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Successful formulas do not always work for others – especially when you miss the key ingredients

July 18th, 2006 francois Posted in communities, marketing, social networking, Strategy, worst practices 1 Comment »

Hub.pngWhenever a company finds a new and successful way to reach a goal, or to reach a hard-to-get-to audience – many others follow quickly – copycatting the original company, often times with dismal results. In some cases, as is the case with word-of-mouth marketing, new entrants screw up the whole playing field for everyone.

There are three main reasons why copycatting does not always work. First off, many companies who copy others do so without really understanding what the real ingredients for success are. The second reason, which took down email marketing and potentially could take down word of mouth marketing for all of us is related to ethics and industry self-regulation in the absence of government guidelines. And the third one is that best practices are not always portable from one company to another.

The entry of Wal-Mart with a Myspace-like offering clearly falls into the first category (via adage – may require subscription). In an attempt to appeal to teens with something else than pencils and backpacks, Wal-Mart launched a social networking site called The Hub. The site is designed to allow teens (hubsters) to “express their individuality.” They can create their own page to show it to the world, and they can post hot-lists of songs and movies. They can even shoot and submit Wal-Mart related video clips and have a chance that it will be picked up as part of their TV advertising.

So far so good.

Except that they screen all content, email all parents requiring their consent for teens to put up a page, and forbid users to email with one another. Oh, and they reserve the right to modify the commercial created with the winning video…

And they call that a “GENIUS WEB DESTINATION?”

It is web alright, but where are the genius and the destination parts? If all goes well, they may win the top price for the “most uncool” social networking site!

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Comcast – a tale of poor customer service and screwed up management decisions

July 12th, 2006 francois Posted in customer service, worst practices 2 Comments »

So a guy has problems with his cable modem and spends time in Comcast’s online customer service hell (he also happens to be the biggest champion for the movie snakes on a plane, even though the movie makers newer acknowledged that). Then Comcasts decides to send a technician out to have the modem swapped out. When the technician calls Comcast to activate the modem, he ends up in the same customer service hell hole as most customers end up in and spends an hour on hold – and falls asleep on the customer’s couch. The customer videotapes the incident and puts it on YouTube. Next thing you know it gets picked up by mainstream media outfits like the NYT, Forbes, and even airs on MSNBC’s “Countdown” program, just to name a few. More than 300,000 people view the video on YouTube.

Another good customer service story – right? This must have been a great wake-up call for Comcast management to start fixing their problems…

What do you think happened next?

Comcast FIRED the technician!

…now talk about a wrong-headed management decision.

What do you think?

(For more info – check out Mary Schmidt’s blog)

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Best practices are meaningless – but worst practices are to be avoided

June 16th, 2006 francois Posted in marketing, random brainsqualls, worst practices No Comments »

Target practice sm.jpgBased on some comments made during last week’s Innovative Marketing Conference, Rebecca Lieb from ClickZ ponders whether best practices even exist.

Bryan Eisenberg said that best practices are often times achieved under very specific conditions and can therefore not always be generalized. Len Ellis said, give me emerging practices, best practices are so yesterday!

All this rings so true. If a practice becomes a best practice that is replicable across other companies or industries, you have to assume that most of your competitors will have adopted that practice – thus giving your company no competitive advantage from embracing it.

What companies really should do is to avoid replicating “worst practices” – a practice which if you were from another planet observing what earth companies do you might conclude they do on purpose:

  • Screw customers after they purchase products by treating call centers as a cost centers instead of customer relationship based economical centers
  • Continuously interrupt prospects with rude and mostly out-of-context messages
  • Treat employees as disposable cost centers instead of valuable customer interfaces
  • Insult customers’ intelligence with stupid messaging or by blaming them for product failures.
  • Grab a ton of information about prospects and customers and give them nothing in return – or worse – asking them for the same info over and over again
  • …and so much more

Let’s ban the worst practices first, then let’s worry about best and emerging practices!

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Why is customer service at Starbucks consistently great – while the service at most other take-out joints sucks?

June 12th, 2006 francois Posted in worst practices 4 Comments »

Customers - care.pngYou go to Starbucks and the energy is positive, the service friendly, and experience somewhat consistent from store to store. You go to Bruegger’s and there is no energy to speak of, the service is chaotic at best, and the consistency – let’s say non-existent.

Now if you think that that is bad, and happen to live in a town like mine – try placing an order with Papa Gino’s or Domino’s – it will not only be the chaotic service and low energy or the “I don’t care” attitude you will have to deal with – it’s pure stupidity! Never do I know whether I will fall within their delivery zone or whether some new driver will decide that I am just outside of it, and usually I do not find out until well after I placed my order and have a house full of hungry/angry kids.

