Customer Service

Last week I wrote about Starbuck’s attempt to reach out to customers and prospects for constructive feedback and new product ideas.  In Tuesday’s Boston Globe they ran an insert (with attached card, see below) that made the following offer: Come in to Starbucks on Wednesday’s for the next six weeks, and receive a free tall Pike Place Roast coffee.  Pike Place Roast is their new smoother blend that was requested by many of the suggestions on the site.  It is a great tactic to use custom media to get new and lapsed customers into stores and try their new coffee.  I have to believe this promotion was focused at people like me who prefer the taste of Dunkin Donuts and do not regularly shop at Starbucks. Six weeks of free coffee can get someone hooked and make a stop at Starbucks part of their regular routine.  Most importantly, it gets the product into people’s hands.  All the “branding” and expensive TV ads in the world can’t guarantee that.

In the interest of marketing science I went to my local Starbucks yesterday morning to test their offer and taste the new blend.  It was the typical Starbucks experience with lots of earnest, serious people sitting around with no particular place to go at 8:30am on a week day.  I strode up to the baristas and ordered my tall Pike Place Roast and flashed my card.  I guess the card identified me a newbie since my barista felt compelled to thoughtfully point out that “tall” means “small”.  It was probably the best coffee I ever had at Starbucks, not as good as Dunkin Donuts, but much improved. 

It is interesting to see their private media channel come full circle from soliciting advice from their customers to putting a program in place to put their words into action.  I will give it a shot the next few weeks and let them try and convert me.  Maybe some day I will actually know what Venti means.

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Starbucks has been getting beaten up this year and faces tough competition from Dunkin Donuts. Even McDonalds is taking a run at them.  One of the ways they chose to respond is a great lesson in listening to your customer and embracing a private custom media channel.  For many companies the knee jerk, old school reaction would have been to launch a “branding” campaign or hire a celebrity pitch person.  Instead Starbucks did something very cool – they launched My Starbucks Idea web site.  The purpose of the site is to ask their loyal customers what they could do to improve the product and service.  I would encourage you to go to the site and read the both the volume and passion of the responses.  The site is powered by salesforce.com and they did a similar site for Dell.  Interesting, Dell and Starbucks have a lot in common – both were innovative companies who used to be the fresh up-and-comers, and once they got too big; they lost touch with what made them great.

I commend both companies for creating a private media channel to have a two way dialog with their customers.  This kind of forum gives customers a place to vent, and make suggestion.  Read through some of them – they are not only thoughtful, but smart.  A lot of companies give lip service to listening to their customer, but how many actually do and act on it?  More than ever, people in the executive suite are isolated from their customers, where they are a long way from their middle class American customers and prospects.  Also, since they only talk to other execs, they get caught in an infinite loop of their own B.S.  How many meetings have you been in where sales and marketing people sit around pitching each other and not taking in outside information?  Happens all the time and the result: the ads we see on TV and in magazines are completely off target.

What I really like about the site is the “Ideas in Action” section where Starbuck employees respond in their own words and tell customers what action they will take based on customer suggestions.  This is powerful because many times when you write to a web site, you get an automated response which is sometimes worse than getting none at all.  I have to admit I have never been a big Starbucks fan – the coffee is too harsh and I can’t stand the ordering process.  It was fun to see that many others feel the way I do.  As a result, they are introducing a “smoother” coffee and talking about an express line for impatient people like me who just want a regular coffee; and don’t want to stand behind a line of people ordering complicated permutations of coffee beans, milk (cow or soy) and odd flavors.

Now, let’s see if they take this process one step further.  They have collected scores of contact names and been given the “permission” to talk to them about Starbucks.  I would suggest starting a real Starbucks private custom media channel to their customers using content marketing to further strengthen the bond between them and their customers.  This approach could get Starbucks back on track and make the brand fresh again.  Meanwhile, I can’t wait for the first express line open. 

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I love Whole Foods as does my “mom” posse - every time I go to the store, I run into lots of Moms I know.  And, we all have at least five grocery stores to choose from that are closer than Whole Foods (WF).   We are not driving out of our way because we are going to save money. Whole Foods definitely skews to the expensive side of the super market spectrum, even for the “healthy” category. So why are we all so loyal to WF during these challenging economic times?

I was curious enough that I posed this question to my friends: “What makes you drive an extra 20 minutes to a market that clearly charges a premium?” Across the board the first response was perceived quality of the products but it was the next strongest responses that I found interesting as a custom media marketer.

