Category Archives: Customer Service

“Drowning in Data”

Data Center

Data Center (Photo credit: bandarji)

I’ve just read a fascinating article in The Times of 22nd October which starts out by saying, “The world is ‘drowning in data’ and computing companies are running out of space to store it…”

Some of the interesting numbers that came out of the article:

  • By 2016, the number of devices connected to the internet will be 3x the global population (so, well over 20 billion devices) – that’s up from 9 billion today, itself an eightfold increase in seven years, with the num

    ber expected to reach a staggering 50 billion by 2020.

  • Global IP traffic in 2016 will reach about 120 exabytes / month. That’s 120 million terabytes (or, if you prefer, 120 billion gigabytes) of data every month – and almost 10% is expected to be mobile data.
  • And, if you think YouTube has too much video on nowadays, by 2016 estimates are the 20 000 hours of video will cross the internet every second!

Already this year we’ve seen the explosion of tablets and smartphones – not just in numbers, but in data traffic, too, with the average tablet expected to handle some 4 gigabytes of data every month, up 8x from last year, and the average smartphone to be handling around 2.5 gigabytes of data a month, about 16x more than last year.

This pace of growth indicates both devices overtaking laptops for data traffic in the next year or so as laptops are ‘only’ handling around 7 gigabytes a month, little more than 3x up on last year.

So, we’re creating vast amounts of information but what are we doing with it all? Seemingly, it’s going into enormous storage pools as another recent article in Microscope (19th October) pointed to a significant skills gap when it came to the ability of companies to handle this level of information – ‘Big Data’ as it’s referred to.

Although the article points to research showing that almost 2/3rds of UK business understood the competitive advantages of being able to utilise this data (nearly twice the number of firms in 2010), less than a quarter believe they have the ability to analyse all the unstructured data streaming in.

So, not only do we have a growing issue with storing all this exponentially increasing data traffic, but we’re largely unable to do anything with it.

It’s going to be fascinating to see the business models that spring up to manage this in the next couple of years.

BAA Humbug – The short- and long-term effects of greed and ineptitude

BAA staff work feverishly to clear the snow at Heathrow

Image via yfrog: BAA staff work feverishly to clear the snow at Heathrow

I’m going to try not to make this too much of a rant, but I’m both extremely disappointed and annoyed – not for me personally (thankfully I wasn’t directly affected), but for the thousands of people who’ve had their holiday plans, reunions and Christmas spoilt through a combination of woeful ineptitude and greed.

And, I think, there’s a real danger of this ineptitude and greed having long-term effects that are several orders of magnitude more serious for the country as a whole.

I’m talking here, for those of you who’ve not yet guessed, about BAA and Heathrow.

How can a company entrusted with managing the world’s busiest international airport be so unprepared for winter? It’s certainly not through lack of money – BAA is on track for an operating income of nearly £1 billion this year, and yet their total expenditure on preparing for snow and winter conditions this year was just £500 000…  (an amount the board has just allowed to be increased to £10 million – still only 1% of their operating profit!). In my view this is a typical case of short-term profit focus, at the expense of long-term sustainability (see my post: The Perils of Quarteritis).

It’s not as if they didn’t have warning. The first cold snap hit at the end of November and there were already warnings that heavy snow and icy conditions could be expected for the rest of the year. Granted, by then it was probably too late to have been able to source much new equipment in time (although they should have learned a lesson from January & February), but they put no contingency plans in place at all.

What about a deal with farmers nearby to use their tractors and grading equipment in an emergency? What about stockpiling grit, salt, glycol, etc.? Then they compounded things by turning down offers of help to clear the runways and taxiways from the military.

And, on top of this, they apparently gave out poor information to airlines such as BA which could have operated more flights than they did, and so reduce the backlog somewhat.

