Blockbuster Video - what goes around comes around...

Blockbuster Video is a perfect example of a company that has been mistreating their customers for years....and now is finally paying the price. They are likely going out of business.

For years Blockbuster dominated the video rental space. Their store layout design was superior to their competitors....as was their marketing.

Unfortunately, they chose to ruin their relationship with customers by imposing on them a system of "late fees". I'm sure the late fees looked great on a spreadsheet, as they comprised a good deal of the profit margin enjoyed by Blockbuster.

However, in the long run, it undercut any loyalty or brand affinity that Blockbuster could have created. This is the same affinity or brand loyalty that would serve them well at this time to combat Netflix and direct download competitors such as CinemaNow and Movielink.

The CEO of Blockbuster now agrees that eliminating late fees and restoring good relationships with customers is a move in the right direction.

Unfortunately, it is too little too late. Unless he plans on personally contacting each former customer of Blockbuster to apologize for past behaviors and explain their new approach, their new tact will hit a wall.

The day I found out about Netflix...I signed up for Netflix. A smile ran across my face as I knew this was the beginning of the end for Blockbuster....and had paid my last late fee. My guess is that many others have had the exact same reaction.

It didn't have to be this way.

Why not uses positive reinforcement instead of negative reinforcement?

Why note offer loyal customers the ability to earn rewards based on whether or not they return the video on time...or even early?

Blockbuster could still punish non-loyal customers with late fees. The non-loyal customers are those that cause Blockbuster inventory levels to swell...and thus they should be the ones to pay for it.

Instead, by not differentiating between their best and worst customers, Blockbuster penalized the very customers that kept them in business all these years...and eliminated any chance of customer loyalty.

As a result, they are probably going out of business. Good riddance.

Arrowhead Water on Demand

My fiancee and I live in a portion of the country where the city water is rather untasty. We use it for showering and cleaning dishes...and that is about it.

As you might imagine, it is very expensive and inconvenient to buy large quantities of bottled water. Fortunately, we signed up for a home water delivery from Arrowhead water, a division of Nestle.

Essentially, Arrowhead shows up at our residence with five-gallon containers of water (we get to specify the amount we need) and removes any empty containers.

We have been using the service for a year. Thus far they have yet to make any sort of mistake around the delivery date or quantity of water.

But that is not what sets Arrowhead apart. Arrowhead's support around the service is what makes their service one that other direct-to-consumer operations should learn from.

First, when you begin your home delivery from Arrowhead, they leave you with a smannualuarl calendar.

Someone at Nestle/Arrowhead clearly gave this calendar a lot of thought. Here is what the hand-sized calendar contains.

1.) Scheduled delivery dates for your water
2.) Your individual account number (for easy reference in case you forget)
3.) Customer service 800 number and website

Good but not great right? Well, that is just the front side. On the back side of the calendar they provide Tips for using VoiceService, Common Voice Commands and Tips for Using E-Service.

Included in these areas is a listing of general tips on how to quickly navigate through their voice system to get things done. Just about anything you would want to do concerning your water delivery is described. It is incredibly well-planned and simple.

But here is the kicker. For other items, it tells you what the key voice command is to get straight to a live representative. When was the last time you had a company spell out in writing exactly how to skip their voice response system to get a live agent?

However, the system is so simple and easy to use, my fiancee and I have never needed to speak with a live agent.

This in spite of the fact we are constantly rearranging our water delivery dates via their voice system. That's right, you can tell Arrowhead with one day's notice that you want to change your water delivery date.

At this point in time, Arrowhead water stands as the most impressive customer-centric company I have encountered thus far.

Congratulations Arrowhead, you have accomplished with expensive airlines, automobile manufacturers, consumer electronics manufactures etc....have not accomplished.

You have made me a happy and therefore loyal customer. For life. (if you keep up the good work)

Zoom, Zoom Gloom from Mazda

As a loyal rotary engine and Mazda RX-7 enthusiast and owner, I was very excited by the release of the new Mazda RX-8 a couple of years ago.

As any enthusisast would do, I purchased the new RX-8 sports car from a local dealership in Santa Monica, CA....fully loaded with about every option available on the car. Frankly, the sales process was extremely straightforward with a minimal amount of confusion and haggling.

I know this is not the normal experience, and the dealership should be given credit for this.

Given that the first rule of customer relationship marketing is "not all customers are equal", I would have thought that the following factors would have been noted by Mazda sales personnel and added to a database:

1.) I am a collector of Mazda RX-7's. (very loyal)
2.) I am relatively young
3.) I am not poor (young executive with good credit)
4.) I just bought the most expensive car they make

However, obviously this type of database is lacking or being poorly utilized. What began as an outstanding experience became a real hassle when it came to the service center portion of the dealership. Few things that happened along the way:

1.) They informed me the "loaner car" was limited in availability. In short you needed to be one of the first couple of customers at the service center at 8 am in the morning.
2.) No appointments were accepted at the service center (I'm too busy to stand in line....that's why I can afford to own three cars)
3.) The service center personnel moved at their own pace and were unbelievably rude
4.) They do not wash/clean the car post-servicing (is this normal?)
5.) They refused to even give me the five minute ride home so I could use my other car

Not to mention there were no questions around "how's your car doing", "are you happy?", "here's a new feature you could add" etc. In other words, it was obvious no one cared.

