Improve Service? How About Improving Expectations?

In real estate, we're told, only three things matter: location, location, location.

In business, really in all life, there are also only three things to consider for success: communicate, communicate, communicate.

Seriously.

Among my hundreds of "quick tips" for which I've become renown, one of my all-time favorites is use of the magic word: "Because." Explain the reasons why to people - children, students, athletes, sales prospects, staff, investors, voters; customers - and you will win their understanding, probably even their buy-in.

Thus, I found the following advice to the airline industry surprisingly refreshing in this morning's NY Times:

Lower My Expectations
Brett Snyder is the author of the consumer air travel blog, The Cranky Flier.

What can be done to make air travel less miserable? I’m sure many people will argue that airline employees need to be nicer or airlines need to reduce their fees. Some will say that the airlines need to give us more legroom, but I think there’s a simpler solution. Airlines need to do a better job of communicating and setting expectations.

The airlines should give me a 360 degree virtual tour of my cramped coach seat — at the very least, I will know what I’m getting.

When I go to book a ticket, what information does the airline give me about my flight? I know the time it goes, how much it costs, and sometimes what type of plane I’ll be on. That’s about it. If airlines did a better job of presenting the full package to me at the time of booking, then my expectations could be set appropriately.

I may know that flying out of J.F.K. at 5 o’clock is a guarantee for a delay, but why not tell me how many times that flight has actually been delayed in the last couple months? And while you’re at it, let me know how long the delay has been on average. The data is there, and anyone can find it (at FlightStats.com), but the airlines don’t usually like to share that information themselves. That’s a mistake, because if I come expecting a delay, I’m going to be an easier customer to please.

Instead of showing aspirational cartoons depicting people sleeping on clouds (yes, a certain Chicago-based airline actually does this), maybe you should give me a 360 degree virtual tour of my cramped coach seat. That alone might get me to pay the price to upgrade to Economy Plus; at the very least, I will know what I’m getting.

The problem isn’t just at the time of booking, of course. I might run into surly customer service agents, lost bags and mechanical delays, but these hassles are easier to endure when the communication is frequent and detailed. Bottom line: Keep me better informed during all stages of my trip and I will be a more satisfied customer.

For the complete article: http://tinyurl.com/n8ja6j*


*By the way, how cool are sites such as http://tinyurl.com? For instance, they just turned the link to the article above from 91 characters to 25. I have no clue how they make money, but what a great time to be alive!

BestBuy's Twelpforce: Gimmick or...?

Can a mammoth company with a horrid reputation for customer disservice reinvent itself? Assuming its top leaders genuinely want to, of course.

Best Buy's brand is suffering because of its unpopular customer service. So, as you may have heard by now, they've embraced Twitter and put a whole army of their staffers online in what they dub the Twelpforce. All in an effort to become more customer-centric, thus to mend their tarnished reputation.

This initiative is new, so let's see how it goes.

Now, two things interest me here. The first goes back to a couple of posts on this blog regarding the all-too-rare position of Chief Customer Officer. In a discussion on Twitter, a colleague said that Chief Customer Officer (CCO) and Chief Marketing Officer (CMO) have so much overlap, there's no need for both. I'm not willing to concede the need for a CCO, but I see this expert's point.

Best Buy seems to agree with my colleague. They have a CMO, Barry Judge, heading up Twelpforce. Here is his blog post on the topic: http://barryjudge.com/twelpforce-%E2%80%93-blurring-the-lines-between-customer-service-and-marketing. It looks promising.

What do we take from all this?

Let's assume Best Buy's top leadership gets that customer service is do-or-die for a brand, and they are aware that their present public image is dirt. So they charge Barry Judge with turning their service around.

My question is, can it be done?

This goes well beyond Best Buy. Can Detroit's Big Three automakers completely re-engineer not only the cars they sell, but their own cultures, so that they are finally attractive to consumers? Our nation has taken a huge bet that the answer is yes, and I am rooting for them myself!

Not that they've shown any inclination, but if behemoths such as Comcast, AT&T, Time Warner Cable, and Bank of America wanted to change a la Best Buy, could they? Is it even possible? Or are these companies beyond hope?

I'm an optimist. I'd like to say any change is possible with the properly committed leadership. That is why this Twelpforce thing fascinates me so. If Best Buy can do it, it can be done! If not...? Well, let's just watch and see.

