Customer Satisfaction and Reputation Management

Best Buy’s on line store ran out of stock on ‘hot items’ during the Christmas season and four days before Christmas, cancelled customer orders, leaving their customers with little recourse to buy elsewhere.  Some of those orders were taken after Thanksgiving, weeks earlier. Customers were furious. What is worse is the way this issue was handled.

According to the Minneapolis Star Tribune, in a article titled Best Buy can’t fill some online orders for Christmas, the following statement was released:

“Due to overwhelming demand of hot product offerings on BestBuy.com during the November and December time period, we have encountered a situation that has affected redemption of some of our customers’ online orders,” it said. “We are very sorry for the inconvenience this has caused, and we have notified the affected customers.”

Customer complaints on the Best Buy Community Forum and Twitter showed how dissatisfied they were.

“Never shop at Best Buy,” one Twitter entry said. “Ordered TV on Black Friday & they cancelled my order today, not in stock. Said not their problem. No present 4me!”

“Every other place I ordered from has already arrived or at least I have a tracking number,” a blogger said. “I expected a lot more from Best Buy.”

“As a Minnesotan I preferred to do my business with a Minnesota-based company. But I can say with honesty, that I won’t shop at Best Buy again.”

The products that were ‘out of stock’ ranged from TVs, iPads and other tablets, digital cameras, games and laptops.

In an article by Forbes, titled Why Best Buy is Going out of Business …Gradually, the author Larry Downes chastises Best Buy for the attitude displayed in their statement. Here are his comments:

“The company “encountered a situation”—that is, it was a passive victim of an external problem it couldn’t control, in this case, customers daring to order products it acknowledges were “hot” buys.  This happened, inconveniently for Best Buy, during “the November and December period,” that is, the only months that matter to a retailer. For obvious reasons, the statement ties itself in knots trying to avoid mentioning that the “situation” occurred during the holidays.

The situation that Best Buy “encountered” has “affected redemption” of some orders.  Best Buy doesn’t fill online orders, it seems.  Rather, customers “redeem” them.  So it’s the customers, not Best Buy, who have the problem.  And those customers haven’t been left hanging; they’ve only been “affected” in efforts to “redeem” their orders.  It’s not as if the company did anything wrong, or, indeed, anything at all.”

Best Buy use a passive voice rather than apologizing directly. They make no attempt to try to find a way to help out their customers or compensate them for their inconvenience. There is no discussion about trying to fix what caused the problem so that it won’t happen again in the future.

The Forbes article  also comments  about how Best Buy refused to discuss this issue with the press after making their statement.

Summary

Every company will have problems from time to time. But to keep their customers, they have to apologize,  ensure they appease customers affected and demonstrate what they are doing to avoid the problem in the future

Does Best Buy think it will attract customers to order from it on line store in the future? They have destroyed their credibility for their online shopping offering. They are also alienating themselves from the press.

What is your opinion of this practice? Do you think Best Buy is on its way to ‘going out of business’ as the Forbes article suggests? Leave your comments in the comment section below.

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I recently called my mobile service provider about some new services I required. Within about an hour I received a text telling me I was going to receive a text survey and 4 more texts of one question each. My answers were to be texted back. All the texts (both the ones I received and the ones I sent were considered free texts by my mobile service provider.

It is interesting that I had also called the same company as they were my phone service supplier as well. They also called me with an automated survey where I gave the answers verbally. The four questions were identical. Three were 3 multiple choice questions and one was open ended.

Why is this important?

Companies are still trying to obtain feedback from customers as quickly as possible after the transaction completes.  Telephone surveys are expensive and there is a time delay. Email surveys often don’t get read within a short period of time. In both these cases the request for feedback came in hours. In both cases, the techniques were automated. There was no human involved though someone will need to listen to or read the comments and code them someway. So organizations are still doing customer satisfaction surveys but they are timely and inexpensive.

What questions were asked?

Text 1: Thanks for calling (company name). Your feedback is important to use. Shortly you’ll received 4 questions. (Survey texts are free)

Text 2. How satisfied were you with the service from our Client Care Rep? Choices were Completely, Very, Somewhat, Not Very or Not at all.