So what do you think makes up the difference between those outfits?

One theory, put forth by management consulting guru John Hagel says that too many companies focus on the transactional view of economics instead of the relationship view of economics. Makes sense! The fact that Starbucks employees get more benefits, stock options, and promotional opportunities not only makes them happier employees – it results in an energy that can be “experienced” by most customers who visit their stores.

Another reason is that the marketing execs at those companies who cut corners in customer service are probably not grokking marketing the way Burger King’s CMO Russ Klein does - where every “out of home food dollar” is considered to have a “social component” to it!

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Mercedes Benz – poor customer service ROI

April 9th, 2006 francois Posted in worst practices 31 Comments »

Mary Schmidt makes a great point in the comments of a previous post where I outline Mercedes’ mangled response to a catastrophic engine failure that happened with our E320 while my wife was driving my son to his birthday party.

In it she asks the basic question that any marketer should ask themselves when faced with irate customers who warn their friends about the bad customer experience they had with a company: “Hmmm. Would be interesting to tally up: 1. How many people read your blog; 2. How many comment here; 3. How many link to this post (and then comment). And so on. Seems to me Mercedes is losing some business out of this, ya think? Perhaps you should do a conservative example cost benefit analysis and send it along to the CEO. Say, “Lost 5 customer at $60K each” versus repair of existing customers’ engine, and so on….You can count me among the “lost” I’ll certainly never think of buying a Mercedes (new, used or classic) after reading this horror story.”

This is so true. Close to 4,000 people read the story so far – and that is just on my site, it does not include all the readers of stories that were picked up by many other sites (one of which made it into Yahoo news for over a day). Everyday multiple people find my stories from googling some Mercedes related search terms. And it even came with some unintended consequences, like having some people who are mentioned in the stories (and who never had the courtesy to get back to me) have my story show up first when you Google them.

For a blogger it is an ethical dilemma as to whether or not to write up a bad experiences like this. For this story I gave Mercedes ample time to respond to me first, and whenever I had a new rant or gripe, I sent it to them first. But the whole situation was ludicrous enough to justify my going public with the story. A 5 year old $60K products that fails after 100K of mostly highway miles should result in an answer that is different than “it’s your fault and we can give you $6,000 for the car in a trade-in.”

For a company which started losing money hand over fist, and which tumbled to 21st place in customer satisfaction, and which lost its title of world’s best selling premium brand to BMW for the first time in since 1993, you would expect a different response. It would have been easy, and relativelly low cost, for them to continue to keep me as a believer in their brand promise. And at my age, I might have bought 2 or 3 more of their cars in my lifetime. That will clearly not happen now, and there is at least one other confirmed person who will never buy their products again because of this story. The ROI on their way of handling the situation is clearly not in their favor when you look at it this way.

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Mercedes says that cars fail in the first 50K miles – after that it’s the fault of the driver

April 5th, 2006 francois Posted in worst practices 15 Comments »

dumb user sm.jpgIn the continuing saga of dealing with Mercedes Benz and their dealers following the recent incident where a loose engine part blew a quarter-sized hole in the engine block of our Mercedes E320 while my wife was driving my son to his birthday party, Mercedes finally got back to us (story described here, and follow up here) .

Someone in their customer service department cleared up all possible confusion by telling us in an email that “It is our experience that manufacturing defects occur early in the life of a vehicle (typically during the warranty of 4 years/50,000 miles, whichever occurs first) and not 50,000 miles after it’s expiration. After reviewing the matter, Mercedes-Benz USA continues to stand behind this decision.”

Get it?

But wait…what are they really saying???? Oh now I get it – it’s the stupid customer’s fault! That’s it!

…while maintaining the car flawlessly according to the E 320 manual, and always with Mercedes dealerships, and with all the receipts to prove it, I must have still done something wrong to cause that. It cannot possibly be the product’s fault, or an error on the part of the dealer who serviced the car 2 1/2 weeks prior to this catastrophic failure. It must have been a dumb user error! That’s what they are telling me…

I guess it’s time to move on, get rid of this piece of junk called Mercedes “Bang,” and look back East to some good quality Asian cars. Thankfully, citizen marketers around the world are not letting this story die. Hopefully we will save a few souls from wasting their money on buying this german junk.

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Mercedes Benz does not care about its customers

April 3rd, 2006 francois Posted in marketing, worst practices 11 Comments »

mercedes_buldog1.jpgAdding insult to injury following the recent incident where a loose engine part blew a quarter-sized hole in the engine block of our Mercedes E320 while my wife was driving my son to his birthday party, the Mercedes dealership launched into a “blame the customer” and “insult their intelligence” routine.

