly click on ads for Lib Tech snowboards 50% off; but not for Single Under 40? I’m an avid snowboarder; I’m also avidly married.

How many social networking updates are actually relevant?

If your Twitter and Facebook feeds are anything like mine, you get a fair amount of info about the details of your “friends'” daily lives.  A recent Jeff Koterba cartoon from the Omaha World Record (no I don’t read the Record, it was reprinted in the NYT), parodied this fact.

If you are reading this on a small screen, it says in part:

” You waste time boring the daylights out of your  friends with the most mundane details of your life.”

The concept of Social Sub-Networks

I have been guilty of boring friends and followers when I post updates or pictures that I know are irrelevant to many on the receiving end.  And I check in with Facebook less often than I would if I didn’t have to wade through updates I just don’t care about – e.g. what the weather is like in London this morning or what someone had for breakfast.  But when I do read through updates and tweets, I often find something I wish I had know about earlier – “U2 concert tickets go on sale Friday” or “this is the last day to get a discount for the Web 2.0 Expo.”   Relevance is subjective.  You don’t care if had eggs Benedict for breakfast, but my sister would as it was one of our father’s favorites. Relevance is person specific and it is at least partly by your interests.  One way to think about things that are interesting to you is to look at your sub-networks of friends.  Mine looks something like this:

My interests include:  work – Web 2.0, loyalty, customer service; my family; my nonprofit interest – Year Up; Snowboarding; Red Sox; etc.

My friends on Facebook or followers on Twitter likely share at least one of these interests with me – updates about them are relevant.  It’s probably safe to assume my connections would like to read about my experiences in a shared circle.  But when I post a picture of the sign in Leicester Square asking Londoners (e.g. users) to go to a web site and provide their input to redesigning the square, it’s safe to assume that many of my friends don’t really care about that – but those in my Web 2.0 sub-network clearly would.  Similarly, most of you don’t care about a photo of Myles catching big air on his snowboard, but those in my “family” and “snowboarding” networks would love to see it.  As the Venn diagram of my social networks illustrates, there are very few people I have relationships with who share all of my interests – I can’t think of one right now.  Therefore the majority of my updates are irrelevant to those receiving them. And thus, if you believe the importance of relevance to creating repeating behaviors – like visiting Facebook and actively participating in Twitter – most updates are actually decreasing the utility of those and other “social networks” whose greatest hopes of delivering value for shareholders relies upon repeated usage by members.

Facebook and Twitter have attempted to address this phenomenon by letting users select those they want to “hide” or “follow.”  But these features offer only an all or nothing solution.  They are giving me a meat axe when what I am looking for is a scalpel to select only those relevant updates and tweets from the many some post.

Your choice:  All or none of Ken?

The solution (at least a non-technical one): Social Sub-Network Tagging

So, how could these growing and therefore increasingly irrelevant updates become more relevant and increase the value of sites like Facebook and Twitter?  What if we could all set up our own sub-social network groups (and even sub-subgroups like “immediate” and “extended” within “family”) and “tag” or categorize our updates with these.  The concept is already being used on blog posts and other Web 2.0 applications.  Because I write about four topics – collaboration, Web 2.0, customer service and loyalty – I categorize each post or white page with one of these topics. That way, those who only care about loyalty can click on the loyalty header and see only the posts in this categorized.

If Facebook, Twitter and others gave users the opportunity to set up their social sub-networks and then “tag” updates to be sent to specific groups, they would cut down a lot of noise and – at least I believe – brand diminishing irrelevant updates that clog member’s home pages.  This could also be “receiver controlled” as well, by making it easy for followers to select the update categories they wish to receive.  For example, I would select “Enterprise 2.0” and “Red Sox” from Andrew McAfee but maybe not “andyasks;” “For Immediate Release updates,”  but not “London weather” from Neville Hobson; etc.

Or better yet, why not develop a new site or application that would be a simple “input page” where we could all fill-in the “what are you doing/thinking about/want to share” box, attach URL’s, pictures and video’s, categorize them to send to relevant sub-groups and then post on Facebook and Twitter?

For now, I’ve secured www.myinputpage.com.  I’ll leave it to the programming teams at Facebook, Twitter and Echo Ditto to figure out how to make this work.

Questions:

  • Does this already exist and is in high use among those under 50, but I am clueless about it?
  • If not, do you agree this would add value to existing social network sites?
  • How would you develop the concept of sub-social network tagging?

Customer Service Disaster Recovery: A car for a car, a coffee for a coffee, $10 for free porn?