Text 3. Thanks, Do you feel your inquiry was resolved? Choices were: Absolutely, Yes, Somewhat, Not Really, Not at All.

Text 4. Great. What is the one thing we could have done better to improve your recent experience? To answer, reply to this msg. This was the open ended question.

Text 5. Thanks. Based on your recent experience how likely are you to recommend (company name inserted here)? Choices were: Definitely, Probably, Maybe, Not Likely, Not at all.

Text 6. Thank you for your time and comments. Your comments will help us continually improved our service.

Benefits of this survey approach.

1. Speed is the of the essence. If a customer is unhappy, you capture it quickly before it gets on Youtube or into Yelp. If there is a concern with the service representative, you can provide quick feedback, listen to the recording of the call, and provide management with the opportunity to respond quickly to rising issues.

2. Customers remember the transaction they just completed and provide honest feedback.

3. These techniques are cost effective so every call can be tracked instead of just a sampling.

4. It’s cool and appeals to the younger generation, especially the texting format.

What is your opinion. Are you using new techniques in your surveying? Share your story in the comments below.

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An employee at a Papa John’s Franchise in New York made a career limiting move by entering a racial slur on a customer’s receipt. The customer posted the image of the receipt on Twitpic and submitted the following tweet.

The image posted on Twitpic shows the slur: ‘Lady Chinky Eyes’.

20, 000 Retweets later,  the story gets picked up by the news feeds such as Yahoo news , and the  Huffington Post, and, at the time of writing over 235,000 people have viewed this customer receipt.

As the headquarters of Papa John’s is bombarded, they release a statement on their Facebook page apologizing.

We were extremely concerned to learn of the receipt issue in New York. This act goes against our company values, and we’ve confirmed with the franchisee that this matter was addressed immediately and that the employee is being terminated. We are truly sorry for this customer’s experience.

The following tweet was issued to multiple influencers.

How would you rate Papa John do on its containment strategy?

1. The response came from the Headquarters of the franchise. Someone in the local franchise location in question responded to questions and sluffed off the incident. But the headquarters took it seriously.

2. The response from the local franchisee was that they would take disciplinary action. The headquarters overruled the franchisee and indicated that the employee was being terminated.

3. Papa Johns used the medium where the complaint was lodged (Twitter) to respond in addition to  addressing the issue on their Facebook Fan Page.

Do you think Papa John’s handled this well? Leave your comments below.

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I came across an interesting article called Keeping Its Commitment To Its Customers: A Bank Does The Right Thing which I think makes an excellent point that companies often forget. At IBM we used to call it being a good Corporate Citizen. That used to mean helping out in the local community, sponsoring local events and supporting local initiatives where employees were involved.

The story of Webster Bank is an interesting twist on the concept of being a good Corporate Citizen.

1. Webster Bank owns and keeps 75% of the loans it makes rather than selling them off to third parties. That means they maintain local responsibility. They are involved directly with those who took out the loans.

2. Webster Banks has accepted 65% of its mortgage modification applications. Compare that to the 33% average nationwide in the US.

The implications of this are enormous in the community.

a. It allowed more people to stay in their homes, paying off their mortgages

b. It protected the prices of the homes in the neighborhoods. When there are foreclosures, prices of the neighboring homes are affected too.

c. Consumers can see the actions of the bank and appreciate that their bank isn’t faceless.

What is interesting is Webster Bank is profitable while doing this. They avoided the legal costs of foreclosures.

The executives of the bank are paid based on the number of loans modified, not foreclosed.

The motto of Webster Bank is ‘We find a way’ and they certainly do. I am sure they have loyal customers and will attract more with these policies in place.

They should be a model for others to follow.

What is your opinion? Do you know of other cases where companies are using Good Corporate Citizenship as part of their customer satisfaction program?

