The Pain of Not Having Hand

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Don’t you hate it when you want your money back and have no leverage?  Explanation of this (and ‘Hand’) follows.

This is about companies who put barriers in place to enable them to hold onto your money until they wear you out.  A war of attrition.  Things like unreachable customer service, phone personnel with no names who cannot be recontacted, endless phone wait times, etc.   We’ve all been there.  Some of you are probably on hold with someone right now!

My goal is always to have a ‘So What’ in my posts but other than stopping transacting altogether, I am not sure how to preemptively protect against this!  So I’m open to suggestions.

So that’s your challenge, dear readers.  For the good of humanity, help us find a solution.

The basic model has been around:  exploit human nature.

gift cardskitchen junk drawer

It used to go something like this: you get a gift card and the issuer gets the revenue and records future redemption as a liability. You put it in the kitchen ‘everything’ drawer next to your frequent shopper cards from 1995, never redeem it, company books revenue with no expense. Nice! Called ‘breakage’ in accounting, commonly known as ‘slippage’ in consumer goods.  Coupons are issued, people don’t bother redeeming, etc.

This new version is more insidious and aggravating. As George Costanza might say, we have no hand!  And they know it!

Here’s how it works (examples below):

  • You transact something online
  • You provide payment via credit card
  • Something goes sideways, not due to anything you did
  • Supplier has your money, and very little motivation to give it back
  • You now spend considerable unplanned time and energy fighting with the supplier to reclaim your own money

Case study 1: Booked AirBNB for about $1600 for a week; they (and owner) got payment in advance. Upon arrival, property has significant water leaks, which are being repaired, rendering it uninhabitable. AirBNB is contacted, situation explained, they offer $400 refund afterward and refuse to discuss the matter further.  Boo, AirBNB!

Case study 2: Rented car with GPS. GPS didn’t work. Took over an hour and several emails just to get back the $30.  Boo, Fox Car Rental! 

Case study 3: Moved across the country. $17k total bill, which required payment in full ahead of time (apparently this is standard operating procedure, which is itself worthy of a separate conversation). Move happened 3 days late, which created additional expense for friends who flew in to help with the move, and which technically qualified as a ‘late delivery’ by the mover.  Several items broken. After huge effort and many hours and emails, result was a check for $20 we got in the mail. Zero hand in this one.  Double Boo, North American Van Lines!

Case study 4: WSJ inexplicably stops being delivered one Friday. Go to handy online notification area but service is down. Chat is not manned yet (it’s before 8). Phone line also not available. Paper doesn’t come on Saturday either, make several online entreaties to both email and chat. Now start getting 2 (identical) papers on Monday. Issue finally settled on Tuesday.  Boo, WSJ!

I could go on.  I’m sure we all could.

In fairness, these infuriating episodes are balanced by the transparency and customer satisfaction focus of many excellent online retailers, who understand something about customer satisfaction and loyalty.

In all of the cited cases the supplier messed up, but the burden was on the consumer to spend the significant effort to (maybe) get a satisfactory reimbursement.  There is no Online People’s Court to help resolve these issues.   I personally resent having to spend precious time just to claim what is mine in the first place!

Sure, over the long haul corporate reputations can be harmed, penalizing bad behavior.  But I don’t want to wait for the long haul.

How can we fix this?

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Fail your way to customer satisfaction

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While there are scholarly arguments on both sides of ‘how much service is too much service’ (yeah, HBR, I’m looking at you), The Armchair MBA suggests that in going above and beyond in solving a customer issue, the customer may end up more satisfied than if they didn’t have a problem in the first place!

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The end result is that you can basically turn that customer frown upside-down, and perhaps even translate that into loyalty – – but it takes effort and commitment.

Net – sometimes it’s the effort – – listening, promptly replying, admitting guilt when appropriate, empathizing with the customer, and making it right – – that makes the difference.  Customers appreciate that you care, even if they don’t get all they want.

A few personal stories illustrate the point.

1) Delta – NOT ready when I was
Recently I was a casualty of the Delta Airlines meltdown, where storms early in the week caused cancellations all week due to Delta’s inability to adjust.

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The impact on me was that I had to rent a car and endure a nasty overnight drive from Providence to Raleigh NC (there were no other flights available).

delta miles

How did Delta handle it?