So, this corporate greed and ineptitude directly ruined the holidays for thousands of people, apart from costing hard-pressed airlines a good deal of money (can they sue BAA?)…

But the long-term effects could be even more serious. With some 30 million people a year visiting Britain, annual tourism expenditure of some £90 billion and almost 8% of jobs supported by tourism, this is a vital sector of the economy. However, the unreliability of British airports – especially one as important as Heathrow – is bound to make travellers think twice about using Britain as a stopover point, or even as a destination.

And airports in the Middle East such as Dubai and Qatar are eager to take these passengers. For example, Dubai is already the 4th busiest international airport in the world, with huge expansion already underway, and one of the youngest fleets in the world (and a flexible one, as Emirates was apparently able to put on 3 extra flights a day to clear their backlog once Heathrow reopened).

The impact of a diversion of disgruntled passengers from Heathrow to Dubai, for example, would have an enormous impact on Britain and on the struggling BA.

BAA needs to wake up, stop being so greedy and to accept proper responsibility for its role in running strategically important airports – or it needs to be replaced by a company that will do so, and quickly.

What do you think – should the company, its leadership, or both be replaced?

Who Controls Your Brand?

social media compain
Image by Laurel Papworth laurelpapworth.com and Gary Hayespersonalizemedia.com

The old order is being turned on its head; companies used to being in control of their customers and their brand are now finding customers are wresting control from them and that they need to adapt or face obscurity.

The enabler behind this is, of course, social media. Customers are now able and willing to discuss their experiences with friends and followers around the world, and companies ignore them at their peril. And yet, it seems to be more common for companies to ignore what is being said on Twitter, on Facebook, on LinkedIn, on YouTube, and on all the other social platforms around the world.

Even though some two thirds of Fortune 500 companies have a Twitter account, and more than half have Facebook and YouTube accounts, they’re just not listening – reports indicate that 43% of all companies have never responded to a single Tweet, while only a quarter of companies respond to a comment posted on their Facebook page.

All this does is reinforce the view that companies are not interested in their customers. Better to have no presence at all than a presence where you don’t respond (the same goes for “customer-service” telephone lines and email addresses!).

However, the fact of the matter is that nowadays you HAVE to listen to what your customers are saying and you MUST respond. That’s the best way to turn customers into brand advocates – and isn’t that what every business wants? What’s more, it’s worth remembering that your products and services are only as good as your customers think they are and that they’re prepared to pay for; it’s much better to know they’re unhappy sooner than later, so you can fix the problem.

Word of mouth has always been the strongest way for businesses to grow – or shrink – and all that social media is doing is enabling this process to operate more quickly, and a lot more widely.

Companies that have embraced this – think Zappos and Starbucks (or Threadless, the T-shirt company that went from startup in 2000 to $30M in revenue last year) – are rewriting the rules for customer service, marketing and the way they’re perceived. Ask Comcast, who went from ignoring social media to an advocate and transformed the company’s image.

While the positive impact is clear and quick to see, the negative impact on companies that do it wrong will take longer to be really apparent – they suffer a slow, steady decline in brand image with all that follows from this – so the good news is there’s still time to adapt, but they shouldn’t wait too much longer.

As Jeff Bezos said, “Your brand is what people say about you when you’re not in the room.” If you’re not in the social media room, you’ll never know – and what you don’t know, you can’t fix.

By embracing social media, having conversations with your customers and other stakeholders, you will greatly strengthen your brand and your company.

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“The Lifetime Value of Customer” Concept

AA vintage sidecar (date unknown) at the Great...
Is the AA’s approach to customers old-fashioned?
Image via Wikipedia

Well, we survived October unscathed (although it remains to be seen if Ireland will drag the whole of Europe down) and am now pretty well settled in England so will be able to write more frequently again.

An issue that has really been highlighted during my move is that so many companies here seem to have little or no understanding of “The Lifetime Value of Customer” concept. And I’m not just talking about SMEs here – in fact, many of them understand it far better than the big ones.

Let me illustrate this – apart from Newsweek, that troubled publication that continues to make it far more attractive to take out a new subscription each year than renew (see “Is There Value in a Repeat Customer”), an excellent example of this is the AA (Automobile Association) here – an organisation that is clearly confused by policies and customers.

