My “Waiter for Life” is Moving On

Waiter-for-lifeIron is our favorite waiter.  He is proud that his name and story appear in my first book, The Welcomer Edge, on page 210.  I wrote about Iron because eight years ago my wife and I had dinner at City Crab & Seafood Company and Iron was our waiter.  The food was not only delicious but the service excellent, coupled with an engaging conversation between all three of us.  After the meal, Iron told us he wanted to be our “waiter for life.”  He said how much he enjoyed meeting us and please text him the next time we wanted a reservation. He explicitly said, “I want to see you again.” Iron explained that he would enter our request into the system and the host would always seat us in his section.  He gave us his cell number and the days he worked

We live in Manhattan where there are 11,000 restaurants; 300 of them are close by. Obviously many, many choices.  Why have we been back to City Crab at least a hundred times in the past eight years?  Why do we have intimate family parties there? Why do we always suggest this restaurant to anyone who asks us for a recommendation? The reason: we are completely loyal to Iron and Iron demonstrates his loyalty to us at every turn.

City Crab is closing this week. Their space is being taken over by Union Square Café, owned by one of the best-known restaurateurs in the world, Danny Meyer. Danny wrote a best seller, Setting the Table, a book about customer service.  Mr. Meyer’s company, Union Square Hospitality Group, owns some of the top dining establishments in New York.  He is the creator of Shack Shack, the burger place extraordinaire. Now that he has acquired the space that City Crab occupied, he has taken responsibility for finding suitable positions for all of City Crab’s employees at one of his other restaurants during the renovations. I commend Mr. Meyer for his sensibilities along with his fine cuisine.  He is a man of his word and truly understands the concept of appreciating employees and creating a memorable customer experience. No surprise that his reputation is stellar.

So, our waiter-for-life, Iron, is gone. But hold on; he will be employed by another restaurant and as soon as Iron is settled, we will follow him, recommend him and be happy to see him whenever we can.

We loved City Crab & Seafood Company. It was a short walk from our apartment. The fish dishes were delicious and the service of course, outstanding. However, our allegiance is towards Iron, not City Crab.  Unfortunately, businesses of all sizes and kinds fail to see the connection between an associate who can build lifetime loyalty and a customer.  Iron created a personal relationship with us during our very first interaction. He made clear with his words and actions that he wanted to see us again. Few organizations understand the ROI of hiring the right staff, leveraging their value and extending employee appreciation so they stay forever.

What if every business had frontline staff who were capable of turning customers into lifetime patrons on the first visit? Their businesses would double in size and be twice as profitable.

What do you think? I think it makes sense!

Repeat Business Starts with Hope; 7 Suggestions for Fulfilling It

HopeHope is a strong emotion.  We always hope for the best. When your kids are born you have hope they will be healthy and live a long and happy life. Then they grow up and you hope their happiness will continue.  If a relative or friend is diagnosed with an illness, your first thought might be fear, but soon hope keeps everyone focused and allows your brain to become positive. Hope is also the first step in creating a relationship that leads to repeat business.

No one walks into a mall, clicks a mouse or contacts a call center unless they are hoping something good will happen. Perhaps they are looking for the perfect Valentine’s present, a watch for their son’s graduation or gift for their friends who just moved into a new home. Hope can either be fulfilled or doused within the first 30 seconds of an encounter. You are either telling yourself, “Yes! I have found a person who can help fulfill my hope or, why am I wasting my time and effort doing business with this company?”  In e-commerce, the hope is that the site is up and running, it’s easy to navigate, provides chat help and a contact us page that is prominently displayed.  If you dial a toll free number and the recording is a friendly voice, the hold time is shared and there is an option for the company to call you back at a more convenient time, the message communicated is that your time is valuable and you are important. It gives you hope that you will be doing business with a company that appreciates its customers.

