We have moved

Shop Talk has moved to our new location.
There won't be any new posts here after that. The older archives will remain, however.

Please head over to our new home, which also contains the complete archive of posts.

If you'd like to update your RSS reader, here's the feed for the new place.

Thanks for reading us here. See you at the new place.

John

Customers are talking - candid customers won't give you 100%

Two things happened to me recently that got me thinking about online product forums.

In the first instance, I was looking for an inexpensive hotel in Las Vegas. Deals abounded, but complications arose when I looked into the customer comments published for each hotel. Here's an extreme example:

Room was not in the main tower, it was right by the parking lot and the tunnel you had to walk through to get to the room smelled like puke and urine, also very hot. The door to the room beside us looked like it was ajar so I gave a little push, on the bed was a naked man laying there. Looked like he was waiting for someone to come into the room. I quickly closed the door and retreated back to our room. A few minutes later I looked back out and the door was ajar again. I think he was for hire. Was very scared because there was an adjoining door. It was very late and were very tired so tried to get some sleep. NOT! So much noise. Twice that night someone tried to open our door. Very scary. Cockroaches in bathroom in morning. Also very squeeky bed springs in room above that continued sqeeking for a long time (must be Viagra) Funny coincidence the room number was 169. This hotel is the seediest most unsafe disgusting place I have ever had to stay in. Never ever would go back.

Needless to say, I stopped looking for the lowest-cost deals after reading stuff like this.

Soon thereafter, I was one of a number of folks who received the same email from a friend, who had just opened a new business in town. She felt that a user review in Yelp.com, which had some criticisms, needed to be countered. To my friend, the negative statements were damaging. To me, as someone who works with helping companies listen to customers, the feedback was valuable and could be useful to her.

These two examples underline that even if you're the Ritz-Carlton (never mind the hotel with the naked man on the bed), you will not get a perfect score from your clients. Not if they're being candid with you. They will point out things that bothered them, that didn't go perfectly, that are chronic weaknesses. Ignoring these forums or getting defensive is not only unwise, it's self-defeating.

I wrote to my friend who has opened the local business. I told her that the Yelp review, while not 100% positive, did say many positive things (among which was that the reviewer had visited several times and planned to go back again--a strong testament). The negative things were accurate and, happily, could be easily addressed.

I recommended to her rather than try to debate the reviewer, take her comments to heart, act on them, and invite her back for another look.

I don't know what to say to the owner of the hotel described above. Suffice it to say I won't be staying anywhere near it.

Facebook, smacked down again, invites customer input

Facebook always does the right thing by their customers... once their customers have beaten them up for a wrong first step. A year and a half ago they stirred up the wrath of their community by proposing an ad-targeting system leveraging its users' profile data, then backed down.

Now they've done it again. Facebook changed their terms of service, igniting another storm of outrage on blogs, Twitter and, yes, Facebook. They relented, returning to their prior terms of service, and yesterday announced that they will be seeking user input on community questions such as terms of service, and be more transparent, including this statement:

Transparent Process: “Facebook should publicly make available information about its purpose, plans, policies, and operations. Facebook should have a town hall process of notice and comment and a system of voting to encourage input and discourse on amendments to these Principles or to the Rights and Responsibilities.”

It's easy to make fun of Facebook for their public embarrassments, but they do get the message their users are sending. Furthermore, they are pioneers in engaging with their users. There is no template they can follow. Facebook's users, because they give personal and sensitive information to the service, is very sensitive to its use, and the web2.0 nature of Facebook means that its users are comfortable using web2.0 means to communicate. Quiet they are not.

It will be fascinating to see how more traditional companies deal with assertive user bases. As consumers find their voices on line (and efforts like VRM give users powerful tools to manage and communicate with their vendors), we'll be reading more stories like this one. Will other companies learn from Facebook's painful lessons?

Related post:
Zuckerberg learns

P&G, in moving into services, can learn lessons from Disney

NOTE: We will stop posting new material to this blog location as of Friday, Feb 27. Please visit our new home, which also contains the complete archive of posts. If you'd like to update your RSS reader, here's the feed for the new place.