Having been a member of its sister organisation in South Africa for some 20 years I joined the AA in England as soon as I was no longer using hire cars, and had bought my own. It’s just a piece of mind thing for me as I’ve only had a very few occasions to need their help in all the years. Well, as luck would have it, a few weeks after joining I did need them, so put in a call.

I won’t go into the details here – suffice it to say that I needed to upgrade my membership for the call to be answered (hadn’t read the small print carefully enough) so did so. Imagine my shock to find that I was not only charged for a new, higher-level membership plus a penalty for not having had the right level when making the call, but was given no credit for my previous membership fees. In other words, I was considerably worse off than somebody who was not a member at all when calling.

Assuming that somebody had pushed the wrong button, I wrote to the AA and – after having to request a response for a second time – got a rather offhand letter referring to “company policy”: that wonderful phrase used by so many people to hide behind. The fact that the policy is stupid seems to have escaped them.

The fact is that the AA, for the sake of around £40 will lose my future membership fees of probably some £3000: an extremely poor decision. They just do not understand the concept of “Lifetime Value.”

Mind you, they’re not alone – I’ve seen numerous examples of some of the world’s biggest companies throwing away, potentially, millions of dollars/pounds in future sales through mistreating their customers in the technology channel.

And yet the concept is so simple: attend to your customers, have sensible policies, take the opportunity of turning an unhappy customer into an advocate for your business and you will thrive. Take a short-sighted view at single transaction level and risk all those future earnings you might otherwise have had – not exactly a guarantee of long-term success, is it?

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Not Really a Global Economy

My Pocket Contents
Image by William Hook via Flickr

The news continues to be full of stories around the Global Economy and how companies increasingly operate independent of national boundaries – so that one could be forgiven for believing that we really do live in a global economy.

However, as my current experience of relocating to a “First World” country – England – shows, where one would expect that things do operate in this way, the reality is very different and the Global Economy seems a long way off.

Certainly, some things work well – one can move money between bank accounts across multiple geographies easily (provided, of course, your accounts are all with one bank, otherwise it’s far more complicated). Mobile telephones also operate well across boundaries, although you pay handsomely for making and receiving calls when away from the country where your phone is registered – profiteering, perhaps?

However, the rather large holes in this Global Economy story (myth?)  have really been exposed when trying to establish myself with the basics here.

  • Renting a home – this is far from simple. You have to get credit reference agencies involved and they require enormous amounts of information. Simply giving them details of your bank/s and relationship managers isn’t enough: you have to do all the leg work yourself.
  • Insurance – amazingly, motor insurance companies apparently don’t give credit for a no-claims driving record in countries like Dubai (an extremely challenging environment as anyone who has driven there will attest), although they are happy to do so for comparatively tame driving countries like New Zealand, so no more no-claims bonus on motor insurance…
  • Telephones – it took me a week to establish that I COULD get Blackberry Services on a Pay As You Go basis (I was told by some mobile operators and some phone shops that this was impossible for the first week, but kept researching until I found it could be done).

In fact, for most general things (even using your new bank account’s debit card) the over-riding requirement is for a local Post Code (you’re asked for this the whole time), so if you’re still trying to set things up and don’t yet have a fixed abode, you end up having to borrow a post code and address from a willing friend or relative for even simple transactions.

Why is it, that with a 30+ year history of banking, credit, insurance, telephone, etc., etc., usage in countries like South Africa and Dubai (countries that have “First World” standards of traceability on such things) I have to start over? One would think this information would be available to the relevant companies and authorities in other countries, but it seems to be only the case for adverse information and anyone else is “guilty until they prove themselves innocent.”

So much for the Global Economy – or is it just a case of laziness and profiteering?

———-

P.S. This relocation process is, of course, the reason for my lack of blogs recently – I hope to be back to regular blogging in September.

Regular readers will notice the banner picture change to reflect my new home…

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Service – the Quick Way to Kill a Brand

I took my car for a service this morning – an experience that once again underscored just how easy it is to chase customers away and kill your brand.