During my second visit to the service center, I became so frustrated with their indifference in finding me a way home, that I walked over to the sales portion of the dealership, grabbed the guy who sold me the car, and brought him into the service center. On the way he apologized for their treatment of me and informed me that he did not think highly of their service center.

I asked him if his management realized that this might affect his ability to garner repeat customers? He said they were fully aware.

After one of the visit I received a very generic survey from Mazda corp about my service experience. Of course, I gave them a scathing, negative review.

Did anyone call or email me? Did anyone apologize to me?

Nope. Nothing.

My recommendation to Mazda to create a very simple online database. The cost of either building or maintaining such a web application, accessible from every dealer/terminal in world with an Internet connection is minimal. Use this system to generate a "value" rating of each customer, and then treat the customer accordingly.

Putting such a system in place should take no more than three months and require less than 70K/year in system costs....in other words...equal to the amount of revenue generated by the sale of two RX-8's. This amount is also lower cost than a single day of their "zoom-zoom" TV ad campaign.

Once the system is up and running, then begins the process of dealer education. My guess is that Mazda already has some sort of dealer education process in place. This program could piggyback on this program.

I've created and managed a similar process on behalf of a top 20 brand name company....and it is worth the expenditure. (and provides a tremendous foundation for a loyalty plan)

Let's hope someone at Mazda is working on this very concept.

Welcome to United's Sometimes Friendly Skies.....

"Welcome to the friendly skies automated phone system. What should take 10 seconds has now been inconveniently programmed to take over 30 minutes and ruin your day...."

I am a member of the Mileage Plus program from United Airlines. For those who are not aware of this program, it allows me to be given credit for every flight I take on United Airlines. In addition, the program allows me to earn credits by purchasing goods and services from their business partners.

For more information on what others say about their program, click here.

This program is thelinchpinn to United's overall loyalty program. In general, the program is a good concept and mostly works as it should. According to their website, they have won several awards over the past few years.

However, one of the major issues that I have with United is that their IVR (integrated voice response) system is completely inefficient to the consumer. United seems unwilling to pay the few thousand dollars it requires to set-up different phone lines and routing based on particular consumer experiences.

I recently took advantage of the credits racked up from my flights on United and booked some award travel using the United.com website. However, post-booking of the flight, my plans began to change around the timing of the flight.

Thankfully, United does allow credit redeemers to change the timing of their award travel.

However, when I navigated to the My Itinerary section, things began to take a turn for the worse. When I clicked on Make Changes, I received the following error message with a phone number to call.

My first question to United is why not allow me to change this online? By forcing me to call them, they are likely going to incur expenses.

Secondly, from a consumer standpoint, the number presented on the screen should take you straight to the appropriate place to make change to your award travel itinerary.

Not so.

Instead it dumps you off at the very top of the voice response system. "Umpteen" touch tone responses later, and I was finally able to get a customer service representative.

Of course, if you are on the run and communicate via cell phone, you may lose contact with the customer service agent. Being painfully aware of this possibility, I requested a number that could allow me to get directly back to the group responsible for making changes to my award travel itinerary.

"No such number exists" was the reply from the customer service agent.

Apparently no one at United realizes that calls are occasionally dropped.

My recommendation to United: Allow people to change their itineraries online. The award travelers are likely to include some of your most loyal customers.

If you insist upon a phone number, then present the customer with an 800-number that allows them to go directly to the branch of your call center that handles for award changes to award travel itineraries.

What is the Corporate Golden Rule?

What is the Corporate Golden Rule? "Treat your customers as if you were one of them".

Of course, it is the rare corporation that is consistently exhibiting this behavior.

As an operations and marketing executive, I've been working with and for major corporations for the past ten years of my career. Through this experience, it has become evident to me that it is financially possible (and often financially beneficial) for every single corporation to give most, if not all, of their customers excellent treatment.....and take a completely customer-centric point of view.

In addition, it has been a rare co-worker or manager who did not agree that that was the way things "ought to be". After all, we are all consumers of goods from corporations.

So what gives? If it is that simple, why are almost all companies on the planet failing to fulfill the golden rule?

I'm not sure that anyone has a clear answer to that question. However, I suspect that it is the structure of corporations itself that are to blame, not the employees.

In the end, no one is really in charge of a corporation. Between employees, stockholders and customers....there is war for attention going on. Everyone is struggling to manage investor expectations, manage upwards, manage downwards, keep costs in check, create top-line growth, offshore, outsource, etc.

All the madness leads to a collective corporate attention deficit disorder....and the end customer is often left out in the cold. They become "invisible" to everyone except the call center.

The goal of this blog is not to criticize corporations as evil, their management teams as evil, their bankers as evil, or even capitalism as evil. On the contrary, it is my strong belief that most folks in business have the best of intentions, they just lack the ammunition to cut through the distractions.

This blog aims to point out specific instances where corporations are mistreating their customers, and to suggest a potential solution that they could deploy to improve the situation.

Trust me on this, if enough of us voice our opinions and give support toward a specific improvement, someone at a given corporation will notice. Then they will have the proof they need to cut through the clutter and improve the customer experience.

And each time we enable a corporate employee to cut through the clutter, we collectively take a step forward toward making the "Golden Rule" applicable in the world of corporate/consumer relations.

I think it is worth a shot. Do you?