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ForeSee runs a e-Commerce survey of US on line retailers twice a year. Here are some of the winners and losers for the holiday season of 2011. Download the free report at their site here

Top Performers

1. Amazon (tops for years)

2. Avon.com

3.  J.C. Penny

4. QVC

5. Apple Store

Bigger gainer:

1. Tiger Direct (up  8 points)

Bottom of the heap

On line stores of

1. Gap.com

2. Overstock.com

3. Buy.com

4. Sony

5. Toys R Us

Bigger Losers

1. Netflix (8 points down)

2. Gap (6 points)

3. Overstock (5 points)

I am surprised to see companies like Toys R Us e-commerce site on the list of dissatisfied customers. This has to be their prime season.

Netflix drop is being attributed to its change in pricing and business model earlier in 2011.  See  earlier posts: Customer Ire forces Netflix business model change and What is the value of Customer Satisfaction? Netflix Case Study.  In the What is the value of Customer Satisfaction? Netflix Case Study  post, we saw the financial hit taken by Netflix stock as a result of their misreading their customers. This is so sad, because Netflix was ranked so high, nudging Amazon in prior years for the ForeSee survey. It’s fall from grace was swift.

“Netflix totally misread its customer base and is paying the price, damaging its brand among both consumers and investors,” Larry Freed, president and CEO of ForeSee said in a statement.

Read more: http://www.nydailynews.com/news/netflix-customer-satisfaction-tanks-foresee-holiday-survey-strategy-missteps-article-1.997852#ixzz1hyrDCcit

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This time is it UPS with the customer satisfaction problem. Just a few days after FedEx had a delivery fiasco go viral on Youtube, UPS was caught in a similar situation. While not as extreme as the FedEx error, the driver was quite intentional in his action.

The UPS delivery man gave the camera that was recording him the ‘third finger salute’ and then threw the box on the customer’s doorstep. The box appears to be from Zappos. It is possible that the contents were shoes or clothing which were not likely to break but Zappos does sell accessories which might be damaged.  Here’s the video which has been seen 115,000 on Youtube) though other sites also are showing the video so the extent if the reach is unknown.

On one of the Youtube videos of the same incident, there is a comment that this is not the normal driver, just a helper hired in the Christmas rush. From a customer perspective, that doesn’t mean much. If you are working for UPS, even as part time help, you are a UPS employee. You represent the company to the consumer.

A video response from UPS was not available when this post was written but in the comment section of one of the Youtube instances where this video above was posted, a UPS employee from their Public Relations department provided this commentary:

“I agree, the UPS employee’s behavior in this video is unacceptable. My name is Debbie Curtis-Magley and I’m with the UPS Public Relations team. Ryan with our Customer Service team spoke with the customer earlier this week to discuss the issue. Please know that mistreating a customer or their package is not tolerated under any circumstance at UPS. We value the trust our customers extend to us and UPSers take pride in delivering great service.”

Contrast this with the FedEx apology. This one is lame!

1. No executive response   A Public Relations representative responded.

2. No apology to the public.

3. UPS tells us that they have satisfied the customer.

4. UPS tells us that they have a culture of treating customers and their packages well.

5. They speak in the 3rd person, rather than directly to the audience.

6. There is no indication of what UPS will do to avoid this problem in the future.

7. The status of the employee is not given. This employee might still be a driver for the company.

8. The response is buried in a comment section of a Youtube video.

Note. The video instance where this comment was posted has been removed from Youtube. The current version shown in this post has no apology from UPS in it.

What is your opinion?

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On Dec 19, 2011, a Youtube video was uploaded showing a FedEx Employee delivering a monitor by throwing it over the fence. It went viral. As I write this post it has been seen more than 5.7 Million times.  Imagine the embarrassment of FedEx! I saw a picture of the incident in my local paper in Toronto. Here’s the video.

The company  responded within 2 days with a video of their own, apologizing. Here are the elements of the apology

1. Speaker was a senior manager at FedEx: Mathew Thornton III, Senior VP, Federal Express, US Operations

2. Acknowledged the video on Youtube

3. Apologized on behalf of all the employees at FedEx

4. Expressed emotion (upset and embarrassed at the customer’s poor expereince

5. Re-asserted that the behavior violated FedEx values and culture. “It’s just not who we are”

6. Assures the audience that FedEx has met with the  affected customer, resolved the issue and the customer is now satisfied.