I read with interest the recent HBR Editors' Blog posting speculating on the difficulties Procter & Gamble might run into in its effort to create a chain of car wash franchises, called Mr. Clean Performance Car Wash.

When I read the post, written by marketing professors Neeli Bendapudi, Randle D. Raggio and Tassu Shervani, we were in the midst of a vacation in Orlando, Florida, at the various Disney parks. So, the connection between what P&G is trying to do now and what Walt Disney kicked off some fifty years ago came to me instantly.

The upshot of the HBR post is that product and services businesses are dramatically different, in particular the need for a service business to deliver an experience over and over again, consistently and of high quality, despite the innate variability of people, locations and customers.

With this in mind I monitored my Disney experience for the rest of the week for lessons that could help P&G.

1. Brand gets people to try your service; blocking and tackling gets them to return. The Disney properties flaunt the characters, movies and TV shows at every turn. Yet after an hour at the park, you notice that trash cans are always close by, so that if you have an empty cup or candy wrapper, you don't end up holding it for more than a few seconds before finding a place to discard it. As a result, the park is exceptionally clean for a place holding tens of thousands of guests.


2. No detail is too small. Kids are royalty at Disney (a significant differentiator compared to most places where they are seen as messy, noisy attention-seekers--which, of course, they are). The bag checkers, waitresses, salespeople--in short, every "cast member" we encountered--took special care of our kids.


3. Consistency reduces stress. Each of the four Disney parks we visited had a similar parking scheme, shuttle bus protocal, and entry design. Which meant there was very little standing around head-scratching and wondering which gate to go through or which bus to board.


4. Customer recognition builds loyalty. Everywhere in the parks I saw guests wearing buttons saying "My First Time!" or "It's My Birthday Today!" These simple gestures to recognize guests made their experiences special, built warm memories, and encouraged them to return.

I'm rooting for P&G in their Mr. Clean car wash project. The above lessons are like much good advice--easy to understand, hard to implement. Whether P&G can execute, and the marketplace and the economy cooperate, only time will tell.

Customers are talking - Tropicana hears feedback, brings back old carton

Sometimes the roar of customer feedback can force a multi-million dollar capitulation. Today, the New York Times reported that Tropicana, a unit of PepsiCo, was responding to a wave of negative customer feedback to its recent change in packaging. The Times writes:

Redesigned packaging that was introduced in early January is being discontinued, executives plan to announce on Monday, and the previous version will be brought back in the next month.

Also returning will be the longtime Tropicana brand symbol, an orange from which a straw protrudes. The symbol, meant to evoke fresh taste, had been supplanted on the new packages by a glass of orange juice.

The about-face comes after consumers complained about the makeover in letters, e-mail messages and telephone calls and clamored for a return of the original look.

Some online reaction to the new Tropicana package is here and here. (And, to be sure we stay fair and balanced, here is a rave review of the new package.)

One wonders what kind of testing process Tropicana used for the new packaging. I would hope that they used the approach that online services use today--which is to roll out new looks to a limited audience and listen carefully to the feedback before rolling things out across their base. But if so, they would have gotten this feedback far faster and before it became a national news item.

Packaged-goods companies tend to be secretive with their makeovers, often keeping details hidden until a widely publicized, nationwide rollout. The result of this strategy, though, is not hearing feedback, positive or negative, until a great deal of investment has been committed. Meaning a rollback, like Tropicana's doing, is terribly expensive (and highly-publicized).

I wonder how Tropicana will handle their next packaging change?

Last Week for Shop Talk at this address!

Shop Talk is moving to a new location at the end of this week.

We'll be closing the doors on this location on Friday. There won't be any new posts after that. The older archives will remain, however.

Please head over to our new home, which also contains the complete archive of posts.

If you'd like to update your RSS reader, here's the feed for the new place.

