I just finished my book @YourService and it is filled with Customer Service stories. It has the good, the bad and the ugly. In my view the businesses must make a shift in the new @YourService economy. Your Customers and employees now control your brand image. Often I am struck by stupid easy things businesses could fix, yet they fail to do so. Is it just me that sees this?

As Customers, new technology has brought us greater ease, yet it has caused us to grow ever more frustrated. Case in point is my recent experience with Best Buy. Best Buy has been an interesting case study for me. Over the past few years the company has gained greater control of their market by the departure of Circuit City. I am a tech geek and have spent a lot of money with them, and most likely will continue to do so (although debating that based on my experience with Amazon). Recently Forbes had an interesting piece on ‘Why Best Buy is Going Out of Business Gradually‘. The post has many strong and truthful observations about Best Buy and ways they could improve. For a few years Best Buy has also been trying to send the message that they are working to improve, including their Twitter Twelpforce initiative, their community forum and ideation efforts, as well as their CEO blog, where he welcomes feedback. I did enjoy the CEO’s post in response to the recent discussion of the Forbes piece. The problem is it should never have taken such a long time to gain reaction from the company. No matter what words are said, actions are louder. Online feedback regarding the retailer has been negative for a number of years, and I have yet to see evidence of any changes the company has made to create the right experience. I should note that I know many people within the Best Buy social team and I adore them. The failure here is not their efforts, it is the failure of the leaders to understand their Customer. Winning in social media is not some program, it is creating the right experience for the Customer where they want to talk about your brand.

Unfortunately I want to speak about the brand in a negative manner, because that is more fitting of my recent experiences. As Consumers, I wonder if our actions have told companies that poor service is okay! I especially think that way because I tend to attract it. That is probably for a post another day. On Black Friday I was wasting time so I went window shopping at Best Buy. While I was there, a TV caught my eye and the price was great. I decided to buy it. Well after waiting really long (not in a line mind you, just one Customer was doing some odd things involving credit, which they were not approved). There were 3 associates there but no one could do anything while this situation played out. So I went online and ordered the TV from a store that was on my ride home. When I arrived I already received the email that it was ready so I went to pick it up. Amazingly there was no line late in the day for pickup so I thought I would be in and out. Well that was not the case. It took well over 40 minutes to get the item from the back. I chalked that up as my fault for shopping on Black Friday. A week later I decided to order an accessory for the TV. I did it online with store pickup. This is where I started to see the dysfunction of the company. About an hour after ordering I went to pick it up. I never received the email but in my prior experience this typically took about 30 minutes. I went to the store and the associate said there is nothing they can do until ‘they’ transmit it to us. First of all they is you and you are Best Buy. After waiting in the store for 30 more minutes, I decided to pick it up myself figuring I could easily cancel the order. Probably my mistake too. First they could not cancel the order in the store. The mysterious ‘they’ had to do it. You also are not able to do it online. Now this makes business sense, take someone who prefers to self serve and send them to a call. If you want to save money, make it easy to do things online! Calling is a trip, but needless to say, after many transfers it did not happen. I did learn that if you do not pick up the item, eventually they cancel it, so I did that. That brings me to my latest. I ordered a game system and some games for store pickup. When I received the first email it had an item with the wrong store as the pickup location. I quickly relooked at the order and for some reason the incorrect store was listed for 1 out of 7 items. Why would your online system even allow that to happen? Bad Customer experience! An easy warning asking do you want to pickup items at two locations would resolve this. Of course I still blame myself for not catching it prior to submitting the order. I do take issue with what transpired next. I called to cancel the order. When you do the only real option that fits is speak to someone, so I select that. Once you get to that point you have to describe your issue, and more importantly, the product you purchased, then you are transferred to describe it all over again. Of course you do not get to describe it when you are transferred to dead air or disconnected. After working on this for 30 minutes, I give up and head to pick up my items. I assumed the products were ready, even though the confirmation only listed two items. I luckily assumed right. While driving I called again and on the 4th attempt I was able to get the item cancelled. Why do I have to go through all that? Why, as I was getting increasingly frustrated, did no one empathetic to my frustration? I am willing to bet it happens so often that the agents simply do not care. This is all emblematic of a larger cultural issue.

