Customer Service Declines When The Economy Improves

Quartz: “Consumers are more unhappy with customer service at department and discount stores than ever. According to the University of Michigan’s American Customer Satisfaction Index, satisfaction is at its lowest level since 2008, falling during the last year by 3.8%. Consumers are griping about store cleanliness and slow checkout lines, specifically.”

“Of the bigger companies, the steepest decline in satisfaction—an 8% drop—went to Macy’s … While an improving housing market increased competition between Lowe’s and Home Depot, both groups saw drops of 9% and 4%, respectively. Among supermarkets, Whole Foods took a 10% hit, knocking its ranking below Trader Joe’s, Kroger and Meijer.”

“The relatively buoyant economy is partly to blame. After 2008, competition for consumer dollars intensified, prompting discounts and better service. Employees fearful of losing their jobs stayed motivated to work hard pleasing shoppers. Then, things got better.”

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Loyalty Is a Two-Way Street at Starbucks

What defines loyalty in the customer-brand relationship? Until this week, Starbucks defined it as the number of times the customer bought a cup of coffee; buy 12 cups and you get one for free. The retailer has now re-defined loyalty as the amount of money spent. This has caused upset among some of its “loyal” customers, who now must purchase 32 cups of coffee to get that free cup. Starbucks apparently was inspired by certain airlines — Delta and United — that now award loyalty points based on the amount of dollars spent, and not on the number of miles traveled. This might telegraph as: We want your money but we don’t want you.

The Starbucks switch was at least partly motivated by profits; obviously it is more profitable to motivate its most profitable customers. However, it also suggests a change in culture. As reported in The New York Times, the Starbucks loyalty program previously was premised on a warmer, fuzzier idea, as articulated by a Starbucks marketing manager in a 2012 blog post: “At Starbucks, our rewards program comes from a different philosophy. At its simplest, we like seeing you, regardless of whether your purchase is a short-brewed coffee or four Venti White Chocolate Mochas. My Starbucks Rewards is designed to show our appreciation simply for stopping by.”

This would be consistent with the way Starbucks famously welcomes everyone to hang out as long as they like at their stores, even if they buy nothing at all. Sadly, such “customers” are the poor cousins of those who gamed the Starbucks loyalty program by asking cashiers to ring up each item separately to artificially inflate their number of visits. This subterfuge also caused lines to slow, making the Starbucks experience worse for everyone else.

The Starbucks-customer relationship in total calls into question the very meaning of “loyalty,” and whether it even exists in a commercial context. As the Times article notes: “Starbucks fell into a trap that is common with loyalty programs: establishing not just an exchange relationship with its customers based on mutual benefit, but a communal relationship based on mutual caring and support … If customers are going to take a ‘hey, it’s just business’ approach to their relationship with Starbucks, they should expect the company to do the same — and it has.”

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Samsung: Retail as a ‘Cultural Center’

Samsung’s NYC flagship store — Samsung 837 — is a “cultural center” that is designed “to build experiences rather than push product,” reports Engadget. “Across three floors you’ll find a 75-seat amphitheater, a full working kitchen and plenty of bench space for tech support and workshops. The amphitheater hosts a three-story interactive screen that was used for an art installation this week, but will be repurposed for screenings and presentations as well.”

“The ground level art gallery showcases works that use technology in a major way. The current exhibition, ‘Social Galaxy’ by Black Egg, contains a mirrored tunnel lined with Samsung devices. Users input their Instagram handle at the entrance and then, within seconds, the displays pull in images and comments from their accounts, creating a rapid cacophony of sound and color.”

“A set of chairs in the front of the store offer up a ‘4D’ virtual reality experience, by having you strap a Gear VR to your face as you sit in a chair that bobs in time whatever you’re looking at … Samsung 837 sourced a lot of its style locally as well. The employee uniforms came from designer line Rag & Bone, which has a location right across the street. The store also has a partnership with the nearby Standard hotel. Samsung 837 considers itself part of the Meatpacking District community, as well as a destination for both tourists and locals.”

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Inclusive Design: Microsoft Thinks Outside the XBox

Fast Company: “Dubbed inclusive design, (Microsoft) begins with studying overlooked communities, ranging from dyslexics to the deaf. By learning about how they adapt to their world, the hope is that you can actually build better new products for everyone else.”

“What’s more, by finding more analogues between tribes of people outside the mainstream and situations that we’ve all found ourselves in, you can come up with all kinds of new products. The big idea is that in order to build machines that adapt to humans better, there needs to be a more robust process for watching how humans adapt to each other, and to their world … They are finding the expertise and ingenuity that arises naturally, when people are forced to live a life differently from most … the promise of this new design process isn’t in just a better Microsoft.”

August de los Reyes of Xbox: ”If we’re successful, we’re going to change the way products are designed across the industry. Period. That’s my vision.”

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Quote of the Day: Craig Spiezle

“Ad blocking is a symptom of a pervasive problem. If consumers enjoyed the web experience and felt there were adequate controls for privacy and the ad industry was making a sincere effort to fight abuse and malfeasance, we wouldn’t be having this conversation.” ~ Craig Spiezle, Online Trust Alliance, via The New York Times.