  • I got several outreach emails from various Delta departments acknowledging the failure and apologizing
  • Delta immediately (at the counter of the cancelled flight) refunded my fare 100%, no questions asked
  • I subsequently received a goodwill 20,000 frequent flier miles

Prior to this episode I was not committed to Delta one way or the other. But this mea culpa demonstration (without me asking), especially compared to how United dealt with its own PR issue at around the same time, has me leaning positively toward Delta.

2) 360fly, Inc. makes what is essentially a baseball-sized 360° GoPro. I ordered one for work, but it was delivered without one of the camera mounts I had ordered. After a few weeks I brought this to their attention.

360fly

Their response: they immediately apologized for the error, sent me the missing mount, and sent me an additional mount as compensation for my inconvenience.

My impression of them went from ‘small company, not particularly well-organized’ to ‘small company, maybe not so well organized but heart in the right place and committed to the customer’. This translates to my discussing them positively (including this post).

3) 1-800 Flowers. I’ve used these guys for years, with mixed results. When I had flowers and a balloon sent to my mother recently, the balloon, while in the photo of the item, wasn’t delivered.  (the inclusion of a balloon was an inside joke).

1800flowers

I sent a gentle email and the immediate result was:
– an apology from the head of customer service, assuring me that the photo would be adjusted so as to not be misleading
– an apology from someone way higher in the food chain
– an immediate reduction in the bill in the amount of the balloon (even though I hadn’t paid for a balloon separately)
– a generous coupon for next purchase
– a balloon appeared on my mother’s door THAT SAME DAY!  WOW!*

*when this happened, it was hard to believe – – what a great demonstration of making it right!  Turns out hard to believe was accurate.  1-800-Flowers did not in fact send a balloon to my mom- – someone else coincidentally did at the same time.  But still, they did a great job.

I’m sure everyone has an experience where they were ready to go to battle with a company, only to have the company respond with such aggressive goodwill that the complainer was turned into a fan.

The secret, in addition to what’s mentioned above?

To be able to solve a customer issue over and above their expectations, you must screw up once in a while.
Excellence on a regular basis sets an expectation.

On the other hand, periodic screw-ups with excellent resolution makes a more compelling impression.

Battle of the 2017 Super Bowl Ad Reviewers

Battle of the 2017 Super Bowl Ad Reviewers

Last year The Armchair MBA presciently foreshadowed our country’s potential slide into anarchy – – and we take no pride in noting that we appear to have been right.

Be that as it may, this glass case of emotion that we call the US must go on, and of course the Super Bowl is still the tentpole of our national identity.  So in the spirit of national unity, we herewith put forward our ratings and reviewer compilation of the advertising from this year’s Brady Bowl (or as some might call it from the Falcons’ perspective, the choking chickens Bowl).

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And as a perfect reflection of society, there is very little agreement among the dozen major reviewers we looked at.  This year we’ve added a feature of averaging the critics’ scores so you can see how YOU stack up.

At the bottom of this post is a chart comparing major reviewers for all the spots run during last Sunday’s game.
NOTE: ads are grouped by my rankings of green/yellow/pink and are now ranked by the reviewers’ average within those groups.

A few observations (all Super Bowl ads can be found here):

NO ANIMALS THIS YEAR!  Unless you count the dead (Spuds McKenzie), the 2-dimensional (Yellow Tail wine) or the sidelined (Rob Gronkowski).  I miss these furry diversions and was hoping the lack of reliance on a lowest common denominator would indicate lots of great spots.  Alas, twas not to be.
But there were some themes at work…

itsa10

High concept does not necessarily make for great advertising. The Armchair MBA is not a fan of co-opting a high-minded theme just to make a statement- often comes off as stilted or forced.
– Audi, 84 Lumber, Budweiser, AirBnB, and It’s A 10 Haircare (I know – who, right?) all went for the high road by tying into the topical (often sideswiping the President, the Real DJT).
Unfortunately, for this image-driven work to be effective it needs to create a strong link to the brand among a group that might be interested in the product (this is advertising, after all).
– It’s A 10 Haircare is a new brand and while their ad was cheeky and visually interesting, they could have done more to tell us why we should care.
– 84 Lumber is a regional competitor to Home Depot and Lowe’s and ran an emotional immigration spot that, partially due to network censorship, required a visit online to see the conclusion.  The average demo for this vertical is male/50, not necessarily a strong bet for following up online or changing their go-to building supply outlet without a reason. It did generate brand awareness, though.
– Audi made a passionate pitch for gender pay equality (with no apparent reason given for why this is related to Audi), then undermined the message by putting Dad (not Mom) in the hot sports car.

