Category Archives: customer service

The customer is not always right. $481M says so.

Everyone hates baggage fees. It’s a crime airlines don’t listen and let you stow aboard luggage for free, as much as you want, right?

Well …

In case you missed it, the airline industry is a tough business. One of the few bright spots helping them stay afloat in the 2009 recession was baggage fees, which drove $2.7 billion in extra passenger revenue to U.S. airlines. Delta came out on top with $481.8 million from such fees — a vital solution, since at year’s end Delta still bottomed with a net loss of $1.2 billion. Without the added charges, Delta’s loss would have been 39% higher.

Sure, customers say they hate fees … but imagine the alternative. If Delta didn’t hide charges until you got to the airport, it would have to raise its ticket prices 2% across the board — about $10 on a $500 flight. And you, dear savvy consumer, planning your trip at Expedia or Travelocity or, would likely click on the nearest Delta competitor flight to Austin to save $10 in your rapid-fire, e-commerce fueled impulse decision. Because when you’re shopping, you want the best deal, brand loyalty be damned.

Run the math, and the 1-2% of customers who really take enough offense at baggage fee surcharges that they would not come back are offset by the 10-20% of air flights that Delta would lose if it had to make all its passenger fees completely visible on aggregator travel sites, a click away from lower-priced competition. Disguising fees to make front-end purchase decisions easier is nothing new: your cell phone, cable company, magazine subscriptions, and even children give you low starter costs that hide whopping fee increases later.

The customer has strong opinions, and businesses should listen. But believe us when we say again, the customer is not always right.

Smashing guitars on the tarmac? United, call Radian6.

Here’s one more reason why your business should monitor social media. Musician Dave Carroll watched in horror from his plane window while luggage guys on the tarmac broke his $3,500 guitar. So he posted a musical to YouTube yesterday spilling the beans on United; the video already has 15,000 views and is trending fast. The most interesting stat: the YouTube video has spawned 950 comments, most with similar angry stories about airlines customer service. As Darryl Ohrt notes, this is not the kind of viral any business plans for.

Apple calls AT&T’s best customers deadbeats

We went to the Apple store in Danbury, Conn., today to look at an iPhone and got called a lazy, bill-avoiding vagrant. Nice.

You see, any current AT&T customer who had a cell phone sold to them at a discount in the recent past will be checked at an Apple store, and the salespeople see your account status flagged with a little “IRU” code. Trouble is, Apple employees cannot distinguish whether this “IRU” code means the AT&T customer now owns a cell phone sold at a discount — as most cell phones are — or if that AT&T customer is past due on bills.

This creates a rather comical customer-service scenario:

Customer to Apple clerk: Hi! I’d like to buy an iPhone!

Apple clerk to customer: Sure, let me look up your account. Whoops. The iPhone will cost you $400, not $200, and I see an IRU code that indicates you may be past due on a bill. You need to walk down the street to the AT&T store and work this out.

Nice. Now, this may be a simple business process issue, but imagine the millions of loyal AT&T customers now inquiring about the new iPhone, all getting told that it looks like they haven’t been paying their bills. Ah, the loyalty that must inspire to the AT&T brand and future Apple product sales.

Perhaps poor customer service doesn’t matter if a product, like the iPhone, is hot. But for now, dear Apple, we’re keeping the second conversation about us buying a new computer for our kids to ourselves. UPDATE: Brad Ward explains how to get around this IRU mess here. Thanks, Brad!

Zappos: Why marketing to your employees is most important

Branding guy Bill Green had a chance to meet Zappos chief exec Tony Hsieh on the recent Plaid van tour and discovered the inner workings of the online shoe/clothing company revolve around employee brand culture.

Zappos is thinking big, targeting $1 billion in sales in 2008, more product expansions, potentially an airlines in the future. And it has grown by pushing brand values more to employees on the inside than to customers on the outside.

– Many new employees must take four weeks of customer loyalty training
– New employees are given $1,000 cash incentives to quit — to weed out slackers
– The company communicates constantly with employees, including a blog by the CEO and a Zappos company culture book
– Result: 75% of sales are from prior customers

It reminds us of a client we served recently who was focused on driving down marketing costs per acquisition. We pointed out the people at the call center could create a huge lift in performance, if only better training and incentives were provided. Why spend so much on advertising media and ignore the people who actually sign up, and grow, the customers?