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Tesco, Apple & The Meaning of ‘Marketing’

Two weekend news stories paint “marketing” in a pejorative shade; one is kind of funny and the other is decidedly not so funny. The lighter story concerns Tesco, the UK supermarket chain, and its decision to stop making crescent-shaped croissants. This is how Harry Jones, Tesco’s croissant buyer, explained the decision in a written statement, cited in The New York Times:

“The majority of shoppers find it easier to spread jam, or their preferred filling, on a straighter shape with a single sweeping motion. With the crescent-shaped croissants, it’s more fiddly, and most people can take up to three attempts to achieve perfect coverage, which increases the potential for accidents involving sticky fingers and tables.” The story concludes by noting that Tesco’s move to twist-free croissants was roundly mocked on Twitter “as a marketing tactic.”

The other story is, of course, the one involving Apple and the Justice Department’s demand for “the technical tools to get inside the phone” to help investigate the mass killings in San Bernardino, California, also reported in The New York Times. In a court filing, prosecutors said Apple’s resistance “appears to be based on its concern for its business model and public brand marketing strategy.”

In Tesco’s defense, it appears the retailer is mainly interested in creating what it believes is a better croissant “experience” for its customers. Call that “marketing” if you want, but it falls squarely within the realm of solving a perceived customer problem. Bravo. The problem is that Tesco is forcing this solution on all of its customers, disenfranchising those who care less about the efficiency of consuming a croissant than the enjoyment of it. For many, this means pulling the damn thing apart bit by bit and making a real mess of it along the way.

As for Apple, it’s clearly a more complicated issue. Without taking sides on the controversy itself, this much is clear: The company should not be denigrated as a “marketer” for trying to keep its brand promise — privacy– to its customers. This isn’t about marketing to its customers; it’s about being true to them. The Times article also makes this key point:

“Apple has taken a strong stand on privacy … because the company’s business model encourages a bolder stance. Unlike other Silicon Valley tech giants, Apple’s business has a straightforward hardware model that hinges on selling physical devices like iPhones, iPads and Macs. Other tech companies, including Google, Facebook and Twitter, depend more on the online collection of large amounts of consumer data for their digital advertising-oriented businesses.”

Where others build their businesses on selling their customers’ privacy, Apple’s premise — and promise — is just the opposite. Its privacy policy states: “When we do ask to use your data, it’s to provide you with a better user experience.” You can believe that or not. You can side with Apple or the Justice Department (and again, no position is taken on that here). However, to disparage or dismiss Apple’s stance as just “marketing” demonstrates a fundamental lack of understanding that the ultimate worth of any brand is grounded in the promises it makes and keeps. That’s not just “marketing.” It’s everything. With a little butter and jam on the side, please.

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Jolly Roger Telephone: A Cure for Telemarketers

The Washington Post: “A Los Angeles man with an unusual passion for phone systems created a new robotic answering service that wastes telemarketers’ time. Roger Anderson started the Jolly Roger Telephone, which lets users start a three-way call with the service so they can listen gleefully as the bot rambles on. It’s designed to provide entertainment and empowerment for everyone who has grown weary of the phone calls. Its first question of the telemarketers is often, ‘Is this a real person?'”

“Anderson experimented with different personalities for his robot before deciding that an odd man who just woke up from a nap worked best. For instance, the robot burned time by telling the telemarketer they sound like a former high school classmate, rambling on about needing coffee or asking them to start over again.”

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Some Uber Drivers Are Not Uber Happy

Christian Science Monitor: “Harry Campbell, author of The Rideshare Guy, a popular blog for rideshare drivers, asked his 10,234 e-mail subscribers to rate their experience with Uber. Of the 453 who responded, only 48 percent are happy with their employer.”

“A common perception of the difference between Uber and Lyft is that Lyft is a better company to work for, but Uber brings in higher pay. But Uber’s claim to fame among drivers – that it offers the highest wages in the game – is slowly eroding. To increase business during the slow winter months, Uber recently cut fares for passengers, and thus salaries for drivers, in over 100 cities.”

Some drivers say “weekly expenses like gas, toll fees, insurance and car maintenance detract the company’s impressive averages. In a company report last year, 11 percent of drivers said they actually lost money after being their employment with Uber.”

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Relativity is a Poor Theory at Retail

The New York Times: “In some ways, what we experience as consumers is like what we experience when we listen to music or lift a heavy object. For example, we are more likely to notice that a drumbeat is loud if we have been listening to, say, a gentle violin. And we will notice that we are lifting extra pounds if they are added to a lightly packed suitcase. The same additional weight is barely noticeable in a heavy one. Vision, heat perception, smell and taste all obey a similar law: Perception is largely a relative mechanism.”

This dynamic manifests itself when we compare prices: “We tend to focus on the percentage rather than the amount we save, and fall prey to a mental illusion. After all, when your shopping is done, it is dollars — not percentages — that will be in your bank account … Ofer H. Azar, an economist at Ben-Gurion University in Israel, asked consumers in the United States how much they needed to save to justify spending an extra 20 minutes … When shopping for a $10 pen, they required only a $3.75 savings, on average. For a $30,000 car, though, they needed $277.83 for that 20 minutes.”

Less affluent shoppers are less likely to fall prey to the illusion: “Poorer people tend to value a dollar more consistently, irrespective of the context. It is not simply that those with less money pinch more pennies; it is that they are compelled to value those pennies in absolute rather than relative terms … To them, a dollar has real tangible value. A dollar saved is a dollar to be spent elsewhere, not merely a piece of token accounting.”

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