7. Addressed the issue of the employee on two fronts.

a. Working within the company disciplinary policies, the employee is no longer working on the front line directly with customers. It is possible that union contracts do not allow for immediate firing. But the employee’s job has changed.

b. Reinforced how seriously they take a breach with customer satisfaction, such as this, as part of their employee policy.

8. Assures the audience that this behavior is not representative of the FedEx employees  ( 290,000 team members ) worldwide.

9. Uses the opportunity to highlight the FedEx motto: “I will make every FedEx Experience outstanding”

10. Demonstrates what is being done to avoid this kind of situation in the future “Using it as a learning opportunity”, “Shared the video internally”

11. Brings up another company mantra: Every package is precious to, you, our customers. Notice that he speaks to the audience as if they are all his customers. Customers are not someone else. The VP recognizes that if we are not his customers right now, we might have been or we might be in the future.

Here’s the execution of that apology on Youtube. Notice it has only been seen about 300,000 times as of the writing of this post.

In the comments of the video, there is one entry that was telling. You never know the root cause of problems by looking at a video.

“…I have friends that work there and know the other side of the story. Like I said I’m not trying to justify what he did, but people can lose it you know? This guy had to keep getting off his route multiple multiple times because he was called to go back. The owner claiming “Ok we’re really home this time” and they wouldn’t be…”

So while the incident was not acceptable behaviour, was it only the driver who was at fault? How about the organization that sent him back over and over again? How about the policy of multiple deliveries? I know when I get a  FedEx delivery, if I am not home, they leave a sticker and if the next day I am not home, I get to go pick up my package at FedEx’s depot. I have called FedEx when I came home and saw their delivery sticker but they would not turn around and send the driver back.

Summary:

Any organization of hundreds of thousands of employees will have a few that don’t follow company policy and do things they shouldn’t, perhaps due to time pressure, personal problems, or other factors unknown to the public. And with the availability of security cameras and cell phone cameras, these incidents can and will be reported. This video went viral quickly and FedEx responded quickly and the key elements of the apology were well executed in the video.They could have done a better job with the description of the video

“Along with many of you, we’ve seen the video showing one of our couriers carelessly and improperly delivering a package the other day. As the leader of our pickup and delivery operations across America, I want you to know that I was upset, embarrassed, and very sorry for our customer’s poor experience. This goes directly against everything we have always taught our people and expect of them. It was just very disappointing.”

This might be a lesson learned from the fiasco of United Airlines where a song uploaded to Youtube went viral.

But only about 300,000 people saw the apology versus almost 6 million that saw the incident. That’s  about 5%. Only 5% saw the apology. I am sure there were other activities that FedEx took to ensure its customers, and in particular, the contacts they have regularly with shipping managers, received additional information about this incident.

But this case study still points out how much damage a single incident can have on a company’s reputation.  It reinforces the need for training of employees, particularly those facing customers and those who direct them.

What if your opinion. Did FedEx handle this crisis well?

PS. On Dec 22, 2011, another delivery firm, UPS had a similar issue with one of their drivers. There is a video but it didn’t go as viral as the Fed Ex one did.  The next blog post will cover the UPS story.

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Here are the ‘most read posts’ in 2011.

How to Handle Complaints: The IBM Way

Facts on How Social Media Complaints impact Customer Satisfaction

Customer Satisfaction technique – Empowerment of Front Line Employees

Customer Satisfaction: What role should a business partner play?

Customer Satisfaction Techniques for Internal Customers

Biggest Challenge to Exceed Customer Expectations?

BP CEO Tony Hayward ousted as Gulf Oil Spill Spokesman

Top 10 Industries with the Most Customer Complaints

Testimonial gathering using Smart Phones and Facebook at Luna Park, Sydney, Australia

How Coca-Cola Social Media Guidelines address Customer Satisfaction

37 Customer Satisfaction gaffs highlighted by Social Media

Fourth Quarter High Ranking posts

Not included in the list above are some posts that only had one quarter of views but still attracted many views.