Read Bill’s complete inside take here.

Update: The current Zappos web site is a bit cluttered and confusing, one weak point in the sales armor. Zappos has a new, improved web site coming soon, you can see the beta here.

Photo: MicheKerr

CD Baby puts a song in your heart

Michelle Marts over at Media Artist notes that too few companies do something original with their standard customer communications. Here’s a nice email she found from

Your CD has been gently taken from our CD Baby shelves with
sterilized contamination-free gloves and placed onto a satin pillow.

A team of 50 employees inspected your CD and polished it to make sure
it was in the best possible condition before mailing.

Our packing specialist from Japan lit a candle and a hush fell over
the crowd as he put your CD into the finest gold-lined box that money
can buy.

We all had a wonderful celebration afterwards and the whole party
marched down the street to the post office where the entire town of
Portland waved “Bon Voyage!” to your package, on its way to you, in
our private CD Baby jet …

Over the top? Yes. Memorable? Definitely. Such prose won’t work for every business, but it’s a wake-up call to start doing more with your standard customer touchpoints. A little humor goes a long way.

Photo: NguyenDai

Breeding ground for customer contempt

Who is talking about your brand? Are you listening?

Andy up in Vancouver knows a guy who is a little upset with the local railroad for damming up a salmon-spawning stream. A few years back, this gentleman might have written letters to CP Rail management to complain. Now he’s posting 20/20-style documentaries on YouTube about a tiny little culvert that blocks the poor fish from their betrothed.

Many organizations focus loyalty programs on their most valuable customers; airlines and hotels chase business people who spend big bucks with points programs, because the math is obvious. Get your biggest customers to spend more. But in today’s age of social media, not watching the little guys on the other end of the spectrum could be costly.

Lightning, like customer service, is so misunderstood

Poor lightning. It has a bad brand image.

This destructor of homes and humanity has been debated for more than 250 years, primarily in how to stop it from killing you. After Ben Franklin’s buddy James Otis was annihilated by lightning as he stood in a friend’s doorway, lightning rods became a symbol of American ingenuity. But no one could agree on how they worked.

Franklin tested concepts with a kite after getting frustrated that a local church would not let him put a rod on top of the steeple. (The church clergy protested that a lightning rod would interfere with God’s will, if God decided to strike; Franklin retorted that then the roof interfered with God’s rain, so why not remove the shingles and rafters as well.) The Yanks and Brits couldn’t agree on whether lightning rods should have pointed tips or a ball at top. And scientists still argue over whether lightning rods protect homes by diverting the blaze of electricity, or by dissipating electrical charges before lightning strikes.

Which brings us to you, marketer. Your customer base is like a charged cloud and occasionally will strike. Will you hope they don’t? Or set up a system to identify, divert or dissipate their anger? Whatever the physics, it’s good to think ahead.

(Footnote: The photo above is one of the few in the world capturing lightning at the exact moment it strikes the ground. We can’t remember the photographer’s name, but recall an amateur took it in a rain storm by clicking the camera shutter a split second before the strike. For a good overview of lightning with your kids this weekend, visit NatGeo’s slide show here.)

Customer service: When the pot cracks

Tonight we had a phone conversation with a very angry man. He wanted to know what we do, what advertising costs, and as we tried to explain the nuances of media planning — that in TV alone there are 300 cable networks with 100 shows each, creating 30,000 options, so let’s first talk about his goals — he grew livid. What does it cost?!

And we realized. Once again, someone was mad.

French psychoanalyst Jacques Lacan believed anger was a human defense against “fragmentation” — the simple fact that people really can’t control the world. We build personalities which Lacan said are illusions of ourselves in control, but when anything threatens to expose our personal fragmentation, a natural response is to fly into a rage. Our aggression covers up our weakness. It makes perfect sense — if you think about how you grow angry, it’s when your control over career, traffic, money, relationships, or status seems most at risk.

This is relevant for marketers, because anger is the root cause of most communications failing. It’s an acid solvent in the chain of exchanging value — you can’t serve a client, or fulfill a contract, or deliver a service if one or both parties is furious at the other. In customer relationships, anger is the tipping point that leads to termination. Anger is the antithesis of advertising response; it’s emotional repulsion. And as surely as response drives sales, rebuttal creates losses.