As I vented this on Twitter, others came out to vent frustration, including Lon Seidman, who shared a strikingly similar post from 2009. Now I do love Best Buy and hope I start to feel the difference, but if it does not happen soon, I am afraid I will be seeking alternatives. Is it just or is service going downhill?

As Consumers when an experience is not pleasant we like to blame someone, often times it is the agent we are dealing with. Is this right? Usually not.

I was reading a few news stories that my readers will find interesting. First was from SmartMoney regarding 10 Things You Will Not Here a Customer Service Rep Say. It is a very thorough look at the state of Customer Service. It is sad to me that we are training Customers to be loud to get proper service. Do we really think that is a good idea for our brand image? Service better get their act together if they want to win in an @YourService world.

Another article, Customer Service Needs Friendly Returns, comes from the Columbus Local News. This article takes a look at a popular topic this time of year, retail returns. Like many of us I feel the same way as the author regarding returns. Often you feel like a suspect instead of a Customer. But to me the friendliness of the representative is determined by the culture of the business they work for. Have you returned items to Target in recent years? A few years back they changed their return policy to be more stringent. Basically for most items you have 90 days and you must have a receipt. If you do not have a receipt they will try to locate it for you (of course you have to know the credit card that was used and be the one with the card). You can fully review their return policy by reviewing here and here. I have witnessed and experience with the no exceptions to the policy, including one person who was at 91 days.

Now let’s look at the return policy for a store I enjoy shopping at. Kohls, often ranked as a top Customer Service retailer, has their Hassle-Free Return Policy. One time I returned a George Foreman Grill that was used but had trouble in the first couple of months. I dreaded returning it because I lost the receipt. I walked up to the service counter prepared for a hassle and instead I was greeted with the friendliest person who said no problem, I would be happy to process that return for you. It amazes me how friendly they have been over the years. Because of this I have spent a lot of money there.

Where would you rather work? Kohl’s is constantly sending messages to the Customer and employee about trust and creating the right experience. Have you ever forgotten a coupon at Kohl’s? No problem here is one for you. I remember years ago working for a different major department store retailer the senior leadership made the decision to not honor coupons unless they brought them with them. How stupid is that to send a Customer ready to buy out of the store. These decisions impact the culture of your employees and the trust of the Customer. I am sure Target’s decision was based on tons of data collected. I am willing to bet, it is impacting their bottom line but not in the way they expected. Including less loyal Customers (I am in that boat) and employee turnover.

I agree we need friendlier returns, but it starts with having an @YourService culture.

I had a great experience returning an item to Lowes last week. The cashier made if fast and was very friendly. She even noticed, without me saying, the color difference which was the reason for the return. Even with that great experience I left with a different message and it is something that can help other companies too. Like many retailers, the service desk is located by the front of the store. It is fairly open area, so it is easy for Customers to see behind the counter. I am always fascinated by hand written signs behind service counters. They usually are something about the policy. In this particular location the sign was signed by the Loss Prevention department, so of course, I had to read it! I did take a picture but it was too blurry to share. Basically the message was to the service team. It was a reminder of a policy about Customer or employees trying to exit through the entrance. I immediately thought about all the times I exited through the entrance. 9 times out of 10 it was because I forgot something in the car. No the 1 out of 10 was not theft! It was because they did not have what I was looking for so I was leaving. Anyway the sign tell the service personnel if anyone tries to exit through that door, you are to immediately stop what you are doing, including helping other Customers and confront the person using the wrong exit and guide them to the other exit by the cash registers.

I should be clear that I understand the need for loss prevention, and years ago even did it. There are benefits for Customers in keeping costs low. That being said, telling a service agent to break away from the Customer they are helping to help the loss prevention team, is ridiculous. It is not the Customers fault that the loss prevention team is not able to watch the door properly. I also do not think it is a good practice to dictate what doors a Customer must use.