Some background – I currently live in Dubai in the UAE, where the climate and conditions are not particularly vehicle-friendly, so that 4 wheel-drive vehicles such as mine need to be serviced every 5000 kilometres (3000 miles). Because the car is still under warranty this necessitates taking it to the dealership from where I bought it.

This particular vehicle, a Mitsubishi Pajero (also known as a Shogun in some markets) is extremely popular in the UAE – providing a well laid-out, spacious interior, good quality and reliability which is what one needs, especially when the temperature outside is somewhere over 45C. We greatly enjoy the vehicle. What I don’t enjoy is the regular service experience – and come the end of the lease period, I’d switch brands for this reason alone.

And this in a market where new car sales were some 82.5% down last year against 2008 according to ArabianBusiness.com. So you think the dealerships would be delivering exceptional service to maximise what few sales there are. Yet the Mitsubishi agents here seem to be oblivious to this simple approach, as today showed.

Yet, a pre-booked service that should take 30 minutes and be done while you wait, means being without a car for 11 hours – I take that car in at 7:30am and can only pick it up again around 6:30pm in spite of asking for it earlier (bigger services take 2-3 days with these people)!

What amazes me is that they seem to live in perpetual chaos. You book vehicles in advance, turn up at the specified time/day and they still seem to be unable to do the job quickly and painlessly because they’ve always got an unexpectedly full workshop. This sort of approach is, incidentally, quite commonplace here – service lets so many brands down (I have another still-unresolved issue with Bose).

What companies really have to recognise is that the after-sales service experience is one of the quickest ways to kill a brand. Customers are not – or should not – be a one-transaction experience. Lifetime value is what  companies need to focus on, as that’s where the real profits lie – repeat customers that become brand advocates. When are they going to understand this simple concept?

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The End of Cash?

Image representing iPhone as depicted in Crunc...
Image via CrunchBase

It’s interesting to see the number of recently introduced products coming to market which are designed to, in effect, remove the need for cash.

One that has garnered particular attention recently is, of course, Square. This comprises a small application that resides on your iPhone (or iPad, iPod Touch) or Android phone, together with a little reader that plugs straight into the audio input jack of the phone and turns it into a personal credit card payment machine that will allow the user to accept credit card payments from anyone for a small fee (typically 2.75% + 15c). With no costs for set-up, application or card reader this is sure to change the game for those tens of millions of small businesses, traders and professionals that have, until now, fallen outside the electronic payment net because they are too small for the card companies to serve cost-effectively.

But Square is not alone – Obopay allows anyone with a  mobile phone to set up an Obopay account and, for just 25-50c (plus 1.5% if you’re using a credit card to fund your account) send money – in other words, make a payment – to anyone else with a mobile phone, whether or not that person already has an Obopay account. Again, there are no setup costs.

And then there’s Intuit with its GoPayment service that also enables credit card payments from a mobile phone – this time with a Bluetooth reader – at a cost of 1.7% + 30c per transaction, although this service does have a monthly service cost of $12.95 attached to it (I wonder for how long, though, given the competition above).

Doubtless there are many others, too, either in stealth mode at present or on the drawing board.

What’s more, these systems allow you to build purchase histories by customers, offer loyalty programs and great levels of service more simply than the straightforward cash systems did – so even the smallest businesses can step up their marketing at little or no cost.

At present, all these products only work for you if you’re a US-resident/business, but it’s only a (hopefully short) matter of time before they go global and the way of transferring value changes forever from cash to electrons. No more looking for change, worrying about how the currency in a new country you’re visiting works, being concerned whether anybody’s watching as you withdraw a large amount of cash from an auto-teller…. And, of course, if you’re a small business, no more concerns about having the right change for those large notes that auto-tellers like to give, about the value sitting in your till, or being worried when taking your cash to deposit it.

It’s going to be interesting to see how society changes over the next generation as we move from cash altogether. Will the nationalistic bonds to a currency (and the resulting issues of payments from/to different countries and with travel) be removed, and could we find a common global currency?

