Buzz Builder

Growing Customers for Life

The following is from the January 2012 edition of my Buzz Bulletin eNewsletter (subscribe for free here to get monthly stories, tips and strategies for building your business with word of mouth marketing - I promise that I'll never share your email address)...

“If you treat people right they will treat you right - ninety percent of the time,” 
Franklin D. Roosevelt

Do you negotiate on an annual basis with your phone, Internet, cable and other service providers? If not, you’re probably paying more than you should. You are also missing out on a valuable lesson in how not to cultivate loyalty. 

Last week, I called our longtime phone and Internet provider to see whether I could lower my monthly bill since the promotional rate I negotiated last January was due to expire. Only after insisting on speaking to a higher-level customer care representative did I learn about a new promotion that will save me $40 per month.

Initially, I felt a thrill that my negotiating prowess had saved me nearly $500/year. Then, I was annoyed. Why should I (or any other loyal customer) have to be so aggressive to save money? Why didn’t the company automatically offer me the best possible deal?

In his excellent book The Ultimate Question (a new revised edition came out in September 2011), Fred Reichheld described bad profits as those generated when companies realize short term financial gain that jeopardizes customer goodwill. Clearly, this is the case of service providers that rely on uninformed and/or busy consumers to not find the best possible deal.

Yet, when consumers discover that they’ve been paying too much (and many will, thanks to the Internet), they feel burned and start looking for alternatives. It’s hardly surprising that people switch phone, Internet and cable providers with great frequency.

Companies that do right by their customers stand to win tremendous loyalty and referrals. If you have long-term customers who might be interested in a new deal or service, don’t wait for them to find out on their own. Extend a special invitation and let them be the first to benefit.

You may find that what you offer is far less important than how it is offered. Last summer, I went to the car wash and the clerk told me that he was going to wash my car for free. Surprised, I asked why and learned that I had washed my car nine times and the company always offered a free tenth wash. Even better, they were tracking my car washes automatically.

How can you surprise and delight your loyal customers with offers they don’t expect? Pull it off and you’ll not only ensure their loyalty but also guarantee that people will be talking about what a great business you operate.

Garbage Company Executive Picks Up After His Driver's Mess and Generates Goodwill

Poor service is the principal driver of negative word of mouth. However, companies can turn a detractor into a promoter with simple words said with sincerity at the right time. The following guest post from Ellen Galvin, my wife, business partner, and author/writer illustrates this point beautifully.

By Ellen Galvin

Sixteen. That’s the average number of people a customer will tell about a bad experience, according to American Express. Personally, I think that number is low. Once a business has gone out of its way to lose my trust, I’m not shy about voicing my displeasure.

That said, I do believe in giving a business an opportunity to address the problem at hand. We all have bad days—days when our technology crashes, the weather doesn’t cooperate, an employee wakes up on the wrong side of the bed. But it is how a company addresses the problem that determines whether customers speak positively or negatively about the experience.

Take our local waste management company. We’ve been on Portland Disposal & Recycling’s residential route for seven years. While I’m not thrilled about the rate hikes, I’ve been about as happy as a garbage customer can be.

That is, until a few weeks ago when a surly new driver roared up the street. I knew right away he was not digging his job—and so could my 3 year-old daughter, who has decided it is her duty to identify grouchy people and make them smile.

“Hello, Mister Garbage Man!”

“How are you?”

“I’m over here!”

“Thank you for taking our trash!” she yelled loudly, from the front porch.

The response? Silence. After making eye contact, the driver added further insult to injury by slapping a red tag on the can to identify it as overweight (which was funny, since I had carried it to the curb myself. In fact, it was lighter than it had been in weeks thanks to a new recycling initiative by the City of Portland).

The red tag, I could live with. But dismissing a three year old who still believes in the magic of garbage trucks? Please.

I went inside and typed up a letter which, I concur, sounds old-fashioned. But again, I believe in giving a business a fair chance to make things right—which does not include slamming them on social media in the heat of the moment.

Two weeks later, the owner/manager of the company called me to apologize and explain what had happened. He didn’t make excuses and he didn’t deny the problem. He wasn’t in a hurry to get me off the phone, either. Instead, he acknowledged that the changeover to the city’s new recycling program had been a difficult one for his company and its 34,000 residential customers. Drivers had been forced to change routes and learn new procedures. Everyone was stressed, and I was not the only customer who had complained.

And, although the company owner said that he had already had a talk with his driver, he acknowledged that there was more training to do.

Then, he said what too few companies say: “Customer service is everything to us. It’s all that we can do. I will see to it that our drivers are better ambassadors of our company.”

His response reminded me that any company—even one that collects trash—can deal with customer complaints in a classy manner that instills loyalty and generates positive word of mouth.

Netflix Price Increase: An Unnecessary PR Fiasco

I always enjoy reading David Pogue's technology columns in The New York Times. His recent piece weighing in on Netflix's 60% price increase for its "unlimited online streaming + one DVD out at a time" package prolvided a balanced perspective in a week of tough PR for Netflix. The blogosphere and mainstream media have been dominated with disgruntled Netflix customers saying that they couldn't believe the company had jacked up prices so quickly and that they would cancel their subscriptions.

