Wal-Mart Still Doesn’t Get It

Wal-Mart Still Doesn't Get ItOn the front page of The Wall Street Journal’s Business and Tech section, June 19th, was an article, “Welcome Back, Wal-Mart Greeters” subtitled, “To deter theft, and improve its customer service, the chain is bringing back a Sam Walton invention.”

Greeters are returning not only to say welcome with a smile, but also to act as “asset protection customer specialists.”  What exactly does that mean?  The Greeters are supposed to greet and make sure no one is leaving the store with any unpaid items. In other words, the Greeters are there to deter theft. In my line of thinking, the concept is an oxymoron. It’s impossible to check receipts as people are exiting at the same time as saying hello and helping them to find what they need.  If Wal-Mart wants to stop shoppers from stealing as the article portrays, security guards should be hired, like those employed by Home Depot or Bed Bath &Beyond.  It should go without saying that the security staff should be friendly and respectful and focused upon customers leaving the store, not coming in.   Greg Foran, Wal-Mart’s new CEO, told employees at a town hall meeting that they should walk the customer to the department after greeting them.  That is customer friendly.  But, I’m not sure how that’s going to work if they are primarily at the door to check receipts.

The author of the article reports, “The company is also boosting wages for some employees to give them more incentive to be more helpful and attentive.” I am a big believer in paying bonuses, but not for staff performing their everyday responsibilities.  Associates should be hired who are natural relationship builders.  Policies, procedures and training must be in place to further the effort.  Unfortunately if staff is paid minimum wage or slightly above, the pool of talented people will be less.

In my opinion, all box stores should place their staffing, training and budgets around hiring people to check-out customers, who are passionate about service, know the stock, have great memories for regular buyers and interact with customers person-to-person. The most important position at any Wal-Mart store is the associate at the checkout counter. That employee should be well compensated.  After all, the associates at the checkout counters are the only staff who consistently interact with customers.

It is the same with any grocery or food chain. Trader Joe’s and Whole Foods certainly employ people who are highly capable of having a conversation with customers. Wal-Mart has experimented with scanning and in-side store kiosks where customers could checkout in advance, all to no avail.

Wal-Mart should not bring back Sam Walton’s invention of the greeter. Greeters were never supposed to act as security patrols anyway.  Instead, make the checkout counters into welcomer-counters. Especially with Wal-Mart building smaller sized stores and stocking grocery items to encourage regular visits, having associates who know the customers’ names, buying preferences and when their kids will be graduating from high school would make Sam Walton smile.

What do you think?

PayPal Doesn’t Seem to Care about its Customers

Paypal doesn't seem to care about its customersIn the last few weeks PayPal has been in the news about its new policy going into effect July 1st.  What’s causing the commotion?  The question involves using auto dialed or prerecorded calls and text messages to call not only the phone number given directly to PayPal, but to “any telephone number that we have otherwise obtained.”  Additionally, PayPal reserves the right to contact customers for surveys and promotions in addition to account-related issues. The user agreement is mandatory; there is no opt-in, only an unclear method of opting out.

PayPal’s suggestion for customers who did not like the new terms was, “Close Your Account Before July 1st 2015.”

After PayPal received bad press, they claimed customers could opt out of certain options by calling their toll free number. However, when customers first started dialing in, they were directed instead to close their account. Apparently, PayPal reps didn’t get the official memo.

The FCC is now getting involved stating the new user agreement “may violate federal laws governing the use of autodialed, prerecorded and artificial voice calls, including text messages.” The FCC notes that the agreement may run afoul of the Telephone Consumer Protection Act.

So, that’s the issue. What exactly is PayPal’s thinking?  It is obvious to me their new policy doesn’t make sense.  Customers are the most important asset of any company and why would PayPal nonchalantly tell customers to close their accounts and do business elsewhere. PayPal used to be the only game in town, but now has competition.  Stripe and Square, similar entities are backed by former executives of PayPal and of course there is Apple Pay.

