Monday, August 21, 2006

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.

Tuesday, August 15, 2006

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.

Monday, August 14, 2006

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.”

Tuesday, August 08, 2006

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.

Thursday, August 03, 2006

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.