As a community, moms pride themselves on making smart choices for their families. The responsibility for making healthy food choices falls squarely on our shoulders. We want our children to learn good eating habits and help them to make good decisions even when we aren’t there. Whole Foods enables Moms to do their jobs better. The store is packed with information about the foods themselves as well as the brands. The content can include health benefits, cooking tips and serving suggestions. Most of my friends commented that they spend more time in WF compared to other stores because they are busy reading about each special item as well as health news and updates. They learn something every time they go shopping. This is a classic example of content-based marketing to attract and retain customers. The use of informative information we can use makes us more likely to shop at WF, and likely increases the amount we spend per shopping trip. In addition, customers are invited to sign up for fl@vors  to receive special offers, recipes and food education. This is a great customer affinity newsletter that aims to get more business out of current customers. 

However, the biggest differentiator vs. traditional markets for the moms is the live informational events. I am not talking “try the salsa and smoked sausage on at toothpick in the aisle” kind of event our moms experienced. We’re talking sushi making classes; kids cooking lessons; cooking demos and book signings; quick and healthy meal classes; you name it! There are events and classes at WF just about every week. Mom friends sign up together and it becomes a big girl play date. Some of them are in-store, some of them are via sponsorships of local community events which cannot be undervalued. (Giving back in these times is not only responsible, it is mandatory.)  This is a very smart use of live events as custom media to strength the bond between store and customer. Whatever the venue, WF has carved as niche as a destination that plays a critical role in our lives.
Positive and fun interactions with the brand reinforce why we are willing to drive farther and spend more. But overwhelmingly, my own little straw poll indicated that the informative content kept us coming back. It is a competitive world out there and creating a dialog and educating the customer can help move products off the shelves, even the most expensive products. I am guessing that there are other retailers out there that could take a page from the WF marketing book: educate the customer with content-based marketing, engage them with live event and watch the bottom line grow.

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Last month I became a member of a somewhat exclusive club which is unusual for me since I have avoided joining anything for most of my life.  You name it – frats, the Elks, Shriners, Freemasons, religions, community groups – no matter the club; I was not your man.

After thinking about it for years, I took the plunge and leased a Mercedes-Benz.  I went to my local dealer on President’s Day weekend dressed like a slob and was clearly only interested in the cheapest model they produce – the C300.  However, from the minute I walked into the dealer, I was treated with respect and like I was someone important.  The sales manager greeted me warmly and made sure I was with a sales person as quickly as possible.  He kept apologizing for the wait which was no more than five minutes.

I purchased 6 cars before this one and each transaction was confrontational and unpleasant.  It was the same drill we have all been through – the pressure to buy today – and the old “What is going to take to for you to buy a car today”.  And of course, the Oz-like sales manager/business manager who is kept in back office and is in charge of closing and the final price.  His purpose is to intimate you into buying now.  The whole experience is usually horrible and you never want to go back.  My father-in-law once punched a guy who would not give him back the keys to the car he was considering trading in.

The people at my dealership worked hard with me to come up with a deal that worked for me.  My sales person patiently explored all options with me in terms of down payment, mileage etc.  I took a test drive and was incredibly impressed with the car and the knowledge of my sales person, who happened to be German – how cool is that.  The business manager was also helpful and closed the deal by giving me a credit for the two payments I had on my existing lease.  At no point did I feel pressured or harassed into buying

What I found interesting was in the sales pitch and all the conversations there was a subtle but strong theme.  From the moment I walked into the dealership they viewed me as a possible life time customer, not a one time deal to make a monthly quota.  There was a lot of talk about “joining the club” how I have earned this car/status symbol. Part of being in the club means I can come by any time for a free car wash, or call for a Mercedes service call anywhere in the US. 

After I signed my agreement, the sales manager who first greeted me came over, shook my hand and put his arm around my shoulder to welcome me and offer his congratulation for “arriving”.  It all sounds corny, but it worked for this cynical guy.

When you think about it there is no difference between a Kia and Mercedes in the respect they both get you from point A to B.  To sell a premium price car you must sell more than basic transportation.  Additionally, the high price point means there is a limited amount of buyers and lots of competition for their dollars.  All the expensive broadcast and print ads in the world can’t duplicate the experience I received when buying my car.  Your next best customer is always your current customer.  Check back with me in three years, but the odds are high I’ll be staying in the club.