And, of course, we’re seeing the continued drive for the mobile phone to be less a telephone and more a personal digital assistant in every way – clock, alarm, calendar, address book, diary, music player, radio, newspaper, camera, voice recorder and now, wallet. As an aside, it’s interesting to see how many of the Generation Ys don’t wear watches – their phones tell them the time. Has the watch industry got an answer to this, its potentially biggest threat?

We’re at a very interesting point in the 5000 year evolution of money as we know it. Will it disappear completely as a physical object in the next 20 years?

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Living Your Brand – do companies really care about their Brand?

Goldman Sachs Tower in Jersey City
Image via Wikipedia

2010 certainly seems to be going down as the year when the proverbial corporate skeletons are coming out of the cupboard:

  • Toyota – which had built its brand on reliable, safe vehicles – recalls many millions of cars all around the world in an apparently ongoing saga, with new recalls being announced almost monthly;
  • Goldman Sachs – viewed by many as the pre-eminent merchant bank – being sued for fraud by the SEC and now under investigation by the UK regulators, too;
  • Many airlines – especially those using words like “Favourite” and “5 Star” in their advertising – simply refusing to abide by their legal obligations, in terms of Regulation 261/2004, to provide accommodation and refreshments for their stranded passengers during the volcanic eruption in Iceland.

And this is just a sample of the more recent headline-grabbing issues.

Are they really “Too big to fail” – or just too big to care?

I suspect they believe the latter, not recognising the truth in the old adage that “Pride comes before a fall.” Remember, almost none of the largest and then most successful companies in, say, 1900, are still in any position of strength today – in fact most have disappeared altogether.

These corporates need to get back to basics, to remember that it is their customers that pay their salaries and to start treating their customers as the company’s most precious resource, rather than as a necessary irritant. Simply repeating a marketing mantra branding themselves as the pre-eminent company in their field doesn’t make it true…

The fact is that branding is a lot more than just a logo with a catchy by-line – a company’s brand is everything to do with that company, and the logo is just something to recognise it by as we’re visual creatures. Branding is about customer service, branding is about the way customers interact with the company in all ways, branding’s about staff training, branding includes corporate governance and social responsibility, branding is about all the materials that company produces – from marketing through packaging to the products themselves – in fact, branding is about everything to do with a company.

And this is where so many companies are falling down: they’ve lost sight of everything but the short-term pursuit of the bottom line. And I use “short-term” advisedly – as without attention to all aspects of their corporate brand, those companies will lose customers and start to fail.

Just look at the consumer backlash against many banks that they perceive to have been complicit in the economic downturn. Imagine how consumers who have been poorly treated will feel about giving more of their hard-earned money to those airlines that left them high and dry. Will former Toyota buyers be as happy to buy another Toyota?

Companies need to start refocusing on their entire brand, they need to recognise the power of instant communication for their customers and embrace it to make a positive difference, and they need to once again really put their customers first instead of just saying they do.

What do you think – do companies no longer care about their brand in pursuit of profits? Have you joined the growing ranks of disgruntled consumers and, if so, which are the brands you love to hate?

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The obligations of Airlines to their Passengers

Europe
Image via Wikipedia

The current chaos following the six-day shutdown of almost all European airspace has thrown the issue of passengers’ rights firmly into the spotlight – particularly with the fact that so many airlines are refusing to take any responsibility for assisting stranded passengers.

With my son being among those stranded (he was stuck in England, trying to get home to Dubai) I have been active in understanding this in order to help him, and so post this in the hope that it will help others in a similar predicament due to the massive problems caused following the eruption of Eyjafjallajokull.

The governing regulation behind all this is one entitled Regulation (EC) No 261/2004 of the European Parliament and of the Council. The Regulation is available in full from various sources on the web, while this Wikipedia entry has a good summary, and this BBC post has one too.