In this new world of @YourService it is important to know the message you are sending to your own employees and Customers. Their interactions are what define your brand. This handwritten memo is an example of this message. Have you seen message like this? As a Customer how do they make you feel?

It seems with all the technology we as Consumers are still growing frustrated by the service experience by companies. It seems to me many companies just created a patchwork quilt to meet the demands of their Customer. Of course many new companies, built from the ground up, are finding new ways to surprise and delight. Today I want to tell you about one of those experiences.

Our story starts with An email from a friend about a free picture book offer from Shutterfly. With the email we began putting together the book of 2011. What a year to watch the kids grow! Anyway, we complete the book and begin the check out process, but we realize the code was already used. No big deal, we check our email and it turns out we had the same offer, but the email went to junk. The friend that sent it to us was not as lucky. See the email was sent to her by another friend. So she emailed Shutterfly and within an they emailed her a code. She is now very dedicated to Shutterfly, because they could have said any number of things, including the offer was intended for select people, etc. They made it easy.

Today we have fairly low expectations of companies especially when it comes to the Customer experience. This is where Shutterfly differentiated themselves. Through the checkout process we decided to order a few more things, totally about $25. As we went through the check out process a $20 credit was automatically applied. It turns out we earned that credit when purchasing school pictures from Life Touch. Shutterfly did not put the onus on us to remember a code or that we even had it. They applied it automatically. The experiences you create are what lead to social media success (or failure). This is an @yourservice world!

I am excited to report that in the coming weeks you will be seeing some changes to this blog.  First I will be updating the look.  But, more importantly, I will be focusing on sharing stories I read everyday regarding Customer Service.  I’ll share the good, the bad, and the ugly.  Hopefully as businesses improve we will see more and more of the good.  I will also be encouraging readers, as well as businesses, to share their stories or ones they come across on the internet.  I think that this will provide a well rounded view of the current state of Customer Service.

All this is in preparation for my upcoming book called @YourService.  The book will include many personal stories, observations and recommendations for the Customer Service field.  The simple fact is the Customer and the employee now control your brand image. Many want to win in social media, but if you want your business to have success you have to start with the basics: your Customer and your employee.  Social media simply highlights the culture you already have.  The Customer service world has changed dramatically over the past 30 years with a lot of impressive technology.  But is that technology designed for the Customer or the business?  The fact is that today Customers feel further and further away from your business, and often we are sending a message that we are not interested in their needs.  We are stuck on process and we provide limited room to move.

In the book you will find many stories about service, some of which I experienced personally.  We tend to make Customers jump through hoops to get things cared for.  Sometimes I wonder if that is intentional.  Are companies just hoping we will just give up?  Of course I like to be more positive than that and hope they are simple mistakes.  Of course they happen way too often.  Here is an example of a situation I just dealt with for a new faucet I purchased.  The final email to this chain, is probably the funniest since I am not sure why I received it.  Our story starts on December 6.  I send an email to Kingston Brass/EOD Faucet because the finish was coming off of the pull knob for the drain of a faucet I bought from Overstock on September 3, 2011.  The original email includes a clear picture, our address, a description of the trouble and a request for a new pull handle.  I do not receive any response, so on January 3, I emailed again.  This time I received a fairly quick response.  The first email asks me to provide proof of purchase, which I respond with.  The odd thing about the email is it cc’ed what appears to be the human resources email address for the company.  This continues through the remaining emails, so I make sure to cc them as well.   The next email asks me to take a picture of the entire faucet “so we know exactly what part to send you.”  My first two emails did include a photo and a request for the part, which was simply the pull.  So this time I respond with two pictures.  One was simply the damaged part and the other was the entire unit.  I then get a response asking me to attach the pictures instead of cutting and pasting them in.  For some strange reason when they received the email the picture were shrunk to icons.  They were full size when they left here.  Anyway I sent the photos with separate emails.  I then get a response asking for the address to send it to, which was included in the first two emails.  Again I respond with that information and we are done with this back and forth.  The good news is I received the part very quickly but now for the odd news.  Remember how I mentioned the agent included the HR email address in the chain?  Well today I received another one which was send from CS103 to Erik Chen at Kingston Brass, the HR email and one that appears to be for tech support at Kingston Brass.