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The proposed take over of Yahoo by Microsoft is a fascinating intersection of marketing, technology and advertising, with Microsoft motivated by its inability to compete with Google in search and online advertising.  If I were in Steve Ballmer’s shoes I would probably do the same thing, but this strategy is a classic example of fighting the last war.

Mergers in the tech world never seem to work out for a variety of reasons, but mostly because they forget about the customer or take them for granted.  These deals always sound good in the conference room where insulated executives pitch each other on stories of efficiency and synergy.  They think that one plus one never equals three, in some cases such as TimeWarner/AOL – one plus one equaled .75.

Trying to merge cultures, technologies, people and rivalries is always a mess, and the needs of and desires of customers always take a back seat.  It is always assumed that if “Joe” is a customer of Company B, and it is bought by Company A, then “Joe” naturally becomes a customer of Company A.  This is faulty logic – our man Joe has no relationship or loyalty to the new company, and may not even like them (remember the HP/Compaq merger).  The market has already selected Google as the de facto search standard by a huge margin.  Why they would think that combing the second and third place search engines would get people to switch.  The wisdom of crowds has spoken and it is not talking about the MSN network.

I have always been a big fan and heavy user of Yahoo’s content and email, but frankly, their search is not nearly as good as Google’s.  I have started the day with my customized myYahoo page and used their email service forever.  However, if a Microsoft-owned Yahoo tries to convert me to a Hotmail account, I am gone, and so will others who don’t want an email address that looks like it comes from an adult site.

Microsoft has to be very nervous about Google’s success and plans for the future.  According to the New York Times, MS is heavily dependent on sales of operating systems and Office (Word, Excel, PowerPoint and Outlook) for profitability.  In the last quarter alone their operating profit from Office was $3.2 billion on $4.8 billion in sales.  That is literately printing money and a business model they need to defend.

It is hard to imagine a time when corporate America won’t be using MS Office, but fast forward 10-12 years.  Do you really think we will all still be using packaged software that costs $400 a pop, or will we be using some sort of Software as a Service (SaaS) or ASP model?  Check out Google Docs and you can see they are moving in this direction.  That thought has to scare the heck out of Microsoft.  Not to mention mobile computing and other platforms where they are lagging behind.

Technology is a cruel business, where one moment you are the hot new thing, the king of the hill, and a minute later you are yesterday’s news.  Google will not be toppled by the combination of Microsoft and Yahoo.  However, one day they will likely be knocked off the mountain by a group of brilliant kids who get their start in a garage.

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I like my dry cleaning strong. Strong colors, strong creases, strong chemical smells. I want to peel my ultra-heavy starched shirts right off the hanger and feel as though I’m wearing a brand-new shirt. I want to lift up that plastic veil and marvel at the sight of my born-again wool coats. I want to be sure that my linen pants were dipped in pool of industrial-strength Oxy Clean and then lovingly hand-creased by a strong and meticulous Russian woman.

After a recent move, I decided to frequent a nearby location of the Zoots chain. “They have a delivery service, shoe repair AND in-store tailoring!” I salivated. “Boy, I bet they’ll crease my pants with pride. I’m there.”

And so began my year-long lukewarm affair with Zoots. At first, I was just vaguely dissatisfied with the fact that when I dropped clothes off, it was at least four days before I could pick them up. Then, I began to notice that the receipt they gave me for pick-up never had the cost on it. And the clothes just never…felt clean. More than anything, I just couldn’t shake the thought that they were trying to dupe me into paying more for what was truly some mediocre cleaning and even more mediocre service. 

So, my recent decision to try another dry cleaner was indeed premeditated. I packed up my silk shirts and tailored pants and headed to another local chain called Anton’s. I dropped my clothes off with ease, was told they’d be ready in two days, and received a pick-up receipt that had the cost of the cleaning prominently displayed. I was already off to a better start, I mused as I left the store.

About three days later, I reached into my mailbox to find a mysterious package with a hand-applied label and a stamp. I took a closer look and discovered it was a cheery, beautifully designed welcome package from Anton’s. I eagerly tore the package open and saw it included a welcome letter highlighting store locations, a bevy of coupons and a card with dry-cleaning tips, among other items.

Anton’s chose the precise media channel, direct mail, to reach me, and right after I had a very positive experience with them. The excellent timing, the variety of useful materials enclosed and the attractive, welcoming packaging all worked together to make me feel like they truly cared about serving me. They noticed I was a new customer, and they sent me a package to show they appreciated it. That’s perhaps one of the most simple, yet most important keys of customer retention – just showing you care. And no matter what people say about the death of direct mail, if it’s as well-executed as my package from Anton’ was, a simple $1 or $2 mailing might just earn you a customer for life.