Let’s assume that most companies want to provide good if not great customer service.  But even those who aspire to greatness occasionally screw-up and end up with a customer service disaster.  We look at customer service disasters as a “crisis” in the way that some interpret the Chinese character for crisis as being comprised of the symbol for danger and the symbol for opportunity.  No business wants to be on the creating end of a customer service disaster, but how they react and recover is what separates those who capitalize on the inherent opportunity of the situation from those who will certainly lose the customer on the receiving end.  Increasingly, poor customer service will also cost you the business of the customer’s friends, relatives and others as user generated reviews grow and become a major part of the consumer purchase decision making process.

You screwed up and clearly have the customer’s attention, now what?

Customer service disasters – as long as they are infrequent, recognized, and acted upon – can be opportunities for increasing customer loyalty.  A few recent examples:

A car for a car.  After snowboarding all day at Waterville Valley on one recent busy Saturday, my nine year old son/boarding coach Myles and I headed down to the valet parking booth to retrieve our car. I gave the tag to one of attendants and we proceeded to hang out and wait for the car to arrive.  After 20 minutes, I sensed something was wrong and approached the valet booth.  My hunch was heightened when I saw several employees frantically searching the premises – including the trash cans – for something.  “Is everything OK with my car?” I asked.  “Well, not exactly, we seemed to have lost your keys,” they replied.

Because the valet crew, headed by a great guy named Andy, have always been incredibly nice and helpful to us, they had a lot of points in the emotional bank account.  I was more than willing to give them the benefit of the doubt that they would find the keys.  So, I gave them my cell phone, told them I was going to take Myles home on the bus and asked them to call me when they figured out what happened.

About thirty minutes after returning home, my iphone rang with a New Hampshire area code.  I answered, expecting to hear Andy’s voice with good news on the other end.  Instead I heard, “Craig, this is Tom Day, the General Manager of Waterville Valley.  I am terribly sorry that we lost your car keys.  This has never happened before and will never happen again, but right now, we want to make sure you are not inconvenienced in any way. I am going to bring one of our cars to your house for you to use.  And if the keys don’t show up by tomorrow morning, we will send someone to Boston to get another set.”  As promised, a few minutes later Tom showed up at our door with the keys to a 2009 Volvo Cross Country.  Wow.  Luckily the keys were found the next morning in another vehicle and all was well.  Actually, all was better as I remain incredibly impressed with how they handled the situation.  The service brand image of the mountain moved a few notches up in my mind.

A coffee for a coffee. A shorter, less expensive example can be seen occasionally at Starbucks.  On a few occasions when either the wait for my coffee has been longer than usual, or – I think this happened once – the baristas made a mistake with my drink, the Starbucks employees have handed me a coupon for a free drink.  Quick, easy and brand building.  Also a good way to get me back in the store ASAP.

We had a similar program when I was CEO of AIR MILES Canada.  Our customer service agents were empowered to give bonus miles to Collectors who had experienced a service breakdown.  We gave the CSR’s guidelines for the number of miles they could give out.  The number of miles available for service recovery increased with the Collector’s profitability to the company and our CSR’s had Collector profitability information on their screens.

$10 for free porn? If you lived in Tucson, Arizona and watched the Super Bowl on the Comcast network, you might have seen an unexpected interruption to the celebration following Larry Fitzgerald’s touchdown reception that put the Cardinals ahead with less than three minutes to go in the game.  Read more

If the Mayo Clinic can use WordPress blogs, Facebook and YouTube to help achieve their enterprise goals, why can’t you?

Net: Despite being in a business where privacy is heavily regulated and systems stability can literally be a matter of life or death, The Mayo Clinic has established itself as one of the leaders in applying social media technologies to build their brand and engage employees and customers (i.e. patients). And they are doing so with great agility and very little incremental investment.

How many times have you thought or said one of the following rationales for not developing an internal and external Web 2.0 strategy to build your brand, engage your employees, customers and business partners in the co-creation of enterprise value, and increase profits?

“Our brand is a matter of life and death to our business.”

“We are in a serious industry.”

“We can’t diminish our brand by playing around with something my kids do.”

“We are one of the country’s oldest and most revered companies in our business.”

“Protecting our customers’ information is a top priority.”

“Our lawyers and IT executives will take years to even think about approving something like this.”


