The Times They Are A-Changing

"Dear Editor: I am 8 years old. Some of my little friends say there is no Santa Claus. Papa says, 'If you see in in the Sun, it's so.' Please tell me the truth. Is there a Santa Claus?" —Virginia O'Hanlon

In response to the above letter from Virginia, Francis Church wrote a column in the on the spirit of Christmas that has become a perennial classic (http://nanaellen.com/village/cmas/cmas-virginia.htm) this time of year.

If he had received the letter in 2006 instead of 1897, would his answer have been different?

Watching the news last night was a confirmation for me that should have been a wake up call for anyone working in the retail sector. There is a lack of Christmas spirit out there these days, and it is one of the factors driving more traffic out of the malls and onto the Net.

Two of the three business news stories on the national news had a Internet factor to them, and the only business story on the local news was about the drop in foot traffic in stores and the surprising numbers of Internet sales this holiday season.

The Bad News: The Internet is not a passing fad, no matter how much retailers want it to go away.

More Bad News: E-tailers are adapting to retailing faster than retailers are adapting to the Internet.

Even More Bad News: Unless you have got a TRULY UNIQUE product that you control the entire supply and distribution chain of, your retail model is going to be pummeled into oblivion by the Internet.

Even More Bad News Gets Worse: Doctors (http://www.doctorevidence.com/) , Lawyers (http://www.wklaw.com/), and Indian Chiefs (http://www.sevenfeathers.com/) have all developed online business models as the transmogrification of the economy into an e-conomy continues. Even as this happens, there are so many retailers out there not paying attention, it is almost as if they are wearing blinders. So many retail verticals have taken a vicious beating at the hands of the Internet, you would think the survivors would have learned by not to be apathetic.

But they are. The evidence this Christmas season to me is overwhelming proof of…and I can't believe I am actually going to use the quote I first became aware of when it was posted on the wall above the throne of Jim Jones of Guyana infamy; but here goes… "Those who fail to learn the lessons of the past are doomed to repeat them."

I watched a news story where the reporter was interviewing a Sears store manager who was commenting on the less than expected foot traffic. Almost as an after thought, he went on to reassure the reporter his store was doing fine because about 50% of their electronic sales this season are being done over the Internet.

I think one of the main reasons the foot traffic is down is there is nothing special about shopping this season. Retailers are so focused on cutting expenses, not offending anyone with decorations; they have turned Christmas shopping into a very bland experience. The very blandness of the experience is one of the reasons more people are shopping online this season.

I did a very unscientific informal survey of most of my friends and family on shopping this season, and I kept hearing the same things over and over.

"It doesn't feel much like Christmas these days."

But I didn't just take their word for it. Once again at great personal risk, I went to a few large malls, and different malls to see if my past experiences shopping this month still hold true.

Sad to say they do.

There are hardly any distinctly holiday decorations in stores. The few decorations there are in stores these days, are sterile and bland. If there is Holiday music in stores, most stores seem to prefer the Muzak version of Christmas Music - A little to sterile and bland for my tastes.

There as a very distinct lack of holiday apparel worn by the staff in the stores this year. I saw more staff in holiday dress on Halloween than I did in the malls during the last shopping week before Christmas.

In discussing my preliminary findings; a friend of mine in Michigan told me California doesn't count because it is hard to have Christmas spirit when the sun is shining; there's no snow on the ground and people are shopping in shorts and tee shirts. But he grudgingly admitted, he would rather be walking through a parking lot in Los Angeles than one in Detroit this time of year.

I thought to myself, maybe it's an economy thing.

Nope. The news stations and business web sites are reporting that national surveys are indicating consumers will spend about $195 more per family on Christmas this year than they did last year. And the online shopping news confirms this trend.

At the beginning of the shopping season, online sales were forecast to exceed $1 billion dollars. On two days, BLACK FRIDAY (the day after Thanksgiving) and GREEN MONDAY (the last day to guarantee packages will arrive in time) online shoppers spent $772 million dollars. If you take the total sales from the other twenty-two shopping days into consideration, online sales will probably beat the forecast increase of 25% over 2005's online Christmas shopping record.

The majority of the sales went to clicks and bricks stores that did a better job catering to needs of their online traffic, than they did creating a memorable Christmas shopping experience for their walk-in traffic.

And in this atmosphere of Christmas apathy at the retail store level, is planted the seeds of destruction for the Christmas spirit where staff is so afraid of lawsuits they wish customers a "Happy Holiday," if any greeting at all.

How can shopping be meaningful and special when two weeks before Christmas, people are already shopping the early sales for next year's presents and wrap? How can shopping be meaningful and special when one of the top five gifts this season is the Gift Card? No thoughtful consideration required.

How can shopping be meaningful and special when the most frequent Christmas stories on the news this season have been the mall upgrades on parking lot security and shoplifting prevention?

If advertising on TV had a Santa at all, he was marking down prices with a twinkle in his eye; delivering presents while driving a Mercedes, or whining and complaining about the competition he is getting at the mall from a cell phone company.

It's a good thing that Virginia didn't send her famous letter this season, because the answer she would have gotten back would have been a whole lot different.

Surviving A Borg Attack

"We are the Borg. Prepare to be assimilated. Resistance is futile."

That is a great line and Star Trek fans will recognize it instantly. Independent retailers will experience it daily.

A year ago I was driving through a rural area on my way to work with a client and in the middle of a farm field I saw a huge strip mall under construction about half a mile outside a small town.

Talking with people at the gas station/diner/convenience store down the road, they excitedly told me about all the business it was going to attract to the area. I was a little concerned they hadn't thought it all the way through, but I kept my thoughts to myself at the time. I still remember the essence of my conversation with a couple of people at the diner to this day.

"How do you think that mall will benefit this place?" I asked waitress. "All the people coming to the mall will need gas. They may want to eat when they get here or when they leave to go home." Another person offered the comment, "With all those stores, there will be opportunities for new businesses to open up. There will be job opportunities that will keep our young people here"

I hoped they were right but I had my doubts. Opening a strip mall is an expensive proposition. Mall owners are about as risk adverse as any group I know of, so in my mind I made a bet that very few of the stores would be locally owned. Too risky. The mall owners probably had the stores all pre-leased to other big and recognizable names help get construction funding.

I drove back through the area yesterday and feel bad I was right. The mall anchor was a Wal-Mart Super Center. All the other names on the storefront facades were all national chains. The restaurants were all national chains. The gas stations flanking the project were national chains.

I don't doubt for a second that new jobs were created. I just don't think that there were many NEW jobs created. The gas station/diner/convenience store is closed and "AVAILABLE FOR DEVELOPMENT." Driving around town, I noticed there are a number of empty storefronts. So instead of creating a lot of new jobs the mall probably hired the employees from the businesses that closed as a result of the loss of traffic and business to the big names in the mall.

Small retail stores are going to feel like they are under assault by the Borg as this pattern continues. The only way for small independent retailers to survive a Borg assault is to learn how to be everything the Borg are not.

The Borg are not quick or responsive. The Borg have to move at a national pace that has a very long decision trail. To win against the Borg storeowners need to run lean and responsive operations. Keep inventory levels low so you can keep pace with the rapid cycles of the changing tastes of customers.

The Borg are not innovative. Just as size creates the buying power that gives the Borg a competitive edge, it is also their greatest weakness. At the local level, the Borg workforce performs low value add functions such as cashiers, stock clerks, while higher level functions such as advertising, buying, and strategic thinking are performed in the CUBE light years away and out of touch with local conditions.

The Borg are risk adverse. Just as scale of economy works for the Borg, it also works against the Borg. With the size of the purchases they must make to maintain their ONE competitive edge, they can't afford to take risks. This causes bland advertising, and even blander product selection.

The Borg are not integrated into the local community culture. The effectiveness of the Borg is their size which translates into buying power. They use their size to create and support the only real competitive edge they have – pricing power. To win against the Borg learn how compete on every level but price.

The Borg do not develop personal relationships with customers. They just assimilate the available balance on their credit cards and move on. This is the greatest opportunity of all to win against the Borg. Develop relationships with your customers. People buy from friends first before they buy low prices.

As Star Trek fans know, in spite of the Borg's size and power, the fast and nimble win their battles against the Borg more often than not.

Lose it Forward

I didn't plan to spend a lot of time writing about Christmas shopping, but there is an undercurrent of discontent as so many levels or the retail world this season, it needs review from many directions. Here's mine.

While shopping this past weekend I witnessed the seeds of destruction for the New Year Sales being planted. This was big home accessory store, and to drive sales they were having a 50% off sale on all Christmas items. The manager must have been under pressure to get sales levels up higher because he came on the PA system and announced, "take an additional ten percent off on all items purchased between now and closing."

The immediate result was that all customers who had completed their purchases ran back the cash registers and customer service counter and demanded their "additional ten percent off" which resulted in an wave of confusion washing over the cash registers. The check out lines slowed to a crawl as the cashiers had to cancel the previous sales and reenter them manually with the additional discounts.