Friday, January 13, 2012

Mr. Chen,

In the morning I answered phone calls and answered technical, order inquiry, and stock status questions. I wrote up warranty request forms and also entered them into Elliot. I entered orders from Kingston Brass Faucet and from SinksPlus. I answered emails from info@eodfaucet.com and techsupport@kingstonbrass.com.

In the afternoon I answered phone calls and answered technical, order inquiry, and stock status questions. I wrote up warranty request forms and also entered them into Elliot. I entered orders from Kingston Brass Faucet and from SinksPlus. I answered emails from info@eodfaucet.com and techsupport@kingstonbrass.com.

Sincerely,

Juan

After writing the book, and a chapter about an inside look at a call center, I immediately started putting together my own backstory to email, including the fact that the agent cc’ed HR on every response.  Is the agent in trouble for something and that’s why he was doing it?  I suspect that the different emails were not due to him but the process they have in place, including lack of history to identify the address.  All this is part of our Customer experience.  The key to winning in the social world is creating a good environment for agents where they can be empowered, such as possibly just sending the pull since the cost is so low, instead of the multiple emails creating frustration.  The book was fun but this will give you a feel for what this blog will be like moving forward.  Thank you for your continued support!  Please send your Customer service stories to frank@frankeliason.com  I’m looking forward to hearing your stories!

A tweet says so much yet may not provide clarity. A few days ago I tweeted about two experiences over the past week with hotels. The more I think about the tweet the more I realize it is a tale of expectations. We tend to tweet or post to Facebook items we are passionate about or the extremes of our own expectations. This is the story of both extremes of my expectations.

When it comes to service I typically have very high standards and I am frustrated often by poor Customer handling. At the same time I have come to expect poor service. It is a sad state of affairs for the service industry. We were attending a wedding at a resort in Atlantic Beach, Florida (near Jacksonville). I had low expectations for the hotel. I knew it would be nice based on the Internet pictures, but I never expected to be wow’ed by the experience. I can count on one hand how often I was wow’ed by a hotel. Anyway the One Ocean Resort was not only able to wow me, they have moved to the top of my list for hotels. It all started upon arrival. We decided to drive down from New Jersey. The plan was a few days for the wedding and a few days in Disney prior to driving back. Due to a police incident in Virginia, we were stuck on the highway from 11:00 PM until after 2:00 AM. At that point stopping at a hotel seemed a waste, so we drove straight through, arriving at the resort around noon or 1:00 PM. We pulled up to valet, introduced ourselves to the attendant, and let him know we first wanted to see if the room was ready before off loading. He turned to us and said “Mr. Eliason, not only is your room ready, I have your key right here. There is no need to check in, let me take your bags right up”. It was a tremendous start. The hotel room had a beautiful view of the ocean and loaded with snacks to meet any tastes. The hotel, prior to arrival, also emailed asking snack and drink preferences. The room was loaded with our selections. What a great touch. During our two night stay we were greeted by name from many of the staff members. The wedding was beautiful and a brunch we threw for the wedding guests was perfect. I loved One Ocean!