I really don’t understand. Even the opt-out provision creates an unnecessary burden and is contrary to FCC regulations. According to the FCC PayPal must first obtain prior express written consent from any and all participants in order to make any kind of prerecorded call. The FCC also goes on to say that the company cannot make signing such an agreement a “condition of purchasing any property, goods or services.”

PayPal’s biggest defense is that this policy is not new.  Customers are just figuring it out, which means they may have been violating the Telephone Consumer Protection Act for some time. That doesn’t sound like a valid excuse.

Personally, I’m not PayPal subscriber. Many years ago I was an avid EBAY trader, collecting memorabilia related to the companies we represent.  I thought that PayPal was a novel idea.  It was a great way for buyers and sellers to exchange money through a third party.  However, now when I purchase on the Internet and there is an option to pay by credit card or PayPal, I select the former. I know if there is an issue with a credit card company, I can call and generally speak to a friendly and knowledgeable representative who listens to my concerns and can solve any problem.

Credit card companies have become very customer-focused. PayPal should follow their example.  Perhaps putting customers on their Board of Directors would point them in a better direction.  Certainly telling your customers to close their accounts is not a good way to do business.

What do you think?

Does Facebook’s New Feature Negatively Impact Personalization?

Does Facebook’s New Feature Negatively Impact Personalization?I have been asked recently to provide my opinion on the biggest customer service challenges affecting organizations today. My number one answer is that consumers want to do business with companies that provide personalized service delivery.  How can companies combine technology with the human-to human touch to create a winning combination?

Let’s use Facebook as an example.  Facebook is now testing a messaging feature for Pages that enables businesses to create, save and send canned responses to frequently asked customer service questions and feedback. The new feature is called, “Saved Replies.” The claim is that the new tool can be a big time saver, especially for businesses that receive a large number of questions from customers on Facebook. Companies are given sample responses that they can use or customize. They can also create new replies and save them for later use. For companies with varied questions, there’s also a way to search for answers.

I am concerned. While large companies have been using scripted responses for years, smaller organizations have not been able to afford the technology to supply the templates.  I’m not suggesting that employing technology to aid in developing quick replies might be helpful. However, an advantage that small companies have is their size and the ability to deliver a customized experience. Facebook is misleading the neighborhood store or unique boutique by encouraging them to reply to a question on their page with a canned response.

We know from our research that consumers are demanding more customized responses.  There will be frustration if an answer to a question not only sounds scripted but possibly is totally off the mark.  Are customers supposed to ask again?  Or, will they give up and seek solutions at a competitor?

Several articles have been written about this new feature and some have stated that it’s a great time saver for start-ups too. That really frightens me. Start-ups will never become sustainable businesses unless their early adopters are completely satisfied not only with product or service offerings, but feel the company truly values and appreciates them. Canned responses are dangerous and will not make the customer feel warm and cozy. Taking extra time to personalize communication is important.

Customers are upset when their questions are not answered completely.  Customers also appreciate when they are provided with additional useful information, and their underlying emotions are heard.  Tailoring messages according to a customer’s buying preference are a big plus. Customers are any company’s biggest asset. Use every question as an opportunity to engage the consumer. It’s definitely worth it.

What’s your opinion of scripted responses?

The Retail Customer Connection

The Retail Customer Connection The new “buzz” is all about the emotional connection in customer service.  I say, yes! Companies should be focused on creating and building relationships.  By forming a human bond, your organization will not only have a volume of happy customers, but customers who need, want you, and will return.

Service delivery can easily be replicated. Technological advances are being made every day to facilitate. But, it’s impossible to duplicate the bond between two people. In my experience, loyalty in a retail setting is not to the physical store, but person-to-person.