The next thing that happened is customers began grabbing more Christmas stuff. So now the main stock for the "after Christmas sale" was flying out of the store before Christmas. I heard customers even comment on the fact they are going to get such a jump on next year's Christmas shopping now, they may not have to shop the New Year Sales.

A perfect example of "Lose it Forward."

As I watched, what I began to think of as the "Titanic Sale," continued to slide along the iceberg. Three shoppers who had already paid and left the store, came back after their friends told them about the additional discount. The three of them went to customer service and demanded the additional discount also. The manager approved it.

So now the cashiers are once again tied up canceling sales and re-keying them to reflect the additional discount causing lines to back up again. As people waited in line, two customers abandoned their shopping carts and walked out the store.

However, the floor traffic picked up as two women called several of their friends still shopping in different stores in the complex and told them about the 60% off sale.

Let's go to the root cause of this sale in the first place. To my mind, one of the main reasons sales are down is lack of Christmas spirit in the stores this season. I am not the only one saying it. In addition to numerous business reports saying the same thing, millions of consumers are saying it as well by where they decide to shop.

Most of the reporters are reporting flat to slightly negative floor traffic. The Internet stores are reporting about a 26% increase in sales over this point last year.

With traffic down, the sales are starting earlier this year. By January the public is going to be "sale weary" and traffic will drop further causing the "panic discounts" to get bigger earlier in the shopping period after Christmas and New Year. The newspapers will report another disappointing holiday shopping season – the fifth in a row.

The earlier sales and bigger discounts are going to kick start "Lose it Forward" into high gear as the media begins reporting a lack of "follow through" in January sales numbers as retail floor traffic continues to fall.

Lost & Found

Each time I go into the stores and malls this Christmas season it makes me a little sad because the last thing I see is anything resembling Christmas spirit. This past weekend I had some errands to do so I decided to see if I could find any signs of Christmas spirit while I was at it. I went into several stores and looked. The signs were not good.

Everyone was rushing about and not a smile to be seen anywhere. No one is wearing anything resembling Christmas garb. No Christmas sweaters. No Santa stocking caps. If it wasn't for the unusually full shopping carts and Holiday Themed Sale banners you'd think this was a normal shopping weekend.

I thought to myself, "Maybe it’s a stealth Christmas spirit." So I tested that theory. "Merry Christmas!" I said to a passing shopper. He did a double take and muttered "Thanks." as he moved on down the aisle. I know that scientifically you need more tests to prove a point so I continued to do experiments saying Merry Christmas to all the shoppers that I met on my way through the mall to parking lot. I kept score on the back of an envelope and test results proving the existence of the Christmas spirit did not look good.

Positive Results = 2

Negative Results = 6

Neutral Results = 16

"What?" Or Some Variation = 4

It was beginning to look like Christmas spirit was on life support until I went to pick up a pizza. The store was "over the top" with a huge tree and Christmas decorations. The store smelled like a fresh cut tree. There was Christmas music in the air and as each customer entered they were greeted with an enthusiastic "Merry Christmas" from the staff behind the counter dressed like elves.

The owner was dressed in a Santa hat pushing around a cart, dispensing hot cider; eggnog and home made Christmas cookies to customers while they waited for their pizzas. I looked around at the rest of the people and saw something I didn't see all day - Happy People.

As I sat there and waited for my order, I felt happy. Going with the feeling, I turned to the table next to me and said "Merry Christmas" and four happy people in unison wished me a "Merry Christmas." I turned to the table on the other side of me, and they wished me "Merry Christmas" first.

I watched smiles appear on the faces of customers as they walked in the door and were greeted sincerely by the elves. The owner wished me a "Merry Christmas" again as he refilled my cider.

The waitress beat me to the draw wishing me a "Merry Christmas" as she delivered my order. I experienced more Christmas spirit in a pizza place than I did in the mall.

I am pleased to be able to say there is still Christmas spirit out there, but you just have to look a little harder than days gone by to find it. It is worth the effort. Finding it brought back many pleasant memories of past Christmas seasons. It didn't take much to take Christmas spirit off life support for me. All it took was happy and sincere people wishing one another a heartfelt "Merry Christmas."

The final confirmation for me that commercialism can be done in good taste without spoiling Christmas came with my pizza in a take-home box printed to look like a present. On the box was a red envelope with a card. On the front of the card was picture of the Santa (the owner) and his elves (the staff) holding pizzas with the letters MERRY CHRISTMAS spelled out in Toppings. Inside, the cynic in me was ready for a "spoiling moment" of pure and unadulterated commercialism in the form of an ad or a discount coupon inside the card.

Instead were the following words,

"From our Family to yours this season of Joy and Remembrance."

I started the day looking for something important to me I had feared lost. Just like the first Christmas taking place in a humble stable; I found the Christmas spirit alive and well in a humble pizza place.

Avoiding Mall Brawl

I have a confession to make. I have probably had one of the best Thanksgivings I have had in a long time. I didn't watch TV. I wasn't subjected to an endless barrage of ads pushing Holiday Sales. I wasn't in line at a Big Box Last Night waiting for Midnight Madness (appropriately named) along with tens of thousands of bargain hunters around the country. I stayed home this weekend and avoided the insanity.

Having done all my shopping very early buying mostly on line, I was done before Thanksgiving. And I was not the only one. Many people I talked to about their shopping plans were "mostly" finished before Thanksgiving. So it was interesting to hear on the news that traffic was heavy but buying in the stores was light.

Buying online this weekend was a different story. Wal-Mart's website was hit so hard on Black Friday it went down several times for a total of 15 minutes as a estimated 22 Million People tried to access the TV and Electronic pages. Wal-Mart estimates this blackout probably cost them hundreds of thousands of dollars as frustrated shoppers went to other sites to buy.

E-Stores are reporting a different story. Ebay sold 14,000+ of the hard to get Xbox at an average price of $1,200, or nearly three times the retail price. Amazon.com sold out of its entire supply of X-Boxes in 29 seconds. Sold out it's entire supply of Mongoose Mountain bikes and Barbie Dolls in 15 minutes. Pricegrabber.com saw a 225% spike in traffic compared to the rest of November and most of that spike was on the TOY pages. Shopping.com saw a 40% spike in traffic over the daily average for the rest of the month.

The Nation Retail Foundation forecasts that 137 million shoppers will visit retail stores this Christmas shopping season (between Black Friday and Christmas Eve). Ebay had 7.5 million shoppers on Black Friday alone.

Depending on which research group you watched on the news shows this weekend; the estimates for online retail sales over the Thanksgiving weekend were between $1.15 billion and $1.73 billion. The general consensus is that web sales this Christmas season will jump up 30% percent over the same period last year to more than $27 billion.

The big box stores saw huge crowds and disappointing sales. To make matters worse, the cost of drawing in the crowds was huge considering the level or promotional pricing and discounting. Wal-Mart is now projecting flat sales to -.01% lower than last year for Black Friday. Other stores are reporting similar experiences.

I didn't shop online to save money. Truth be known; including shipping and insurance, I probably paid close to what those people who were standing in line paid.

I shopped online to avoid the mayhem usually associated with Christmas shopping. I hate the "hyper intensity" and "shark feeding frenzied" atmosphere in the stores. I hate the bad background music interlaced with endless "price promotion" broadcasts. I hate the way the stores are so full of merchandise, signs, and displays you have to almost walk sideways in the aisles.

I hate the way the worst in people come out in what is supposed to be one of the most joyful times of the year as local news delights in the endless running of the "road rage" incidents captured on video in mall parking lots.

I hate having to run gauntlet of panhandlers in the parking lots and coupon/flyer dispensers strategically positioned at the entrances like offensive linemen; and I am not alone feeling this way. The last couple of years the purchase of GIFT CARDS has increased dramatically. It is estimated this year there will be a 50% increase in GIFT CARD purchases this year.

I personally think that unless stores can improve the shopping experience to the point they won't need to use aggressive discounts to lure shoppers, the pendulum is going to keep swinging towards e-shopping.

I think the differences in shopping experiences between store shoppers and e-shoppers this Black Friday was best summed up by a television news interview of a woman who had been standing in line at a store since noon on Thanksgiving waiting for the store to open at Midnight. "I'm feeling pretty stupid about now."

Ten Degrees of Separation

The other day I had a unique experience. I went to Sacramento and forgot my cell phone. It was like line out of a Joni Mitchell song. "You don't know what you've got till its gone."

When you don't have a cell phone you begin to notice how much you rely on cell phones. It wasn't until I got to Starbucks I was even aware I didn't have my phone. By then it was too late. I discovered it missing when I reached for it to call friends and let them know I had arrived in town so we could coordinate a meeting spot for lunch.

The first thing I noticed was that everyone else was on the phone…but me. The second thing I noticed is that pay phones are now as rare as…as pay phones. I went to Wal-Mart. All the pay phones that used to be at there were gone. I walked over to the fast food joint next door and could see the painted outline where two pay phones used to be.

