This is a rant.

Meet the disgruntled customer:

We’ll call her, oh, let’s say, Katherine. Katherine sees the infinitely shiny and appealing new application store on iTunes. Katherine wants. Katherine eagerly downloads applications and proceeds to cry a bucket of invisible tears when she realizes that she must wait (oh no) a whole ten hours for Apple to release iPhone software 2.0 (the worst sort of tease).

Katherine eagerly goes to sleep, wakes up, and, lo and behold, the infinitely shinier and OMG1!1!! iPhone 2.0 update is available! She plugs her iPhone in and clicks ‘check update’ followed by ‘download and install.’ Fail. She tries again: more fail. Katherine is a little distressed, but she perseveres. Everything now insists Katherine has the latest update (which is NOT 2.0), so Katherine unplugs and reconnects her iPhone to the computer, and tries again, only clicking ‘download’ instead of install. At last the sparkly new update downloads! But then it does not install, and mysteriously disappears from her hard drive. Katherine tries downloading the software again and updating.

Uh-oh. What. NO. NO. MY BABY. WHAT DO YOU MEAN ERROR, APPLE?!

Katherine tries doing a restore (because the iPhone still thinks it has the latest version of its OS system). All seems to be going well, it’s been restored, the firmware is updating–error. Katherine’s phone can’t find the iTunes store.

Katherine’s phone has NO OS, no contacts, no ANYTHING. Katherine effectively has no phone.

Dear Steve Jobs,Thanks for your extremely unshiny update that has just Black Plague’d my means of communication with the outside world to death. I really wanted to spend my entire morning trying to clean up your aftermath.  I’ll use my iPhone as a doorstop, because that is about all it is useful for, and it even stinks at doing that because it’s too small.

Sincerely,
Katherine

What have we learned from this? (Besides the fact that not all updates are shiny, and being technologically at the front of the line is not always worth it.) If your business deals in technology, you better make it easy for your old customers to update. Do NOT force them to connect to your ONLINE STORE in order to activate the update: I guarantee you that your bandwidth cannot handle it unless you have under 10 customers. (This is made more frustrating by the fact that I can access the iTunes store via iTunes–but apparently not with my phone? What?) Not everyone buys the new and shiny things right away.

Barry says to be there when your customers are ready to buy. Katherine says to be there when they’re ready to update with something that WORKS, and if it doesn’t, send an update–if you have no problem sending me 3726 emails about the iPhone 3G (or *insert shiny new product here*), how about one apologizing for messing up, or one that says ‘we’ll have everything up and running in an hour, your updates will occur then.’ Just because you are a large corporation with many customers does not mean you can ignore your old customers (unless, of course, it’s a plot to make us all fed up and buy the new product, in which case, all hail capitalism at its finest). But don’t just give me error messages and direct me to support pages, I want to know WHY you have failed to provide me the service I paid for. Communication is important.

Being there when they want to throw bricks (better known as useless phones) at your head, is, of course, up to you.

Ah, edit: Apple fails to provide because they didn’t learn from their failure last year. Barry says that there isn’t always something to learn from failure–let’s all remember to always make sure that there isn’t.

I have never been a big fan of contracts. There are very few times in business where it would actually make sense to sue someone over violation of that contract. But, contracts are a good thing to set expectations of both parties in terms of cost, products or services delivered, etc. Contracts are in place so people perform their part for an agreed to period of time.

But in the case of T-Mobile, its only a contract until they say that it isn’t. Mobile telephone companies give you that discounted phone in exchange for a 2 year commitment.Try to switch before your contract is up and they sock with a huge term initiation fee. The Chicago Tribune reported a few weeks back that T-Mobile had terminated a customer of 6 years because they were no longer profitable for the company. Apparently the customer gave her phone to her daugher who is now using it in Winona, MN where there are no T-Mobile cell phone towers. As a result, the phone calls all have to roam (use other company’s cell towers) and are less profitable to T-Mobile. So in May, the company disconnected her phone! Apparently this is in the fine print of  paragraph 7 of the contract that allows the company to do if they deem your use of the phone “excessive, unusually burdensome or unprofitable”.  Unsually burdensome and unprofitable? Doesn’t the company take these into consideration when we sign a two year contract? What if I wanted to break the contract because it became unprofitable or too expensive to use their service? I doubt if there is anything in paragraph 7 that allows me to break the contract.

