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Transparency in Numbers

HostGator is a relatively large web hosting company that has been experiencing rapid growth for a long time. They recently moved to Houston and hired 50 new employees, bringing their total headcount to about 100 or so. They plan to grow much larger in the next year or so.

I was happy to see that the company started a blog. They posted a letter from the CEO, a tour of their new office, and some of the standard promotional things you see on a blog. Not a bad start. Recently, though, a post about their live chat numbers sparked my interest.

June 1 to June 14, 2007

Total Number of Chats: 13,355
Total Surveys Returned: 4,170

Overall HostGator Experience
Excellent: 1,895
Very Good: 984
Good: 784
Fair: 378
Poor: 129

Chat Technician Rating
Awesome: 2,301
Good: 1,464
Needs Improvement: 396

As you can tell from looking at the numbers (reposted above with permission), HostGator has a lot of volume: 7,000 chats a week. The stats given don’t show the total amount of tickets or phone calls (maybe someone from HostGator can send them our way?), but 1,000 chats a day is quite a lot. HostGator has been growing very fast and it is quite obvious they are doing something right just by the number of customers that they have.

Something that is interesting is the return rate for the chats. It’s over 30%, which is really good. This gives HostGator a lot of data to work with and probably a fairly diverse survey base.

Customer service know how (and more scientific studies) say that unless people give you one of the top two ratings (Excellent and Very Good or some variation thereof), they are just as likely to defer to the competition as those who rate you as poor. For example, if a company rated HostGator’s service as Good (say a 3), they are just as likely to go to a competitor as someone who rates HostGator’s service as Terrible (say a 1).

More customer service know how tells us that people who are unhappy are more likely to fill out the survey than those that are happy. Furthermore, if someone just closes the chat window, they aren’t shown a survey. Therefore, the people filling out the survey are the most savvy and unhappy of the bunch, which is worth noting.

With that in mind, HostGator’s satisfaction rating for the overall experience (from the chat) is like 69% or so. That means most people think their service is between Very Good (80%) and Good (60%). The 69% number shows that a majority of customers are generally happy, but chances are that an employee going above and beyond and providing really great customer service is not super common. In layman’s terms, HostGator is providing customer service that is definitely acceptable, but they haven’t gotten it to the “next level” just yet.

The chat technician rating is interesting as well. Assuming that “Awesome” is the top two grades, the chat technician average rating is about 55%. That is a bit low for comfort. However, I’m pretty sure that if HostGator expanded it to Excellent, Very Good, Good, etc., that the numbers would go up quite a bit. Awesome is a strong word, and as such, people who weren’t supper happy (i. e. the top rating) are less likely to rate a tech as awesome.

Some numbers and exercises for HostGator to consider crunching/doing:

  • Are the number of live chats and the satisfaction score a representative gets related? (Does more chats = less satisfaction?) (How many chats did Kevin N (who get the highest satisfaction rating) do?)
  • Has that satisfaction number increased over time? By how much?
  • Have an employee only do one chat a time for a day. See how his or her numbers do compared to other days.
  • Don’t base “top scores” purely on volume. Come up with a combination of volume and quality. Maybe 50% volume, 50% quality.
  • Send out a similar survey after tickets and see what the results are.
  • Research some alternative wording to Very Good, Good, etc. that is more “harsh.” (Example: Completely Unsatisfactory, Needs improvement, Acceptable, Good, Very Good or a variation of that).

Today’s post talked about what the numbers mean and how to get more accurate numbers. More on how HostGator can improve the numbers tomorrow.

Disclosure: I know and have worked with some of the executives at HostGator on both customer service and other projects. HostGator did not pay for this post.

Interested in having your numbers analyzed like this? Let us know!

 

Corporate Transparency

I wanted to talk about another subject related to blogging today, but will save that for another time. Too much about blogs lately, so I’m going to talk about corporate transparency. I will mention blogs, but the blogosphere will not be the main subject.

Mainly due to a Wired Magazine article and a lot of follow up blogs posts, corporate transparency has been discussed a lot lately. Many, many organizations are not transparent. Very few are transparent and even the ones that seem transparent are usually not telling you much.