I went across the street to the gas station. I know this station well because it is my regular refueling stop on my way to the Bay Area. I walked around to the side and the payphones were gone. How could a gas station not have a pay phone? Isn't there some kind of Federal Law mandating payphones at gas stations?

I went inside to ask where the pay phones were and was told they were gone because people kept vandalizing them. The Vandals kicked the Roman Army out of Germany in 406 A.D. starting the decline of the Roman Empire and now they've kicked pay phones out of just about every public place they occupied before. Could this be a trend?

In ten years the cell phone has gone from being a luxury gadget to being a vital necessity. You don't believe me? Leave your cell phone home for a day and see how much you depend on it.

This whole episode reminded me of a prophecy first made in the movie "The President's Analyst." In the movie, the President of THE PHONE COMPANY is making a chilling prediction. He wants the president of the United States to pass legislation to implant a phone chip in every newborn's head so that in a few years "all you will need to do to talk to anyone, anywhere at anytime is just think of them and you'll be instantly connected."

That day is already here. There is now a chip in everyone's hand (unless they leave it at home) and it didn't take legislation. There is no doubt in my mind that the cell phone companies are working the implants as I write this.

This little experience has caused me to take a very careful look at my life. Contrary to popular belief there are not Six Degrees of Separation between two strangers, there are ten (555) 555-5555.

Sign of the Times

I had to go out of town to one of the three cities left in the US still not served by Southwest Airlines. I had to fly another airline. I hadn’t flown them in quite a while and was looking forward to seeing if they learned anything while they were in bankruptcy.

As we pulled up to curbside check into I felt great. Southwest had about 40 people in line at curbside check in and my carrier had 5 people in line. I was thinking to myself this just might work out. Half an hour later, the Southwest line was gone and I still had one person in front of me. This was not a good sign.

Traveling by air these days is bad enough without having to deal with surly attitudes. My bad was overweight by eleven pounds and I was directed to check in inside because he is not allowed to accept over weight baggage. I went inside and there was another long line. It was still two hours before my flight and now I was having doubts that I was going to make my flight.

When I got inside, I asked why they couldn’t handle me outside, and the man behind the counter said, “I don’t know why not. All they had to do was tell you to move some clothes from one bag to the other.”

Fortunately, the flight was delayed and I made it just as they were boarding the plane. Then the irony struck me. I was happy my flight was delayed. This was not a good sign.

The flight was an evening flight – the kind of flight where most of the passengers are business travelers. The airline used to charge for head sets to watch the movie, but now they are free. I was just beginning to have hope this would be a pleasant flight after all, and then announced the movie: “Over the Hedge.” There was not a kid on the flight, just a load of grumpy tired business men moving from point A to point B.

The bad thing about the collapse of the airline industry has been full planes. Apparently the airline industry hasn’t noticed American’s are getting bigger. So the only thing that made flying comfortable was the empty middle seats. With the fully occupied planes, the comfort is gone. This flight was no exception it was full and since I was traveling at the last minute, I was shoehorned into the dreaded center seat. As I approached my row, I knew it was going to be a tight fit because I am a big guy to begin with and the other seats were occupied by the a couple of guys that looked like linemen in the NFL. This was not a good sign.

Due to the extended check in – the long the long line in security, I was not able to stop to get a coffee for the flight as I normally did. Not that that would have helped since you can’t carry any fluids on planes any more. The flight was very turbulent. The turbulence kept the stewardesses in their seats and the drink cart in the galley. No movie, no reading, no comfort, no drinking. So I arrived at Denver parched, frustrated and exhausted.

I stressed trying to get out of the plane to make my connection as I fought the Universal law of flying that says: “The tighter your connections between flights, the further back in the cabin you will be seated and the slower the people in front of you will move as they exit the plane.”

Thank God, my connecting flight was having engine trouble. Now instead of forty minutes between flights, I now had 4 hours between flights while they scrounged up a spare plane. I was happy on another level about this delay. Prior to this I had serious concerns about the airline’s ability to get the baggage to my connecting flight on time. Now I am confident they will. I am happy my flight is going to be seriously late? This is not a good sign.

I use my time wisely. I return my calls. I respond to my email. I eat a late dinner. Now I have to kill three hours and thirty minutes.

I am a little giddy as I get on the plane because the computer system screwed up and assigned me an aisle seat. I should have known this was just the Universe’s way of setting me up for the fall one last time on this flight. After take off, I reached up to turn on my reading light…and it didn’t work.

The reading lights for everyone else worked. I realized I was being tested at the moment: What did I want more: to read my book, which would now require me to trade seats with the person in the middle seat; or to sit on the aisle? It wasn’t even close. I decided I would continue to sit on the aisle. Having made the decision not to move, I thought I would try to take a nap for the remaining three hours of the flight to Miami, but the Universe wasn’t finished with me yet… the seat refused to recline. This is not a good sign.

As I sit upright in the dark, I wonder if I can sue Southwest for not flying to Miami from Reno, and decide if I ever tried to do that I’d be condemned to a lifetime of “C” boarding passes (Southwest fliers will know what I am talking about.), so I let the urge pass and suffer in silence, upright, in the dark, for the next three hours.

I got to Miami. It was dark. It was late. It was raining. I was looking for some kind of sign that all my suffering was going to be worth it. That my trip under such adverse conditions was going to be a meaningful experience. It was going to be an enlightening experience. I was looking for a way to make lemonade out of my experience so far as I loaded my bags into the rental car.

At that point a homeless person wandering through the parking lot asked me for money, and when I refused, he opened his zipper and peed at me and said “Welcome to Miami asshole.” This was not a good sign.

Money For Nothing

“You are entitled to a free trip to Las Vegas. Stay on the line and one of our operators will be with you in a minute to give you the details on how you can enjoy a weekend in Sin City…on Us!.” In other words “Money for Nothing...” and being in Las Vegas, there is the implication “…and Chicks for Free!”

(http://www.lyricsfreak.com/d/dire+straits/money+for+nothing_20040681.html)

Ah…Money for Nothing. Who wouldn’t want that? This is a permanent part of the American Dream and it keeps resurfacing in one form after another on almost a daily basis. What kind of a secret buyer would I be if I didn’t see what the catch is because we all know there is no such thing as a free lunch let alone money for nothing; so I stayed on the phone to hear what the catch is.

They lied right off the bat. The operator wasn’t there in a minute. It was seven minutes. If I weren’t doing research I’d have hung up about five minutes and thirty-seconds ago; which got me to thinking. Since I didn’t hang up, and they didn’t seem to concerned about that…there had to be a reason why they were keeping me on hold. So I began to listen closer to the advertorials playing between snippets of the worst hold music in the world.

I am almost praying for an operator to come on to save me from the hold music. As I type this I have a revelation. The horrible hold music is their secret weapon. The dangle the promise of a weekend in “Sin City” on them, implying all expenses paid, then they pummel your brain until every shred of common sense is beaten out of you, and when the pitch comes, with few brain cells left functioning, you’ll sign up no questions asked.

“Hello, I’m Amanda. Have you ever been to Las Vegas?” So I decide to play dumb to see what the pitch is, “Not for quite a while.” Basically what followed next was a very long, a very dry, and a very boring presentation on Vacation Timeshares.

I was very upset, because I had waited on line and suffered through the horrible music and endless series of commercials on the phone, and now that I am talking to the operator with a flat voice obviously reading from a script, I am insulted. I am insulted by the fact they can put together an approach this bad, this poorly executed and have it work.

Then it hit me, the approach works because of greed! Greed is the reason bad telemarketing works.

Greed is the reason people will eat the uneatable and in the process humiliate themselves on national television. Greed is the reason why people will spend money they can’t afford on lottery tickets. Greed is the reason why smart people make bad choices. Greed is why students cheat on tests and term papers, to raise their test scores high enough to get into good colleges so they can get great jobs and make a lot of money.

Greed is also why smart people get caught when they do things they shouldn’t. I watched a documentary on crime where some very highly paid computer engineers figured out a way rig slot machines. All they needed to do was to consistently win a little over time and they could have milked the gaming industry forever, but they got greedy and won a lot in a very short time and got caught.

Greed is why people lose money investing in real estate and the stock markets, they want big money fast, and safe stable investments take too long to pay off for them. It’s why the “penny stock market” continues to flourish despite a long and public history of people losing all the money they invest.

There is a saying everyone knows and agrees is true. "If it sounds too good to be true, it probably is." Yet people overlook it when it comes to making investments. Greed is why Nigerians can send emails around the world and get people to send them money and reveal personal banking information before they get taken for everything they have.

A friend of mine owns a Oriental Rug store, and one day he got ten orders online for thousands of dollars of rugs. He ran the cards and they were approved, then the shipping clerk came to him when he noticed one odd thing the ten orders had in common. The "ship to" was the same address in Nigeria. What are the odds that ten US citizens moved to the same house in Nigeria and had the urge to remodel at the same time.

