Mad 4 Blog

My wife loves that new TV series, Undercover Boss, because she thinks it is high time that CEOs and company managers got out from behind their desks to see how things are really working on the front lines.  I couldn’t agree more. But honestly, isn’t this something that every CEO should be doing every year? Surely, they could learn a thing or two about their employees, and more importantly, how to better serve their customers.

Take my recent visit to the Boca Resort Hotel. When my wife asked whether there was a ladies’ room on the floor that we were on, the hotel worker’s response was, “Of course there is.” Not the kind of answer you’d expect from a hotel that thinks it’s as good as a Ritz Carlton now is it?

What would the CEOs of other companies discover if they spent a day or two on the front lines? Well, the CEO of Home Depot might be surprised to see how difficult it is to find an associate to help them in the plumbing department without searching aisles away in electrical or lumber. So I say, let the CEO of Hess find out how many gas stations don’t refill the receipt paper at the pumps and require customers to walk inside to retrieve it. Good way to sell an extra coke and a bag of chips though, don’t you think? Let the CEO of Sports Authority try to buy a pair of athletic shoes and discover that there’s little customer service, nothing in his size, and no suggestion to find it at another store, or ship it to his home. Let the CEO of Office Depot find out how there’s nobody in Business Machines who knows anything about the products they’re selling. Let the CEO of Bank of America stand in line with 6 customers in front of him or her because there’s only one teller window open, yet there are 3 bank officers sitting at their desks with no customers.

In fact, let the CEO of virtually every large corporation in America call into customer service and be taken from one automated operator to another, pushing button after button, and still wait forever to get a “live” person on the other end.

In other words, just be a customer for a day, or a week, and see what your employees are doing right and wrong. Find out what’s working for your customers and what’s not. And for heaven sake, start putting the customer first!

By Stuart Dornfield

It’s Monday morning. And as I do every morning, I pour myself a cup of Starbucks and sit down to read The Miami Herald. There was a time, 30 years ago, when the paper was thick and robust. Filled with ads, news stories, inserts, and the like. But like millions of Americans throughout the country, the daily paper has gotten noticeably thinner. With little in the way of investigative reporting. Little advertising. And for many people, decidedly fewer reasons to subscribe.

Certainly, the continued growth of the internet as a news and information source, especially among younger and  time pressed audiences, has contributed to declining readership and lower newspaper subscriptions. With it has gone the investigative reporters who used to help keep corrupt politicians in check. Also gone are the advertisements from department stores, appliance stores, jewelry stores, tire stores, banks, auto dealers, and countless others who have found more cost-effective, non-traditional media channels to build their awareness and engage customers.

Of course, as more advertisers pull out of the newspaper, as more readers cancel their subscriptions, as more of the product gets less important, newspapers must cut costs even further. That means fewer local reporters and more reliance on national press agencies. In fact, this past Wednesday in the  main section of The Miami Herald there were 11 stories from Miami Herald Wire Services, 3 stories from The Washington Post, 6 from Associated Press, 3 from McClatchy Wire Services, 1 from Firmaspress.com, and 3 from The Miami Herald.

So what’s the answer? Well one possible strategy is to “rollup” the news resources of every major newspaper in the country to act as one large news bureau. Not just AP and other wire services, but local reporters in local markets sharing their juicy investigative reporting and news stories with the top newspapers in the country.
Miami’s reporters sharing their local and Latin American stories with New York and vice versa. Los Angeles with Chicago. Houston with Atlanta. And so on and so on.  Now instead of one major newspaper in one major market having a staff of 3 investigative reporters seeking fresh news, they have 25 times that amount, making their newspapers more robust, more relevant, more interesting, and giving advertisers and readers more reason to purchase. Now add to that news content 25 times more “Lifestyle” content, 25 times more “Business” content, and 25 times more “Sports” content from 25 major newspapers sharing among themselves and you’ve now got a newspaper product that has far greater appeal to those searching the web every day, or for those who want original, fresh content from around the country.
Now, if this “rollup” strategy is successful, there’s another revenue producing idea. Offer national advertisers a discount to purchase ads in 25 newspapers instead of just a few. Give them the ability, like television networks, to place an ad in 25 markets at the same time and reach 40+ million consumers at once.
It’s time local newspapers put their stubborn independence aside. Time to discard their age-old pricing models. Time to go beyond ego and start thinking about survival. If they can get national advertisers like Proctor & Gamble, Nissan, Toyota, Coke and others to buy newspapers at a significant discount, it sure beats printing a daily paper with no advertisers, doesn’t it? And when the advertisers return, the readers will follow. And when the readers return, so will profitability!