After the wedding we took the few hour ride to Orlando to visit Mickey and all the Princesses. This was my third trip to Disney and the other two were magical, so I had very high expectations. This time, using credit card points, we were staying at the Grand Floridian. It was just going to be one night, so why not. During the few hour drive and after reviewing the weather, we decided to extend our stay 1 night, if the hotel had availability. So we arrived at the hotel. The guard was exceptional directing us to the front of the hotel to leave our bags before taking the car to self park. The bellhop was really nice as I have come to expect from cast members. We then drove to self park, which was full. We then found ourselves in cast member parking, which did not seem right, so we drove back and did valet. As we went past the security guard again he did let us know we could have parked in cast member parking but I decided to valet instead. Finally made my way to check in. Again another nice gentleman greeted me. I asked about extending the stay. He checked me in then had to call the reservation desk to see if they could extend (why he could not do it seemed disjointed to me). He then informed me that the reservation was not done through Disney but he could add a night at a different rate. I was fine with that. That night we attended Mickey’s Very Merry Christmas Party. It was a magical, although wet experience. It was great being in Magic Kingdom with less of a crowd. The next day I got up and the first thing I did was work with the concierge for the girls to attend a dinner with Cinderella. I then went back to the check in desk because I realized our car pass had the incorrect date. The woman at the desk was confused by the reservation and was telling me it was not right. She made some changes and said that should fix it. It was at this point I started to expect problems ahead. Anyway it was time to head to Animal Kingdom to start the day. As soon as we arrived at Animal Kingdom I made a purchase at the gift shop (waterproof bag after the wet evening before) and charged it to the room. We then went in the park. I love Animal Kingdom, especially for the character access. After meeting a few characters we went to make another purchase. This time charging to the room was not going to happen. Our card was deactivated. I called the number on the card. The first person was very nice and listened carefully, she then had to transfer me to the hotels front desk. The next person seemed confused and had to connect me with someone in the back office. I am not sure what she did, but I found myself back in the queue and about 20 minutes later back at the front desk. I hate loops! Needless to say the new person had no clue, so I reiterated the story. Instead of reactivating the cards, she issued new keys that they would keep at the front desk. If I wanted to make any purchases, I just had to tell the person to key in the code at the bottom of the key and change the last two digits to 07. I would guess they can not reactivate existing keys. There system, to avoid risk, creates trouble for the Customer. Not uncommon but very frustrating. When we finally got back to the hotel, shortly before the scheduled dinner, I went to the front desk to pick up the keys, again explaining my frustration with the experience. Instead of getting the keys already cut, they printed new ones and handed them to me. I provided my wife her key and suggested she shop and I would take the kids back to the room. The hotel is spread over multiple buildings, so heading to your room can take time, especially with 2 girls. I finally made it there and you probably already guessed, the key did not work. This most likely meant my wife could not make purchases or get in the room if she beats me back. I made my way with the girls back to the front desk. I again explain the situation and my frustration. He seemed to think it was about charging back to the room an hands me back the key and says now you can charge. I said great, of course my goal now is getting into my room. He then reviewed a few things and said he had to go back and check with his manager. He then came back and printed another key and promised that one would work. All the other keys were now useless. I was fine by that. I was surprised that if he went back and relayed the story to the manager, I would have expected then to come out and apologize for the trouble, but none of that happened. Well the key did work, the bill seemed correct and the rest of the trip was as magical as I expect from Disney. I have seen similar key trouble in many hotels, but I had higher expectations for Disney, especially the Grand Floridian. I did not see the empathy from the staff as I would have expected. I loved the trip to Florida and I know I will be back to Disney but maybe next time my expectations will not be as grand.

Much Discussion has been made about how successful companies can market themselves and their products through social media. I personally wonder if anyone truly cares about hearing brands do this, but that is a post for another day. I do know that companies can destroy their brand quickly in this space and I thought it would be fun to look at different ways this happens.

The first thing to recognize is that the brand image is owned by others and not the PR department or marketing. Both of these departments are important but they are no longer in the driver’s seat for brand image. I wonder if they ever were? Again, probably a post for another day. I am not sure things have changed in this regard but perception has. The masses, whoever they may be control it. In reviewing recoveries by brands who have had trouble, we can still determine how a brand can be destroyed in social media.