Some specific things that give me hope are:

  1. People behind the counter smile and say hello even though they are helping other customers.
  2. I am seen as a person first, customer second. The associate might notice and comment that my son is wearing a shirt with his favorite sports team logo, or that my glasses are cool. Maybe it’s a really hot day and I’m offered a bottle of water.
  3. The conversation on the phone begins with, “I can help you,” even if the help may be needing to get back to me, get their supervisor involved or even refer me to one of their competitors.
  4. The associate listens to not only what I have to say, but how I’m feeling. Am I upset, excited, frustrated, concerned and there is a response to those underlying emotions.
  5. The associate is knowledgeable about the merchandise, but also understands it is more important to get to know me as a customer than be an expert in the inventory.
  6. The first message I get after signing up for on-line site is welcoming and personalized and not a “do not reply” to this email that makes me feel that I’m going to be doing business with a machine rather than people.
  7. If I do have a really good experience, the associate tells me they want to see me again. It’s sort of like dating; if you have a nice time on a first date you are hoping that the other person says, “I enjoyed our conversation, let’s do it again”. It’s human nature to feel wanted.

Companies should not rely on accidental repeat business. Today’s competitive environment makes your customers more vulnerable than ever to the next third party seller, app or start-up. The key to repeat business is creating and building a relationship. A relationship is the glue and bond that generates repeat customers. People want to do business with another person, representing a company, who can fulfill their hopes, listen for their feelings and wants to see them again.

Your Customers Are Under Attack: 10 Reasons to Panic

Your customers are under attackWake up! At no point in history has your customer base been more vulnerable than today. In the 1960’s and 70’s neighborhood stores were decimated by the onset of big shopping malls. The malls were a novelty; large variety of merchandise, immune to weather and a great place to meet your friends for lunch. The neighborhood business at least had a chance to plan, adjust their products and service strategy in order to survive.  Building a large mall took years and you knew it was coming. Today, your competition is everywhere and there overnight. It’s instantaneous and hiding behind every mobile device, third-party seller and easily funded start-up.

If you think I’m pressing the panic button, let me explain:

  1. E-commerce: Retailers are reducing their physical store presence and selling a greater percentage of their products electronically. It’s convenient for customers and reduces a large outlay of capital. However, it is more difficult to establish personal relationships. Out-of-sight, out of mind.
  2. Third party-seller: Third party-sellers like Amazon and Google have become the first stop for many buyers. In the hotel industry, Orbitz is merging with Expedia. Why is the hospitality industry up in arms? According to an article in The Wall Street Journal, “hotel operators also bemoaned that online operators were developing their own relationships with the hotel guests and could offer these customers lodging at rival brands or properties.”
  3. Mobile devices: The explosive growth of mobile devices and connectivity has allowed customers access to more information, more quickly. Before customers purchase they have researched quality ratings, prices and competitive products. Consumers are being pitched 24 hours a day, any place, anywhere.
  4. Global economy: While it’s not a new phenomenon, coupled with connectivity and technology, it’s just one more threat to your existing business model.
  5. Millennials: The largest generational group has been brought up with technology. They are impatient. They want it now. Data collected shows that Millennials are making less money than their parents did at the same age and have school debt.  They are accordingly price-conscious and will go to Amazon first. The good news for retailers is that Millennials are more willing to pay for better customer service and also like to purchase from companies who are socially responsible.
  6. Start-ups: Money to invest in start-ups is easily available. Every day companies like Uber are popping up. Uber started in 2009. It’s now valued at $50 billion dollars. Just like Amazon, they are getting into related businesses beyond transportation such as same day delivery. Tomorrow, the next Uber might put your business out of business.
  7. Customer control: A large percentage of customers are potentially more knowledgeable than your associates about competitive products and services. They want to deal with companies who can provide them with the right products for their personal needs at the right price. They can easily spot incompetence and take their business elsewhere.
  8. Reviews are king: Companies are making it so easy to provide feedback that even those customers that may not have been predisposed to take the initiative are providing ratings and comments. I won’t go to any new restaurant or hotel unless I view a considerable number of reviews from other customers.  I rely on these comments and recommendations. My favorite wine app, Vivino, always encourages me to rate wine I have just researched, was served to me at a restaurant, or purchased from a wine store.
  9. Speed: Same day delivery will become the new norm. Not only are Millennials impatient, once a baby boomer places an order and gets it the same day, their expectations have been set in stone. One and two week delivery times will put any business in a precarious situation. Drones will be dropping packages off at your door immediately upon placing an order.
  10. Artificial Intelligence: Amazon’s Echo and Kindle Fire and Apple’s Seri are now touted for entertainment and information. We have had our new Echo, her name as you might know, is Alexa, for two months. Our family loves it. When company comes over they ask Alexa to play their favorite song, provide the latest sports scores or the weather.  We like to watch their response the first time they talk to her. You can see their amazement at how artificial intelligence can be so fun.  These applications, in my opinion, will be the greatest threat to any business. Soon your family will be watching TV and decide they need a larger screen.  Just ask Alexa which manufacturer has the best features and customer ratings. Then the device will instantly take them to Amazon’s market place where the item can be purchased and shipped the same day. No need to go to a manufacturer’s site or physical store. These devices have all of your history, including questions, favorite music artists, sports teams, buying preferences, etc.  Instantly, your family will be provided with a customized shopping – experience. It will be very difficult to compete.