I don’t brag often enough about some of my clients. But Nick Sarillo at his two locations of Nick’s Family Restaurant did something in the area of customer service this week that blew me away. He gave everyone that visited his two restaurants (seating capacity of about 700) free dinners, drinks and takeout! On Tuesday, with the bill for each customer came a note from Nick that read how he knows the recession is tough on people and he wanted to help out.

In the note, he said that “Tonight, your meal is on us. Compliments of the entire team at Nick’s. No tax. Nothing.”

Customers were delighted! Imagine finishing your dinner (lunch too in this case) and the restaurant says that the meal is on us (and the food was good and the service outstanding.) Outrageous! Nick even got the staff to chip in and donate their time. They all worked for tips that night. (The team split all the tips evenly.)

Nick says he got the idea when he realized that it cost $60 to fill up his gas tank. So while others are charging a fuel surcharge, Nick’s is giving rebates! Even though his cost of flour has doubled in the past month, he shows he still cares about his customers. Now that’s crazy customer service. Nick is known for his generosity. He has been recognized by his peers as the Restaurant Neighbor Award in Illinois in 2007. All of this is very much in line with Nick’s purpose and values- He says that he serves “Pizza on Purpose“!

What outrageously generous things have companies you know been doing to help us doing these tough times?

As a group, consumers are a lazy bunch. Once we start moving in a direction, it is hard to get us to switch to do something else. The switching costs may not be high, but we keep buying and shopping the same places we always do. Just because.  Retailers and service providers count on this. Even if we are offered lousy service, it takes alot for us to switch. Even if we are offered a better or cheaper deal, it still takes alot to switch. We are lazy consumers. Case in point:

I had been a Netflix customer since they got started and fell in love with their service. When Blockbuster introduced a similar service, I did not switch even though there is a Blockbuster 2 blocks from my house. With Blockbuster, I  could turn the movies in there and get them much faster. Finally after 5 years, I made the jump to Blockbuster. It was scary , but now 6 months later I love it. It is much more convenient and flexible than Netflix. I wished I switched 5 years ago. Netflix kept me as a customer simply because I was too lazy to switch. It made no economic sense. I stayed with Netflix even when Blockbuster was faster, better and cheaper.

Faster, better, cheaper does not always win the day. Habits and inertia win alot of the time. That is why I always ask entrepreneurs: Why will the customer switch to you?

You have all seen the news: American Airlines will begin charging $15 a bag for the first bag you check beginning June 15th.  I am an executive platinum flyer with the airline (the top level) and this makes no sense at all. (BTW- they sent me an email yesterday saying that I would be exempt from this fee because of my “elite” status.) American is of course blaming higher fuel prices on this latest action- I am not denying that fuel prices are high but it seems that everyone is blaming everything on the price of oil these days.

American’s $15 a bag will eventually backfire. People will try to bring more bags on the airplanes and try to stuff them into the overheads. This will delay the loading and departure of flights and will further hurt customer satisfaction for airlines which is already at a record low. We need to do actually the reverse- limit what people bring on. This is what European airlines do and the planes their load and unload much more quickly. I would much rather have American raise its fares and get me their on time….don’t nickel and dime me on the way especially when it effects customer service.

I like American Airlines. They are my preferred carrier. They have been good to me. But $15 a bag will backfire on them and they will need to find another way.

Payment schedules to pay my bills on time seem to be getting shorter. I received a bill the other day from MCI and it says that it it is due 21 days later. I always thought I had 30 days to pay this bill. After calling customer service and reading the fine print, I realized that their bill is deceptive. In one section of the bill it says that the payment is due May 16th. In another part of the bill it states that “a 1.5% late payment charge will apply to any unpaid balance as of May 23, 2008” (30 days from the date of the statement). So, while the payment “due date is May 16th”,  I can pay as late as 5/22 and not receive a late charge. I understand why MCI does this. If they can get their customers to pay their bills a week early, this extra week’s worth of cash is worth millions of dollars to MCI. This is a large source of cash flow for them.