walken-timberlake

You simply cannot go wrong with Christopher Walken. He did it for Kia Motors last year, and this year changed sponsors to team with a deadpan/mute Justin Timberlake for one of the best-received spots – for Bai Antioxidant Drink.

mccarthymalkovich

Actually, celebrities were out in force, probably to the greatest degree ever, and generally to good effect.  In this high-stakes, high-octane environment, celebrities provide one of the only reliable ways to guarantee eyeballs. In addition to Walken:
John Malkovich’s arresting visage gave Squarespace breakthrough
– The Coen Brothers directed a Mercedes-Benz spot featuring Peter Fonda
– Kia traded Walken for Melissa McCarthy (and a few draft picks) for a generally entertaining spot for the new Niro
– A newly nerdly Justin Bieber drew attention for T-Mobile in his own polarizing way
– Other celebrities included Terry Bradshaw (Tide), Cam Newton (Buick), Kristen Schaal (T-Mobile), Lady Gaga (Tiffany), Martha Stewart and Snoop Dogg (T-Mobile), LeBron James (Sprite), Morgan Freeman (Turkish Airlines), Tom Brady, even Bill Nye the Science Guy!  And the list goes on (including a slew of very amusing high school yearbook celebrity photos in a Honda spot).

honda-yearbook

Generally well-accepted spots had breakthrough and were straightforward (usually with some humor)
Honda, Bud, Avocados from Mexico, Skittles, Ford made this list.  Inexplicably so did a Bud Light spot featuring an exhumed Spuds McKenzie.

bieber

There were also some universally unloved spots, mostly due to lack of wit, relevance or originality.
American Petroleum Institute (paaaarrrty!) headed this list, followed closely by the generic twins Fiji Water and LIFEWTR, Yellow Tail Wine, KFC and Michelin.

Finally, our annual check-in with Weather Tech – for this, their 4th effort, they did kick back and have a beer (not while driving) and the result was a looser, more fun spot.  Well done.

This table compares 12 major reviewers, who clearly do not all see things the same.  (did you really expect Vogue to feel the same as the WSJ?) 
Simply click once or twice on the table
 to make it readable.

superbowl2017

Footnotes:
My evaluations are generally based on the Kellogg ADPLAN approachAttention
–Distinction
– Positioning
– Linkage
– Amplification
– Net Equity – – along with some personal gut feel.

Reviewers and links to reviews (if you were involved in any of the reviews and feel I got something wrong, let me know):
Kellogg Graduate School of Business – Northwestern University
Adweek
Ad Age
Bleacher Report
Chicago Tribune
Entertainment Weekly
The Guardian
New Yorker
USA Today
Variety
Vogue
Washington Post
Wall Street Journal

That’s it for this year – – as always, with The Armchair MBA, you get what you pay for!

Plus, I want that new Alfa Romeo.

See you next year!

Peace of Mind as a HUGE Competitive Advantage

Some of you may know that I recently moved from the Chicago area to Raleigh after some 35 years.

While I have moved away from many close family members and old friends, the person I will probably miss the most is Mr. Lee (who, like my elementary school teachers, has no known first name).

Mr. Lee runs a humble shop called North Town Auto, and took care of our out-of-warranty cars, both domestic and foreign, for many years. It helped that he was only 2 blocks from us in Northbrook (convenient to the Metra Station!). And while there are probably mechanics who could do a certain thing for a slightly lower price. I would use Mr. Lee even if it required a drive to get there.

The reason? Peace of mind. Peace of mind that the car would be fixed correctly, that I would not overpay, that I would not pay for unnecessary repairs, that things would be done on time, that if he said I needed to do something, then I actually needed to do it.  That there was service with respect and a smile.  No worries, as they say.

I had complete loyalty to Mr. Lee.  And when it comes to loyalty, peace of mind turns out to be a huge competitive advantage.

Americans spend a lot on lots of stuff. They generally don’t seem to mind spending a lot.

However, Americans HATE the thought that they might be over-spending. And they don’t want to worry about it.