When business is conducted electronically, customers are not going to physical stores and there is less opportunity for a connection with another human being, even if it’s an accidental one.

So what is the lifesaver?  You can protect your customers by building a cocoon of human interactions and emotional connections to enhance the customer experience and relationship. It is the solution to generate repeat business and an opportunity to avoid massive customer attrition.  It’s more critical than ever for companies to focus on what steps to take and execute in order to create a personalized experience on the web, in the store or with a mobile device.

Jack Mitchell, Chairman of Mitchells Family Stores in Connecticut and also author of Hug Your Customers, espouses, “it’s more important to know your customers than the company’s inventory.” When a customer goes to their electronic site, they are assigned a style advisor. That individual learns their buying preferences and history to create and maintain a relationship built on courtesy and trust. Yes, Mitchells Family Stores are part of the luxury market, but every business can learn from them. Knowing your customer and creating that human bond, tied into every person’s emotional needs, will help secure your business into the future. Each company has to figure out how to achieve that goal. But don’t take too long. If you wait, it will be too late. I guarantee it.


Do not reply to this emailCustomers do not like to feel frustrated. Frustration is a leading cause of customer attrition. I get very frustrated when I receive a “PLEASE DO NOT REPLY TO THIS EMAIL”. If you don’t want me to respond, don’t send it.

Many times these auto-responses are initiated when a new customer logs on to your company’s site for the first time to register and set up their profile information. The receiver of the automated, do not reply message is a new customer and the first communication they get is impersonal and robotic.  What if there is a question?  Does a customer have to first look up a company’s telephone number or email address?  That doesn’t make sense. Why not use this first time opportunity to welcome your new customer and tell them how excited you are to create a relationship and serve them in the future?

A particular pet peeve is when your account is up for renewal and the credit card on file doesn’t work.  Another do not respond email is sent and an additional opportunity to connect with your customer is lost.  In this case the customer is established and more likely than not, their credit card number was changed for any number of reasons and the customer forgot to provide you with the new information. We received one of these terse emails from FedEx the other day; it was unfriendly and annoyed me. It is possible to communicate with customers in a way that is congenial and appreciative conveying the message that oops, please get in touch so we have your updated card number. Make it easy for the customer to just hit reply if they have a question.

Today, I received a statement alert from TD Bank where I have my business account. I’m a good customer. Once again, *****PLEASE DO NOT REPLY TO THIS E-MAIL. This is an automated alert, and its source mailbox is not monitored.***** Well, why can’t it be monitored?