He called the bank, they did research and called back a couple of hours later and informed him all those credit cards were now in the process of being cancelled due to fraudulent transactions. Seems that ten more greedy people fell for the Nigerian get rich quick scheme.

It’s hard to believe that in this day and age, Ponzi schemes are still going strong which brings us full circle to the end of the timeshare presentation. As she was winding up, Amanda talked about my timeshare being more than a vacation option, it is also an investment opportunity.

Should I ever decide I am through taking vacations I can sell it and recover my “investment” and basically had all those vacations in wonderful places around the world for “free.” It’s just more money for nothing; and with the “mandatory attendance” at the presentation where I sign up being in Sin City the implications are “..and chicks for free!”

A Trip to Wonderland

I went to renew my drivers’ license this past Saturday and felt like I had just steeped through the looking glass.

When I do my training classes on customer service, I ask attendees “What state government agency is universally hated in every state?” The answer I get most often is Department of Motor Vehicles. So Saturday after four years of avoiding going to the DMV I had no choice. It was close to the end of the month and it was a Saturday. The worst possible time to renew, but I had no choice; my license was going to expire on Sunday. Reluctantly I went and I was prepared for the worst.

As I pulled up to the main DMV office – the only one open on the weekend, I saw empty parking spaces. My first thought was that the DMV was now closing early in response to budget cuts. I even started to drive past the DMV when I noticed a couple of people walk in the door. I was shocked. Things looked strange and were getting stranger. It was almost as if I had seen a fully dressed white rabbit walking through the doors of the DMV.

I made a questionably legal U-Turn right into the parking lot to chase the rabbit and hoping no one saw that maneuver moved quickly inside the building to get lost in the crowd. As I dropped down the rabbit hole, I thought “Uh oh! Not a big enough crowd to get lost in.”

A Highway patrolman walked in the door. Was he looking for me? Like the Mad Hatter, I put my hat on, and pulled the brim down low in an effort to blend in as I joined the line to be screened.

In the DMV here, you have to be screened to move to the next level of bureaucracy. The process reminds me of the “tea party” where nothing makes sense. You have to stand in line to get permission to stand in line.

I quickly moved up in line until I was before one of the “screeners.” These are people who make sure you have all the right documentation BEFORE you get in the REAL line. In the past this line would have taken me 35 to 45 minutes on a good day. A good day would have meant being in the parking lot ten minutes before the door opens on a Wednesday in the second week of the month. On a Saturday towards the end of the month this line alone would have been a good hour plus wait.

But this line moved. It moved so fast, I couldn’t read my book because the people behind me kept telling me “the line moved.” I moved through the screen line in 13 minutes.

The attitude of the screener was different. In the past they would just hold out their hand to receive your paperwork, look at it and give you a number. You hoped they didn’t send you back home chasing some obscure piece of paper.

After receiving a service number, you would have to go and sit and wait for your number to be called. This time smiling like the Cheshire cat she greeted me, and after looking at my paperwork, called me by name and told me the renewal line was moving pretty fast and they would have me out pretty soon. Of course, though shocked she even talked to me, I didn’t believe her.

Once I got my number, I looked at the Call Board and saw there were 42 people ahead of me. Now this was more like the DMV I remembered. I sat down and started reading. I had been reading only about ten minutes when I looked up as saw there were only three people ahead of me. My first impulse was to look and see if my watch had stopped – no DMV line moves this fast. In the time it took me to check my watch and look up at the board again – MY number was up.

I looked at my watch. “Curiouser and curiouser!” I thought to myself. This can’t be real I must be dreaming because I had spent only 11 minutes waiting.

I went to the window, reviewed all my information, and paid and was told to go to the photo window. Four minutes after my number was up, I was on my way to the photo window. What happened next shocked me even more.

The clerk took my picture and then told me she thought it didn’t look good and asked my opinion of it. My head was spinning. Did I hear her right? It didn’t look good and she wanted my opinion? I thought they were trained to take bad pictures. I looked and agreed it was lousy.

Then just when you think things can’t get more shocking they do…she retook my picture FOUR TIMES until she got one we both agreed was good. Five minutes later I was walking out with a new drivers license.

I came in expecting a two to three hour exercise and walked out in a little over thirty minutes. Something had changed. What happened? The place was quiet. No one was stressed. People seemed happy. There were only two possibilities here. The first was this was the site of the first Stepford DMV operation. The second possibility was massive use of recreational drugs.

The is a third possibility that was so far fetched I didn’t even consider it until them: something has changed in the way the government does business.

It is a crazy world. Black is white. Bad is good. Corporations are now reviled for poor customer service and the DMV is the paragon of perfect customer service.

Bah Humbug!

I guess that I will be forced to address Christmas several times over the next couple of months. Today I am compelled to address it because I saw Scrooge yesterday. Yes Scrooge exists. I, like most of you, thought he was a fictional construct used as a thinly disguised metaphor representing the “de-humanizing” aspect of industrialization at the beginning of the Industrial Age.

After yesterday, I came to realize that he was real.

An explanation is in order here. I walked into a furniture store and had the pleasure (?) of witnessing the motivational session of a sales manager chastising a salesperson for arriving at the store twenty minutes late. This was a bad experience for the salesperson to be sure; but it was also a bad experience for the store on many levels.

The first level of bad was the fact there were witnesses. Unfortunately the sound acoustics in the store are very good, and the sales manager was passionate about what he had to say. So I and about seven other people got to listen to Scrooge tell the salesperson, a young woman in her mid-twenties, “Your baby sitter problem is yours. You being late is mine! I don’t give a f**k about your problem. But if you’re late again; even one second, you’re outta here!”

When something like this happens on a sales floor it poisons the buying mood of customers. Customers want shopping to be a fun and pleasant experience. What happened on the sales floor was the equivalent of a drive by shooting. All buying activity came to a halt. The seven customers in the store began browsing their way towards the door to leave. The “nervous energy” of those remaining contaminated the “buying attitudes” of the customers who came into the store after the motivational “drive by.”

I have seen this happen many times in many different stores and the results are always the same, buying slows dramatically until there has been a complete change over of customers on the floor.

The second level of bad was the effect on the salespeople. The morale of the rest of the salespeople plummeted. Being is sales is a hard job. It takes a lot for salespeople to get into that “happy place” mentally to be able to do their jobs effectively, and the sales manager just destroyed it.

The effects are salespeople are similar to an experiment I read about in a psychology class in college many years ago. It was a scientific experiment investigating the effects of motivation/de-motivation using plants.

In the experiment, there were three rooms: In the first room were two plants, the control group. These were just left alone. They were watered and fertilized automatically with no human contact. They just grew. In the second room, the two plants were watered and fertilized automatically, but each day one of the plants was talked to in a nice an encouraging way. They both thrived, but the plant talked to grew a little grew taller and a little bushier than it’s roommate. In the third room, the plants were watered and fertilized automatically, but each day one of the plants was verbally abused. Both were equally barren and stunted.

After spending years in sales management and more years watching sales management, I can say without fear of contradiction that the effects of most sales manager “motivational” conversations have the same effects on salespeople and they did on plants.

The third level of bad is the negative impact on the bottom line. For customers, the memory of their experience that day will last for years. This event caused a very visceral reaction that is now going to be incorporated into the subconscious memory of all the shoppers who witnessed it. They now have a negative feeling associated with this store anchored at the subconcious level. In the future, when given a choice to shop at this store again or another store, subconsciously they will go to the other store first.

The store will lose those customers for life. Unless this store creates a reason so compelling for them to come back it negates their subconscious feelings. That reason is usually a “very big discount” sale. And that is what is happening more and more. In this store, on this weekend, they are having 70% off sale.

After what happened yesterday I make the following prediction: The sale will be extended!

When I see retailers posting lower than expected earnings and blaming the housing market, I see a bunch of people in denial. Customers haven’t stopped buying; they just stopped buying from them. So as we enter the season of good cheer, I offer this word of advice to the Scrooges of sales management: Be nice to your salespeople!

My first sales manager mentor was a man all the salespeople would fight tigers for. He taught me well and as I moved up the food chain, I had the kind of sales management success he had by following his five simple rules.

1. Love your salespeople. Make them feel they are the most important people in the company because they are. They are the people who generate the revenue that feeds everyone else.

2. Commend in public. Reprimand in private. Seeing you come out onto the sales floor should be a good thing; not the feelings of dread felt by a cell of prisoners watching the executioner coming for his next victim.

3. Be a trainer, not a dictator. Salespeople are like thoroughbred racehorses; the are nervous, skittish, high strung and temperamental. They rarely respond well to the whip. Do everything in your power to help your people improve their talent, skills, abilities, and life; and they will win races for you.

4. Don’t post sales performance records for all to see. Everyone must believe they are winners, posting performance divides the team into winners and losers.