  • My favorite associate at Nordstrom, Ruth, who got to know me well, met members of my family and learned my tastes, moved to another state. And Ruth was not only my go-to person, she also met my emotional requirements of feeling wanted and cared for.  She made me feel special. On my next visit to Nordstrom, no one made a connection. I finally found another “Ruth” at a different department store and now they get my dollars.
  • Every time I went into my favorite coffee and bakery, Cait & Abby’s, it was Javi who gave me that big smile. I knew that Javi was glad to see me from 40 feet away. When Javi asked about my weekend, he listened and was interested. When he decided to go back to school fulltime, I was so excited. But, my bond was with Javi, not with Cait & Abby’s. There were other coffee shops in the neighborhood and, after a few tries, I found my “Javi” a few blocks away.
  • Most people are extremely loyal to the person who cuts their hair. In a fancy place, they might be called a stylist or it could be just an old fashioned barber. Why is the loyalty so strong? In a way, the interaction is set up for success.  You’re in a chair and there is almost always a conversation. The person certainly knows who you are, learns about your likes and dislikes and of course hears your special plans for the weekend; the wedding, your son’s graduation or daughter’s confirmation. The next time you arrive, you are eager to share everything that’s happened in between. A bond has been created that is important.  Many times if the person who cuts your hair leaves a particular place, you will follow wherever they go.

In every example, the loyalty was between two people, two human beings. What does this mean for retail?  You need to hire people who are capable of building that human connection and understand how it’s done. I named them; Welcomers. They are associates who see the customer as a person first, customer second. Equally as important is that you value each frontline associate, your Welcomers, and treat them as loyalty building blocks. Give each fair compensation and respect. If they are capable of making those emotional bonds providing hope, developing trust, and ensuring that your customers feel wanted and special, your business will flourish. If they leave, your company is put in a more vulnerable position.

Creating that human connection requires a series of steps, each one a part of the customer journey.  Using technology to enhance the process is a wise business decision; thinking that technology can replace the emotional aspect of the relationship is a “fool’s errand.”

Individual retail establishment are setting themselves up for failure if they believe a robotic encounter with a frontline associate will ever create customer loyalty. Without the human connection, there is no basis for an ongoing relationship and no repeat business.  If it costs 5 to 7 times as much to acquire a new customer as keeping the ones you already have, does that make sense? I don’t think so.

What do you think?

What’s Your Company’s Customer Loyalty Capital?

What’s Your Company’s Customer Loyalty Capital?ZipCap, a start-up in San Diego, is providing loans based on “loyalty capital.”  Testing a system that quantifies customer devotion, ZipCap is lending money based on the total dollar commitment customers make through a pledge to a specific business. Their mission is to fund local Mom and Pop neighborhood establishments.

I think it’s a great concept and novel idea.  What if every company could ask their customers to put in writing how much they will spend in the future?  The response would be telling and in this case, the foundation for acquiring needed capital to make improvements and grow the business.

The article about ZipCap appeared in the New York Times. The story focuses on Beezy’s Café in Ypsilanti, Michigan. The restaurant, which just celebrated their six-year anniversary, employs 16 people. They do a thriving breakfast and lunch business and recently extended hours to serve dinner on Fridays and Saturdays. They wanted to get a loan to help with their operations, but were turned down by two banks since financial institutions consider this type of establishment a risky venture. The owner and founder, Bee Roll, has no collateral. She rents her home and leases the restaurant’s space. The most valuable asset she has, which is the most valuable asset of every company, are loyal customers.

According to ZipCap’s website, “We turn customer loyalty into a line of credit. ZipCap is the loyalty program that helps customers reward their favorite local businesses. With access to affordable capital, these businesses can hire more people, make improvements (i.e. a new outdoor seating area) or expand their offering in other ways. Unfortunately, banks won’t lend to most of these businesses and the other options for capital are too costly to consider. Access to a line of credit through ZipCap will make a huge difference.”

ZipCap’s merchants start by recruiting an “Inner Circle” of customers who pledge to spend a set amount of money in a fixed period of time. ZipCap provides loans based on a percentage of those pledges. Businesses need to accumulate at least 100 Inner Circle members to qualify for a loan. When Bee Roll asked people to become part of their inner circle, it was easy to find members. ZipCap helped to cement an even stronger bond between Beezy’s Café and its most devoted customers.