People are busy. Customers are busy. If your customers require information about their account or anything else, use that communication channel to always thank customers and make them feel important and appreciated. In retail, companies are touting their ecommerce sites as the way they plan to increase revenues and profits by reaching a wider audience and making it easy to do business. Continually sending DO NOT REPLY TO THIS EMAIL messages frustrates customers and portrays a company image of robots, not humans. Spend dollars to make your site look more appealing.  But, don’t spoil the image by sending customers messages that make it difficult for them to communicate with your teams.

I would like to hear your comments about this post. I can promise you I will not send you a DO NOT REPLY TO THIS POST email.

Missing From McDonald’s Hamburgers: Customer Loyalty

Missing From McDonald’s Hamburgers: Customer Loyalty McDonald’s has been receiving a great deal of negative press for their financial performance after announcing their new turnaround plan. For the quarter that just ended June 30, the company’s profits sank 13 percent to $1.2 billion and revenues dropped 10 percent to $6.5 billion. That’s a big problem. Both the The New York Times and The Wall Street Journal recently ran articles: McDonald’s Earnings Falter Despite Turnaround Efforts and McDonald’s Initiatives Have Yet to Turn Tide.

According to McDonald’s new CEO, Steve Easterbrook, the company is trying to change the menus, work on reducing complexity and streamlining tasks for its franchises, like taking steps out of assembling menu items, changing the way packaging is laid out and implementing technology to improve communication between the counter and the kitchen. However, I failed to see any plan focusing on building customer loyalty or creating the ideal customer experience. What about improving the communication between the front-line associates and the customers?

I understand we are talking about hamburgers. Fast food drive-ins have all become a commodity. However, go to almost any neighborhood coffee shop and just stand back and see how the staff knows the customers’ names, their schedules, how they want their coffee and importantly, how they welcome a customer with that big smile. A smile costs nothing, but is priceless.

McDonald’s, in addition to changing the menu, should make creating and building customer relationships a priority.  Hiring the right employees and training them to deliver a customized experience and ensuring employee turnover is kept at a minimum is critical.  True, many McDonald’s customers are transient and drive-through, but worldwide are neighborhood stores where just as many people frequent the same establishment.  Do any McDonald associates know the names of their customers or anything else about them?  I guarantee that employees at Mary’s coffee shop do.

The following statement appears on the McDonald’s website to prospective employees: McDonald’s offers a chance to learn, grow and gain hands-on experiences that can set them up for success – whether here at McDonald’s or anywhere else they pursue their opportunities. And the pride that comes from bringing a little lovin’ to our customers every day.

I am not really sure how they bring a little lovin’ to their customers. Lovin’ is important, but there is more to creating a great customer experience than that. Teach associates the principals in the most successful business book ever written, How to Win Friends and Influence People, by Dale Carnegie, in 1937.  His message is as valuable today as when the words were first written.  Mr. Carnegie believed that “financial success is 15 percent professional knowledge and 85 percent the ability to express ideas, assume leadership and arouse enthusiasm.”

It is most important that staff at the counters and drive-in windows be taught to understand the value of creating and building that special relationship. Going to a fast food restaurant should be no different in theory than going to a 5 star hotel.  A simple smile and trying to make a connection with another human being must be the basic standard in any industry.  Remembering the customer’s name and recalling it on their next visit can be the best turnaround plan for any company. Keeping up with a more nutritional conscience nation, apps that make our lives easier and looking at ways to improve productivity are all important, but when there is no focus on person-to-person communication, the package is incomplete.

Make sure your company grasps the importance of improving the human-to-human connection.  That emphasis is the secret sauce to create a winner.

6 Repeat Business Ideas for Retailers

6 Repeat Business Ideas for Retailers  It’s mid-July 2015 and we are celebrating summer activities; family vacations, picnics and summertime concerts. But as we get ready to move into the fall season, let’s set our sights on some ideas to generate repeat business.

