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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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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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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Fresh Air: Glade Discloses Ingredients

Huffington Post: SC Johnson is “the first major player in the household chemicals industry to list 100 percent of the ingredients used to create fragrance in one of its lines of scented products, the Glade Fresh Citrus Blossoms collection of wax melts and air fresheners. That includes the chemicals ordinarily glossed over with catch-all phrases like natural ingredients or essential oil.”

“Its goal, in part, is to create a new standard of transparency that would challenge upstart competitors, who sell themselves as greener alternatives, to disclose every single component in their fragrances.”

“It’s important to lay it all out there for the scrutiny of the world what goes into our products if consumers are going to trust us,” says Herbert Fisk Johnson III, the company’s chairman and chief executive. “In the absence of information, people tend to think the worst.”

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The Model ‘X’ Experience: Tesla Bans a Cranky Customer

Elon Musk cancelled an order for a new Tesla after the buyer criticized the Tesla CEO’s handling of “an event designed for customers.” The customer was venture capitalist Stewart Alsop, who complained that he “felt ignored” because he had spent two hours at a Musk-hosted event but never got to see the Tesla Model X he had on order and had been invited to see. “I suppose you think that I left too early at 9:00pm and should have stuck around longer if I really wanted to see the car,” Alsop wrote after being banned.

About Musk banning him as a customer: “I am mostly sorry not to be able to participate in the automobile revolution that Tesla started,” Alsop wrote. “You have created a car company when everybody decided decades ago that it was not possible. You have challenged the hateful and intimidating distribution system that forces people to be subjected to the hard sell even if they just want to buy a car they know they want. You have innovated on user experience, battery technology, autonomous operation, and virtually every other aspect of the automobile experience today. And you designed and produced a really beautiful and amazing car along the way!”

Noting that Tesla “does not have a marketing department,” Alsop suggested “it might be time for the company to take on such a function. At the very least, it might mean that your events start on time and they are designed for the people who are invited to attend.”

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Pretzel Logic: Airline Snacks Make a Comeback

“After 15 years of near austerity, U.S. airlines are restoring some small perks for passengers crammed into coach,” reports The Washington Post. “Don’t expect ample legroom or free checked bags. But fliers will find improved snacks, a larger selection of free movies and — on a few select routes — the return of free meals.”

“This month, American will start offering Biscoff cookies or pretzels to passengers flying between New York and San Francisco or Los Angeles. By April, those snacks will expand to all other domestic routes. In May, American will bring back full meal service for coach passengers between Dallas and Hawaii.”

“These are token investments in the passenger experience that will not cost airlines a lot of money but are small ways to make passengers a little bit happier,” says Henry Harteveldt, the founder of travel consultancy Atmosphere Research Group. “American and United realized: We don’t let other airlines have an advantage on price, why let them have one on pretzels.”

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Volvo Promises a Death-Proof Car by 2020

Christian Science Monitor: “Volvo says its “vehicles will be death-proof by 2020, making good on industry promises that autonomous vehicles are not just cool, but life-saving … Volvo’s 2020 plans will bring together sensor technology like adaptive cruise control, which can work in stop-and-go commuter traffic; it’s already an option in its XC90 SUV, which won the North American Truck of the Year award and a Top Safety Pick Plus from the Insurance Institute for Highway Safety.”

“The company’s supposedly death-defying cars will also use sensing and alerting technology to let drivers know when it senses the car is going off the road, turning into oncoming traffic, or about to hit a cyclist or large animal — and if that doesn’t work, they’ll put on the brakes automatically. The vehicles will even keep an eye out for sleepy or distracted drivers, sounding a warning if erratic driving suggests someone’s nodding off behind the wheel.”

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