For years I have been asking companies to disclose their “at risk” factor, a concept I think is important for any business.” All businesses carry insurance for many purposes: property and casualty, workman’s compensation, professional liability, etc. But, what about their insurance coverage to assess their customer devotion? While it’s not an exact science, by asking customers, “using a scale of 1 to 5, how likely are you to continue doing business with our organization over the next year?” helps your business establish its “at risk” factor.

I really like the concept of customers committing their loyalty and dollars to a company. Most Mom and Pop stores understand how to show their customers they count.  They know their names, give them a big smile when they walk in the door, ask them about their day before ever asking about their order, and when they leave, say, “I can’t wait to see you tomorrow.”

I had the pleasure of speaking with Evan Malter, ZipCap’s founder and chief executive officer. He told me, “It’s worth noting we turn loyalty into access to capital but also the accessing of capital into loyalty. By engaging customers in this process, they feel a stronger bond with the business and have a better understanding of their impact. This creates greater loyalty and stronger referrals.”

ZipCap has created a fantastic business model. I’m so pleased that they found a way to quantify the value of loyal customers. Kudos to them for creating a new formula to help companies that know how to provide the ideal customer experience.

Image courtesy of The New York Times.

Can Poor Customer Service Cause a Heart Attack?

Can Poor Customer Service Cause a Heart Attack?Angela Hawkins, a Virginia grandmother, is suing Verizon for $2.35 million, claiming the company was responsible for both negligent and intentional infliction of emotional distress. Ms. Hawkins says she got so upset after being threatened by a supervisor that she ended up in the hospital where an EKG confirmed she had experienced heart failure.

It will be up to the courts to decide the case, but from my own personal experience, I know that poor customer service can raise my blood pressure. All of us in the field of customer experience understand the lifetime value of purchases and past loyalty and don’t understand why others just don’t get it. I had my own situation with Verizon. I have been a Verizon Wireless customer for over 25 years. I upgraded my phone and the representative recommended I change my plan based on past usage. The following month my bill almost doubled. I went to the store to resolve the issue and the manager was more than unreasonable. I wanted to go back to my old plan and receive a credit. I felt the rep had made a mistake in reviewing the plan already in place. I received a flat out “NO.”  Really, after being a customer for the last twenty-five years?  You can bet my blood pressure was soaring.

The word “no” gets people frustrated and upset.  All my loyalty to Verizon was tossed out the window.  The company was missing the forest for the trees by not considering my years as a customer and potential future revenue. I was furious and can still remember getting more and more angry and feeling my entire body was in a free for all. It wasn’t even about receiving the refund, it was about the way I was treated with total disrespect. My business was unimportant and under appreciated.

Back to Ms. Hawkins. In her case, the supervisor said he was going to send the police since she had threatened to kill everyone in the call center. She waited for two hours in her house, scared that the police were going to show up at her door. How many grandmothers do you know who would be so frightened if this happened to them that it would make them sick? A legitimate question. This was all over a $60 credit. The supervisor called back two hours later after listening to the recording between Ms. Hawkins and the agent to apologize.  He said she never threatened anyone. It was just a miscommunication.

My wife and I decided that I get too aggravated when I hear “no”.  No also takes the form of “I can’t, I won’t, it’s our policy, etc.” Getting so frustrated isn’t good for anyone’s health. Now, I just walk away or hang up the phone. If it involves money, I forget about it. No amount is worth the chance of getting sick.  I have actually put aside dollars into an account for stupid companies. I will give-in easily, just say fine, but never step back into the store or do business with them again.

I love being in the field of customer service, but it’s like being a doctor who gets sick. They know what needs to be done to get them better. Whenever I experience poor customer service, I know better.

Have you ever gotten so upset that it made your blood boil?

Zappos – Is It Not the Perfect World?

Zappos – Is It Not the Perfect World?In an article in The Wall Street Journal, 14 percent of Zappos’ employees have resigned after the company implemented a new management structure called Holacracy. This is an interesting statistic.

Everyone knows Zappos pays new hires to leave. They only want people to stay and provide service to their customers if they really believe in their culture. Zappos has an outstanding service reputation so it must be working.