Many larger brands have had trouble in their history, even before social media became a large part of communications. McDonalds and Starbucks had difficulties at one point in their life cycle and both recovered nicely. Both had similar issues, they had inconsistent Customer experiences at different locations. They also strayed far from their core products. Both recovered in similar ways by working to create Customer experiences that were consistent from location to location. This will always be trouble for franchise type organizations or decentralized business model because the brand image is not as much in the companies control. In recovering they first outlined who they are and what they strive to be. Starbucks founder Howard Schultz returned as CEO. One of the first things he did was bring back the smell of coffee. Very basic but key to a consistent experience. McDonalds focus on cleanliness of locations and consistent food. How consistent is your brand? Are you doing what you are good at or are you trying to be too many different things to various constituents?

Your brand is also owned by your employees. Since there has been a long standing analogy of social media as a cocktail party, what story would your own employees tell at a cocktail party? Would they say what a great place your company is or would they bitch about their job? Worse yet, would they say nothing? Apathy is much worse than negative commentary. At least negative commentary means they want change or improvement but if they say nothing, they do not care at all. Employees have great power over the brand and could help build it further. There are also many examples of employees hurting brands, such as the Domino’s video from years ago. Domino’s did a great job recovery from that event but I am sure it fundamentally changed them.

Customers have the greatest power they ever have. Companies dream of Customers taking their message to others, but as a Consumer how often do you do that? I have done it for Apple and Samsung products as well as a few service brands that wow’ed me, but more often than not, I am more negative due to experiences that did not meet my expectations. Brands may have dreams, but the fact is people will not talk about your brand unless you give them strong reason to. Do you create wow experiences? If not, do not expect people to share your message. Also if you are not a well liked, but create something cool, they may share it with commentary such as ‘this is cool even if I do not like XYZ company.’ This happens because they are not playing to you, but instead they are playing to their crowd. They do not want to get blasted by their own friends for supporting a brand that others do not like.

You win or lose in this social world through the Customer and employee experience. Know what your brand is about and consistently deliver on that.

Over the past month the #occupywallstreet fever has been sweeping the country. There have been a few different thoughts surrounding the movement and I feel it is time for me to share some of my own. The movement has confused many because there is no clear leadership to express their views. It also has created challenges in responding to them. First there is frustration with the economy, politicians, and business. From the movement I have heard many different thoughts from wanting a world without money to environmental concerns. The movement is not all that different that revolutions we have watched around the globe and even quieter ones taking place right before our eyes (I will be writing about this in my book @YourService coming out from Wiley Spring 2012). Social media provides a voice to everyone and it allows those with like views to connect. That is what we are seeing take place. As I have analyzed the social conversations taking place, I am seeing set themes. First is a lack of trust of government, business and leaders. Trust is earned and it is imperative that we start to do that. This is done with more human interactions than business or government is ready for. They better get ready! There is a frustration with profits on Wall Street and CEO pay. I think these have been issues for many for a long time, especially when there is a lack of jobs. In reviewing the online dialogue, in my view we need to discuss job. The other frustration I am seeing is centered on student loan debt, which to me centers on the cost of education, societal pressures, and the lack of jobs when one graduates. We have always placed a strong emphasis on education with the notion that one would be rewarded. In many ways I wonder if ease of student loans helped create an education bubble and universities to raise tuition rates, similar to what occurred in housing costs an mortgages. I agree that these are important points for society to strive to address.

The challenge is not the lack of leadership on the #occupywallstreet side, it is on the other side. Social media provides us the opportunity to have a dialogue on issues like these at a scalable level to include everyone. It requires someone to step forward and say how are we going to come together to find solutions that move America and the World forward. We need positive leadership to do this, yet I have not seen that anywhere. I find that very frustrating. How can we improve education? What are the best ways to create jobs? How can we create this private/public partnership? I love America and business. We have to lead the way. What are your thoughts?