*****

This might sound strange coming from a guy whose reputation has been built on brutal honesty (see my two recent Bank of America posts for examples), but I don't have very strong feelings one way or the other about Best Buy's customer service.

Here's why:

1. As far as I can see, Best Buy is the #2 reason Circuit City is out of business* (#1 being Circuit's own inept leadership and resultant abysmal customer service). So as a consumer, I have to thank Best Buy for that.

2. Perhaps because of Circuit and a lifetime of companies much like it, I don't expect better than one-star disservice from big box retailers in general, electronic stores in particular, so Best Buy would be hard-pressed to disappoint me.

3. I haven't shopped at Best Buy in a while (because of the service), so whatever outrages I last suffered there have faded in my memory.


*By the way: Systemax now owns Circuit City's website and name. That's an... interesting... business decision. Here's the letter from the CEO - note the (verbal) commitment to customer service. http://www.circuitcity.com/sectors/opt-outv2.asp

Weird. It's like someone buying the rights to the name Edsel from Ford or Corvair from Chrystler. Why?

Zappos Proves Service is a Savvy Strategy

This article - from Advertising Age, of all places! - gives great insight into how passionate top-down customer service isn't an expense at all, it's a billion-dollar business strategy.*

The article is about Zappos, which the world just learned late yesterday is being bought by Amazon.com for just shy of a billion dollars.

http://adage.com/cmostrategy/article?article_id=138080


*****

For your convenience, here is Zappos CEO Tony Hsieh's letter to his own employees explaining the move, along with a short video by Jeff Bezos explaining the purchase from his end, trying to make his new Zappos employees comfortable with the move.

http://blogs.zappos.com/ceoletter

We'll see if this combination works. The only way it will is if Bezos truly does leave Zappos alone, as he says he will. I give 'em 50/50%. We'll just have to see.

I've long admired Bezos, and that's a word I rarely use. I really do think he's the real deal. His video is... well, I don't want to sound sycophantic, but it's brilliantly humble from someone who has no need to be.

I have to admit, I'm a little disappointed now that this potential showdown is settled - I saw Zappos buying Amazon in five years if they kept it up. But now I can be happy for two companies I enjoy; neither has to lose.

The Right Customer is Always Right

I had a lot of fun this morning jousting on Twitter with another author, John Jantsch of Duct Tape Marketing fame (Twitter: @ducttape). The topic: is the customer always right?

Here is John's blog post on the topic:
http://www.ducttapemarketing.com/blog/2009/07/21/is-the-customer-always-right/

And here is my stand:
http://savvycapitalist.blogspot.com/2009/07/customer-service-profits-or-whats-point.html

Now, the news that may surprise you all (and John, for that matter): He and I agree completely!

Do not sell to the wrong customer! Don't chase the wrong customer in your marketing & sales efforts! Serve the customer that fits your business plan, and serve them slavishly.

...Yes, I said it, slavishly!

At Coiné Language School, we targeted companies, not individuals. We looked for firms that had foreign workers or Americans who traveled. If the company was too small, they might not be able to afford us. That was okay with us. We offered very reasonable, fair rates, and gave much more than our clients paid us for; we did not lose money on our customers.

If you're an upscale retailer, open shop in affluent towns. You with me?

If you're a marine engine mechanic, advertise to boat owners. Don't try selling to bicyclists, wonderful as they are: they're a bad fit for your particular business.

There are so many kinds of businesses, that to opine about the each and every business model is a bit tricky. So I won't. Instead, follow these three basic rules, which work across industries:

Rule #1: The customer is always right.
Rule #2: If the customer is ever wrong, reread Rule #1.*
Rule #3: You're a business. Make money. No matter how great your customer service is today, if you close up shop, you won't be able to serve your customers. So stay in business!

If you're at all savvy, those three rules should work together quite nicely.


*These first two rules are written in stone outside Stew Leonard's, "The world's largest dairy store" (www.stewleonards.com). 4 locations, $400 million/year. Any questions?

As for me, I'm looking forward to reading Duct Tape Marketing.

Good Karma, Good Business

I'm happy to say that I'm hard at work on my third book, Good Karma, Good Business: How doing the right thing pays.

Last September-October, as our current financial crisis got under way, I started working with some colleagues at The Naples Institute on a study of those companies that are thriving despite the downturn. I was going to call the book from this study Recessionproof.