Zoots may have cared about my business, but they certainly never showed it. And now that I have Anton’s to re-fresh my creases, I’m one happy customer. 

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“It looks like your payment was misplaced, so we had to turn off your electricity. We have no proof that you sent it. I can’t backdate payments. This probably ruined your credit. I know it’s 95 degrees out and you’re sweating to death in your house. There’s nothing I can do. Maybe you own a fan? Thank you for calling First Electric Company! Have a great day!” rambles the robotic customer support representative, barely stopping to listen.

As you slam down your phone and your dog whimpers in the sweltering heat, you yell, “How could they lose my payment?! They didn’t even listen to me! I AM HOT!”  

Whether it’s a snotty salesperson, a condescending technical support representative or a negligent front desk agent, we all know what it’s like to be treated badly by someone who is being paid to help us. As we seethe in anger over being mistreated, we have several options. Our doctors would recommend a brisk walk so we can clear our heads. Our inner fatties demand ice cream. The road-rager in us demands we get in the car and see how many other drivers we can drive off the road.

But what do most of us do? We complain. Loudly. To anyone who will listen. And increasingly, that includes posting about our experiences online.

No matter what you’re angry about, there is a site on which you can post about it. Having issues with your faulty Hyundai? Post on furiocity.com, where the site logo is a frowny-face emoticon. Have major beef with Capital One? Take a gander at caponesucks.com, where over 6,000 registered users complain about being mishandled by Capital One. Feel that you were wrongfully arrested? Grumble about it with fellow inmates on screwedcentral.com, where they will also gladly host your complaints about the government.

So how do companies control the negative feedback? As media becomes more and more instant, the need to know what people are saying about your company is critical. The impact of one bad experience broadcast on the internet could potentially expedite customer churn and cost you millions of dollars in lost revenue. I came across one extremely angry man who claims that a pest control company killed his dog and is trying to send his wife to prison for writing a bad check. If that isn’t bad PR, I don’t know what is.

It may be easy to brush off angry customers as being crazy, but that tact might not be the right one to take. In most industries, there is very little difference between competitive products, so customer service has become the great differentiator. It is critical that someone in your marketing organization monitors these sites and monitors what people are saying online about your brand. In addition, it would be a wise move to provide your customers with a clear and easy-to-use forum for sending their disputes and complaints to you directly instead of sending their rage directly into the void. 

The bottom line is that you’d better start listening, or else the rest of the world will first.

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There I was, in my local toy store, with my son who was in the process of potty training. Can I tell you how much I have spent in that toy store? I have shopped in this store over and over again, not only for my three children, but for the countless number of friends who have invited us to equally numerous birthday parties. If shoppers were frequent flyers, I was a platinum purchaser.

After walking around for the obligatory pace lap, my son announced to the entire store that he had to “go potty”. Of course I said to the woman behind the counter, with my hands full of Polly Pockets, baby dolls, a t-ball set and a model sailboat, “Can my son please use your bathroom?”

“No, I am sorry, we don’t have one” she replied.

“You don’t have a bathroom?” I said just loud enough for all the other mothers to hear, slightly sarcastically?

“Well… um. Er. Actually we only have a bathroom for employees, not customers.” 

My son was by now whining, creating quite a scene, and with the same frustration that I have experienced with slow or unresponsive online stores, I abandoned my shopping cart. I left it full and unpurchased. I left it and never went back. I called every mom I knew and told them about the injustice and in solidarity we all agreed to not shop there again. I ran into a mom at the playground later that week, who unbeknownst to me, had also been in the store at the time of the scene. She too abandoned her arm-cart in sympathy, but not without giving the woman a piece of her mind.

Moral to the story for smart marketers: Don’t make us mad. Maybe it’s not your bathroom, maybe it is your return policy. Maybe it is your message. Maybe it is the challenge of finding what we want with facility. Maybe it is just your customer service or your tone of voice. But don’t make us mad. Our sisterhood is extensive and we know how to use it to help us and to punish you for your bad behavior.

By the way, it works both ways: we are quick to embrace and reward the vendors and service providers who speak to us with respect; help us save time and money; make it easy to do business with; and of course, let our little guys use their potties.

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