There is a happy medium between too transparent and just transparent enough. A few organizations can do it and have done it fairly well. Too transparent is bad because you may reveal operating or company secrets; aggravate employees, customers, partners, and/or competitors; or something of the sort. Bigger companies risk upsetting shareholders. Companies of all sizes may be concerned about law suits.

Being too “not transparent” (I’m not sure if the word opaque works) makes your company seem secretive and people don’t have an idea about what’s going on. Customers and employees are curious about what your company is going through. They want to be in the loop and have an idea about what’s going on behind the scenes.

Then, there are some companies that are pretty transparent internally, but not very transparent externally. I’ve worked with a couple of these companies and it works out fine for the employees, but the customers don’t know what’s going on. If you are a customer and ask what’s going on, they will usually tell you, but they certainly don’t volunteer much information.

So, how do you find the happy medium? Very carefully. Here are my suggestions:

  • Start a blog. Start a company blog and have different staff members post to it. Have someone that has a legal understanding (i. e. a business side of the house executive) look at posts for the first couple of weeks, but don’t let legal intervene beyond that. Do not let PR firms or employees read posts in advance.
  • Be honest and complete on your blog. Talk about what’s happening at your company, but do it fully. If you want to talk about the current state of your customer service, don’t only tell a part of a story. If you want to talk about something, talk about in full and honestly.
  • Publish a newsletter. Publish a newsletter and in your newsletter, be honest and complete as well. Don’t make the entire newsletter sales-oriented – talk about what’s going on in your company.
  • Don’t pad things with PR speak. Another advantage to not having PR people look over posts, is that they won’t be padded with PR speak. Don’t let executives that already speak PR to write the posts.
  • More on different employees. Have different employees contribute to being transparent. It can range from first level technical support to the CEO. Southwest’s blog is a good example of this. Meebo (a favorite corporate blog of mine) also does a good job of having different people write to the blog.
  • Ask for feedback. As you are trying to be transparent, ask your customers about what they want to know. Ask employees the same question. Use their feedback to decide where you want to take your transparency efforts and how transparent you should be.

It isn’t all the all inclusive guide to being transparent, but it should get you started. Being transparent is important in customer service. Don’t withhold information from customers or employees and you’ll find it a lot easier to keep the facts straight.

Does America run on “Dunkin’ Donuts”?

I'm thinking that in this case they should have just gone with the singularBrands Keys Customer Loyalty Engagement Index sets Dunkin’ Donuts as number one in customer loyalty for the coffee category. Second only to oil production, coffee is the largest commodity sold. The coffee category included ratings on consumer preferences, the consistency of meeting customer expectations for taste, quality, service, and brand value. This is the sixth year in a row the quick food coffee shop has been recognized with the award.

Dunkin’ Donuts has more than 7,000 restaurants in the United States and District of Columbia and another 10,000 restaurants in 33 countries. Their products are also sold in grocery stores and other specialty shops thus giving them a much broader shot at international brand recognition through a larger variety of different venues.

So what makes “Ameica Runs on Dunkin'” so popular? Most Dunkin’ Donuts are franchises, and their core values include honesty, transparency, humility, integrity, respect, fairness, and responsibility. Franchise applicants are required to have liquid assets of $250k and a net worth of $500k. Experts in the field provide extensive learning and training opportunities. Much of the organization’s success has been attributed to the dedication of the franchises and their ability to create an outstanding customer experience.

Perhaps the hardest part of meeting customer expectations however, lies with brand value and delivering the product to customers to make them happy. Actually the superior guest experience happens when customer expectations are exceeded. The company’s Dunkin’ Donuts Perk and Rewards program translates into free beverages as well as emails informing customers of the latest news, special offers and new store openings. Every year a participant receives a free medium beverage on their birthday. People remember – and couple the marketing with fast service, a smile from the person behind the counter, and 100 percent Arabica coffee beans, a recipe for success seems to have been achieved.

You may be a loyal fan of Starbucks where customers contemplate a more comfortable setting, a wider array of coffees, frappucinos and smoothies, having an employee inscribe your name on the cup and that small convenient table for sugar and spice – but “America Runs on Dunkin’ ” is less expensive and still makes the consumer feel as if they are appreciated.

