Making It or Breaking It with Customer Service

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From Innovations, a website published by Ziff-Davis Enterprise from mid-2006 to mid-2009. Reprinted by permission.

On June 13, Vincent Ferrari decided he no longer needed his $14.95-per-month account with a major online service provider. Ferrari had heard stories about the company’s notoriously poor customer service, so on a hunch, he wired his phone to record the conversation.

What he got is a marketer’s nightmare. After waiting 15 minutes on hold, Ferrari finally spoke to a customer service rep who spent the next five minutes insisting that he shouldn’t cancel the account. Despite Ferrari’s repeated requests to “Cancel…the…account,” the agent wouldn’t give up. The exchange reached the height of absurdity when the rep asked to speak to Ferrari’s father. Ferrari is 30.

There was a time when a story like this would have been shared and laughed over with a few friends. But this is the age of the blog and Ferrari did what any self-respecting blogger does these days. He posted the recording.

The response was overwhelming. More than 1,000 readers weighed in with comments, many lamenting their own customer service horror stories with the vendor. Ferrari was interviewed on the Today show. Google news lists 32 news accounts of the incident. The recording was downloaded more than 65,000 times from YouTube. Demand was so high that Ferrari’s blog server crashed. You can read his story here.

The conventional wisdom that a dissatisfied customer tells 10 people about a bad experience is outdated. Today, they tell millions. Social media is unforgiving in this way. Consider the poor vendor in this situation. One negative exchange with a customer resulted in a firestorm of bad publicity that was wholly out of proportion to the offense. Ferrari had a juicy story to tell and the media loves a juicy story.

For many businesses, customer service is a neglected afterthought. Squeezed to cut costs, businesses are increasingly marginalizing the customer experience by inserting automated phone systems and ponderous Web interfaces between themselves and their clients. Or they’re outsourcing the whole thing overseas. The result is that customers are becoming more and more disenfranchised. And they’re going to sites like The Consumerist to vent their frustration.

I set out today to write about innovative customer service, but in researching the topic, I discovered so much rancor about the state of customer service that I changed course. It seems to me that in the outsourced, cost-controlled, Webified and automated business world, innovative customer service is increasingly about going back to basics. It’s about providing your customers with a speedy, hassle-free exchange with a pleasant human being who genuinely appreciates the customer’s business.

Think of the businesses you patronize that give you good customer service. What do they do right? Chances are they make a positive customer experience part of their value system. Whether it’s an efficient web design, a helpful e-mail newsletter service, a pleasant telephone support staff or a cheerful hello at the checkout counter, they show you that they appreciate you as a person, not just an account number.

So innovative customer service these days isn’t about innovation so much as it’s about core values. Getting back to basics. Sweating the details. How important is a happy customer to you? How dangerous is an unhappy one?

Let’s close with a positive anecdote. The other day, my regular Federal Express delivery guy rang my doorbell just to tell me that it was starting to rain and he had noticed the top was down on my convertible. He didn’t have tell me that; I’m sure he had plenty of deliveries to make. But he took literally one minute out of his day to help a steady customer. I will remember that small courtesy for a long time and will tell other people about it. In fact, I just did!

What are businesses doing to make you a happy customer? Share your stories in the comments below.

YouTube’s revenue model built on your content?

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I mentioned in the previous post that teen-focused social-networking sites are searching for a business model. Apparently, they’ve found one: take your intellecdtual property. BoingBoing.net points out in this post that YouTube and MySpace have both revised their licensing terms to give them the privilege to redistribute the content you upload to their servers. If they are allowed to do that, then you should consider going here to buy YouTube subs. The terms differ from service to service, but the net effect appears to be that content you create can be liberated and reused for whatever reason – including in ads and promotions – without your consent and without compensating you.

Facebook sells access to politicians

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Facebook is giving political candidates a chance to buy exclusive access to its audience of teens and college students. It’s a great idea and one that I think will become more common as social media sites become established.

Sites like MySpace, YouTube and Facebook have struggled with revenue models because their audiences, while vast, lack buying power. One path to building established businesses is to limit access to the sites and then charge advertisers a premium to reach those users. MediaPost’s Cory Treffiletti has an interesting analysis of the Facebook initiative that basically endorses this gated community concept (you have to register to read it).