I just listened to an outstanding interview on the For Immediate Release (FIR) podcast. Started in January of 2005 by Neville Hobson, one of Underwood Partners UK colleagues, and Shel Holtz, from Concord, California, FIR is one of the longest running podcasts. In addition to their twice weekly podcasts on business and nonprofit enterprise applications of Web 2.0 and social media technologies, Shell and Neville frequently interview leading edge practitioners. The February 5th FIR Interview featured Lee Aase, Manager of Syndication and Social Media at the Mayo Clinic. The interview is very well done, lasts about 50 minutes and is well worth your time. A few highlights:

  • The Mayo Clinic began experimenting with podcasts in 2005 by taking interviews with their doctors they had developed for their web site and posting them on iTunes . They were surprised to see downloads rapidly grow from 900 to 74,000 a month. As a point of reference, the Mayo Clinic treats about 50,000 patients a year, or less than 4,200 a month.
  • Lee’s team found using flip video cameras to interview doctors to be an efficient way to get breaking news (e.g. research findings) to media and patients. Paraphrasing Lee: “It was low cost and enabled us to be a lot more nimble. Instead of going through the four day process to get copy editing done for a traditional news release, we shoot a ten or fifteen minute interview and pull out five minutes of it for video news releases.
  • The Mayo Clinic created what they call “a culture blog” sharing.mayoclinic.org, where patients share their experiences with diseases and treatments.
  • Mayo uses WordPress for their blogs with the full blessing and support of IT. Lee: “We have been very blessed with our IT colleagues who were supportive of using WordPress.” Mayo uses CSS customization and maps the blogs to a sub-domain of their patient web site. The Mayo Clinic is paying about $55 a year per blog or “about a couple of Starbucks per month.”
  • Health care providers are all bound by HIPPA regulations that prohibit them from providing information about patients’ conditions. But the legal team working with Lee, whom he describes as innovative, supportive and “enlightened folks,” determined that if the patient decides to tell their story it is the patient disclosing information, not Mayo Clinic. He adds that the Clinic has blog guidelines and encourages patients to think carefully about what they put on the site.
  • Mayo Clinic has a Facebook group with 5,577 members. The Mayo Clinic main page on Facebook offers people a chance to write on their wall. Said Lee: “We did this so that people’s friends would see that they wrote on our wall and what they said about us.”
  • The Mayo Clinic YouTube channel was established 12 months ago. Although some questioned “whether YouTube was the kind of place for an august dignified brand” like the Mayo Clinic, Lee’s team did research and found that among those who had an opinion, 39% were positive about  a Mayo Clinic page and only 6% were negative .
  • YouTube was also a no or low cost initiatives as the videos come from interviews used for other purposes and YouTube is free for nonprofit organizations. They use YouTube as their video server because is far cheaper than self hosting and easier for others to imbed in their blogs and share with friends and colleagues. (They also make the raw files available.)
  • The Mayo Clinic engages employees with an internal blog “Let’s talk” and has used it to engage Mayo’s 50,000 staff members in their strategic plan by inviting comments and asking employees to collaborate on such topics as “What does quality mean in your area?”

Why engage in social media? Lee states that the primary drivers of patients to Mayo Clinic are word of mouth and stories in the news media. Their social media programs combine the power of both while increasing engagement and collaboration of many of Mayo Clinic’s stakeholders. He goes on to add:

“We treat 500, 000 patients a year and have 50,000 employees. Our goal is to engage and empower them and to get them involved.”

Question:

If the Mayo Clinic can use Word Press blogs, Facebook and YouTube to help achieve their enterprise goals, why can’t you?

Public servants deliver great customer service

Friday night, Myles and I arrived at our ski house around 10 PM.  This was several hours later than our usual arrival time as his third grade basketball team had the honor of playing during the half time of the Brookline vs. Wellesley High School game.    The good news was that leaving at 8 meant very little traffic and we made the drive without delay.  The bad news was we heard a beeping noise when we entered our home.  It sounded like a smoke detector in need of a fresh battery, so I headed to the check the usual suspect on our second floor.  To my surprise the noise was coming from a box on the wall I had never paid much attention to. Turns out it was the CO2 monitor and the indicator light was blinking yellow.  Not realizing how dangerous a CO2 leak could be (until my wife explained it to me in no uncertain terms a few minutes later), I casually pushed the reset button and the noise stopped. At least for a few minutes until it was replaced by the shriek of the alarm, which sent Myles running outside and dispatched a couple of fire engines to our home.

Within minutes, Andrew Vermeersch, Adam Trayner and Brendon Oriordan arrived at our house, happy to see the two of us out front and no one passed out inside,  They proceeded to enter the house and check all levels with their hand held CO2 detector.  Finding nothing, they concluded the false positive alarm was caused by a faulty detector.

The fact that the officers were incredibly nice and friendly despite being called out in zero degree weather at 10 pm on a Friday night was impressive, but what happened next really impressed us.  In addition to checking the air and the alarm, they went on to check for a weak battery in the CO2 detector and even replaced a wall anchor when the mounting screws came out, checked all of our smoke detectors and replaced a battery in one, and finally politely asked if they could see the rest of the house.  This request was so they would know out layout if there ever was a real fire emergency, they would know how to get around and where we might be sleeping or trapped to facilitate a rescue.