While a 60% price increase sounds large, the new charge for the unlimited online streaming + one DVD is still a bargain at $16/month when compared to other services (check out this PC World post comparing Netflix to its competitors).

What really hurt Netflix wasn't so much the price increase but how it was presented to the public. Its PR chief did such a poor job justifying the sudden price increase to Pogue that I read the column a couple of times and still couldn't understand the reason behind the sudden change. Perhaps the Netflix official that Pogue interviewed did a poor job, I thought. Nope. After reading articles about the price increase in a variety of respected publications, I became even more confused about the rationale. My conclusion: Netflix's PR people simply didn't have adequate information to explain the price increase to consumers.

I've been a satisfied Netflix customer for almost ten years, and I will continue with the service since it remains a relative bargain. But, I'm not so sanguine about what other Netflix customers will do. In February 2011, the results of Brand Keys' annual survey of customer loyalty were released and in its first year of inclusion, Netflix came out on top of the list of all 528 brands, beating out reigning champ Apple. I'll be very curious to see how Netflix fares in the 2012 survey. I'm guessing that they'll drop in rank. In short, it's a lot easier to lose loyalty than build it in the first place.

I'm Not Even Worth a Dollar to Dollar Rental Car: A Case Study in Invisible Toll Booths and Bad Profits

Please excuse the long lag between posts but client work and speaking commitments have kept me away from this blog for too long. "Excuses, excuses," you say. Well, you're right! So, to keep me on the blogging straight and narrow, starting today, I commit to posting to this blog at least twice a week for the rest of 2011. If you notice that I fail to do this, please send me an email and I'll mail you a thank you card along with a free copy of my book Secrets of a Working Dog: Unleash Your Potential and Create Success.

I felt an urgent need to write since I received a great lesson in "bad profits" from Dollar Rent A Car that is just too useful to keep to myself. It came in the form of a letter from the company's Vehicle Violations Team stating that Dollar Rent a Car charged $26 to my credit card on record for a $1 toll charge and a $25 "administrative fee" since I allegedly failed to pay a toll on the Crosstown Expressway in Tampa Bay, Florida during our recent vacation.

After discussing the supposed infraction with my wife, who thankfully has a much better memory than mine, she remembered how we paid various toll fees at booths throughout the area that day. When I called Dollar Rent a Car's Vehicle Violations Team to explain what happened, I got a humorless customer service representative who said in a robotic sounding voice "Our records do indicate that you failed to pay a $1 toll fee."

I told her that I would never pass through a toll booth without paying. She said, "Well, I'm sure you paid some tolls but there are many toll roads in Florida that don't have booths, and that's why you must have been charged." I was incredulous and politely expressed my frustration.

"Go ahead and look up invisible toll booths on the Internet and you'll see that I'm right. You should have opted for our prepaid toll option when you rented the car and we would have covered the $1 toll," she insisted. I protested and she said "Okay, I'll credit you back $20 but we still have to charge you for the toll part of our administrative fee." 

As advised, I did look up "invisible toll booths" on the Internet and found multiple entries for Florida. However, I'm absolutely certain that Dollar Rent a Car never offered me "prepaid toll protection" coverage (yes, it really does exist) when I rented the car.

Instead of sending me a bill for $26 and forcing me to call and complain, Dollar Rent a Car would have been much smarter to take the high road. The company should have covered the $1 toll charge out of its own pocket and sent me a note tellling me that they had done this while warning me about the existence of "invisible toll booths." Additionally, Dollar Rent a Car could have suggested that I buy "prepaid toll protection" coverage the next time I visited Florida to avoid similar problems. 

While Dollar Rent a Car has collected extra dollars from me and others that invisible toll booths have ensnared, they are surely alienating customers and driving them to other rental car companies. Sometimes, going after every dollar just doesn't make cents sense!

Video of "Galvanizing Your Business with Word of Mouth Marketing" Keynote Presentation at the Hillsboro (OR) Chamber of Commerce

Last week, I was invited to give a keynote presentation on "Galvanizing Your Business with Word of Mouth Marketing" at the Hillsboro (OR) Chamber of Commerce's monthly Forum Luncheon. I enjoyed the enthusiasm and energy of the audience of business leaders looking for creative ways to build buzz for their companies.

I hope this video provides you with ideas for growing your business. Please keep in mind that audio quality improves after I'm introduced since the microphone is on my lapel. Also, I suggest that you learn from a mistake that I made. If you're ever filmed as speaker, don't forget to take off your nametag.

If you know a company, chamber of commerce, or association looking to educate people about word of mouth marketing, please consider referring me as a speaker.

Special thanks to Karyn Reohr of Black Label Films for shooting this video in challenging lighting conditions and editing it.