Steve Jobs’ contribution to Customer Service Excellence

What is the value of Customer Satisfaction? Netflix Case Study

Customer Ire forces Netflix business model change

The Embarrassment of Being Wrong

Year End and Year Beginning Posts

Customer Satisfaction Year End / Year Beginning Activity Planning

Customer Satisfaction Preparations for a New Year

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Customer Satisfaction is often measured  by Customer Survey data. There are many market research companies that will create and run customer satisfaction surveys for you, based on your unique needs.

Factors to Consider

1. How will the customer be contacted?

Different methods might include: telephone, email, in person, or on the web or on a mobile device. It is important to try to choose a method of surveying that provides the customer will the ability to provide feedback securely. Some customers may not want to provide their names or their contact information but would be happy to provide anonymous feedback. Explain how the data will be used. Use someone outside the normal day to day interaction staff if doing the survey directly with the customer.

2. How many customers will be contacted?

Will you contact all available customers or a sampling of them. Often a sample will be reduced by other factors such as limiting the frequency of surveying, or the ability to successfully engage with those customers you want to survey.

3. Where to get the contact names  or contact information.

Sometimes you don’t know who has bought your product or service. That could occur if your product distribution is through business partners or retailers. Often manufacturers will ask to have warranty cards returned in an effort gain customer information but from what I learned at IBM, only about 2% of warranty cards are ever returned.

If the survey is a relationship survey (see below), then picking who in a large organization represents the views of the customer is a challenge. If the sales team offers up the names of the people to be surveyed, they may skew the survey to a  ‘known’ friend in the organization rather than the real decision maker. You also need to decide if the contact you want to survey is not available or delegates the survey to someone else in the organization, if that is acceptable to you.

4. How often to contact a customer.

If your organization surveys a customer after they call in for support or come to have their car repaired  and there are several events in a short period of time, the customer may get annoyed if you request feedback too often. This is called ‘survey fatigue’. One of the industry best practices is to limit surveys to once in six months. For relationship surveys (see below) that might be extended to annually.

5. What questions to ask.

This is a not a trivial issue. The people who commission surveys or create them will often use the language of the organization rather than the language of the user. Survey questions should always be created with the wording and terms customers would relate to. Leave an opportunity, if possible for customers to leave you an open ended comment. Sometimes the most valuable feedback is not related to questions you are asking in the survey.

6. Topic of the survey

a. Relationship Survey: Is this a relationship survey based on an overall  relationship that spans multiple years. In this case, the questions would relate to partnership, helping the customer with their business objectives, not just how well your organization performed its contractual duties.

b. Transaction Survey: Some surveys can be done at the end of a business transaction such as a support call, automobile maintenance visit, or a sales transaction.

c. Product or Service Survey: Some surveys may be done after the customer has acquired a product and used it to determine how easy it was use, learn and any features that seem to be missing. Or if you sell services,  any comments about the value of the service,  whether it met the objectives and any  improvements to services would be the main topic of the survey.  These Product or service surveys are useful as they reach customers who may never have contacted your organization after the original purchase.

7. How quickly  to survey

If you are measuring transactions, how fast do you get back to the customers about the event you wanted to track?. If you wait too long to contact the customer or cannot tell the customer exactly what the transaction, sale or product is that the survey is asking about, you may get invalid responses.

If you are measuring a relationship annually, you may want to schedule the survey at the same general time every year. If you are measuring a product or service, you may have to give the customer some time to experience the product or to determine if the service matched the requirements. In those cases, care must be taken to pick when to survey the customer.

8. Reporting of results.

Once you have a survey process in place, picking a timetable to report results is another decision to make.  You want to have enough results to be meaningful and be able to show a trend. So if you volume of surveys is low, you may have to report quarterly, semi annually or yearly. If the volume is high, maybe the results can come out weekly, or monthly. It is important to watch trends in customer satisfaction sentiment.