The bottom line is that the days of open access and rapid growth may be numbered for new online communities. These services have experienced amazing growth rates over the last two years but they’ve done so using a very Web 1.0 approach, which is to throw everything open and try to build audience as quickly as possible. It’s very expensive to build infrastructure to handle that kind of growth and the logical next step may be to tighten up on qualification criteria and begin excluding users in the name of improving demographics. Facebook is gambling on that approach and it’ll be interesting to see if the business materializes to prove it right. One area of the economy that is still seeing robust growth is political contributions, so Facebook is certainly targeting the right market.

Speaking of gated communities, note that the Wall Street Journal is going to start selling ads on its front page. I guarantee you there was blood on the walls at the Journal’s offices over this decision. Journalists are very protective of prime editorial space and this concession to business realities must have been hard for a lot of editors to swallow. It’s another indication that all is not well in the print newspaper world. The New York Times will reduce its page size and lay off another 250 employees. The Times says about half the losses in editorial space will be made up by printing more pages but you know that isn’t so. Issue sizes are determined by ad sales and those are headed in the wrong direction. With less editorial space, there will be less space for the in-depth coverage that the Times provides. That coverage should move online, but knowing how the accountants at print publishers work, I suspect it’ll just lead to more layoffs.

Categories: Journalism, Social Media

How to Create an Innovative People Strategy That Maximizes the Talents of All Your Employees

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From Innovations, a website published by Ziff-Davis Enterprise from mid-2006 to mid-2009. Reprinted by permission.

It’s been said that if you build an organization entirely out of creative people you get chaos but if you build one strictly out of task-oriented people you get the registry of motor vehicles. But innovation is neither creativity nor routine; it’s a cultural bias toward continually improving the way business is done. Every single employee in your organization should strive to innovate in ways that streamline tasks or create new business opportunities. There’s no downside to having a workforce composed entirely of innovators.

Innovative employees are important not only because they think up ways to improve the business but also because they have the mindset to tolerate change and innovation by others. Nothing will derail a project faster than the “That’s the way we’ve always done it” or the “You must fill out this form” mentality. You need to build innovation into your human resource strategy from the start.  Here are a few strategies that I’ve seen successful organizations use:

Look for innovative job candidates – Hiring managers and HR departments should be alerted to look for candidates who use words like “initiate,” “create” and “conceive” in their resumes. Avoid the people who “perform” their job or whose “responsibilities include” a laundry list of tasks. When interviewing candidates, be sure to ask for specific examples of ideas they have conceived and carried through to fruition. The second part of that equation is critical. There are plenty of good ideas out there, but precious few people who can see them through to results. Finally, check references and be sure to ask past employers for specifics about a candidate’s innovativeness.

Celebrate innovation – Study after study has documented that most people value peer recognition more than money. So put in place some small programs that recognize innovation and tie them to creative rewards. One company I worked for awarded the journalist with the best “scoop” story of the month an ice cream scoop, gift certificate to a gourmet ice cream shop and a framed certificate. People displayed those certificates proudly for years. You can create your own program. Launch a monthly innovation award that includes a short article in the company newsletter, two tickets to a show or ballgame and a photo of the winner with your CEO. Stick with it. If you make reward programs a part of your culture people will learn to value them. If you let them lapse, people will doubt your sincerity.

Demonstrate that innovation yields promotion – Many companies don’t do nearly as good a job as they could of telling employees why certain people get ahead. When you announce a promotion, point to specific examples of how someone demonstrated innovation in their work. And tell them what was innovative about what they did.

Put your money where your mouth is – Search giant Google is famous for encouraging its employees to spend 20% of their time working on new ideas. You don’t have to go that far, but you can make it a point to give people time and funding to develop ideas into business plans. Don’t make this work additive. Use temporary help or divide tasks among others in the group to give the employee time to develop an idea. Tie small bonuses to short-term milestones or offer to give back to the employee a small percentage of the savings or revenues benefits you realize from their ideas. If the idea really has legs, put the employee in charge of the group that’s charged with carrying it through to fruition.