In a company that serves more than one billion cups of hot coffee and iced tea annually, clever marketing has made people feel more engaged. The company’s green policy began in 2008 when the first green store opened in St. Petersburg, Florida, and on January 20, the second green store opened in St. Petersburg using eco-friendly LED lighting, recycled water for landscaping, coffee grounds for area farmer composting and even an electric car charging station.

The company supports veterans and donates coffee to the USO and provides grants for the welfare of the hungry.

When Nigel Travis, president and CEO of the organization was asked how he saw his company’s menu evolving in the next ten years he replied:

“I think we’ll be selling a lot of doughnuts. I think we’ll be stronger in our beverages, because that’s continued to grow steadily over time. We’ll continue to test things. We have more ideas than we can cope with.”

photo credit: craigemorsels

How to Leverage What You Do Right!

checkI saw a commercial today for an exterminating company that advertised the ongoing training their employees receives. I’m not looking for an exterminator but it made me think about the importance of using what your organization does right and leveraging it as part of your marketing plan.

We moved a few years ago and I researched moving companies to help us. The only way I knew to assess these kinds of companies (this was before Angie’s List) was to ask about their internal practices. I asked if they provided training for their employees and if they solicited customer satisfaction data. I was truly surprised at how different the response was from company-to-company. I ultimately picked a business that did both ongoing training and solicited customer feedback. This was important to me because it told me that employees were put through a structured training program (I didn’t want them dropping my TV) and if they asked for customer feedback, they were probably more likely to respond to customer issues.

So what kinds of things is your organization doing right that you can leverage?

  • Training: Depending on the industry, most people place value on training. Whether it is customer service training or mechanic training, most customers feel a level of comfort in knowing the people who are taking care of their needs have had the appropriate training to do so.
  • Background Checks: Whether you have service technicians who enter customer homes or are a daycare center who takes care of small children, communicating that background checks are part of your screening process can help ease the concern of potential customers. I worked with an organization that hosts a large summer day-camp every year and they do background checks on the army of volunteers they use to manage the children. Parents find comfort with that.
  • Accreditation: Accreditation and certifications demonstrate a person or organizations credibility in providing products or services. Whether your organization is accredited through the Better Business Bureau or have certifications in information technology, the paying customer is interested. These kinds of credentials are what separate the professionals from the not so professionals.
  • Financial Transparency: Nonprofit organizations that solicit and rely on outside funding and donors benefit greatly when they provide financial information to donors. Donors want to know that the money they are donating is being used wisely and for the purpose it was intended.
  • Customer Satisfaction: When a customer purchases a product or service, they want to be reassured that they will receive what was promised to them. Collecting, monitoring and advertising customer satisfaction data can be a powerful tool in marketing to new customers. Customers want to know that their voices will be heard.
  • Quality Data: Organizations that track quality data can use it to advertise products or services. Whether an organization has won the prestigious Malcolm Baldrige National Quality Award or can claim a 0.001% product defect rate, quality data can be a great way to sell your product or service.
  • Best Places to Work: Customers like to do business with organizations that have happy employees. Being nominated or winning awards for best places to work is another way to demonstrate creditability with the community and improve employee engagement.

Organizations that advertise the things they are doing right have the advantage of attracting the educated consumer. The ever-changing consumer driven culture demands more and more transparency in how an organization is run so you might as well boast of your good practices!

What are other things you leverage in your marketing plan?

Writer Bio: Kathy Clark is an MBA who is passionate about helping small business owners see their vision come to life by creating corporate infrastructures that support business development and growth through strategic customer focus. She writes for, and is the founder of http://thethrivingsmallbusiness.com.

photo credit: PNASH

Retail reward programs no guarantee of customer loyalty

IMG_7981Most retail organizations use discounts to entice customers to buy their merchandise at the end of each season, but that doesn’t do much to guarantee a shopper will ever return to a store or even garner customer loyalty. Retailers spend billions of dollars on loyalty programs which are designed to bring customers back for repeat business, but a recent poll by Crossview, an organization designed to optimize consumer experiences, revealed that 66 percent of consumers responding to a survey about loyalty programs do not shop at a particular retailer despite promises of earning points for future purchases.