If you know anything about Zappos then you know that it’s a successful online retailer that built its brand not only by selling a great assortment of footwear, but by delivering an exceptional customer experience. Perhaps that’s why Amazon paid so much leather to buy them. Zappos proved that if you deliver winning customer service you get back loyal customers who spread the love about your company. So then, why are retailers so reluctant to spend money to recruit better employees, provide ongoing training, and delivering great customer service at the expense of paid media and other marketing initiatives?

If you listen to Pete Blackshaw, Nielsen VP and author of “Satisfied Customers Tell Three Friends, Angry Customers Tell 3000,” it’s the failure of retailers in deeply understanding emotional psychology. That’s probably true. But I also think that C-suite executives living in the lap of luxury are so far removed from the “real” world that they have forgotten what it’s like to walk into a store as an “average customer” and sense how little their own stores offer in the way of service. Walk into Sports Authority and try to buy a pair of athletic shoes.
No one is there to help you find your size among a wall of boxes. (Chances are, they don’t even have your size in stock) Nor will a store associate try to locate it from another store, or order it for you and have it shipped. You’re much better off buying from them online and skip the expectation of in-store customer service altogether. Which is precisely what many retailers today are pushing their customers to do.

Not so at Apple. I have had nothing but great things to say about them to dozens of friends and colleagues. Why? Exceptional customer service. The staff is motivated and interested. They’re knowledgeable and accommodating. And they surprise and delight customers at every turn. From the Genius Bar in the store to their “expert” online. In fact, just a month ago, I went to their store because my 2-year old battery was shutting down at 14% remaining capacity.
The tech gave me a new battery…free!

Of course, good customer service extends beyond brick n’ mortar to a merchant’s online store, as well. Take Best Buy for instance. I recently purchased a 46-inch Toshiba at bestbuy.com and 3 days later saw a competitor  with a much lower price. So I contacted bestbuy.com and was told that the Best Buy Price Guarantee was only valid on purchases made at the store, not online. What? You’ve got to be kidding me? I’m not entitled to a “store policy” because I purchased  the item at your online store?  What’s more, the price guarantee is only valid if you find a lower price at Best Buy, not a competitor’s. Here’s the language of their policy: “The BestBuy.com Price Match Guarantee does not apply to other retailers or other websites. It also does not apply to Best Buy Retail Stores or BestBuy.com.” Shame on you Best Buy. You have lost a customer forever!

It’s instances like these that make me love Apple even more. But the real question is:  Does exceptional customer service cost so much that other retailers can’t replicate it and still earn a decent profit?  Why can’t Office Depot do it? Why can’t Macy’s do it? Why can’t Walgreens do it? Why can’t Best Buy do it?

Blackshaw thinks customer service is a competitive advantage. I couldn’t agree more. But I think retailers, especially the brick n’ mortar stores, need to get much better at this.  I fear, though, as the recessionary pressures continue to weight heavy on retailers like Best Buy, even Nordstrom, you may even begin to see these great customer service models begin to unravel.

The following is an editorial blog by Stuart Dornfield. All comments and opposing views are welcome.