One other point is worth noting. Recognizing innovation means that management must give up its monopoly on good ideas. You need to control egos so managers are encouraged to step back and let the spotlight shine on their best people. That’s a scary idea for control-oriented bosses, so you need to make it clear to all your managers that the success of their employees reflects well on them. You can do this in little ways: quote the manager in that company newsletter article or add the manager’s name to the innovation award certificate. Just make sure that everyone in the company understands that innovation is a quality that’s valued at every single level of the organization chart.

Dell's blogosphere baptism-of-fire

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I just returned from a week of Internet-deprived vacation to find that Dell has joined the blogosphere, and what a welcoming party it’s been!

In the 11 days since Dell launched the one2one blog, it’s received more scrutiny in social media land than the anti-abortionist who took an article in The Onion seriously. Having the benefit of a little hindsight by being late to the party, I have to give Dell credit for quickly fine-tuning its blogging voice to adjust to the early comments from critics.

If you look at Dell’s inaugural post on July 5, it looks like something created by the advertising department. Very promotional, very boring, very disappointing. Dell shoulda known better, really, after the drubbing it took last year from Jeff Jarvis and a band of sore customers.

The blogosphere was quick to respond. Jarvis ridiculed the effort as being too self-promotional. Fair enough. Steve Rubel said he was disappointed and invited Dell to join the conversation, not just talk at people. Both Jarvis and Rubel got their fair share of comments from Dell-haters, of whom there are apparently many.

I thought Nicholas Carr’s review was the most interesting, though. He upbraided Jarvis and Rubel for blogger smugness and pointed out that one2one is a conversation between Dell and its customers, not its blogger critics.

Carr nailed it. There’s a real risk of bloggers looking smug and insular now that their ship has come in and blogging is suddenly popular. A-listers like Rubel and Jarvis should be welcoming Dell to the conversation and offering gentle advice, not lashing it for cluelessness.

I suspect the decision to launch a blog was a very difficult and political one inside Dell. Last January, a Dell spokeswoman told me that there were no plans for a corporate blog, so this is a big turnaround. I’m sure Dell knew it was going to get plenty of feedback from customers when it went live and that it was going to be no small task managing that response. Customers certainly haven’t disappointed with their comments. Dell isn’t responding openly to many comments on the blog, but it’s possible they’re handling a lot of that offline. In any case, Carr is right that one2one is a conversation between Dell and its customers, not a Broadway show playing to critics’ reviews.

It’s true that Dell’s initial blog entries were weak but the company deserves time and patience to get it right. And the company is trying. On July 13, Dell’s Lionel Menchaca defended the company against criticisms that it isn’t listening. The same day, customer support director Laura Bosworth issued a rather remarkable confession about Dell’s support woes. And on Friday, Menchaca was back elucidating and elaborating on the blog’s commenting policy.

All in all, I think Dell came a long way in a week-and-a-half toward adapting its blog to the standards of the community. It launched its blog under a spotlight, made some quick adjustments and is demonstrating that it’s willing to listen. Jarvis has provided running commentary that is still on the shrill side. Steve Rubel came back with a positive and constructive attaboy.

Category: Corporate Blogging

How One Innovative Company Made the Most of Business Intelligence

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From Innovations, a website published by Ziff-Davis Enterprise from mid-2006 to mid-2009. Reprinted by permission.

Sometimes, even a successful and profitable business can contain huge hidden opportunities for savings.  Such was the case with Vicor Corp., a $180 million maker of industrial power conversion equipment based in Andover, Mass.

Vicor’s business is highly customized. Each of the 8,000 customers it will serve this year buys a somewhat different configuration of its products.  Because its market is so specialized, Vicor can derive big profit gains from identifying deficiencies in its operations.

In 2002, Vicor’s operating profit margins were in the high 20-percent range. This year, gross margins will approach 45 percent.  That’s a remarkable improvement in just four years. The difference is focus. And cubes.