John

Time for a humbler, more focused, wireless wholesale market

The US MVNO market is the greatest missed opportunity I've seen in my wireless career, stretching back almost 20 years. Through carrier resistance and MVNO hubris, a business model that works very well in Europe and Asia has floundered here. Strong, focused MVNOs, which manage their costs and market excellently, improve services and value for wireless users in many places outside the US.

Yet there may be a light flickering in the US market. It's been several years since the meltdowns of Amp'd, Disney Mobile, ESPN and other high-profile players. The iPhone and its imitators have demonstrated the value of a (relatively) open architecture and application environment. And the carriers are still no better at rolling out truly innovative services than they have been.

Plus, nationwide carriers #3 & 4 (Sprint & T-Mobile) trail far behind the leaders in market share. This creates a strategic scenario where a customer acquired by a Sprint or T-Mobile reseller is relatively unlikely to poach the direct business of the wholesaler (and in Sprint's case, they should welcome retaining customers by any means, even if they are transferred to an affiliated wholesaler). Therefore, the perceived opportunity cost of a full-on push into wholesale by these carriers is lower.

Who will be tomorrow's resellers? Those that are laser-focused on markets unserved by the carriers. They will be smaller but profitable, with excellent, low-cost distribution channels. They will be true innovators, bringing high-value applications to their customers. They will have customer bases who purchase phones without subsidies. They will be able to create win-win agreements with the wholesalers.

In a perfect world, a Sprint & T-Mobile push will force AT&T and Verizon to re-enter the wholesale market. Then there will be a strong, vibrant, competitive market where resellers will have some control of their destiny.

And the biggest winner of all will be... the customer. You and I.

Ten Bucks

When I was a teenager, the stores in our town stayed open late on Thursday nights between Thanksgiving and Christmas. In 1978 I worked at one of the local hardware stores and I was on duty one of those Thursdays. I had earlier that day cashed my paycheck. Around seven or so, business was slow and I asked the manager if I could take 15 minutes and walk up to The Gramophone Shop. I went in and bought a record I had had my eyes on for a number of weeks: Dire Straits' first album. It cost, by my recollection, $8.98 plus tax.

Was that album worth ten bucks? It's a stupid question. That album was part of the soundtrack of my late high school years. It was probably worth $100 to me.

Now it seems that people who spend ten bucks on music are stupid. Free mp3's are everywhere, legitimately or otherwise. Subscription services and internet radio stations offer everything at the touch of a browser button. There's a sea of music out there, just waiting for a listen.

But paying ten bucks for an album caused you to make a decision. (Not that those decisions always worked out. For example: the Knack's second album.) You had to hear enough songs to get a good assurance that the album was decent, or take a risk that the one great song you heard was a pattern for the rest of the album. (Also not foolproof; see Sniff 'n' the Tears.)

Carrie Brownstein's recent post on NPR Monitor Mix brought this to mind. Carrie lamented the decline of the record label, in this case the decision by Touch & Go Records to stop distributing the work of smaller labels. Wrote Carrie:

We are careening toward a paucity of experience and a paucity of means with which to evaluate music. I mean, can we really engage with art on a Web site and in a vacuum, without ever bothering to contextualize it or make it coherent with our lives or form a community around the work? If we never move beyond the ephemeral and facile nature of music Web sites -- and let's not lie to ourselves, that's where it ends for a lot of us these days -- then that makes us worse than blind consumers; it makes us dabblers. We have become musical tourists. And tourism is the laziest form of experience, because it is spoonfed and sold to us. Tourism cannot and should not replace the physical energy, the critical thinking and the tiresome but ultimately edifying road of adventure, and thus also of life.

To me, the process of getting recommendations, listening to a friend's record, hearing something great on the radio (or a podcast), then making the decision to plunk down real money is, in Carrie's words, an adventure--and one of the great pleasures in enjoying music. If everything's at your fingertips, undifferentiated, you can sample, skip and flit around. You're, as Carrie said, a tourist.

And to me that's a bad thing. Free music isn't only bad for musicians, it seems. It's also bad for the audience.