9. Handling of unhappy customers

Invariably some of the customers contacted will be dissatisfied. It is important to have a process to handle these dissatisfied customers.  Someone must be monitoring the results as they come in and dissatisfied customers need a response. At IBM, we ensured the  dissatisfied customer, found in a survey,  was addressed quickly. Customer are often very pleased that they have been ‘heard’ and that their issues have been explained or addressed.

10. Feedback to the customer base

After a survey has been conducted, if there are glaring issues that arise, then your business needs to address them. After they have been fixed, the customers needs to be informed that you have made some changed based on their feedback and what has changed.

There are various methods to inform customers from press releases and analyst reviews, to additions to the website, or bills mailed out or any other communication vehicle to reach your customers. Expect it to take time before customers will notice that you have changed something. If it is a service or support change, not everyone calls in regularly for support. Perceptions change closely.

Summary

These 10 factors to consider are some of the important elements in setting up a customer satisfaction survey for your organization. Does your organization use other factors. Leave them in the comments section below.

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Customer Satisfaction methods often focus on individual consumers and businesses. Normally the business is bigger, more powerful and may  employ the language and thinking of slave-owners when dealing with customers.  The consumer feels small and may be intimidated.

There are cases, however, where there is a more even match between customer and vendor, or where the customer has more power than the vendors.

Many of us can relate to large conglomerates like Walmart and their power over suppliers. Large organizations expect volume discounts, special handling and perhaps products with special specifications only available to them.

(That’s a little trick large organizations use so they can advertise that they have the best price and will guarantee you won’t find the same product cheaper anywhere. Guess what? You can’t. The product is only available from that organization.)

Sometimes the organizations are more evenly matched in size and scope. And then the golden rule applies.

The Golden Rule:

He,  who controls the gold, makes the rules.

Here’s an example from my experience at IBM.

A large customer had requested a ‘Request for Proposal’ from multiple vendors to meet their needs. IBM was bidding along with other competitors. What was interesting about this particular bidding process was the way the customer evaluated the proposals.

Each vendor had to prove they had a viable solution to the customer’s problem, submit the details of their proposal and their bottom line bid.

The customer would then assign the vendor a score based on various elements, most of which reflected the cost of doing business with that vendor. Those with the worst score received a  large ‘add on factor’ to the bottom line bid price. The ‘cost of doing business’ factor was added to  each of the vendor’s the bottom line bid price. The results were used to make a final decision.

The company’s rationale seemed sound.

If vendor A provides inferior technical support over Vendor B, that means the organization needs to have more support people trying to determine the problems themselves than doing business with Vendor B.

If vendor A’s products break down more often or have more quality problems, then there is a cost of maintenance or repair  (also called total cost of ownership) that would be assigned compared to other vendors.

Let’s use a concrete example. If I buy evaluate Car A  and it is inexpensive to buy but more expensive to maintain and the gas milage is worse than Car B, then I might decide that Car B had a more favorable ‘cost of ownership’ even though the initial price of Car A might be less.

All elements of doing business were included in this customer’s evaluation criteria.

1. Service

2. Product Quality

3. Billing and Accounts Receivable Quality

4. Upgradability

5. Reliability

6. Maintainability

7. Track record of continuous improvement

8. On time delivery

An add on factor was created for each vendor as an index of these various areas.

So while the initial focus of the bidders was the bottom line price, it soon changed to ensuring that the customer’s rating of the cost of doing business factor was favorable to the vendors.

To make this kind of process work, an organization needs to be doing business with all the vendors, in order to evaluate them and assign a score.

After the Request for Proposal was over and the business was awarded to one of the vendors, the losers were then counselled on how to improve their scores for the next time. This led to a complete review of how we, at IBM, were set up to handle customers and was instrumental in moving forward the case for improving all aspects of customer satisfaction, not just service or support.

The Harvard School term for this process is Vendor Relationship Management  and Doc Searls is one of the experts in this area.

Does your organization use any form of Vendor Management or rate your vendors based on the total cost of doing business with them? Leave your story in the comments section below.

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