Interesting and important, I'm sure, but not entirely inspirational to me, the author, so for my readers...? Let's just say I thought I could do better.

The data we've collected for our study led me directly to the broader topic of the book I am currently outlining, Good Karma, Good Business.

I'm looking at 4 "constituents" of any given business for this study:

1. Employees
2. Customers
3. Community
4. Stockholders

The premise is simple, if not widely accepted in the world's boardrooms: no business can serve the stockholders/owners directly. The more management practices what I've dubbed Primitive Capitalism, with a myopic focus on maximizing short-term profits, the more long-term financial success will slip through their grasp.

Rather, it is only through Enlightened Self-Interest (first espoused by economist Adam Smith in the 18th Century) and the practices of Capitalism 2.0 that a company can become successful in any meaningful, sustainable measure.

Some of the perspective I'll be sharing, based on hundreds of examples from small, medium, and enterprise-sized businesses:

* Treat your employees respectfully, give them a company they can be proud of and a cause they can rally behind, and they'll build your company for you - because it's for them, too.

* Spoil your customers rotten; they'll become loyal and even bring you their friends. Abuse them and they may stick with you for a while (for instance if you're the only or the cheapest game in town), but sooner or later they'll drop you like a hot skillet.

* Our study shows companies that do well long-term are much more often than not good corporate citizens. While one firm may focus on the global environment, another on employee-volunteerism, and a third on local literacy issues, most stand for something: they give back. Employees, governments, and customers admire that, and all this earned good karma shows in the company's bottom line.

Good Karma, Good Business will be the culmination of my career as a businessman, author, and thinker. As with everything I write and speak on, it will be chock-full of real-world examples, from companies that get it and are thriving as a result (Patagonia comes to mind), and from some that don't get it at all, and are struggling as a result (can you say GM?).

I invite you, my readers, to share tales of your favorite companies! If you can think of a company that deserves our attention, or if you have a story to tell, please email me directly: tedcoine@gmail.com.

I can't wait to hear from you.

Are Your Customers as Loyal as a Black Lab?

Interesting and little-understood fact: you're never going to achieve that elusive fifth star of customer service Nirvana by giving flawless service at all times. ...Which is good, since we humans will never be perfect, no matter how relentlessly we try.

No, five-star customer service is earned in the crucible of recovering the dropped ball. Your staff screws up, and someone - that staffer, her manager, maybe even the Chairman - makes amends. A disgruntled customer is won back around, so impressed by your efforts and sincerity that she turns from "satisfied" or even "happy" to "Labrador-loyal."

As you might imagine, I've collected some phenomenal five-star customer service-recovery stories in my lifetime, especially over the past five years or so. Here are just a few:

* "The Immaculate Recall" that catapulted Lexus from an industry joke to the leader in the luxury car class.

* The time Nordstrom gave a "customer" a refund on his tires, despite the fact that Nordstrom has never sold tires.

* The time a JetBlue ticket agent bought over $100,000 of tickets for his passengers on another airline when the flight he was working was canceled.

These are all great examples of what they call "heroics" at Nordstrom - going way above and beyond to make sure the customer isn't merely satisfied, not just happy, but so stunned by your service recovery that she'll be talking about your brand to strangers twenty years from now.

Seriously.

Taken in any type of a short-term perspective, most heroics are just plain dumb business decisions. You can't operate a company like that. Not if you expect to be around for very long, anyway.

...So don't think short-term. Forget about counting trees, and get to looking after your forest. If you're an executive, a business leader, and you're obsessed with short-term numbers, with feasibility, with what you can and - especially - what you can't do, well then you aren't very savvy, are you? Indeed, you aren't much of a leader.

Here then, without further ado, is my new favorite heroic - this time from Patagonia, in Japan.

I'm quoting founder and owner Yvon Chouinard's book Let My People Go Surfing, the education of a reluctant businessman (p. 132). If you haven't read it, read it.

Writes Chouinard,

"Our model for customer service is the old-fashioned hardware store owner who knows his tools and what they're made for. His idea of service is to wait on a customer until the customer finds the right widget for the job, no matter how long it takes. At the other end of the spectrum is the employee who doesn't follow through, as the letter quoted below illustrates. It came from our manager in Japan in 1989 as an explanation of the lengths he had to go to in order to make up for bad service by one of his employees.