All CEOs Should Act Upon the Wise Advice for United Airlines' CEO from Zane Safrit

What if you consistently experienced your company in the same way that your customers do? And, to supplement the experience, you invited your employees and customers to share their issues and suggestions directly with you while you were trying to live in their shoes.

Surely, seeing your company from the perspective of your customers and frontline employees will spark ideas. And, if you honestly shared your experience and what improvements you will seek in response to it in your company blog, newsletter, and other communications vehicle in your own plain-spoken words (and not some hyper-polished PR speak), imagine the postive buzz that you would generate.

Such is a recommendation that Zane Safrit, a business startup consultant and former telecommunications companny CEO, makes for the CEO of United Airlines in a thought-provoking recent post in his always engaging blog.

Surely, the CEO of United Airlines, which has many detractors including now famous ones (thanks to YouTube) like a singer who I blogged about a couple of times in 2009, should follow Zane's advice.Actually, all CEOs who live in the shoes of their customers and frontline employees consistely will find that is one of the most valuable ways to spend their time.

Blogging Regularly Is Like Eating Spinach: You Know It's Good for You But It's Hard to Do Consistently

Blogging regularly is like eating spinach. You know it's the right thing to do to build visibility and credibility but it's so easy to find excuses not to do so on a regular basis. To inspire me to keep on blogging, I've found myself bookmarking posts about remarkable people who have achieved incredible success in life when they had ample opportunities to stop trying. A recent post entitled "What Your Excuse for Not Achieving Your Goals?" on Copyblogger, an excellent blog for learning how to increase website traffic, links, subscribers, and profit, provides inspiring examples of famous people who pushed through difficulties to succeed. It motivates me to stick to my blogging and other New Year's goals when I start thinking about reasons to do otherwise.

If you're a blogger, what helps keep you going strong?

A Critic Speaks "To Do in 2011: Shoot All the Social Media Experts"

Happy New Year! Since I know that many of your are still planning your social media campaigns for 2011, I check out this thought-provoking post from Rich Meyer's New Media and Marketing Blog on why you should take what social media gurus have to say with a huge grain of salt. I appreciate Rich's no-BS stand when it comes to evaluating the advice that you receive. At the end of the day, social media is only as useful as it gets your clients and prospects to take action that helps your business meet specific objectives that you can track. How do you evaluate the quality of advice you get from social media experts?

Good News for Companies that Deal Efficiently with the Bad Things that They Do to Their Customers

Sorry for the absence from the blog but I went on a long vacation to Turkey (more on this in an upcoming post) and I'm just now getting back into the blogging saddle...

Over the past few years, I've flown on Southwest Airlines as often as possible since I appreciate their low fares, on-time departures, and excellent customer service. Recently, a friend in Texas sent me a clipping from the Dallas Morning News titled "Making it right if things go wrong: at Southwest, LUV means saying you're sorry - quickly - to keep customer relationships strong" which is a well-written account of how Southwest deals with passengers who face flight snafus and the benefits the company derives from a rapid response. There are also some hilarious anecdotes in the piece that make it worth reading such as the story of the female passenger who kneeled in front of her middle seat and chewed on the seat cushion, then stripped off her top and ran down the aisle.

Ten years ago, when I worked in my family's office furniture business, like Southwest Airlines, I learned that some of our most loyal customers were those whose who had the biggest problems when their orders. Sure, nobody liked gettting the wrong furniture delivered, dings on the bookcases, or damage to their doorways. Our customer service manager took pride in contacting folks about our mistakes before they were noticed. Many customers told me how surprised and happy they were to hear us fess up to our mistakes. And, to my surprise, many customers who had horrendous things happen to their furniture orders with us kept coming back to us to buy and sending in their friends. Paradoxically, a mistake corrected quickly and completely often generated better results for our business than a job done well in the first place. Have you experienced something similar?

Why The Oregonian Must Better Address Subscriber Complaints or Risk the Sad yet Funny Path of the Boston Globe

Four months ago, my wife gave me two-year gift subscription to Mix, a new monthly food magazine from The Oregonian that is mailed to subscribers. One of the enticements to subscribe was the offer of a free cookbook. I've received a few issues of the of the magazine which I like for its innovative content and attractive layout. However, today I called The Oregonian, our state's largest circulation newspaper, to ask why I have not received the promised cookbook. The service representative was nice and told me that the she was aware that the book was late to many subscribers and that the paper "wouldn't deal with the guy who did that book anymore." However, when I pressed her about when I would receive the book, she told me that she had no idea. She took my number and said somebody would call me and that they're handling calls on a case-by-case basis.

If The Oregonian knows that there is an issue following through on one of their promises, why are they waiting to hear from subscribers to react? It would be smart to send a letter of apology to all subscribers expecting the book stating that there has been an unforeseen delay yet the book will arrive. In an age of rapidly diminishing circulation numbers for print publications, proactive customer service is the best way to hang onto existing subscribers to avoid nightmare scenarios like this video spoof about the steps that The Boston Globe must take to retain a highly diminished circulation.