The best opportunity for retailers to generate repeat business is for associates to create and build relationships with customers. We all stop at our local coffee shop in the morning to see Mary who gives us the big smile, knows when we are going on vacation, where we like to travel, if our children had a great experience at summer camp and what our plans are for back to school. Once you find your Mary, you won’t shop price and or seek out another, more convenient coffee house; your loyalty is towards Mary.

Here are my 6 repeat business ideas for replicating Mary at your business.

  • Teach associates to greet people like they would welcome a new neighbor into their home.  Communicate to front-line staff how important it is to smile and connect with customers as people first. It’s more important to find out about the customer than to know what’s in your inventory.
  • Ask customers if they have ever been in your store before, whether they purchased something or not. If someone is new, tell them more about your business; the best places to park in the future, your hours, the type of merchandise you carry, how long you have been in business, other locations, return policies, customer experience philosophy.  It will not only provide useful information, but more importantly, create a dialog and relationship.
  • Always tell the customer you can help them.  People like to feel they are speaking to a person who can help. The help might require asking another associate for advice, requesting more information or even referring a customer to a competitor. It’s not important how you help them, but showing the customer you care about answering their question or resolving their problem goes a long way.
  • Listen to emotions. Pay attention to what customers are feeling, not just saying. Unless a person is totally robotic, they are most likely happy, frustrated, excited, disappointed, etc. By expressing, for example, “you sound disappointed we don’t have your size in stock. Let me double-check and get back to you,” will create a new and beneficial relationship.  
  • Have business cards printed up for all associates. It will make your staff feel more important and it’s an excellent way to invite the customer to return. The employee can say, “I really enjoyed helping you today. Here is my card with my contact information. Now that I know your tastes, I can let you know if we get something in stock you might like. Would you prefer me to email, call or text? Just let me know.”
  • Keep in touch. Ninety percent of all retailers fail to show the customer they matter after the sale. That’s a big mistake. Just sending daily emails has a negative effect.  Brainstorm with your team about the best ways to show customers they are relevant after they leave your store.

I grew up in a retail environment. My dad owned a men’s store and I worked there in my early teens. I learned two important lessons.

It was more important to listen and learn the customer’s state of mind than find out their method of payment

When new customers entered the store, they were strangers. My father hoped by the time they left, they had become new friends

If more retail executives understood why they visit the same coffee shop to see their Mary and taught their associates the concept of customers are people first, customer second, I guarantee the percentage of repeat customers would exponentially rise.

Learn How To Build Character: Visit Camp Winadu

how-to-build-characterCamp Winadu’s 90-year anniversary is just around the corner so they must be doing something right. Their mission is “Building Character Through Sports.” Their claim is, “Sports create the opportunity for children to learn critical life lessons while having tremendous fun.”    Number one rule: “Don’t be afraid to make a mistake.”  

From my experience, too many corporate associates at all levels are afraid to take any risk. Unfortunately, this creates an environment of stagnation instead of innovation. Although leaders talk about how their organization should, “think outside of the box,” it’s not possible when there is fear of retribution.

How did I learn about Camp Winadu’s philosophy?

We are vacationing for a few weeks in the Berkshires, beautiful here.  My children stayed with us for the weekend and we visited a sleep away camp so my 8 year-old grandson could participate in a ‘rookie’ day.  What is that?  An opportunity for a new camper to experience activities, the counselors, dining room – in effect, spend a “pretend” day at camp without parents in anticipation of becoming a full- fledged camper the following summer.  Driving up to beautiful Camp Winadu I think we were all a little nervous and uncertain about what to expect.

Whatever butterflies any of us may have had flew away with the first hello.  We were greeted so genuinely – the directors and staff were happy we were there and that message was conveyed in their welcome.  Each staff member told us their name and asked us ours.  The “rookies’ went off with their designated counselors and each family was given a tour.  Our guide, an assistant director, was thorough and answered more than our questions.  He shared information that he thought would be helpful about what our grandson would be doing and learning at camp everyday.