'A woman did request our catalog and paid 600 Yen ($4.00 US) to us, but Patagonia Japan staff lost her address and phone number in messy desk and office. After two weeks husband of woman made phone call and he was so angry like volcano. He entirely refused excuse of staff. He needed talk-fight with Mr. Responsibility of Patagonia Japan. He said, "You guys lie, just take money and never send catalog. Hey, this is your way? I am working legally to stop your business with the public facility." I decided to take train to Tokyo from Yokohama to hand catalog and apologize directly to him. However, volcano-angry customer additionally said, "Even if you come to me and my wife I will never stop to kill your business." At his home, he needed my begging head on the floor (this is biggest humility of Samurai). The customer was impressed with my behavior and he said, "Thank you for your delivery and your mind." There are not so many customer like this in Japan, but he is not special type of Japanese customer, he is pretty usual customer if problem happened.' - Katsumi Fujikura

I think I know exactly why "There are not so many customer like this in Japan." If your "pretty usual" customers were so passionate and "volcano-angry" that service recovery inspired your top manager in the country to ride a train for two hours and put his head on the floor over an undelivered catalog, you'd make sure flawless customer service was routine, too!


*Note the Japanglish: I'm thinking this Patagonia manager had a translation dictionary handy as he wrote Chouinard this letter. As a former English teacher, I can verify its authenticity. Like Chouinard, I love the Japanese!

Customer Service = Profits. Or What's the Point?

We're all in business for the same reason - I don't care who you are. We conduct business to make money.

I'm not being flippant when I say that if you aren't interested - on any level - in making money for yourself and your company, then I just don't think that business is for you.

My advice instead is to work in the nonprofit realm, participate in government, or go drink some beer at the beach. Seriously.

I call myself The Savvy Capitalist to drive home the key point of everything I teach: shrewd businesspeople get the importance of sterling customer service, enlightened management practices, and the value of philanthropy. These things bring their business more profit.

While I'm currently enjoying a break from the fray of running my own business (and it's such a nice respite that I may never go back; we'll see), I built a very successful company on the concept of Enlightened Self-Interest: that doing the right thing pays.

In four years, we took Coiné Language School from two students in our living room to a valuation of $10 million (we brought in an experienced start-up CFO to guide this evaluation). Jane and I didn't end up selling, but that's another story. We built something solid. Something based on intelligent business practices.

Number one in our minds at all times was the idea that if we spoiled our customers rotten - if we gave them much more than they asked us for; indeed, much more than most even knew they might want - then we would earn their repeat business, their recommendations, and even their unsought referrals.

It worked. That last part, especially, was very cool.

When an executive calls you completely out of the blue and says one of your clients suggested you, and she'd like to give you, say, $30,000 in business.... well, you know you're doing something right.

This week, for some reason, a number of folks have challenged one of my favorite pieces of advice, taken from a seven-foot stone outside the front entrance to Stew Leonard's:

Rule #1: The customer is always right!
Rule #2: If the customer is ever wrong, reread rule #1!

"How can that be?" they've asked. Some have said, "Some customers are far from right!" Others have said, "Giving the customer what he wants every time will break your company!"

Where do I start? There is good solid truth in these objections. Just... you can't let them trip you up.

Today, let me leave you with a couple of key points. Digest them, and next time, we'll delve into more detail on how you can make these precepts come alive for your company.

1. Customer service is meant to drive profitability, not siphon it off. If you manage to get service right, you will rarely have to give the customer anything free.

2. Part of shrewd business is to not do business with customers who are unprofitable to you. You can't serve everyone no matter their needs, and you shouldn't try.

3. Yes, you can "fire" a bad customer. About once every ten years you may need to do this.

4. Many customers will be happy to pay you more in order to get the service they demand. Let them! It's a win all around.

5. A commitment to service is a long-term business strategy. If you have a short-term outlook, you will not see the value. If that's you, perhaps you're reading the wrong blog.

6. Don't take it from me: to some of my readers, a $10 million company in 4 years is nothing much. So look instead for proof of concept to these service leaders, among many others: Zappos.com. Stew Leonard's and Wegmans supermarkets. Lexus. Loving Care Home Health Care. Diamond Plumbing. Chick Fil-A. Sunshine Ace Hardware. Saratoga Technologies. Nordstrom. Mitchells/Marshs/Richards. VSM.net. Capella University. Truly Nolen.