The only way to manage anger is to understand its natural progression. Anger is sparked by adrenaline, then escalates in the mind, and like a missile launch rapidly heads skyward with no brakes. The receiving party naturally leaps toward defense mode. Psychologists note the common response to anger is (a) hurt followed by (b) immediate lust for revenge. As in, dude, if we didn’t have to be polite we would leap through the phone to wring your puny-ass neck. Hey, we’re just hypothesizing here. So how do you not react in defense?

Guide to Psychology suggests it’s as simple as recognizing the situation and speaking up frankly immediately. Not about the other party, but about what’s happening. Say, “hey, this is getting warm, let’s back up and talk about some solutions.” Being silent only allows the angered party to continue to escalate. So ask open-ended questions. Try to flow around the obstacles. Heck, be honest: “Look, we got off on the wrong foot, let’s start over and tackle the question.”

At the broader marketing level, organizations need training and business rules on how to handle unruly customers. Call centers often do this brilliantly with call scripts and save queues and customer loyalty offers, but other arms of the business are usually less prepared. The thought grenade for your own team is: How are we prepared to respond when customers complain, or worse, demand something unreasonable?

But if you are stuck with a malcontent who is intent upon “woofing” to get a reaction, hang up the phone.

Falling bridges and customer feedback

There’s a bridge above Interstate 84 in Connecticut that isn’t looking so well. Drive west on I-84 and about 2 miles before exit 6, as you near Danbury, you’ll see it — cracked concrete supports with iron rods exposed, peeling paint with exposed steel, rust everywhere under the overpass. If this bridge were a house, we wouldn’t buy it. If our kids’ school bus drove over this every day, we’d demand a new route.

But whom do we talk to? 911 would laugh. Letters to the governor don’t get returned. We’d call the local paper, but they’ve been downsizing and probably would brush off the call.

Customer feedback systems are notoriously awful. It costs businesses and government a lot of money to listen to customers, and the majority of callers have personal complaints that probably mean nothing. In the ideal world of simple access, organizations would be awash in crank calls. Our little bridge example could be the same — perhaps steel beams covered in rust and peeling paint are perfectly healthy, and crumbling concrete supports don’t mean the bridge may someday fail.

Of course, the flip side is one keen observation could save a bridge … or save your business. You have thousands of customers who interact with your organization every day, and they’re watching closely. It’s worthing thinking about as a marketer — what are you doing to listen to your customers or prospects? You know that some of your message is working. How do you find out about the parts that are not?

New York Times welcomes you — to meet some crappy sponsors

Silly New York Times. We signed up at its web site again recently, after a mild internet browser mishap wiped out our cookies and we forgot a few passwords. NYT asks new readers to punch in some useful data, such as your job title and household income, before giving free access to its reports. So, as we entered the hallowed walls of all the news that’s fit to print, we were greeted with … a butt-ugly AOL-circa 1997 Special Offers for You! page inviting us to get medical hair restoration, no-cost diabetic supplies, and a cheap vacation in Branson, Missouri.

What is NYT smoking? Imagine if your business sold intelligence as a product, and an affluent, educated, 40something new customer walked in your front door. Would your first greeting to the new customer be, hey, see you’re in the demo for thinning hair, how about some potion to cover up that bald spot!

This smells like business silos, folks. The same idiocy that gets American Express to insert ads for cheap steak knives in its bills to affluent business customers (some doofus at the AmEx billing center figures she can make a few bucks for her org unit) encourages some ad guy to sell crap on the NYT welcome page. No one is thinking about the overall customer experience, or the incredible harm to the overall brand when a crass touchpoint leaves a bad taste in the customer’s mouth. Some sub-silo at is making money, and no one is looking at the big picture.

The sad thing is this first touchpoint is a wonderful opportunity to pull the new reader in. Explain some cool NYT features. Offer a simple dial that allows the reader to customize the news home page. Provide a free trial offer for a home print subscription. Mention the latest NYT awards, or introduce the hippest NYT bloggers. So many ways to engage and start building loyalty … without a Disney vacation planning DVD.

Our free offer to NYT: Find that welcome-page marketing manager and fire him.