During the conversation where he relayed the news that neither Mercedes nor his dealership would help us the dealer service rep started off by “blaming” us – saying “we (meaning him and the Mercedes factory rep) think it could have been caused by two things. The car overheated because it had no cooling or perhaps “you” did not put oil in it. We can also find no record of changing the oil in the last 20K miles.” As it turns out, we have religiously serviced the car according to the E 320 manual, and always did it with Mercedes dealers. We have the receipts to prove that. But more importantly, we have a receipt dated Feb 28th, 2006, 2 ½ weeks before the car blew up, that specifically states that his dealership did change the oil and the oil filter on that day. So not only did he do the “blame the customer” routine, he actually launched into false accusations!

When my wife rebutted, saying that the reason there was neither oil nor cooling fluid in the engine was because there was a quarter-sized hole in the engine block, he said that he would have to check on that. Check on that?! The other dealer, where we originally had the car towed told us that this is what happened. Would you call this Mercedes-like behavior? Coming out and accusing someone and then “having to check” when asked a pertinent question?

He then told her that this was all just bad luck – and neither the fault of the dealership nor the product. “Everything “looked” good when we serviced the car”, he said. He then proceeded to further insult her intelligence by saying that cars are like people – “some people are healthy and live a long time and some people get sick a lot and die young. You never know!” What is this supposed to mean?

Being flabbergasted at this (hopefully) un-Mercedes-like behavior, I decided to send one more email to register my outrage with their VP of Marketing, their GM for the customer assistance center and a few other folks in their marketing and customer service department. I also decided to copy someone who labels herself as “I am responsible for generating positive press and mitigating negative press on Mercedes-Benz vehicles in the USA” on LinkedIn.

Do you think I got a response? Nope…not a peep from Mercedes land!

For those of you who know me, I am a consummate marketer, and I do know something about marketing, product quality and customer service. I also realize that sometimes things break down, and I was not expecting a call from the CEO or a free upgrade. But this being a $60K consumer product from a company with a reputable brand, and with a proven track-record that we maintained the product according to their specifications, I was also not expecting them to “blame” the customer or to insult the customer’s intelligence in the face a of a premature and catastrophic failure of their product.

That is just unacceptable!

For a follow up – click here

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Mercedes – a case study on how to squander a great brand

March 30th, 2006 francois Posted in branding, marketing, worst practices 23 Comments »

mercedesstern_320x320.jpgAlmost 5 years ago – I decided to buy a Mercedes E320 for my wife’s birthday. The brand attributes that were appealing to us at the time were:

  • safety – important as she was driving around our 6 year old son in New England weather
  • reliability – we trusted that the German engineering would not cost us a fortune in service charges
  • a relationship – we were looking for a relationship with the car manufacturer instead of a dealership . We were told that we were buying a Mercedes, and that all promises would be honored by any dealer – no matter which one
  • luxury – that is what the brand stands for after all
  • status – in hindsight there was unfortunately some of that

It did not take long for us to realize that Mercedes was not delivering against most of its implied brand promises.

I bought the car from Herb Chambers’ Flagship Motorcars, as they were the only one willing to provide me with a quote via the Internet at the time. Soon after we bought it, various parts of the car started to break down and the engine started to lose oil. And soon after that we found ourselves looking for an alternative dealership as we were very dissatisfied with this dealer’s service level. One dealership, which was actually closer to us, did not have Saturday servicing. Nor were they willing to provide a loaner car during major services to customers who did not buy the car directly from them. So much for the promises across dealerships.

We ended up with Foreign Motor West, a 45 minute drive from our house, and over the years spent thousands of dollars with them on all kind of problems, which ranged from small things, like various indicators and buttons failing, to bigger issues such as a leak in the air conditioning system in year three which unfortunately could never be located and resulted in repeated air conditioning failures, to brake problems, to the ongoing oil loss problems and more expensive repairs for things I don’t even understand – nor care to understand. What I do know – it is a long, too long list.

Less than a month ago we had the car serviced again – this time it needed a new air flow meter and a few other things – costing another $1,100. Three weeks later , while driving to our son’s birthday party, my wife’s car blew up on the highway less than 3 miles after leaving the house. To our surprise, Mercedes Roadside assistance did not cover the tow – which ended up costing $5/mile. We had it towed, at our expense, to the nearest dealership.

But the biggest surprise came a few days later when they called us from the dealership with the estimate for repairs. Turns out something had blown a hole the size of a quarter in the side of the engine. Which meant we needed a new engine. The cost: $14K!

I am not a car expert, but I feel confident saying that a 5 year old Mercedes with 100K miles (mostly highway miles), should not blow a hole in the engine. The dealership where we had the car towed to told us there was nothing they could do other than putting a new engine in. When we contacted our dealership they towed the car back to their garage for inspection, only to get back to us a week later and tell us that the engine had overheated because there was no antifreeze in the car. A rather important point here: the other dealer had told us that the reason there was neither antifreeze nor oil in the car was because of the aforementioned quarter-sized hole in the engine.