This post was done on my iPhone so please excuse typos, etc

‘You’ve Got Mail,’ a term we all loved to hear in the mid 90′s but when was the last time you heard it?  Actually for me it was about a month or two ago.  Do you remember the Tom Hank’s, Meg Ryan movie of the same name?  Yes, I watched it.  That movie started me thinking about the evolution of business.  Although AOL still exists it is a vastly different, smaller company today.  Last week I received an email from Barnes & Noble regarding their purchase of the Customer list from Borders.  Here is an image of the email:

I loved the human tone of the email, particularly this quote from Barnes & Noble CEO, William Lynch:

“First of all let me say Barnes & Noble uniquely appreciates the importance bookstores play within local communities, and we’re very sorry your Borders store closed.”

This brings me back to the movie ‘You’ve Got Mail.’  If you remember the movie, the character played by Meg Ryan owned a small book shop called ‘The Shop Around the Corner.”  Tom Hank’s character, along with his family, controlled the Fox Book Superstore, moving in around the corner.  Fox Books would remind you of any Barnes and Noble or Borders location.  It was very open, featuring a wide range of books, other media, and, of course, the all important coffee bar.  Although the two characters fell in love, ‘The Shop Around the Corner’ does go out of business.  The model changed and the little shop was not able to change with the times.  Now today we see the model changing again.  First Amazon made a strong competitor with their internet book business.  They further pushed the model with the introduction of the well loved Kindle.   The iPad and Apple furthered this evolution, as did Google and their Android devices.

Business models are changing all the time, and the most nimble businesses can bring success to this.  ’The Shop Around the Corner’ and Borders may not have been able to make it, but companies like Barnes and Noble are trying.  Amazon has proven to be a disrupter to the typical business model.  How nimble is your business?  Do you see change before it is too late?

It is interesting, when taken into context of yesterday’s Netflix post.  Evolution is imperative but timing can be very difficult.

Over the years Social CRM has continued to be a hot topic of online conversation and debate, yet I am not sure we still have a clear understanding of SCRM versus a Customer experience culture! Two different aspects that both play into the successful organization in todays connected world. What started my thinking for this post was a Facebook post I noticed today indicating that Netflix was in a ‘CRM crisis.’  The Facebook post linked to this blog post by Harish Kotadia, Ph.D titled ‘Netflix’s Self Made CRM Crisis and How Social CRM Can Help.’  I found this interesting, given my views regarding social CRM. Now let me be clear the debate regarding this topic will not end here, just like it did not end when Paul Greenberg put his stake in the ground. In that post Paul offered the following short definition for SCRM:

“CRM is a philosophy & a business strategy, supported by a technology platform, business rules, workflow, processes & social characteristics, designed to engage the customer in a collaborative conversation in order to provide mutually beneficial value in a trusted & transparent business environment. It’s the company’s response to the customer’s ownership of the conversation.”

I love his definition, but I do wonder if it is too broad.  I firmly believe that the social Customer owns your brand and a change in the way we conduct business is an imperative.  We will take a close look at my view of the Netflix issues in recent months.  Before going into that, lets take a look at CRM.  Wikipedia defines CRM as:

Customer relationship management (CRM) is a widely implemented strategy for managing a company’s interactions with customers, clients and sales prospects. It involves using technology to organize, automate, and synchronize business processes—principally sales activities, but also those for marketing, customer service, and technical support.  The overall goals are to find, attract, and win new clients, nurture and retain those the company already has, entice former clients back into the fold, and reduce the costs of marketing and client service.  Customer relationship management describes a company-wide business strategy including customer-interface departments as well as other departments.  Measuring and valuing customer relationships is critical to implementing this strategy.

CRM, although part of a broader culture, starts with technology to better understand Customers, interactions, and build relationships.  CRM tools help us know our Customers and the interactions they have with us.  When you add the social component, you do gain a few other aspects.  First and foremost, you now gain the ability to know more about the Customer, or at least what they want known by the general public.  You can learn what is important to them, whether about your product or not.  Great way to further interactions with Customer and prospects!