What is Holacracy? According to Holacracy.org, the concept is a distributed authority system – a set of “rules of the game” that bake empowerment into the core of the organization. Unlike conventional top-down or progressive bottom-up approaches, it integrates the benefits of both without relying on parental heroic leaders. Everyone becomes a leader of their roles and a follower of others’, processing tensions with real authority and real responsibility, through dynamic governance and transparent operations.

When the change to Holacracy was announced, Tony Hsieh promised employees at least three-month severance if they decided that the newly implemented structure was not right for them. The offer was open to all employees including senior management. Zappos did not disclose the percentages of staff leaving by position or title in the article.

The Wall Street article reported that the “transition to self-management has been difficult.”  Mr. Hsieh is impatient with his staff and wrote a memo to that effect, stating that, “it’s taking too long to implement the new management structure.”

I think Holacracy is an interesting and workable business model, not only an unusual one.  The idea of “no bosses” creates opportunities for employees as well as responsibilities.  Obviously it is an environment where everyone has to work well with each other.

When there is a change in a business structure, especially a major shift like the one at Zappos, perhaps the problem is that there wasn’t enough lead time for the employees to embrace the new paradigm or concrete information about Holacracy rules.  Whatever the reason, bottom line is that change can be difficult and it’s important in any organization that employees and staff are successfully brought into the loop to encourage each other.

Zappos is projecting a big increase in profits for 2015 of $97 million this year, a 77.9 percent jump from $54.5 million in profits in 2014. Their customers love them. So, as I said before, they must be doing something or everything right. And as we all know, Zappos’ employees make it work.

Holacracy is a new concept to me.  Of course, I always like to learn.  I welcome feedback and want to further the conversation.

What’s your opinion?

Return Policies – Make it Visible

return-policiesHow many times have you been dissatisfied with a product or it was the wrong size or color but didn’t return it.  From my own experience, I just might not make the time or effort or I forget. Frequently, I’m not sure of what the store’s return policy is and in our digital world of commerce, I throw away the paper receipt that often contains this information. So what is the outcome?  Especially if I felt the store sold shoddy merchandise, that company lost me as a customer for a potential lifetime of purchases.

A few weeks ago, my wife had some minor surgery and the staff at my office wanted to send her flowers. My company is located in New Jersey and we live in Manhattan, so they asked me for a recommendation.

I immediately suggested Ariston Florist, who I use when I have a special occasion or event. The flowers arrived and they were beautiful.  My wife was happy. However, within a day, the roses started to wilt and within 48 hours the petals were dropping. I had two choices; one not to say anything and never shop or recommend Ariston again. No need to tell my staff of course. My second choice was to contact the florist and tell them what happened.

The choice was easy because of the card enclosed with the arrangement. It read, “We have built up an excellent reputation on beautiful flowers and prompt service. If we ever fail to meet your expectations, please let us know. It was a pleasure of give your order our personal attention.”

Seeing that message, I did not hesitate to pick up the phone. The woman who answered was friendly and upbeat. When I told her about the flowers she said she was sorry and asked if I could hold while she checked the order. She was surprised, but immediately told us she would send a replacement. An hour later, a new arrangement arrived and we enjoyed it for a week.

Ariston made my day and my wife was so happy to get another bouquet. My staff never knew of the issue.  The florist will continue to get all of my business and referrals to neighbors and friends.

People are too busy to read all your posted return policy signs and most likely don’t keep the paper receipts.  I think all businesses should include a nice note that specifies their product guarantee. Return policies should be used as an opportunity to continue the customer journey, not act as a detour. They should not trigger an abrupt end to the relationship and the loss of future dollars.

What is your company’s return policies and how do you tell your customers about them?

How Much is a Roach Worth?

how-much-is-a-roach-worthIn my case, twenty-five percent of the check.

The other day my wife and I went to one of our favorite restaurants. We dine there often; great food, good value and service, a few blocks from our apartment. Whenever friends come in from out of town, this is our go-to-place.