Now I really felt taken for a ride (and not the smooth, luxurious one Mercedes promised us)… Mercedes was turning what should have been their problem into a chicken or egg problem – did the hole come first or did the antifreeze disappear first? And they were blaming me for not having antifreeze! Where, oh where, did the antifreeze go in the three weeks since they ran all their sophisticated electronic equipment on the car? Maybe most Mercedes customers are stupid (including me for being motivated by emotions instead of economics), but to me (and the other dealer) it seems obvious that the antifreeze leaked out after something blew a hole in the engine!

Still believing that this was just a bad movie and that nobody at Mercedes corporate would want anybody to perceive their brand this way, I wrote to Mercedes customer service asking for their help and also emailed a few PR folks as well as their newly minted VP of Marketing – Mark McNabb – asking for help. I never heard back from the office of the Vice President, but someone from their PR got back to me and introduced me to Paul Juron, the GM for the Customer Assistance Center. I pinged him twice but never got any response. Finally I did get a response from someone in his department – simply stating “Thank you for your recent e-mails to Mercedes-Benz USA, LLC. After review, I have been asked to respond on our organizations behalf. Arrangements have been made for your concerns to be reviewed on a local level; you may expect further contact shortly, if not already.” Well, as it turns out, the local decision stayed the same…it was deemed to be our fault/problem that something got loose in the engine and blew that hole in the engine block.

My final analysis? No wonder Mercedes has tumbled to 21st in the most recent JD Power Satisfaction Survey. It is mind boggling (instructive too) to witness and experience how such a prestigious brand has fallen so far so fast. And while I’ve learned something, believe me that it’s been no fun being on the receiving end of this knowledge.

Oh one more thing: Mr McNabb, if you happen to stumble upon this post, I would like to extend you a complimentary invitation to our upcoming Innovative Marketing Conference’s CMO Summit – a $1,500 value. Not only would it be fun to have you there to discuss Mercedes as a case study, but you might actually walk away from the event with some valuable lessons on how to do the right thing for your customers.

Check here for the rest of the story, and here for another follow up.

Other posts linking here:
Pito’s Blog
The brandbuilder blog

PS – if you like this story – please digg it!

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[rant] Ford caves in to religious right – and I thought marketing boycotts did not work!

December 8th, 2005 francois Posted in marketing, worst practices 3 Comments »

I just heard this on NPR, and now read it on CMO Magazine’s blog:

“Ford has announced that its Jaguar and Land Rover brands will no longer advertise in gay publications, by which they meant The Advocate and Out and Curve but which I always think means GQ or Men’s Health. This announcement came not long after the company had a sit down with members of the American Family Association (Motto: “America’s Foremost Right Wing Busybodies) which had called and then suspended a boycott of the car maker because of such ads and charitable works that it deemed a threat to heterosexuality.”

(also here in Washington Post)

Well – I sure hope for Ford that all those religious nuts will be buying Fords, because with two of them in my driveway, I will never buy one again!

Isn’t there enough evidence that boycotts rarely have a real economic impact?

[/rant]

Update – 12/08 [newrant] I will be doing a lot of my Christmas shopping at Target this year. Not because I am a regular customer – in fact I rarely set foot in the store – but because they are one of the only chains that did not cave in to another boycott to restore Christmas by those same religious extremists that pushed Ford to stop advertising in Gay mags – they actually want stores to use “merry christmas” in their advertising – ironic, if you ask me! (here for business week article, here, and here for int’l perspective) [/newrant]

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Unbelievable customer service

October 24th, 2005 francois Posted in customer service, worst practices 1 Comment »

In trying to help the family of my friend, who passed away this weekend, I offered to arrange for the ticket of her brother for him to attend the funeral later this week. What followed is pretty astonishing.

First I checked fares online and settled on a Delta flight. I went through the complete registration only to find out at the end that the passenger must present the credit card with which the ticket was purchased. Figuring this was just a glitch and that I could get around that I called Delta and explained the situation. Not only did the agent not acknowledge the situation, she said that this problem could be solved by paying an extra $100. I said, “you must be kidding me – how can $100 fix this situation and how can it not be fixed with $0?” Upset, I added “this is theft.” She proceeded to repeat the exact same sentence as if I was some kind of moron who did not understand English. I hung up…

Then I called American. Not only did the attendant acknowledge the situation, she offered me an emergency fare that was $100 cheaper than what they had on their web site, and she was also very patient while I was placing other calls to get the funeral home information. Go figure…

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