Now let’s get into the Netflix conversation!  First let me say I personally love Netflix streaming and have been a subscriber for a while.  I tried Netflix by DVD years ago, but I never fully got into it.  I also have been fascinated by the Netflix CEO, Reed Hastings, for his ability to be a disrupter to varies business models over the years.  Netflix first stirred the pot back in July when it increased subscriber fees.  Basically DVD rentals used to be $2 a month more for streaming subscribers.  This of course caused a firestorm, because this was a rate increase from $9.99 a month to $15.98 a month, a 60% increase for many subscribers.  As a percentage, the increase was substantial, and in many views, unwarranted.  Based on financial discussions during quarterly calls, it is safe to assume that Netflix knew that they would see a backlash and some subscriber defections.  Of course later discussions make me think this was much greater than they anticipated.  As pointed out in this CNN article  on the topic, Netflix lost one million or more in subscribers.  Then on September 18, Reed Hastings and the Netflix team offered an explanation, and introduced ‘Qwikster.’  In the post I think there is a strong glimpse into Reed Hastings with this quote:

“Most companies that are great at something – like AOL dialup or Borders bookstores – do not become great at new things people want (streaming for us) because they are afraid to hurt their initial business. Eventually these companies realize their error of not focusing enough on the new thing, and then the company fights desperately and hopelessly to recover. Companies rarely die from moving too fast, and they frequently die from moving too slowly”

For those of us who paid close attention as the scenario played out, you know that the blog post seemed rushed.  Even the Qwikster domain was still pointing to another web property.  At the same time, the quote above still holds true that the decision to split could have been the thought all along.  The big question then becomes why not discuss it when the fee changes were made?  Now comes the recent news that they will not be switching to the Qwikster model due to feedback from Consumers.  Basically the feedback was very negative because increase cost and then the perceived difficulty of consumers if they have to manage their Netflix accounts from multiple websites.  Now the overall situation reflects flip flopping, as pointed out by this CNN article.  You can also make the case that there appears to be overly managing to the perception and not the business.  In my view Netflix is a great service, with strong leadership, but there are causes to this trouble, long before the price increase.  First the model was obviously priced to gain market share, which Netflix did in a tremendous fashion.  During the time they helped change the model for renting movies, including seeing major rental chains going out of business or severely downsizing.  There brand was also mentioned regularly when anyone discussed cord cutting from cable.  They were changing many business models.  The challenge I have always seen was price.  It used to cost $3-$5 a night to rent movies (okay $2 when rentals started), and they shifted that to about $8 for as many as you could get.  As a Consumer, I love that, but as a business person I have to question sustainability.  Even in there streaming business, they offered a lot of content, much of which came from Starz, yet it cost less than Starz on a monthly basis.  I could not see Starz keeping that up, which, as it looks like now, they will not be as of early next year.  This to me can be partially a breakdown of SCRM, specifically over thinking business decisions and making quick decisions based on negative feedback.  Ultimately if you had a strong business plan, you would not be jumping around like this.  This is more reflective of leadership, as opposed to SCRM.  There are going to be times tough decisions by business have to be made.  If the fees were a key component, then they should have discussed the business realities on day 1.  If the plan was to split the business all along, then they should have done that from day 1.  I would guess the real plan was to increase the price, allow the falloff of Customers then slowly shift to an all streaming model.  I am not sure we will ever know the real reasons for decisions, but I want to see the disruptive leadership in Reed Hastings step out further.  What I have seen is handling that is reminiscent of so many other, more mature firms instead of what I have come to expect.

Key lessens is listen, as it would appear Netflix is doing, but SCRM will not always help every situation.  In this case this was a business that was well trusted.  The trust is eroding not due to SCRM but what appears to be missing focus, speculation by others (even myself within this post) and a vision not yet articulated.  My advice to leaders is

• Know your business and the future you envision
• Focus on the needs of the Customer
• Do not be afraid to make tough decisions, but be honest to what they are
• Be cautious of wavering, because it does erode trust (sometime you must, and then just be open to why)