Loyalty programs started as far back as 1896, when stores would give out “green stamps” that could eventually be redeemed for household products. Very popular in the 1930s through the 1980s, supermarkets and other participating stores would give out stamps commensurate with the purchase amount, and the stamps would be pasted in collector books. Each book would be completed when 1200 point stamps were collected, and the popular catalog with all the great reward choices became a family’s favorite pastime.

Today most people have at least one loyalty card, but the constant barrage of worthless emails and low-value rewards  have people  discontinuing the programs. Most consumers don’t want to spend the time figuring out the value of points and a reward that may take months if not years to earn.  Who wants to read about useless offers when they open up their email?  Shoppers want immediate benefits; in other words there has to be a program that keeps customers engaged, and shoppers want the programs to make a substantial difference; make it worth their while.

Rodney Clark, a ladies clothing retailer  uses a VIP customer Endless Rewards loyalty program which gives back something to a customer for every purchase they make. Customers have the choice of either the gold or platinum level which entitles the customer from 5 percent to 10 percent discounts for each purchase. According to a store spokesperson, customers spend an average of $100 more per visit than non-VIP customers. Nordstrom’s Fashion Reward program gives cash back and offers private and exclusive shopping experiences to cultivate customer loyalty and incremental sales. Target stores refund 5 percent of every purchase when a customer uses a branded credit or debit card.

Only if the reward programs show customers they are important and allow customers to view the program as valuable, relevant, and exceptional will customer loyalty increase. Retailers spend billions of dollars on loyalty programs and hope that it brings customers back. Stores do need to remember that consumers want immediate benefits, transparency, good prices, great experiences, and exceptional service. Now if the retailer happens to offer another 10 percent discount  just for presenting a  reward card – that’s just another plus.

photo credit: CLF

Are you listening to your customers?

Down the PlatformNew Jersey Transit, America’s third-largest public transit agency has introduced a new initiative called the “Scorecard.” Its purpose is to rate customer service response times and on-time performance of bus and rail lines, crime statistics, ridership, and revenue per hour. The survey is in response to a backlash of frustrated and angry customers.

New Jersey Transit director Jim Weinstein stated;

“We need a way for people to see what we’re doing, to measure how we’re doing it, and, frankly, for us to motivate ourselves and for us to measure how we’re doing.”

Public opinion says the agency needs to do a better job of communicating. The customers’ biggest criticisms center around transparency and seeing results. In the past, customers claim the agency has collected data, and now question what was done with the information? Lastly the suggestions of the past have never been acted upon.

Karl Zielaznicki, a commuter customer thinks that spending extra money on initiatives like Scorecard are a waste of money.

“If doesn’t matter if they hear you if they are not listening!”

Bottom line here! Use what you learn when you go through the trouble of taking the time and money to conduct surveys. Take the time to tally up the results, and it doesn’t matter if 75 people love your business and only 25 people find fault. Listen to the people who have complaints because you want to please 100 people. Look for trends which indicate ongoing problems, and determine if the complaints are valid. Companies need to be realistic enough to deal with those customers who are dissatisfied. Organizations need to be objective, and use the data to gauge what others really think.

In the particular case of the New Jersey Transit Authority, what is going to be different this time that will promote confidence in passengers? Will the agency do a follow-up? Any organization needs to let customers know what changes have been instituted after a survey has been done? Customers want to know if what they have suggested has been followed through and the appropriate changes made. After all, customers are the ones who can just as easily click onto another website or walk into the next store while visiting the mall.

Now as to the New Jersey Transit, it just proves how dissatisfied customer opinions can promote change. Passengers like Karl Zielaznicki might not have many options as to his transportation, however he is being heard, and hopefully this time someone is really listening.

photo credit: JosephLeonardo

Of car dealerships and customer service

pic48Jaguar of North America has just been recognized as a JD Power 2011 Customer Service Champion which means they have excelled in their own industry by delivering superior service to their US customers. Part of the criteria used to measure customer satisfaction were the “touch points” of people, presentation, process, product, and price.

According to JD Power, Jaguar is noted for standing out by satisfying customers with new-vehicle sales experiences. Doesn’t that make one wonder why every dealership can’t provide a similar kind of customer experience?