Some are small, some are mammoth, but all hugely successful in a normal economy, and several are thriving even in this recession.

I did not invent capitalism, and I did not invent customer service. I am just the messenger.

Guess who's training your workers in customer service

Do you want to know who's been training your workforce in customer service skills for the past eighteen, twenty, forty years? Simon Cowell. Vince McMahon. And that wretch Dylan from down the street.

A few years ago I came across surprising results of a study on how we form our manners. Most germaine was this take-away:

The three most important influences on the manners of our children are (in this order):

1. Friends
2. Nuclear Family
3. TV

Yes, TV! And by the way - Yes, friends trump parenting!!! And other influences you might name, such as teachers, coaches, extended family, the clergy...? Not even in the top three. That's right, Stewie Griffin has more say in the character of my daughters than my own Mom.

As a parent, all I can say is "Oh no!" As a customer, all I can say is, "Oh. That explains a lot."

Manners and customer service are two sides of the same coin, I'm sure you'll agree. After all, you can't be a boor in your personal behavior and then turn on a switch as you walk through your office or store entrance - at least, I doubt it. So if you're rude in private, chances are you're professionally rude as well.

Let's break this down, shall we?

I'm sure you'll agree, ALL of the kids your children know are absolute selfish brats - my kids, your kids; everybody's kids have friends that suck, lots of them, because parents stopped even trying to say "no" about 40 years ago. So the biggest single customer service "trainer" out there is hopelessly... uh... hopeless.

Then, what's on TV these days? Scooby-Do, The Brady Bunch, and Leave It To Beaver have been supplanted by South Park and The Simpsons, Survivor and Ultimate Fighting. So influence #3 is pure toxin.

But here's the worst part: Families are led by parents whose first and third most powerful influences were their own punk-rock friends and the quartet from Sienfeld! The problem has compounded!

All of which to say: you think customer service sucks these days? Really? Duh!


I don't just like to report facts, though: I'm a teacher by trade. I like to use facts to make a point, even if sometimes it's a stretch to glean something positive from a tidbit like what I've presented above.

It's a tough one, but I think I have an angle on how you can benefit from this dire news.

1. Hire for attitude. There are still folks out there who are coming from the right place; who are eager to serve (one reason I enjoy Midwesterners so much). Especially if they're younger, they may be quite rough around the edges, though, so...

2. Train for skills. As odious as this may be to someone raised with proper manners, who "gets" customer service concepts instinctively... it's necessary. So teach your new hires how it's done. It'll be worth the extra effort.

3. Never stop training. There is no such thing as "finished" when it comes to customer service skills. It's like exercise: if you stop practicing, you'll quickly get flabby.

4. Use The Magic Word. ...What is the most important word in customer service, in management; in teaching? "Because." Explain Why this or that customer service practice is so important to the prosperity of your company and, thus, to your employee's job security.

That's our lesson for today. Below, a couple of notes on popular culture.


* Simon Cowell: that nasty little man on "American Idol."
* Vince McMahon: owner of one of the professional wrestling brands (I'm proud to say, I'm not sure which one).
* South Park, The Family Guy (Stewie Griffin), and The Simpsons are cartoons made strictly for adult consumption, but which lame parents allow their children to watch anyway. And as you're an adult (what kid would read a business blog?), I highly recommend them - Jane and I can't get enough!

Bank of America: Gouging Customers

Last Tuesday, July 7th, an article by Candice Choi of the Associated Press reported some disturbing practices in retail banking. Below are some excerpts in italics with my numbered comments.

The math is alarming for anyone with a debit card.

At Bank of America, overdrawing your account by as little as $6 could trigger a $35 penalty. If you don’t realize you have a negative balance and continue spending, you could incur that fee as many as ten times in a single day, for a total of $350.

1. Agreed, responsible adults should be aware of their bank balances at all times. It’s true!

2. In the real world, however, there are all sorts of wonderful, highly effective and usually responsible adults – great parents, terrific workers, model citizens; business authors - who do not monitor their bank balances that closely because we trust our bank to!

3. Indeed, as we’ll read in a moment, many of these people rely on their debit card to let them know when they are out of money in a given account. They let the bank do the math for them. This new BOA policy predates on that traditional relationship of trust between customer and bank.

Failing to repay the overdraft within a few days now results in an additional $35 penalty.