Myles and I both thanked them for their help and I asked if we could pay them for their trouble, or make a contribution to the fire department.  They replied, “No, just tell our chief we did a good job.”  So, to Waterville Valley, New Hampshire’s Chief of Police Dave Noise and Fire Chief Chris Hodges, your guys did a GREAT job!

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 II: Hertz #1 Club Case Study

My first job out of business school was with Bain & Company consulting.  I spent six years at Bain and during that period and my longest non-travel period was two weeks. One of the first things I did after starting at Bain was to join every frequent flyer program and several hotel rewards programs. Although I do not remember the exact date, I also joined the Hertz #1 Club as soon as it was launched.

One of the greatest benefits of the Hertz #1 Club is you can usually avoid standing in line at the rental counter and proceed directly to the lot where your car is waiting for you.  Although I perceive Hertz to be more expensive than Budget or Alamo, I made the mental value calculation that the ease of reserving (call the 800 # 1 number) and picking up the car is worth whatever premium I may be paying.  I have also been able to rent some great vehicles recently, notably the Ford Edge on my frequent trips to Pittsburgh.

Last weekend, I planned to fly from Boston to Pittsburgh, pick up a Hertz car, drive to Morgantown, WV for two days of board meetings, basketball and football games and then on to Charleston to visit my father for a few hours before flying back to Boston via Charlotte.  I was originally planning to start my journey Thursday by flying from Boston to NYC for the OMMA Advertising Networks conference and then to Pittsburgh Thursday night.  But the LGA-PIT flights were canceled Thursday night, so I flew back to Boston and took the Friday morning 6 AM BOS-PIT flight.

On the way to the airport in Boston, I remembered I had not changed my car reservation, so I called the Hertz #1 line and re-booked. While on the phone, I remembered seeing a recent Hertz ad claiming that you could “reserve the car you wanted” at many Hertz locations, so I asked about this.  The reservations agent read a list of vehicles available and said I could “request one.”  Although the Edge was not on the list, I selected a Pontiac G8.

When I arrived in Pittsburgh later that morning, I was surprised when the #1 agent told me I would be renting a Honda Accord and not a G8.  No problem, I thought, the new Honda’s look like great vehicles as well.

As I approached space D4 underneath the Pittsburgh airport, I realized the Accord was not the new model, but rather at least one model old.  I was even more surprised to find out that the car smelled like smoke and had cigarette burns on the seats and door fabric.  On the seat next to me was a “Pre-Rental Vehicle Inspection Form,” something I had never seen before in any rental car.  The form noted that there were “dents” and “scratches” on the front, driver and passenger side of the car.  To complete the picture, when I started the Accord the odometer read 34,000 miles, another first in my rental car experience.

So, as an ex-smoker extremely sensitive to the smell of cigarettes, I found myself driving to Morgantown with a raging headache in a smelly car that was out of alignment.  For 20 of the past 27 years (the exception being my time in Canada when I was 100% loyal to Tilden/National, our AIR MILES Sponsor) I have only rented Hertz cars. Hertz has the data to know this, yet they give me a vehicle that is worse than I would expect from the lowest cost car rental company, and charged me $100/day for the experience.  Maybe given my last minute change this was the only vehicle available that could be dropped in Charleston, but if that was the case, they could have and should have apologized in advance.

My next steps:

  1. Check out Avis, National and or Budget “Number 1” Programs
  2. Wait a few days to see if anyone from Hertz is monitoring their customer’s comments on blogs like this.
  3. Try to find Hertz CEO’s email address and see if he/she is interested in responding to this.
  4. Do the same thing with the Hertz board.

Here’s the back of the envelope loyalty math.  Assume I rent 20 vehicles a year for another 20 years at an average price of $50 per rental.  That’s $20,000 in lost revenue from breaking the virtuous cycle of relationship marketing and not using the information Hertz has in its database to treat a valuable customer well.  Hertz blew it at step 1, they know I am a loyal customers and instead of rewarding me with an upgrade or other amenity, the insulted me by giving me a brand damaging vehicle. Let’s see how they attempt to recover, if at all.

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?

Response from Dell

Just noticed this response from Dell manager. Bonus points for finding this new blog and post and for the very candid response on how Dell’s culture is still evolving to embrace customer and customer service collaboration. His comments:

Good points on social media in the enterprise as a whole. Thanks for the write-up. While we at Dell place social media as a top priority, clearly we have room to improve.
To be honest, even though we consider ourselves leaders in the PC business on social media, our “corporate culture” is still evolving. We implement changes based on what our customers tell us on IdeaStorm, Direct2Dell corporate blog, and our own Dell Community Forums constantly.
This is clearly an area where we have some work to do- getting front line tech, care, and sales agents steeped in social media concepts like ratings and reviews.
I thank you for pointing out our shortcomings in this area, and will make sure to pick up the “Read your own ratings and reviews” baton myself, and get the word out.

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?