Vicor made the migration to PeopleSoft Financials in 2002. The ERP system gave Vicor unprecedented insight into its own operations. But what really accelerated the transformation was the addition of business intelligence (BI) tools, according to Joe Jeffrey, the company’s director of manufacturing.

Vicor saw BI as a way to focus its problem-solving. Managers thought they spent too much time identifying problems and not enough time solving them. They believed that BI would be the tool they could use to ask better questions, which meant getting answers more quickly.

The company made a commitment to BI. It armed its managers with an assortment of data cubes. Cubes are multidimensional database views that give users a way to examine data from different perspectives and to drill down to a fine level of detail. Each cube was a roll-up of database records, and the multidimensional analysis gave managers a way to look at information from a variety of perspectives: for example, over time, by product and by customer

If a manager noticed an anomaly in inventory, for example, she could drill down to find the exact work order where the anomaly originated. “When a question is posed about what happened, it’s now a much more specific question,” Jeffrey says. “It makes questions tactical, which means you’re focusing on solving problems rather than figuring out that problems exist.”

Vicor went a step further. It made sure that the metrics it was tracking in the data cubes were linked to specific business goals. Those goals, in turn, were tied to individual performance plans. When a goal is reached, a new one is quickly set and reflected in the individual performance plans of employees. Users are responsible for monitoring the metrics that will decide their performance. In effect, they can’t afford not to use the cubes.

The result is that managers across Vicor are totally bought in to the value of business intelligence. That has paid off in innovative uses of the tool across the organization. For example, the analytical program that users write can be shared and applied around the company. A routine that works for volume analysis, for example may also be used for dollar analysis. Jeffrey said some programs are used in a half dozen different applications, even though each tracks different things.

Users also understand that the business intelligence tool is intrinsic to their own success. Because their metrics for success are so closely tied to reports, users have an incentive to learn how to use business intelligence. That’s created a widespread acceptance of the tool and a spirit of innovation around it.

The difference at Vicor was that the company made a commitment to a technology at an early stage and stuck with it. It made sure that the tool was central to everything its managers did and it created a culture in which success with the tool equated to success in business. I wish more companies would take a chance like that. Too often, we’re tentative with our adoption of technology and leave it to the individuals to decide whether to use it. Vicor’s experience demonstrates that commitment and vision creates the most effective scenario for deployment of  technology for strategic advantage.

Has your company experienced success by committing to a new technology at a high level and then sticking with it? Let us know by posting a comment below.

How to Create an Innovation Investment Strategy That Puts Your Company’s Resources Where They Count

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From Innovations, a website published by Ziff-Davis Enterprise from mid-2006 to mid-2009. Reprinted by permission.

When Lou Gerstner took over as CEO of IBM in 1993, he issued a directive that shook the research world to the core. Gerstner ordered that IBM’s research activities, which had once tackled big, hairy problems like quantum computing and holographic storage, would now be focused on solving customer problems. Success would be measured less on standards of innovation than on a project’s success in delivering products to market.

Gerstner’s move wasn’t popular at IBM or anywhere that basic science was done. But it helped IBM live to fight another day. It would be hard to argue today that IBM is any less innovative as a result.

People sometimes take a hands-off approach to investing in innovation, presuming that creativity takes freedom and money. But if you look at companies that are truly innovative – Apple, 3M, Southwest are good examples – you don’t see massive R&D budgets. What you do see is focus. Those people who don’t know where to start investing have not looked at the Awin Report, so if you haven’t read it yet, go now!

3M has been making Post-It notes for more than 30 years and continues to lead the market against a raft of competitors. There are people in that company who are laser-focused on improving and extending the product line into new applications. 3M delivers a constant stream of new Post-It products, which keeps its competitors in constant catch-up mode. 3M won’t allow them to compete.

Apple has carved out a distinctive and profitable niche in personal computing because it is focused on delivering a wonderful customer experience. Apple’s products are beautiful to behold and to use, and this focus enables Apple to continue to sell profitable proprietary products in a sea of white box discounters. Apple is focused.

Southwest does three things well. Its planes leave on time. They arrive on time. And passengers get their luggage quickly. This focus on addressing the most important aspects of a customer’s flying experience is the main driver of Southwest’s success. Everything the company does, from its route network to its open-seat boarding system, is driven by the goal of getting customers to their destinations as quickly as possible.