Think about institutions that offer what Mr. Lee does:

  • fair price (not necessarily the lowest)
  • high quality
  • consistency in delivery – no surprises
  • customer focus – great service, you don’t need to be on guard

Here are a few that come to mind that deliver great peace of mind:

unknowntj

  • COSTCO – – once I pass through those portals with my oversized shopping cart, I’m pretty sure that anything I put in my cart is a great deal and great quality (even if in the back of my rational mind I realize that some things are better value than others)
  • Trader Joe’s – – great value, interesting selection, fun experience – 2-Buck Chuck!
  • Amazon Prime – – I know my selections will be delivered on time and at no cost
  • Tire Rack – – awesome customer service, great pricing, instant shipping – – it’s the only way to go
  • Online window treatments – seriously – – it’s so automated and competitive that you’re not going to make a big mistake
  • Spirit Airlines (just kidding!)

Here are a few organizations that seem to fall down on the peace of mind continuum – – you might be overpaying, you’re not sure of the quality delivered, etc. And that bugs you.

chipotle

  • 1-800-Flowers – – sometimes works, sometimes doesn’t
  • Chipotle – – unfortunately moved from the other list – – love their food, but still have a vestige of doubt
  • Car Dealers – – sorry, guys – no change
  • Movers, painters, realtors, various local contractors – – until you build a track record like Mr. Lee, you’re not on my speed dial.

Why is peace of mind so important? Because we’re so stressed with just the basics of surviving from day to day that we need to simplify and eliminate unnecessary decisions.

dog

While Mr. Lee is a small businessman, the Peace of Mind list includes enterprises of all sizes.  We all have our examples of who provides peace of mind and who doesn’t (would love to hear about yours).

In the end, it’s about delivering consistent, dependable value. And that’s good advice for everyone.

Making Sense of the Unexpected

By now everyone and his mother/brother/horse has opined about how Donald Trump, inarguably a petty, bombastic vulgarian, climbed to the highest perch in the land (at least from a status/power standpoint).

trump

So I will chime in, with a very able assist.  Professor Tim Calkins (Kellogg Graduate School of Management at Northwestern University) has defined Trump’s ascent as an example of the concept of benefit vs values.  In short, people are attracted to and identify with values but ultimately vote for benefits.  A link to Prof. Calkins’s piece follows below.

Before that, however, a thought on how this can be applied to marketing.  Values may be good, but not necessarily sufficient to make the sale.  Strong clear benefits have a better shot.

A good example was provided by colleague Harvey Chimoff, regarding an innovative round paper towel (Ora Paper Towels) that provides dual benefits of one-hand grabbing and environmental benefit (no cardboard tube).  Scores very high on the innovation scale (although I remember round beach towels long ago that allowed rotating to catch the sun without moving your towel – – was interesting but didn’t really catch fire.)  Actually, this design ultimately proved unique but not trademarkable.

round-towel
As it relates to Ora, seems that the values are admirable but perhaps not earth-shaking enough to generate a change from the old familiar cylinders (higher cost; where do I put this stack; etc)

Regarding values vs benefits as a motivator: the Clinton campaign had sort of a feel-good, I’m with her, we’re on this bus together sort of feel but didn’t seem to have at its core a defined cause/benefit that people really were passionate about and willing to make a stand on. It was almost literally, vote for no change.

clinton-celebrities

The Trump campaign (and Sanders’s, for that matter), had at its core a group of people who were feeling disenfranchised, mad as hell, pitchforks and torches handy, skin in the game, and willing to hold their noses and vote for change. (hmm…sounds a little familiar…)

trump-supporters

In the end, seemed like a much higher level of passion, frustration and motivation (and maybe desperation) among Trump voters. And they acted on it.

And now, Professor Calkins’s adroit dissection:

http://timcalkins.com/brands-in-the-news/marketing-observations-on-the-trump-victory/

Clip and save for the next election!

Don’t Be Something You’re Not

This week a woman named Federica Marchionni was eased out of her position as CEO of Lands’ End after only 19 months on the job.

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Federica Marchionni

This illustrates (fairly predictably) what can happen when a brand tries to be something it’s not.

Ultimately, brand-building success is driven by meeting customers’ needs, not by trying to teach them to want something different. And loyal customers have this peculiar habit of resisting (resenting) signs that they’re being taken for granted.

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Lands’ End 1983

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Recent Lands’ End

 

 

 

 

 

 

 

 

 

In the case of Lands’ End, since its 1963 founding by Gary Comer as a sailing supplies business, it developed a heritage as a casual sportswear business that was eventually bought by Sears (and spun off in 2014).  Mr. Comer was fond of saying “Take care of the customers, take care of the employees and profits will take care of themselves.”