We were having dinner with another couple, when it appeared.  We were savoring our last bite of dessert and had already asked the waiter to bring the check, when our friends pointed out a roach crawling on the wall about 6 inches from where my wife was seated.

Embarrassed, remember the part about our “chosen” place where we bring friends, and a fighter, my wife took her cloth napkin and squashed the bug.  At the same time, our waiter brought us the check. We all chimed, “found a bug and here it is.”  You could tell from the waiter’s face, who knows us well as good customers, that he was not a happy camper.

He immediately took away the napkin and our check as we wondered what would happen next.

Our waiter brought back the bill with a recalculated amount.  There was the original total and the restaurant gave us a twenty-five percent deduction, which had a mysterious code next to it.

We weren’t sure whether the code was to specifically indicate if it was a roach or just generally a bug. We quickly computed that the roach discount was equal to $11 a person. The incident and the resolution happened so quickly that we really didn’t have time to think about fairness or anything else.  Our tip was based on the original amount since the roach was in no way the fault of our server.

Was our customer experience affected?  Of course, and not just for that meal but for the future too.  How could our favorite restaurant still be favorite if we had to be on guard for critters crawling on the wall?  What could have been a possible better outcome? Yes, our bill was reduced, but the management remained silent even if they didn’t want to call attention to our situation to other patrons. However, if they had contacted us the following day, apologized and reassured us that this was an isolated incident and would be further addressed, we might have felt more comfortable about returning.

What would you expect or want the restaurant to do?

Ten Tips to Create and Build Customer Relationships

Ten Tips to Create and Build Customer RelationshipsThere is a distinction between customer satisfaction and customer retention.  Many companies don’t understand the concept.  Someone might be happy with your product or service, basic satisfaction, but never purchase again.  Why?  The gap between satisfaction and repeat business is the relationship between the customer and the sales associate at the company.  Creating and building relationships is the link and differentiator.  Strong relationships definitely increase the probability that your customer remains yours and not your competitors.

Ten ways to create and build relationships:

  1. Have a few friends or colleagues call your company to ask a question about your services, hours or directions and see how quickly the phone is answered, how friendly the conversation is and if additional information is provided beyond just responding directly to the inquiry.
  2. In general, new customers need to know more about your services and products then repeat patrons. Create a list of items that would help first time accounts learn more about your business. It will be appreciated.
  3. Loyalty begins with a person, not necessarily the company itself. People go to the same coffee shop every day because “Mary” knows their name and how to prepare their latte without asking. Make sure you retain your associates who naturally know how to build relationships. Don’t let them go to your competitor for a $1 more an hour. Your customers will follow and you will have lost more than an employee.
  4. Review your emails, letters and posted signs to make sure that are customer friendly and welcoming. Instead of “no returns after 10 days,” write, “we will gladly accept returns within 10 days.”
  5. Train your staff to use the customer’s name. Most people pay with a credit card. When you return the card, say, “Mr. Smith, have a wonderful day.”
  6. Empower your staff to make decisions about policies and procedures without having to go to management. Give a dollar amount as a guide. For example, if the item costs less than a $100, and there is an issue, staff should have the flexibility to make the customer happy on the spot rather than having to get back to them.
  7. Instruct your staff to be observant. If someone is wearing a sport’s jersey, comment on it. If a woman has on a beautiful scarf or earrings, make a remark. People love compliments.
  8. If you own a store, and people are leaving without purchasing anything, try to find out why they came in the first place.  Engage your customers. You might learn something new that could help with future sales.
  9. Reinforce the concept about first impressions. Make sure your staff and higher management know that there is only one opportunity to make a good first impression.
  10. Welcome everyone into your business as you would welcome a guest into your home. It makes people comfortable. Give them your full attention. Put away cell phones. People feel disrespected if the text from your friend is more important than they are.

Creating and building relationships takes time, effort, and care. But, it’s more than worth it.  Relationship is the key. Learn something about your customer that can be shared on their next visit or phone call. It’s those little things that can make a big difference.