Technology companies, especially successful ones, often abuse their innovation investments. They either presume that success in one market presages success in another (which it rarely does) and so go off chasing rainbows. Or they pour resources into reinventing the wheel. Digital Equipment Corp. executives admitted sheepishly at one point that the company funded as many as 30 different project teams working on the same problem, each with their own set of ideas and approaches. Is it any wonder that such companies sometimes crash and burn in spectacular fashion?

Investing in innovation is about saying “no” a lot more than it’s about saying “yes.” In my experience, innovative companies constantly streamline their investment decisions to get to the core of what they really do well. But they invest aggressively in those projects that are fundamental to the business. As long as the business doesn’t get marginalized by a new technology, they do just fine.

Teams should constantly reality-check their efforts to be sure they’re on track to deliver value to the business. Xerox Palo Alto Research Center (PARC), the innovation incubator that 30 years ago invented so many of the IT tools we use today, was a classic case of innovation without application. The team at PARC had lots of freedom and money. They pushed the limits of computer design but worked for a parent that had no plan for packaging their discoveries. Their work benefited countless companies that came after them, but it never benefited Xerox.

You probably don’t have the luxury of being a test lab for your industry. That’s why your investment strategy should be to fund generously a few projects that have high value potential. It’ll force you to say “no” a lot, but you’re more likely to live to fight another day.

Ford's Bold Moves campaign raises transparency stakes

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Ford is taking openness to the next level in the innovative campaign. The company hired an award-winning documentary film crew and gave them unprecedented access to the behind-the-scenes world of Ford as the automaker struggles to reinvent itself. A new short video will be posted every week.

This certainly is a step toward transparency in a market that needs to reinvent itself. Among the quotes from Ford executives in the first episode:

“Maybe we didn’t care for as we should have.”
“We’re in trouble because we lost touch with the consumer. “
“It’s very easy in our own little offices to create our own idea about what it means to be competitive.”
“The auto industry is in a stage of major crisis…this is a company that really could go down.”
“Our pricing is irrational.”

These are Ford executives talking.

The video also features prominent headlines about auto industry losses and clips of its competitors’ cars and logos.

The home page is adorned with a headline ticker that this morning includes this: “Ford Motor’s June U.S. Auto Sales Decline 6.9% to 269,404.”

As advertising goes, this campaign certainly breaks the mold. It is startlingly honest. Ford deserves a lot of credit for trying it. The company reportedly is spending $50 million on the Bold Moves initiative.

Not that the site is perfect. The point-counterpoint columns on today’s home page aren’t really as controversial as they could be. And, as BL Ochman points out in an excellent post, the site’s commenting policies and disclaimers are excessive. The registration confirmation message also contains this strange line: “If you no longer wish to receive any email communications from Ford Division call 1-888-829-8149.” Huh?

But given how difficult it must be for a company to take a chance with a campaign like this, the product is remarkable. I’ll look forward to future weekly episodes.

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Kumbaya at Gnomedex

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This is my first Gnomedex but certainly not my last. I haven’t been to a conference in years that was this relaxed, upbeat and even festive. It’s the most interactive event I’ve ever attended. The audience actively participates – even shouting out comments at times – and the speakers encourage feedback and conversation. It’s very Web 2.0.

It reminds me of the early days of the PC industry, circa mid-80s, when conferences like PC Forum had a kind of we’re-all-in-this-together camaraderie to them. That all changed with arrival of market growth, venture capital, profitability and winners and losers. That may well happen to social media, but let’s hope money doesn’t spoil all the fun. At this point, there’s a spirit of mutual support and shared purpose that hasn’t existed in the computer or Internet business for a very long time.

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PubSub on the edge?

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Neville Hobson saysPubSub is still in business, which means probably not for long. The blog aggregator has been rumored to be close to closing its doors for a while and these vignettes from Gnomedex add fuel to the fire. This would probably be the first major casualty of competition in the social media industry, though it’s far too early to say there’s consolidation going on.