4. Quite a number of the people who start with a $6 balance don’t have $350 lying around to pay off surprise bank fees in the first place. Thus, this $35 late penalty is kicking a dog when it’s down.

The article goes on to discuss customers expectations of what a debit card is and how it works, which is crucial to understanding why Bank of America is being so particularly abusive in this new policy. Says Jean Fox, director of financial services at the Consumer Federation of America, traditionally with a debit card,

“If you didn’t have enough money, the bank wouldn’t accept it and you wouldn’t owe anyone a fee.”

Now automatic enrollment in overdraft programs, which allow consumers to draw more than what’s in their accounts, is an industry standard.

The Federal Deposit Insurance Corp. says a 2006 survey found three-quarters of large banks have automatic overdraft programs.

The article notes that the just-passed federal law regulating credit card abuses does not cover debit cards. Banks have found a way to game the system for their own (short-term) advantage.

5. Here’s one we haven’t discussed yet: These “on the edge” customers are not where Bank of America – or any bank – makes its money. They are actually a drain on the system. This is a not-so-gentle way of inviting these unprofitable customers to leave, to find another bank.

Let’s go with that. Let’s assume that Bank of America and its peers aren’t just trying to dig up some ill-won revenues: they’re trying to cull their customer base.

I was actually part of a small group at the Boston Chamber of Commerce a few years ago who met the then-new president of New England operations for BOA. She told us point-blank that retail customers, the ones we’re discussing in this article, were not the priority of her company. That is not where BOA’s bread is buttered, she related. To hear her tell it, they were all about commercial banking.

So… there you have it. This explains an awful lot.

However, it fails to explain why Bank of America spends so much money on advertising to the general public, or why they have so many retail branches. As I sat there ingesting her words, the disconnect struck me as odd – even dysfunctional. Did this lady actually work for Bank of America? If so, had she seen their business plan?

Even if we assume that said president wasn’t just having a bad day (or a nervous breakdown) when she told us this, I bring up a point in my book Five-Star Customer Service that every service provider is wise to heed: the $6 on-the-edge customer today is quite possibly your next seven-figure depositor tomorrow. Add to that the knowledge that some of these $6 customers could give you an awful lot more business right now, today, if they saw fit.

I’m a perfect example. Part of my self-appointed job as a customer service researcher is to do business with different banks. At one point I had money in six different banks at one time: I was shopping. To think of your customers in terms of the business they have already given you, rather than their potential, is just… what’s the word I’m looking for? …Oh, here we go: dumb. It shows a phenomenal lack of imagination.

As the article states, Bank of America may be the most flagrantly abusive of its field in this new trend, but they are not alone. Seventy-five percent of large banks are doing it, if to a lesser extent.

My first walk-away for you, my reader: give your business to a small local bank today! No matter that I’m posting this on a Sunday – just do it!

I call this blog “The Savvy Capitalist” because that is who I am writing to: capitalists (a.k.a. business leaders, influencers; change-makers) who are savvy/shrewd/smart enough to realize that short-term piracy, Primitive Capitalism, is no way to build a long-term business.

In other words, if you’re smart, you’ll do the right thing.

Not because it’s good karma, necessarily (although we can hope!), but because it’s more profitable. Doing the right thing pays.

So here is your second, much more important take-away from this article: don’t gouge your customers.

Don’t be a Bank of America.

As Google puts it, “Don’t do evil.”

Not only is it a crappy way to lead your life. It’s also just plain dumb business.

Why there's no hope for Bank of America

Like most Americans, several years ago my bank was bought by a bigger bank which was then bought by a bigger bank and then, a few such purchases later, the last-and-biggest bank was bought by Bank of America, making me a BOA customer.

What did I know? At the time, all I knew was that customer service has very little prominence in the banking industry in general, so BOA was nothing special - or especially terrible, as it were.

Well, I've since learned. We left BOA a year or so before leaving Boston. Thankfully.

When I wrote Five-Star Customer Service, I included three "From the Trenches" stories about my bank: two bad ones and a great one. At the time I was kinder and gentler, I suppose, so I didn't name names for the two negative episodes. I did, on the other hand, give BOA full props for the phenomenal service my personal banker gave me.

As I did with all the companies mentioned in the book, I sent a copy to Ken Lewis, then Chairman and CEO (now just CEO*) of Bank of America. Just a simple, "Way to go - thought you'd appreciate knowing your staff did something special enough to go in a book."