But Lands’ End had recently been stumbling, so Ms. Marchionni, with a background at high-style retailers Dolce & Gabbana and Ferrari, was brought in and offered an experienced, glamorous executive who could help reshape Lands’ End “into a meaningful, global lifestyle brand”.

That’s when the trouble started.

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Marchionni and actress Kate Hudson

New lines were immediately introduced, meaning loafers were sold alongside stiletto heels. Ms. Marchionni dropped low-profitability catalog shoppers and hired prominent fashion photographers to shoot elegant catalogs at exotic locations. She insisted on working out of New York City rather than the corporate headquarters in Dodgeville, WI, and was often seen hobnobbing with celebrities.

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New Lands’ End Canvas Line

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Lands’ End shoes – traditional and new

 

 

 

 

 

 

 

 

 

 

 

 

All of this alienated not only customers but employees, who were used to casual access to top management in Dodgeville and who would be critical in execution of plans. And unfortunately sales lagged spending, creating a lot of red ink. Ultimately the board decided it was time for another change.

old-spice

Successful reposition – Old Spice

While there are success stories about brands repositioning to catch a younger/new demographic (think Old Spice or Target), this is not the first time a brand has suffered from trying to fly too close to the sun.

JCPenney famously failed recently; going farther back, the breeding ground (figuratively) of nerds, Radio Shack, tried and aggressively failed to get more hip by calling itself ‘The Shack’. And even staid Dolly Madison snack cakes invented a character called the ‘Snackin’ Dude with a Snackin’ attitude’ to try to become somewhat more hip. Another whiff.

radio-shack-the-shack

Radio Shack unsuccessful reposition

Back to Lands’ End, the acting CEO (COO James Gooch) spends all of his non-traveling time in Dodgeville and is odds-on favorite for the permanent role.

We’ll see how the company and customers respond to an expected return to tradition. On the other hand, Mr. Gooch was recently CEO of the S.S. Radio Shack. Hmm…

Conclusion #1- – ignore loyal customers at your own peril.

Conclusion #2 – – just because a brand isn’t hip, doesn’t mean it isn’t great

You LOVE Modified Foods – you just don’t know it

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Modified foods are everywhere and we all prefer them. I am, however, not talking about GMOs. No whining diatribes here (stage whisper: get over it).

No, in this case I’m talking about word modifiers. You know, descriptors: adjectives and their ilk. The way food is described has a big impact on its appeal.

Despite your insistence that it doesn’t affect you, it does.

ApplewoodBacon

We will approach this post with increasing levels of pretentiousness.

Let’s start with bacon (please!).
“Applewood Smoked Bacon” sounds delicious, and is possibly the most perfect meaningless descriptor since it conjures images of fruit and juiciness and wholesomeness but in reality is not detectable for most people*. Closely related is hickory smoked. Everyone smokes their bacon and hickory is the most commonly used wood. But you will buy either of these before you buy something called simply ‘smoked bacon’.
*According to Joseph Sebranek of Iowa State University, “most of us can’t tell much of a difference.

Artisan

Everyone in the food business plays these games. Restaurants use throwaway terms like farm fresh, handcrafted, artisan and slow-cooked to lend some authenticity to otherwise generic fare. ‘Crispy’ has more appeal than ‘fried’ and ‘poached’ sounds better than ‘boiled’.

And these modifiers can help the bottom line. Stanford’s Dan Jurafsky and colleagues studied 6,500 U.S. restaurant menus covering 650,000 dishes, and found that “every increase of one letter in the average length of words describing a dish is associated with an increase of 69 cents in the price of that dish.

This article in the Daily Mail does a great job describing this phenomenon and explaining what’s going on – – essentially a fancier name is there simply to support a higher price.  To absolutely no one’s surprise.

And this handy chart can help those of you who are thinking of opening up a restaurant.

Screen Shot 2016-07-31 at 9.22.50 PM

Marketers would be well-advised to use descriptors to add that extra bit of specialness to their offerings.  And not just food – just watch a few minutes of direct-response marketing to get a heavy dose of it.

Fancy modifiers, in addition to driving appeal, can also make a dish more socially acceptable. How else to explain that you’ll feel ok ordering ‘poutine’ on a first date but maybe not ‘gravy-drenched fries with cheese curds’?