5. Do everything in your power to make the sales floor a fun and exciting place to work. Happy salespeople cause customers want to shop and return often to a place that is fun and exciting.

The holidays are here (already) and the difference between a good season and a bad season is going to be the happiness levels of your salespeople.

"...Christmas is already here!"

Christmas is coming earlier and earlier every year. Here we are barely in October; not yet past Halloween, the elections or even Thanksgiving and I have already seen my first Christmas Display.

It was an aisle of Christmas decorations and lights. There were also shelves of “pre-wrapped” stocking stuffers with a visual display of the contents. There were boxes of cards and a rack of wrapping paper rolls and ribbons.

We haven’t even advanced into fall yet. It was 85 degrees outside, the sun was shining and I was in a tee shirt, shorts and flip-flops staring at an Inflatable Santa next to a Snowman inside an inflatable Snow Globe complete with blowing snow.

Probably the tackiest of all (at least to me) was the selection of “Pre-Paid Christmas themed gift cards” that take all thought and consideration out of the gift shopping process.

I think retailers have killed Christmas. It has lost it’s magic for me and many people I know. For a lot of people Christmas is now so commercial it has become a chore. The death of Christmas is even becoming a popular theme in Hollywood as shown in the movie "Christmas with the Cranks."

Christmas has become more about buying and less about giving if I were to believe the signs throughout the store encouraging me to shop early and avoid the rush. It reminds me of an old Stan Freeberg comedy routine called: “Green Chri$tma$.”

(http://freberg.8m.com/text/greenchristmas.html).

There was a time when the approaching colder weather was a sign the holidays were coming, but now the retailers are skipping right to the mother lode of shopping and moving the season up sooner and sooner as the chase the Holy Grail of more sales.

There was a time when Thanksgiving weekend was the “semi official” start of the Christmas shopping season. What ever happened to Thanksgiving and Halloween? I guess they aren’t profitable enough to be focused on by retailers.

On a technical note: I think that moving the shopping season up earlier and earlier each year is the reason why Christmas sales are so disappointing and getting more so each year for retailers.

Christmas shopping has gotten to be such an “Un-Special” experience, it doesn’t matter when you Christmas shop anymore. Over the last few years I have heard more and more people talking about doing the Christmas shopping for the following year during the January clearance sales.

It’s ironic in a way, by moving the shopping season up earlier, consumers have taken it to an extreme and are using the retailer’s Christmas overstock situation as a bargain shopping opportunity... for next Christmas.

There is going to be a death spiral aspect to the Christmas shopping season next year only a retail consultant or bargain shopper can love. To make up for the lack of sales this year, retailers are going to make the Christmas shopping season even more "unspecial" next year by moving the season to August.

The longer and earlier shopping season will cause even more merchandise to be sold at deeper discounts the following January as holiday sales again fail to meet expectations. This will end up causing retailers to attempt a recovery the following year by kicking off the Christmas shopping season on 4th of July weekend.

This does not say good things about the country, the economy or even us as a people. I fully expect to wake up on Christmas Day and see ads in the newspapers and on television claiming there are only “365 more shopping days until Christmas!”

Singing Pigs and Mimes

I believe in making the shopping process more experiential, more educational, and more entertaining. There are a lot of companies that do a great job making the shopping process fun and entertaining. Costco this past Sunday was not one of them. There’s an old saying that goes: “Never try to teach a pig to sing. It’s a waste of your time and only irritates the pig.”

What about the people who must endure the singing pigs? I ask this question because I was shopping at a Costco last Sunday one of the vendors was having live demonstrations of his product…Your Home Karaoke System.

I am a big fan of product demonstrations, but this one was missing an essential component – someone who could sing. Some of the worst experiences in life involve bad singers; Happy Birthday songs at the local restaurant, outtakes from American Idol, and Karaoke. At least with the Happy Birthday songs, they are over in less than a minute. With American Idol you can hit the “Mute” button. For some reason Karaoke singers believe volume overcomes lack of talent and that is where the problem begins.

You have to look at the roots of Karaoke to really understand the phenomenon. It began in Japan during the late 1980’s as a way for emotionally repressed “company men” who were culturally obligated to spend their evenings after hours bonding with their bosses while drinking copious amounts of alcohol, to vent their feelings of frustration.

Having attended a few of those sessions, it always appeared to me the singers were bad on purpose as a way of torturing their superiors in a socially acceptable way for forcing them to go drinking instead of going home after work. I have never heard of a music star in Japan who got their start at the local Karaoke bar.

There are companies out there who do a great job at making the shopping process more experiential, more educational, and more entertaining. The first one that comes to mind for me was Harry’s Farmers Market in Atlanta Georgia. When I first moved to Atlanta, Just about everyone I met, upon learning I was new to the area asked me if I’d been to Harry’s Farmers Market yet, and went on to tell me wonderful stories about their shopping experiences. I went and learned how much fun grocery shopping can be. The experience defies documentation in a format such as this.

Then there was a music store that sold records, instruments and sheet music in Honolulu called Da Music Place (long since closed and evicted to make way for yet another high rise condo) that featured local musicians playing on a small stage in the store three days a week from 6pm to closing. On weekends the instructors would offer free lessons on guitar and ukulele. It was a fun way to spend a few hours learning about music while shopping for music.

One of my favorites was a bar and grill on the beach on north coast of Brazil. When you ordered food at the bar, the waiter would bring it out on a plate raw and lead you outside to this huge donut shaped grill out on the beach that had a couple of chefs in the middle. A chef would quiz you about your knowledge of cooking, of spices and your tastes and make recommendations. Then they would coach you through the process of cooking your dinner.

It was there I learned a style of spicing and grilling fish that has caused me to receive high praise for my cooking skill from family and friends for twenty years.

Barnes and Nobles and Borders bookstores have learned that making the shopping process more experiential, more educational, and more entertaining is a good way to protect their business against Internet predators such as Amazon.com.

There is enough aggravation in our daily existence that we don’t need more of it while shopping. They only thing I can say good about shopping at Costco last Sunday was they didn’t have mimes manning the tasting booths.

Running with Scissors

The way many retailers are embracing technology today reminds me of kids playing with their new toys. My first evidence is the fact that air travel today is using technology to replace people to the point it is beginning to resemble some form of Universal Torture with all the players competing for the title “Most Unfriendly Way to Fly.”

I recently had to travel to Miami and tried to book a ticket over the phone. I encountered the increasingly more popular ROBOATTENDENT. A computer with a voice recognition system that is doomed to send more people into a depression than the Wall Street Crash of 1929.

Computer: “And where would you like to fly to?”

Me: “Miami”

Computer: “I didn’t understand what you said, could you please repeat where you would like to fly to?”

Me: “Miami”

Computer: “I didn’t understand what you said, could you please spell it? Please say first letter.”

Me: “M”

Computer: “I didn’t understand what you said, could you please repeat first letter?”

Me: In a desperate attempt to escape from the roboattendent: “CUSTOMER SERVICE!”

Computer: “I didn’t understand what you said, could you please spell it? Please say first letter.”

It is not just happening with airlines, it is happening every where as all companies look for ways to use technology to replace people. Somehow it seems to me that the more businesses try to improve their ability to take our money from us the worse it gets for us. The roboattendent is just the tip of the iceberg.

Along with roboattendents come the new breed of money extracting technology “robocashiers.” These automated cashiers now are frustrating customers in supermarkets and hardware stores, but it is only a matter of time before they take over the entire retail sector and renders it “humanless” fulfilling the prophecies of “The Terminator” movie series.

As companies accelerate the pace at which they replace employees with machines, any savings in labor costs are offset by declining sales. All the business pundits blame the drop in retail sales the past couple of quarters on the drop in home sales and I think they are wrong.

It seems to me to be obvious why sales have fallen, or are stagnant for many retailers including Wal-Mart; you’ve fired all the people. It reminds me of an old protest poster from the sixties: “What if the had a war and nobody came?”

Since I make my living working with retailers, I wanted to see if this trend was going to be as big a threat to my income as it is to the cashier’s income. Over the weekend I went to a number of retailers to see for myself what impact the robocashiers were having on productivity. To start with, I went to Home Depot and as I walked in, I saw that there were long lines formed behind the human cashiers and all the lines at the robocashiers are empty.

Now this is where the robocashiers are costing them money. Once the lines at the cash registers get long, some of the customers heading to the checkouts took a look at the long lines and abandoned their full shopping arts in the aisles and left.

In the meantime the only people using the robocashiers at Home Depot are people with only a couple of items. So they spend God knows how much money on the technology, programming and training only help some rapidly purchase a gallon of flat white latex primer.

What makes this really funny is that Home Depot has a person stationed at the robocashiers to help customers use them. Why don’t they just open another register and put the “attendant” on it?