The Wall Street Journal recently reported that restaurants in an attempt to get more families to dine out are “scrambling to counter a tendency by recession-pinched parents to leave their children at home when they go out to eat.”  Case in point, this past summer The Cheesecake Factory and P.F. Chang’s China Bistro added their first-ever kids’ menus. And while P.F. Chang’s had previously offered some kids’ items that servers would suggest to parents, Chief Operating Officer Rick Tasman commented that “not having an actual children’s menu made parents feel like their kids weren’t welcome.”
Now, don’t get me wrong. I am in no way suggesting that restaurants who cater to families shouldn’t continue to make kids and their parents feel welcome with better and healthier menu items for children. Nor am I suggesting that there aren’t plenty of restaurants that already do that.
My question is this: How much does a restaurant risk losing its core audience of adults seeking an adult-only dining experience if it erodes its brand experience by pandering to families with kids? Certainly, I welcome opposing opinions, but I do not want to drink and dine across from tables filled with albeit screaming kids. When my wife and I are looking for a relaxing and upscale dining experience at P. F. Chang’s, Cheesecake, or any of a number of adult restaurants serving liquor and wine, I don’t expect to see kids running around tables, or hear babies crying.
I recognize that P.F. Chang’s 6.8% decline due to fewer customers is a concern. But perhaps they should look at other ways to increase their profitability other than eroding the brand experience for their core adult customers.
Imagine Starbuck’s offering a kid’s menu and installing a video game arcade in their coffee shops to increase parent/kid visits and incremental sales. Not.
The Wall Street Journal reports that a study last month by market research firm Mintel International Group found that parents are “looking for healthier alternatives to the standard kids’ fare of chicken fingers, grilled cheese sandwiches and macaroni and cheese.” I applaud that. But the answer is not to turn adult-oriented restaurants into kid-friendly restaurants because they already offer healthier meals, but rather, to encourage parents to challenge family restaurants to offer healthier menu items for kids.
Seriously Mr. Restaurant CEO, if the average size of a group dining out with kids pushes the bill up by an average of $8, is it worth $8 to lose adult customers who don’t want to dine with babies and kids? Short-sighted thinking? You bet. When profits drive a brand to change who and what they are and the brand experience changes with it, that’s when the CMO or the CEO needs to say “wait a minute…this is not who we are.“
According to Maria Caranfa, Mintel’s director of menu insights, “restaurants don’t want the reason for people not coming to be because they don’t offer kid-friendly food.” Well I submit, how about adults not coming because you’ve changed your focus to a kid-friendly dining experience!
While I can understand Denny’s Chief Executive Nelson Marchioli’s saying “people with kids are uncertain of the economy, so they don’t need any discouragement from the industry from dining out,”  I also think adults without kids don’t need any discouragement either.

Too few companies know how to use the concept of up selling in their marketing and advertising to their benefit. What is up selling?

It is the process of getting more business from your existing customers. More often than not, they can be your best customers. Take banks for instance. In the past 2 months, many local banks have boosted their CD rates to attract new depositors. These new depositors are great new customers. Customers who need car loans, home equity loans, college loans, credit cards, checking accounts, money market accounts, you get the idea. Yet if you survey most banks, few if any communicate with their new CD customers.  They are missing a huge opportunity to get more business from their existing customers, and more importantly, move them from a “transactional” customer to a “relationship” customer.

Don’t make the same mistake with your business. Look for new ways to up sell your existing customers by offering them new products, new services, or new offers that can build your relationship with them while garnering more share of wallet. Develop a formidable plan to make sure your customers know what services you provide and keep your core and other related messages in front of your customers as often as possible.
But don’t be impatient. It may take up to 10 forms of contact for a customer to identify with your brand or make a new purchase. Yet in a down economy, it’s one of the surest ways to boost your profit margins because up selling has a far better ROI than acquiring new customers.

PR: wait… I: wait… L: wait… LD: wait… I: wait… wait… C: wait… SD: wait…