I got my first box of books from the publisher and sent these copies out. About a week later, I called Ol' Ken's office in Charlotte to follow up.

"No interest," said one of his assistants. And before I could even finish saying, "But I'm not trying to sell him anyth-!" Click. Call over.

So much for Southern hospitality. So much for gratitude. So much for just being polite to a customer!

More prominent business leaders that Ken have been an awful lot kinder to little-old-writer me, most notably Jack Welch. (Sorry, Ken, that's right: you're no Jack Welch.) So let's just say, as I share the following link to my new Twitter friend Big Robby's blog, that I'm allowing myself ever-so-slightly to enjoy the negative press that Bank of America is "enjoying" since Tuesday's AP article on their predatory fee structure.

More on this whole fee scandal next time.

Meanwhile, Robby says it better - and more colorfully - than I ever could: http://bigrobby.com/.

Why is there no hope for Bank of America? Because, as my favorite saying goes, a fish stinks from the head. BOA isn't going to stop alienating its customers because its top dog doesn't have the faintest clue that you can't run a business that way. Instead, they'll keep on gaining new hapless customers by buying other banks and by out-spending their competition on advertising. They're doing the typical big-business mistake: opening the doors wide to bring in new customers, but losing masses of them out the back door as those customers realize how badly they're abused.


*Karma is sometimes slow, but it is inexorable. His board demoted him several months ago for something unrelated to my call in 2005. Officially unrelated, anyway.

P.S. This is where I add a disclaimer so you don't think your friend Ted is an egomaniacal nut job who thinks that CEOs of Fortune 50 companies have nothing better to do than sit around the office waiting to field a call from me. The fact that I've gotten scheduled for calls with any of these leaders at all surprises me each time it happens, and I'm honored.

Instead, what I expect to happen when I send my book to a prominent CEO is for him/her to pass the book off to a subordinate a few rungs down the chain - Bill Marriott gave it to his son David, for instance. These guys know the Big Boss passed it off, though, so they're typically inclined to follow up - not necessarily to invite me to speak at their next annual meeting, but they'll take my call. My Dad taught me this trick, and it's a good one.

There. I'm confident, not nutty.

A 10.0 from the Russian Judge!

Here's a shout-out to First Watch restaurant on Immokalee Road & 41 in Naples. When presented with a customer-service challenge this morning, they nailed it with aplomb. If this were the Olympics, even the Russian judge would have given them a perfect score.

The situation: I ate breakfast, only to realize at the cash register that I'd left my wallet at home. As Homer Simpson would say, "D'oh!"

Pause there. If you're in retail, what would you do? As a customer, I know this has happened to you (uh... hasn't it?). How did the merchant handle it?

As you can guess, First Watch did just what they should have done - just what I write about in Spoil 'Em Rotten! The cashier smiled broadly to put me at ease and said, "No problem. Don't worry. I'll hold the check till you get back."

No fussing, no mussing. No looking for the manager. No hesitation. Indeed, she didn't even ask me how long it would take me to get back, when to expect me, or anything of the sort.

I didn't have to show her my driver's license. I didn't have to give her my phone number. Nada. Zero. Zip. Because it truly wasn't a problem to her. I'm her customer; she knows I'll come back to honor my part of the deal, their part having already settled in my tummy.

*****

Want to see this in action in a supermarket setting? I learned something from my friends at Roche Bros. (Boston area) that impressed me so much that Jane and I put it in Spoil 'Em Rotten! as part of the "Core 15" practices at the fictional Walsh's Supermarkets, where the story takes place. You can find this on pages 120-122. It reads:

Forgot your wallet? You can pay next time your in.

As you read, remember: this is based on standard operating procedure at Roche Bros. Not a bit of it is made up or exaggerated.

By the way, guess who is weathering this recession just fine? As I've written before, that would be Roche Bros. Oh, and First Watch was packed again this morning, as always. Despite the recession and this being off season.

Surprised? You shouldn't be. After all, doing the right thing pays.

Chief Customer Officer Debate Rages

Okay, "Debate Rages" is a bit strong to describe the polite conversation inspired by my previous blog post on the topic of the Chief Customer Officer (CCO).

It's tough - and probably unnecessary - to move the dialogue from the Twitterverse to the comments section of this blog, so I decided to bring some of the most salient comments, thoughtful experts, and apropos links here instead.