Watching the toys at work is one thing. Playing with them is another. So I took the plunge. After an hour of watching the trials and tribulations of the “early adopters” braving the robocashiers, I walked the aisles and picked up the necessary ingredients to build and Iguana cage with my son. The hinges scanned, and the box of screws scanned, but when I tried to scan a set of drill bits, the robocashier had a tantrum. It kept saying “please scan your next item” over and over again. I tried the vertical scanner; I tried the horizontal scanner to no avail. I was going to call the assistant, but she was busy trying to scan a shovel for another customer with the results I was getting.

So I lost hope and I left the items on the robocashier and went to True Value Hardware. They had no robocashiers, short lines moving fast, and all my business.

I next went into Albertson’s to see what effect the robos were having on productivity there and saw the same thing happening that happened at home depot; long lines behind the human cashiers, empty robo lines and a dedicated robo assistant standing there doing nothing but talking to the girl at the customer service desk.

Like anything new, it is going to take time until human customers are going to accept the inevitability of robocashiers, but in the meantime the learning curve is going to be brutal on the businesses that are the early adopters of the technology. I read a report in a magazine where supermarkets using robocashiers are reporting a 35% drop in impulse purchases.

What do they expect? They remove the cashiers in the name of cost cutting, and replace them with very expensive machines that work 24/7 and take no breaks, and don’t talk with customers causing a line to form, forcing those waiting in line to look at magazines and candy bars until they can’t resist the urge anymore.

I think the machines are having a worse effect on the businesses that invest in them that no one wants to talk about because of the amount of money spent. They are afraid that if they tell their bosses what is really happening in the stores, they will be replaced by roboexecutives. And since they won’t tell you what is really happening with the robocashiers on the store floors, I will.

The robocashiers are causing the businesses that install them to lose sales…for now. They are causing businesses to lose money because they humans are much slower to adapt to new technology than businesses are. It is a vicious cycle: companies make massive investments in techology to reduce operating expenses (number of employees) and the payback fails to meet projections. So the business has to cut expenses (number of humans) again so they invest in more technology causing the proliferation of robots to get worse.

I called my credit card company because there was an unfamiliar charge. But there was something different this time, when I pressed "O" instead of getting customer service I got “That is not a valid option. Please try again.”

My satellite service provider has taken over my credit card company (see An Eternity in Hell). The credit card company has become part of “Sky Net” the creator of the Terminators. They have terminated the human employees and replaced them with roboemployees. No matter what button I push I can’t reach a human, so I am cancelling my credit card. If they don’t want to give any work to humans, I don’t want to give them my money any more.

As businesses eliminate humans from the workplace in the pursuit of lower operating expense, how much longer before they eliminate humans altogether and just have the robots do business with each other? Think this question is far fetched look at the world of securities and how “electronic trading” has eliminated the most of the human element.

When the last employee is laid off, who is going to be left to buy?

I think the people who make investments in technology to save money need to inflect it on themselves first, before they inflict it on the public. If they don’t; they are in effect like kids running with scissors. Except the only thing they end up cutting is their bottom line.

Perspectives

Last Wednesday morning about 7am, I pulled into the parking lot of a coffee shop in Pacific Grove. I mention Pacific Grove, CA for a reason; it is an upscale retirement/baby boomer community. When I pulled up I admit I was playing the stereo a little loud and I had my windows down. The couple sitting in the Porsche SUV next to me was giving me “stink eye (Hawaiian slang for a disapproving look).” When I stepped out of the car their look turned to one of surprise when they saw a fellow “baby boomer” staring back at them.

I tell this story because it illustrates the problem with preconceived ideas. They heard the music coming out of my car – “GORILLAZ/Fire Coming Out of the Monkey’s Head” – and assumed they were about to encounter a twenty something with tattoos and piercings, and got me instead.

It was kind of fun to watch their body language as they attempted to recover with style and grace and failing.

I have a “twenty something” son, and for many years we have been sharing the radio. As a result, he is as big a Doors fan as I am; and I have developed an appreciation for his music. In fact the playlist on my Ipod according to a boomer friend of mine is “defiantly twisted.” It contains the usual classic rock groups, Hawaiian music, and a mix of:

Blink 182
Korn
Tool
Powerman 5000
Sublime
Bucket Head
Gorillaz
Insane Clown Posse
Creed

among others. I bring the subject of music up because of a problem I have observed in a number of stores selling big ticket items: “conflictive staffing.” The challenges faced by salespeople dealing with customers of different generations. It is a two way problem. It is a problem that more storeowners need to recognize and deal with because it is costing them money.

Do you play music for the staff who you pay, or for the customers who pay you?

I went into the coffee shop in Pacific Grove to get breakfast. I was thinking a large coffee with a sesame seed bagel with cream cheese, and a chance to get on the Internet to check and respond to emails. As soon as I opened the door, I was hit by a wall of loud music that was hard for even my expanded tastes to take. The rest of the customers were boomers and not enjoying the loudness or the harshness either.

As I suffered through waiting for my order, I decided that I didn’t need to check my emails, got my coffee and bagel to go and left. The next four days of my stay in Pacific Grove, I went to a different bagel shop for breakfast. It had no Internet access, but it also had no blaring “Grunge Rock” music either.

In my little town, which has a mirror age/income demographic to Pacific Grove; the owner of the coffee shop is on top of the “conflictive staffing” challenge in a way the owner of the coffee shop in Pacific Grove is not. This makes for a good contrast observation.

When I go into the bagel shop in my town, most of the tables are full. There is no music blaring. There is no music at all. Instead of blaring music the customers talk to one another. Most of the people are regulars. Most of the tourists in town that discover the place come in each morning during their stay becoming “temporary” regulars.

I understand the young staff in Pacific Grove had to come in very early and work hard to have the product ready by opening time. I know from experience good (subjective I know) music loud during the very early morning hours creates the kind of atmosphere that helps make the morning routine more enjoyable.

The very young staff at the coffee bagel shop in my town has the same morning routine. The difference is when they open the doors; they create an atmosphere that makes the morning routine more enjoyable for the customers.

The First Cut is the Deepest

My car caught fire today and burned into my mind a lesson every storeowner needs to know about the most powerful advertising campaign ever created: Word of Mouth (W-O-M).

I was having yet another problem with my satellite Internet service and was being dragged through the depths of hell (see previous post: An Eternity in Hell) once again. I needed a break, an excuse to go to town, a cup of coffee and Internet access – all in that order.

So I shut down operations for the rest of the day. I drove to town, got a cup of coffee, sat with a few people and righted the wrongs of the world, and then used the free wireless Internet access to do my email routine for the day.

As I was leaving I heard something pop under my car and pulled over to see what happened. As I stepped out of the car I saw flames coming out of the left front wheel well. My power steering hose ruptured and set my car on fire. I hung up on a friend explaining, “Car’s on fire, gotta go.” Reached into the car popped the hood and grabbed my large coffee and put out the fire.

Coffee: the Swiss Army Knife of consumable beverages. Don’t drive without it.

Once the fire was out, I was able to crawl under the car and figure out what happened. So I went back into the coffee shop to get a refill while I waited for a tow truck. I explained to the girl behind the counter I needed a refill because I had to use the coffee to put out the fire. The clerk was wondering if they should charge extra for that as she refilled my cup.

But what happened next was the most interesting thing; everyone in the coffee shop began debating where I should take the car. Recommendations and horror stories about the different auto repair shops in town were coming at me from all directions.

I wish I had a tape recorder going. It would have been very good for the owners of the different auto repair shops to hear the unsolicited stories that were being told about their businesses today. In the end, I was very strongly influenced by the discussion on where I would have my car towed. I picked the shop that had the most champions, telling the most positive stories based on their experiences.

The tile of this post, “The First Cut is the Deepest” is the title of a song by Rod Stewart about how deep and wonderful or how deep and painful love can be. It is appropriate in this case, because it explains how deep the love/hate customer experience can go.

In my sales training I teach salespeople to look beyond one customer to the entire circle of influence. What you do and say to one customer will be heard and experienced by many. Many you will never hear from if for the one, the First Cut is a bad experience. This is the power of W-O-M advertising.

Word-of-mouth advertising is the most powerful form of marketing in the world today. It is something that can make or break a business. It is so powerful that Madison Avenue is trying to figure ways to duplicate or ways to control a W-O-M campaign’s power.

W-O-M is either the cheapest or most expensive form of marketing depending on how you treat your customers. Most frustrating for owners is the fact it is totally out of their direct control, or so they think. The real truth is the fact it is totally under your control because it is dependent on how good or bad you treat your customers.

No advertising campaign in the world will be able to move me the way the W-O-M campaign in the coffee shop did today. It moved me because there was a high level of authenticity in their stories. Because it happened to them the stories were told with authority, passion and emotion.

The W-O-M campaign has a dual effect. Just as it made them the shop of my choice, it has also made me a better customer for them. I have high expectations for a satisfactory outcome from my visit there because I got a number of powerful stories of personal experience told with passion.