The summary bottom line is:

  • All passengers stranded in Europe are entitled to their choice of: rerouting to another airport for onward flight to their destination (difficult for this in Europe at present); accommodation, refreshments/meals and communication services (basically 2 calls) while they are stranded (the most applicable option); or a refund of their ticket (not sure why they would want this as they generally want to get home).
    • This is regardless of the nationality of the airline on which the passenger is flying, as the European rules apply to the airlines while they are operating in Europe.
  • All passengers stranded outside Europe with tickets to a European destination on a European airline are entitled to the same choices detailed above.
    • The key points here are firstly that the carrier must be a European airline (if on a code-share flight, the ticket must have been issued by one of the European airlines on that code-share), and secondly that the destination must be a European one.
    • Unfortunately, if you are stranded outside Europe with a non-European airline, they are not obliged to provide this assistance.

Many airlines are claiming that as the volcanic eruption is an “Act of God” (or “Force Majeure”) they are absolved from any responsibility for such assistance and are turning passengers away. This is patently untrue as the regulation only makes provision in such circumstances for airlines to be excused from paying additional (cash) compensation that they are normally liable for in the event of delays. They are still required to accommodate, feed and provide communications for stranded passengers, regardless of the reason.

Other airlines, such as Qatar Airways (on which my son is booked – so much for the “5 Star Service” they like to advertise!), are saying that they are not required to provide any assistance as they are foreign-owned. Again, this is simply not true. Although they are not obliged to provide assistance for those passengers stranded outside Europe, they are absolutely obliged to do so for the passengers stranded in Europe.

Should your airline have refused you compensation at the time, you should retain all receipts for accommodation, food, etc., while you have been delayed and lodge a claim with the airline on your return home.

I hope this will help clear up the confusion surrounding this issue and enable people to claim appropriate assistance.

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Twitter – The “Next Big Thing” for Business

Image representing Twitter as depicted in Crun...
Image via CrunchBase

With Twitter set to pass the magic 100 Million user mark later this month, or early May, and the company having been valued at around a Billion Dollars last year, it’s moved from the realms of novelty. So, should business sit up and take note; is it the “Next Big Thing” as a business tool?

Speaking with business leaders and marketers, one gets mixed responses – the enthusiastic advocates on the one hand, and those that hope it will fade away as it can potentially damage their company, they believe, on the other.

There’s no question that any public forum can be used by people to disparage, or worse, a company, but is that a reason to abstain from that forum, or should one take the opportunity to embrace it and counter any adverse remarks? After all, unhappy customers that are turned around tend to become the most loyal advocates…

Others look at Twitter and ask whether 140 characters is really enough for any sort of meaningful dialogue with customers and dismiss it on this basis. But in our information-overloaded world, is brevity not a blessing?

Properly used, there is no question in my mind that Twitter really can become a significant business tool:

  • Customer service – probably the first Twitter application area to be embraced, companies like Southwest Airlines, Staples and Zappos have found it invaluable to track unhappy customers, respond quickly and show a great service ethos.
  • Sales leads – of course, great customer service leads to sales, but many more companies, like Dell, Sony and Starbucks are using Twitter to promote products; in fact an article last month reported Sony measuring over £1 Million in sales directly attributable to its Vaio Twitter account.
  • Promotions – an extension of the sales leads application is using Twitter for promoting special offers to followers. As the integration of GPS technology with phones increases, these could even be location and time specific, making them highly targeted.
  • Product feedback – companies are often accused of making products that customers don’t need, or of not including “obvious” features. Twitter can give a window for listening to the needs and views of a very wide customer base.
  • Order tracking – an area I’ve yet to see, but one I think is an obvious one: imagine being able to Direct Tweet to a courier company and get an automated response as to where your special delivery is in the system…

In fact, the possibilities are endless – limited only by imagination. With Twitter, companies have access to an incredible mass direct marketing tool without the dangers of being considered spammers – people would simply unfollow those they consider annoying – and one which can provide real-time, real-person feedback on an incredibly wide range of issues.

Twitter, I firmly believe, is poised to be the “Next Big Thing” for business, and companies that ignore it do so at their peril.

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