It is the same in your business. If you do $1M a year in business and your average customer pays in 6 weeks and you cut the payment time by one week to 5 weeks, you gain $20,000 of cash. Not bad since you can now use that cash for reinvestment in your business or payout to yourself!

Sometimes, I just have to rant. I was “shocked and awed” yesterday when I visited a local deli, Cold Comfort which had a sign on their menus that informed me their would be a 25 cent surcharge on all bagels and bread items due to their increase from their supplier. This must have something to do with the high price of oil or the higher price on flour around the globe. Many of us have become use to “fuel surcharges” on transportation and things but where are the days when a business took the risk for price increases or decreases from their suppliers? Isn’t that part of what the business gets paid for? Will prices go down when the price of oil goes down? Do businesses lower their prices when their prices go down? Not likely….

In writing my third book about that the only sustainable competitive advantage left in this world is customer service. I am pondering whether excellent customer service means giving the customer 110% or 200%. Can we afford to give 200%? Is it necessary as long as we meet or exceed the customers expectations? Will 110% do?

This past week, there was a serious problem on Chicago’s train system. One entire line was shut down for awhile, and some people could have been hurt. This happened at 9:00 am and was resolved by 12:00 PM. A long time if you are stuck inside a train but not that long in the scheme of problems  thatChicago’s train systems have. By that evening when I boarded the train system (not the line that had been broke), I found out they were handing out flyers of apology (that’s nice) and giving free rides to EVERYONE in the entire system. If you do not live in Chicago, you need to understand that our public train system is always broke. They are constantly talking about cutting service. We have one of the highest fares in the country. Isn’t giving out free rides going to make it worse? Is this really necessary to show good customer service by giving away a free ride or is this just a publicity stunt?

I would much rather the train system have my fare and deliver transportation that is clean and on time. To me, that is the definition of outstanding service. What do you think?

I made made my every 3 year journey to getting a new computer this week- something I always approach with angst. Windows computers and networks are not stable by their nature and changing them scares me. However, my desktop had become so unusable in the last 6 months that it was time to upgrade. I really had no choice. I enlisted the help of my client, Lisa Singer at Singer Networks, which eased the burden. The Dell dual core is the way to go coupled with the 24 inch widescreen monitor. It’s heavenly.

But, then it was time to reformat and reinstall Windows on my old computer so I could pass it on to my wife since hers (the slowest in our house) was a boat anchor. I successfully reformatted the hard drive and loaded Windows XP. Unfortunately, not all of the audio and graphics drivers loaded. I did not have the disks and it was time to call Dell Computers. I could feel my stomach churn inside.

I dreaded the idea of talking to someone in India at their support facility who had no idea what they were doing. I was surprised. Through remote control technology, they were able to look at my computer and upload the appropriate drivers (scary but it worked). The best part was that even though the computer was out of warranty by 3 years, they help me for free “this first time”.

As a customer service policy, this made sense to me. I had never called them on this computer and I liked the policy that they would help me the first time I called when it was not in warranty but would charge me for future times. I considered this excellent customer service- help me know, warn me that they would need to charge in the future.

When I was in Springfield, Illinois last week, I stayed at the fanciest hotel in town: The Crowne Plaza. When I checked in at 7:00 PM at night, there were 9 people in line with only one person at the desk to check us in. While Bill at the front desk did a great job trying to check people in quickly, there was no back up for him to help out. The front office manager’s card, Michelle Skube, was on the counter encouraging me to report the situation to her. Bill needed backup. I of course did send her an email that evening and I have heard nothing since I sent it on Thursday. I never excuse poor customer service. But when you offer to help or resolve customer service issues, at least answer your email! With Michelle not even answering my email, it makes a bad impression even worse.

I won’t even discuss that it took an hour to get a hamburger at the hotel dining room that evening….