Even though I have never been to the shop before this, I have a high level of trust in these guys, because they are trusted by people I trust and respect. I am more likely to believe what they tell me about the problems and accept without question their recommendation because of the unsolicited testimonials.

Just as the power of the positive recommendations is true, so is the power of negative recommendations as indicated by the previous post “Fade to Black.” There are a couple of auto repair shops that spend a lot of money advertising that were only briefly considered, but fell out of competition, dragged down by the weight of the negative W-O-M stories.

The W-O-M recommendations have higher credibility with me than the slickest ad because the stories were unsolicited. Instead of having a paid actor in a paid ad, saying what he is paid to say, by the guy who owns the business and has vested interest in convincing you to come to his place of business; I had before me people who went to the businesses and are sharing their experiences and the results of their decision.

I’m not saying all the positive W-O-M stories had positive outcomes. They just had positive experiences. In fact the story that impressed me most about the shop I had my car towed to was about a botched repair:

A repair that took two days instead of the forecasted four hours.

A mechanic who admitted he made a mistake and what he thought was wrong with the car wasn’t.

An offer to pay for one day of a car rental so he could fix the right thing without further inconveniencing his customer.

Here was a mechanic who gets it. He knew that giving good customer service was going to pay off many times over the cost of the car rental and it has. Seven people heard this story told with pride and passion and one of them had his car towed to the shop based on that story. I am sure that if any of the others in the coffee shop yesterday afternoon have need of auto service or repairs, this shop is going to get the first chance at their business too.

Aloha to an Old Friend

I got bad news yesterday. I heard through the grapevine my favorite bar and grill was sold, and rumor has it turning into a martini bar.

It was a place I have been going to off and on for about twenty-six years. Even though I now live on the mainland, I still managed to get back a number of times over the years. Going back was like going home. I still remember the first time I went there as if it happened yesterday.

I had just come off of a very long and very bad sailing trip from Kona to Honolulu. We had a fast boat and would be sailing with the trades, so the trip back usually took us about eighteen to twenty hours. For a short trip like that all we took with us in the way of supplies was a large thermos of Kona coffee (of course), cooler full of beer and soft drinks, a dozen submarine sandwiches, a few bags of potato chips and a couple of platters of assorted sushi rolls.

God has a sense of humor and he showed it on this trip. We left in the early afternoon to make landfall in Honolulu around lunchtime. About midnight, halfway to Honolulu we were becalmed on a sailboat with a dead engine. We drifted in the channel for three days in the one spot in Hawaiian waters totally devoid of any other boat traffic. Stubborn pride kept us off the VHF radio.

We ran out of food before we ran out of wind, so we never had a chance to ration out the food. We ran out of beer and soft drinks the first day of drifting, because we never in our wildest dreams thought the calm would last beyond the next morning. For the next two days we were reduced to rationing out melted ice for drinking water.

As people who are starving to death while dying of thirst with absolutely nothing to do are prone to do, we spent the next two days discussing in great detail our favorite foods and drinks and the meal we would order if we survived this ordeal. As the hours pasted we continued torturing ourselves with descriptions of food and delicacies beyond our reach and pocket book.

At three in the morning on the third day we were awakened by the sound of sails flapping in the wind. The trade winds returned. We flew out of deep sleep into action as we trimmed the sails and set course for Honolulu. The trades were strong and we hung out every bit of rag we could to crank every bit of speed out of the boat.

As we sailed towards home a debate began, “Where should we go to eat?” For the next seven hours each person submitted a name and a description of the food in detail as they pleaded their case for their favorite restaurant. We all finally agreed on a place, but the process was brutal. It made us even hungrier.

I have to admit, the selected restaurant was not my choice. There were many other names submitted that offered better fare, more substantial fare, more diverse fare, or cheaper fare. The winner was selected based for one reason: It was close to the harbor.

Feast of Feasts! The waitress looked at us as we entered. We looked bad, and I‘m sure we were a tad on the ripe side. I was sure her first thought was going to be to call the police. But she was a pro and had dealt with her share of castaways. She lead us to a table and without even asking brought pitchers of ice water and glasses with ice cubes and lemon slices in them. It tasted wonderful. As we drank water she brought out baskets of fresh baked bread – one basket per person.

People at the surrounding tables who have often wondered what a pack of hyenas sounded like when devouring a fresh kill learned that morning.

Our waitress was Lani. After leaving the baskets she gave us a little time to recover our dignity before she came to the table to take our orders. She handled with kid gloves to the point we didn’t even know we were being handled. She got us to calm down. She corrected our manners. She got us to use our “polite voices.” She helped us work our way through menus that overwhelmed us with choices, and served us nirvana on a platter. She went out of her way to make our meal memorable and it was. At that moment life was perfect.

The owner came over and introduced himself. I am sure that he was just coming to check to see if this was going to get out of hand. We assured him that Lani had us under control because she did. My friends and I adopted the place. It became our sanctuary…our version of “Cheers.” I probably ate at least five to ten meals a week there for years until I got married. Although the other waitresses were as good as Lani, I always tried to get into her section.

One day I was having coffee with the owner and pointed out that from my perspective, the girls ran the place. I was surprised when he confirmed it to me. “I was just damned lucky they decided to keep me.”

He told me that he learned the secret to running a very successful bar and grill from another very successful owner. “Hire good people, give them all the support they need, and stay the hell out of their way.”

Lani was the epitome of his declaration. She made that first meal there very memorable. Over time she showed me the power serving with sincerity could have on other people. She led a team every bit as devoted to caring for the customers as she was. Twenty-six years was a good run in food service. She is the gold standard by which I gauge restaurant service to this day.

I have said my Alohas to an old friend this day. It was my home away from home, and the people who worked there were my friends. It was like the theme song for the television show “Cheers;” it was a place where everybody knew my name. In this increasingly impersonal world there are not many places like that left.

I’ve come to terms with the fact that my old hangout is gone. It will soon to be replaced by a new generation’s version of “Cheers.” I only hope the new owner has enough sense to “Hire good people, give them all the support they need, and stay the hell out of their way.”

Fade to Black

I am watching the retail auto industry with great fascination. It reminds me of the title of a book by Kurt Vonnegut: “Slaughter House Five: A Duty Dance with Death.” Based on what I saw happen last year and again this year, the US automakers are dancing as fast as they can.

The current “death dance” began in earnest the summer of 2005 when the Big Three all launched marketing campaigns pushing price discounts to drive sales. The “Employee Discount” program launched by General Motors was quickly followed with similar programs launched by Ford and Chrysler. The Big Three spent millions of dollars advertising their discount programs and unit sales increased dramatically. By the end of the summer all three companies succeeded in their goal to increase the number of units sold. They all set new volume records.

By the end of the year all three companies were in deep financial trouble and the business news stories were full of “bankruptcy” predictions. By the second quarter of 2006 GM was giving employees up to six figures to quit. Ford was laying off 30,000 to 45,000 people; closing factories and shifting a lot of manufacturing to other countries. This year looks like it is going to be a more vigorous dance than last year based on the ad campaigns for summer of 2006.

On the other hand, the foreign manufacturers didn’t play the discount game and saw a bigger increase in sales than the Big Three during the summer. More importantly, their increased sales were at full retail pricing. Toyota is now the Number two retailer jumping over Ford and their stock value is ten times that of GM. Nissan is talking about buying up to 25% of GM. Honda made so much money they don’t know what to do with it all so they are branching out in airplane manufacturing.

Why didn’t sales fall for the foreign manufacturers in the face of such a massive discount sale by the Big Three? The foreign manufacturers knew something that the Big Three didn’t know. They knew today’s car buyers are now more focused on the process of buying a car than they are on the price of the car.

It doesn’t mean that price was unimportant – it just means price wasn’t the primary decision factor for most of their buyers.

I got off on this whole car-buying tangent because I just noticed that one of the local car dealers is the latest “Death Dancer.” He has just finished his “LIQUIDATION SALE.” The doors have closed and rumor has it the site will soon be turned into another pharmacy to match the ones on the other three corners.

I never bought a vehicle from my local car dealer. Having heard horror stories from those who did caused me to stay away. I mention this because apparently there were enough horror stories out there enough people went out of their way and bought cars in Reno (86 miles east) or Sacramento (79 miles west) rather than shop at the local dealer.

Although I never shopped there, I did go there on several occasions and it was easy for me to see what the problem was: “conflictive staffing.” It’s a new term and you read it here first. I use it to describe the conflict between the sales staff profile and customer demographic profile. In other words you had an older (baby boomer) customer base that never really clicked with the 20 something salespeople.

This area has an older population. According to Walgreen’s who purchased the site, they have been looking to move into this area for a while because 33% of the area’s population is 55 years or older (That explains why we will soon have a major pharmacy center on all four corners.) compared to 9% for the state of California as a whole.

Say what you want about the baby boomer generation, but as a retailer there is one thing you need to know, we have money, and we want respect. If not for ourselves, at least for our money.One thing I know that minimizes the enjoyment I get while shopping is the generational conflict. I am older; most of the salespeople I encounter are younger. Being younger is not a crime, unless they are in management positions in retail operations…and untrained.