The staff was so amazing and put us at ease. Eliminating any trepidation, we were able to focus our attention on their important message of “we are passionate about using the power of sports as a teaching tool.” Through their programs, children learn critical life lessons while having tremendous fun. Some of those lessons are:

  • Win with humility
  • Lose with pride in their efforts
  • Be good teammates
  • Respect their opponents
  • Take care of their bodies
  • Value cooperation
  • Value consistent sustained effort

Camp Winadu believes, “children learn best in an environment where they are encouraged to try new things and improve their abilities without fear of criticism.” This is how character is built, that distinctive quality in an individual’s life that determines his or her response regardless of circumstances.

Perhaps all corporate leaders should experience summer camp where mistakes are encouraged to build character.  They could then create a business culture where employees would be encouraged to experiment.  In our competitive and global economy where the bottom line drives decision-making, leaders would be wise to take some risks in order to create inspiration.

I’m going to recommend to the owners of Camp Winadu that they open their facility to CEO’s for a week. I’m sure senior executives would learn the value of taking a risk which would make them better people and leaders too. Character is built one mistake at a time.

Lack of Communication Creates An Additional Malfunction

Lack of Communication Creates An Additional Malfunction A few weeks ago there was an unfortunate incident with a United Airlines flight.  The plane left Chicago bound for London and because there was an engine malfunction, had to be diverted to Goose Bay, Canada, for repairs.  Yes, unfortunate, but add insult to injury because the passengers were treated with disrespect and disregard.

When the passengers were interviewed about their experience, of course they were upset about the delays and poor accommodations, but everyone was particularly dismayed because they were kept in the dark without any information from United Airlines personnel.  Customers really wanted to know what was happening.  Did they plan to be in Goose Bay?  No, but they were, and would have been more satisfied just to be given updates.  The bad situation could have been better if the passengers had been engaged in a conversation and understood what to expect.

It is difficult to understand what United was thinking.  The passengers are their customers and they were completely ignored.  I would think that United doesn’t have too many flights that are diverted on a daily basis that are not related to weather delays. You would imagine there are procedures in place to inform the C-level executives when there is an issue with a flight. I’m confident if the passengers were sent a video message from the COO of United that the military facility where they were staying was the only place that could accommodate that many people, the passengers would have just thought it was bad luck and not bad service.

The crew was housed in a hotel; after all, they needed to rest in order to pilot and service the plane. That also makes sense and should not have gotten the passengers aggravated, but being ignored and left in a cold and barren barracks didn’t seem fair.  United offered its passengers a refund.  That totally misses the point. It’s the same as with cruise lines. An entire voyage could be spoiled because of a virus and reimbursement is not sufficient. However, if passengers are treated well and communicated with, compensation becomes less of an issue.

I wrote a blog about United Airlines (May 27, 2014) praising their customer service.  The United representative put all the passengers at ease when our plane was delayed.  He meticulously and patiently explained every detail about what was happening and what we should expect.  We were delayed but definitely felt better.

I was contacted by United Airlines after the blog was published thanking me for my comments.  The employee was commended and the blog printed and posted for all to read.  So my question is:  where is the consistency?  It is important for any company, airlines included, to have procedures and policies in place ensuring that customers feel important and appreciated.  If United Airlines recognizes that passengers were grateful for the information provided by the representative when there was a flight delay and those passengers were still on the ground, how could they not do the same when a plane had to be diverted to an out of the way place and passengers had no idea what was happening next?

Customer service is the keystone to repeat business.  In this situation, good customer service would have been to keep passengers in a precarious predicament informed.  It’s the very least United Airlines could have done.  Will those passengers ever fly the “friendly skies” again?  Maybe, but damage has been done.

Would you?

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?