1. Contributors worth following include (among others): @GrahamHill, @Agotthelf, @mopartnersceo, @wimrampen. My "handle" is @tedcoine.

2. Graham Tweets: I am not against CCOs, just appointing them at the wrong part of an organisation's development - http://tinyurl.com/qx4gqe

3. Also from Graham: And the evidence for the success of peripheral CXO's, like CMO's, is actually quite weak - http://tinyurl.com/nlgeb9

By CXO, Graham means there are too many Chief ___ Officers in some companies. The M in CMO stands for Marketing. I'd say there is more than a little overlap between a CCO's and a CMO's job description, though they also differ.

In any event, I'm not conceding his point (at all), just sharing it with you.

I'll actually take his point one further: I think titles are silly. Any titles. W.L. Gore & Associates (makers of GORE-TEX: www.gore.com) doesn't use titles, and that's a company that we can learn a lot from.

4. I think - but am not sure - that this is Wim's comment: CEO should balance better between shareholder & customer value-creation

I agree with that completely. Here's the trick, though: by spoiling your customers, you are increasing their loyalty, which will increase your shareholder value. There is not one thing you can do directly for your shareholders that will affect the customer positively.

In other words,

Take care of your customers, and your customers will take care of you.

This is the Zen of business. Not to get too deep, but I've noticed that all of life works this way.

I invite you to join the fray on Twitter. It's a priceless tool for improving your expertise, making connections world-wide... and it's just fun!

Why Every Company Needs a Chief Customer Officer

Chances are, unless it's tiny, that your company has a CEO. And there's also an excellent chance that it has a CFO - a Chief Financial Officer.

The next two most prevalent chief officer positions are typically of operations (COO) and technology (CTO or CIT). Let's not forget the president. And most companies of any size will have some form of in-house legal council, right up there with the big dogs.

I don't think I'm telling my readers anything new here.

But there are two key aspects of business that are missing from the typical "C-Level" lineup: what about people? Internal people (Human Resources)* and external people (Customer Service)?

Let me quote Jack Welch in one of my all-time favorite books, Winning:

"The head of Human Resources at every company should be at least as important as the CFO."

I love it. But he didn't mention a customer champion, so I will. Your company needs a CCO - a Chief Customer Officer.

This week, I engaged in a lively discussion with some respected acquaintances I've made on Twitter (most notably @wimrampen and @curtisbingham, himself a CCO) about whether a Chief Customer Officer was necessary, or even a good idea. Wim, an expert in our field from the Netherlands, pointed out his misgivings. He points out,

1. Championing the customer is the CEO's job. That's how important it is.

2. When the other leaders know there is a C-level customer champion, they'll think they can ignore the customer; they can abdicate their responsibility in this matter.

Both good points. But here are my counter-points:

1. By giving customers a C-level leader, the CEO is sending a message loud and clear to the entire company and to customers as well: "Customers really do take precedence here."

2. If finance has a chief, but not customers... what kind of a message is that? If operations and technology also have chiefs, but not customers, now it's even worse.

3. Any leader, be she a governor, president, or CEO, needs someone to follow up and take charge of her initiatives. A CEO can't go it alone in the battle for the hearts and minds (and wallets) of customers any more than she could in financial, technological, or legal battles.

And finally, the dirty little secret that most of us, as customers ourselves, are keenly aware of:

4. CEOs may talk a good game when it comes to commitment to the customer, but your typical CEO doesn't have the slightest clue how to delight a customer.

Savvy business leaders understand customer service without much trouble - the how and the why of it are both as clear as day to a wise leader. I haven't checked out whether Wegmans or Zappos has a CCO yet, but if they don't, that's okay for them - every person in those winning cultures is an avid defender of the customer, from the CEO all the way up (yes, UP!) to the folks washing the floors at night.

But for the rest of the corporate jungle? Let's put it this way: if your company doesn't have a C-level officer reporting directly to the CEO, someone whose council the CEO values even more than his CFO's... Well, then, maybe that's why your advertising budget has to be so high - to lure in new suckers.

AT&T, Comcast, Time Warner, Bank of America: are you listening? I wrote this for you.


*Some of the coolest companies have replaced "Human Resources" with "People" - as in, "Southwest Airlines has a VP of People." It's just a token, but then so much of communication is. I like it.