Shopping is a feast of the senses. The more senses I (and other shoppers) engage, the better the experience and the more likely I (we) will buy. Realtors have been all over this for a while. I don’t think there is a home showing anywhere without the obligatory smell of fresh bread or cookies in the kitchen to engage the sense of smell. There also always seems to be fresh cut flowers on the table or in the living room while Yanni plays on the stereo engage the sense of hearing. Realtors are very careful to engage and pace themselves with the demographic profile of their customer. Too bad that doesn’t happen often in retail.

I went into a furniture store last week, and the music (and I can’t believe I am actually going to say something my father once told me) playing in the store was anything but music…to me. The music must have sounded good to the salespeople who were kind of moving to the beat (?) as they walked around in the store (mostly by themselves) but it drove me out of the store. It wasn’t just this store.

A week ago when a business trip got extended, I went into a men’s clothing store to buy shirts. The store was empty save for two young salespeople. One was on the computer. The other was on her cell phone. Both were too busy to help me. The music gave me a headache. Young, untrained salespeople badly managed, is the reason why car dealers, and many other retail stores are doing the “duty dance with death.”

Not feeling very appreciated is one thing. Not having my wallet appreciated is the opening bar of music calling more dancers to the floor. So I was treated in this clothing store pretty much the way friends of mine were treated in the now defunct dealership. Badly! So my wallet and I left, and since I’ve yet to learn to buy clothes over the Internet, I went to the mall. That is why all the strip malls have the same cookie cutter stores in mall after mall after mall. They are bland and boring, but least you have an idea what to expect.

It doesn’t take much to avoid joining the other "death dancers" on the conga line. If you are going to hire young salespeople train them. Train them to pay attention to customers. Train them to respect customers. Train them to serve customers. That’s all it takes to get me to shop in your store.

Another One Bites the Dust

Just when you think things couldn’t get any more bizarre in the retail world, they do. If I didn’t know any better, I would think there was a workshop out there for owners and managers on “100 Ways to Abuse Customers.” If a workshop like this existed, it would have been led by Orin Scrivello, the Dentist played by Steve Martin in the movie “The Little Shop of Horrors.”

Yesterday I was heading home from a business trip. I was near the end of a four-hour drive, when I pulled into town and I needed to use the restroom. I also wanted to pick up a couple of movies, so I stopped at the video store thinking I’d kill two birds with one stone. I walked in and went first to the restroom but the door was locked.

Thinking someone was in there a I waited for a few minutes, and then I noticed a sign taped to the wall about two feet from the door that read: “Ask for key at counter.” In my mind I was wondering why they didn’t put the sign on the door as I went to the counter to ask for the key.

After waiting in line for about five minutes while the clerk checked out two people ahead of me, I finally got to the head of the line and asked for the key. The clerk got a very annoyed look on his face, picked up the phone and called for someone to cover the counter for him. While waiting for his replacement the clerk told me he would open the door for me. Before I could ask, “Why not just give me the key?” his replacement arrived and he led the way back to the restroom. Along the way, he explained that he has to escort me; “company policy.”

Once we got there he knocked loudly on the door, and in a voice that everyone in the store and the next two stores could hear asked, “Is anybody in there?” After waiting about ten seconds he knocked again with all the subtly of a drummer in a marching band. Receiving no answer, he opened the door and walked in.

I was stunned because now I had to wait again. If I had gone to the gas station instead of the video store, I’d have filled the tank, got a newspaper and been half way home by now. But before I could leave out of frustration, he came out and in a booming voice announced, “I have to inspect it before I can let you in.”

After I finished in the restroom, I asked to see the manager. I wanted to let her know what I thought about the new policy. Unfortunately the store was short staffed and the manager was manning a check out window and there was another line in front of her and the last thing I wanted to do was to stand in another line I this store. So I wasted my time, didn’t get any movies and left.

My philosophy is that life is too short to suffer situations I don’t like. So I will make changes. I have heard about Netflix from a number of my friends. Up to now I haven’t looked into it, but I will right now.

I just got back from Netflix. I have very high expectations because it was easier than I thought it was going to be. Much more affordable than renting videos, and a bonus for me...NO LATE FEES. I think I am going to like this service a lot. I have completed my list and my first videos are on the way. And no public humiliation required.

What did this one episode of bad customer service cost the business? A lot.

I am not a very heavy user of movie rentals compared to a lot of people I know, but I rent two or three videos a week or between one hundred thirty and one hundred and seventy videos a year. My circle of immediate family and friends do about the same or more. Some a lot more. I know that once I start receiving my movies a lot of my friends and family are going to try it if for no other reason to avoid late fees.

Will my defection from the local movie rental to net movie rental be the triggering event in their demise? I doubt it. But my defection is going to have an impact on them once the ripple effect kicks in and the members of my circle of influence start to recommending the service to their circle of influence and the number of movies being mailed to our town escalates at a geometric rate. This has happened in our town in the past as Internet book buying helped cause several book stores in town to close.

Bad customer service at local stores (and the new customer service policy on "restroom access" at this store is a text book example) is the primary reason why the Internet Retail is growing at triple digit rates. Will this store survive the Internet? I don't know, and because of the way I was treated, I don't care.

An Eternity In Hell

I have satellite Internet access, and I had a problem today. Three out of five lights were glowing green, one was blinking green and one was yellow. Not a good sign. So I called tech support, which I dread, for no other reason than it is in India. I always seem to have a difficult time explaining my problems due to language and cultural barriers.

Solving the problem takes being transferred up three to four levels of support and telling the whole story over again to someone who barely has a grasp on the American version of the English language. As a result it usually takes a very long time to get problems resolved.

Today, something was different. Instead of being routed to India, I was now the customer of a different company. It seems the company I have for access has been sold to another company. Maybe, things would be faster and smoother I thought. My hopes were immediately dashed by a welcoming message on the phone system that ran for 45 seconds. And once we got past the welcoming message, the menu had so many choices and options that by the time the choices were all listed, I had to hit star to repeat the menu to remember the one that I needed. Once I selected tech support option for my satellite receiver I was put on hold.

I was on hold a long time listening to the same 45 second message extolling the virtues of my new service provider followed by the first sign of what I can call an electronic torture session: “Please remain on the line, calls are answered in the order they are received.” After which I got to listen to the virtues of my new service provider…again and again and again. Each repeat of the message was beginning to feel like being lashed by a bullwhip.

This went on for about seven or eight minutes before I got the bright idea of counting how many times I was lashed with the whip… I mean how many times I had to listen to the message. After nine more lashes, I began to try all my tricks to get past the automated system, and no matter what I tried, I kept getting “That is not a valid selection.” And the lashing…I mean the message would start over.

After a while it gets past the point of frustration and borders on the stupid. I sat here on hold listening to the same message over and over again for nearly an hour. This is where the stupid part comes in. I am justifying sitting here being tortured; by thinking I have been here on hold so long I must be getting to the top of the queue. As I have that thought, the demons inside the phone system laughed so hard they start to choke.

After an hour and fifteen minutes, the repetition of the message started doing strange things to me. I became paranoid. I knew that some how they knew I had been waiting a long time and they were waiting for the right moment to dump my call. I needed to go to the bathroom, but knew the moment I left someone would pick up my call and decide no one was there and hang up forcing me to start the process all over again…so I suffered. And by all indications, if I want high-speed access I will continue to suffer.

As a customer, I am being taken for granted and I know it. Proof of this the fact it is a reoccurring problem, and each time I call tech support it takes longer and longer to talk to a live tech. This is proof to me the company is spending money to get customers, but not spending enough to keep pace with the increases in customer service calls.

Sitting here uncomfortable and feeling stupid for sitting here this long letting them do this to me, I made a decision. I am going switch high-speed access providers. This was not an easy decision for me to make. I was a satisfied customer for a long time, but as the company grew, customer service shrank. I wonder how many others abandoned ship before I finally saw the water level rising. No wonder the company was sold.

During this opportunity I had to reflect on life, I had other calls coming in on my line, and instead of putting this line on hold to take other calls; I let them go through to voice mail. For all I know one of them could have been Ed McMahon calling to tell me I won the Publisher’s Clearinghouse Sweepstakes, but since I didn’t pick up they called some one else.

Frustrated beyond belief at going through this same problem every few months, I am about to abandon ship. I am no longer a loyal and patient customer. After I get my service back on line I am going to do research and the satellite provider with the best marks for both customer service and reliability are going to get my business.

Finally at one hour and twenty-one minutes I got a different message, “Your call is now being transferred.” and my hopes soared. I felt vindicated for having waited. I was elated about the fact my problem would soon be solved. Maybe the new company was going to be the answer to my prayers after all. I was over the top excited again because some one was about to take my call!

“Hello. I am Rajheed, but you may call me Steve.” I was back in hell.