I remember reading a statement from the CEO of Hyundai who stated, “Americans would rather go to the dentist than visit a car dealer.” Fortunately the Internet has helped us as customers take control, rate dealerships, and even create our own reviews based upon our personal experiences. Since car dealerships are independently owned franchises, they are not entirely controlled by the automobile manufacturer thus there are going to be different concepts regarding customer service. Surprisingly statistics indicate that only 30 percent of car buyers negotiate online. People seem to feel they need to touch the product and do a face-to-face encounter with a car dealership salesperson. So what are the main complaints when shopping for a new car that brings shivers down our spine when we attempt to relate car dealerships and customer service?

  • Negotiations – Car buyers complain about being bullied and intimidated. Too often the process is meant to wear down buyers by bringing out more salesmen and managers.
  • Inefficiency – There is the wasted time while the salesman has to confer with his manager. There is an extended amount of time in the finance office, the contract preparation office, and finally the vehicle preparation procedures.
  • Transparency – There is nothing more frustrating than to feel you overpaid for a car. Too often the salesperson will present only the monthly payments which is an intentional method to obscure the true price of the automobile. Then someone comes over and begins the add-on expenses of extended warranties, insurance, manufacturing fees, transportation fees; all done with little explanation.

So does it have to be an expensive automobile like Jaguar for consumers to expect exemplary customer service? After all when I sell a house for $100,000 or one for $700,000 the service is the same. Customer satisfaction should be based on the salesperson, the efficiency of the deal, the delivery process, and the dealership’s facility. If in doubt while negotiating for a car, keep in mind the following:

  • Walk away if your first impression of a sales person is not positive.
  • Ask for a new salesperson if you feel at any time you are being bullied or “herded” into an uncomfortable situation in “turnover houses.” (wear down buyers until they purchase a car)
  • Speak to the general manager.
  • Ask to speak to someone over the general manager if you are still not satisfied.
  • Use social media to carry your message.

There have been positive changes, however in the car industry. GM brought in trainers from the Ritz Carlton to help Cadillac dealers treat customers royally. AutoNation shows customers how much they will pay for a car thus avoiding the add-on expenses after the deal is made, and has cut down the transaction time a customer actually spends during the process of buying a car. Maybe someday other car dealerships will realize how customers should be should be treated, and make car shopping a positive experience no matter what your budget.

photo credit: chuckoutrearseats

What creates customer loyalty?

CBR001831Customer loyalty is the attitude of a customer when he purchases a particular product of a particular brand over another. The customer retains that brand loyalty and re-purchases or re-uses that product or service. In order to gain a customer’s loyalty, the brand has to be trusted and presented as trustworthy, competent, efficient, and intelligent.

Nowadays it is more than just running a business with creativity and skill, because customers want to know if the promised honesty and integrity is acting in a consumer’s best interest. We want favorable behaviors from companies. For instance, let’s take the example of the successful clothing company Patagonia. Their corporate social responsibility for people who work in the factories that make the clothing and what Patagonia has done to ensure the safety and fair humane practices of workers has made an impression on purchasers of their products. Patagonia offers their Footprint Chronicles which follows the impact of specific products from design through delivery. This kind of transparency allows customers to draw their own conclusions. Companies that are candid tend to balance the market and restore lost trust.

Many of us remember Kathy Lee Gifford’s clothing line came from a Honduran factory with children as young as twelve years old working in abysmal conditions. There were significant marketing efforts to turn the tide of public outrage, but in the end Gifford finally had to admit to sweatshop conditions and made some amends to revamp her tarnished reputation.

On a much larger scale, consider the ecological disaster created by BP. Had the company used the safety standards mandated, billions of dollars and thousands upon thousands of jobs, lives and wildlife would have been spared the suffering of such an egregious debacle. What happened here was denial, deflection, and the “spin” of marketing experts. The company lost all credibility when important information was withheld, and the company refused to answer truthfully. Will the company ever fully rebound? We have all seen the damage control commercials assuring the country that BP will be making everything right again. Still some experts questions what ever did happen to all of those oil plumes in the Gulf of Mexico?

And finally how about Starbucks? Look at their creativity and skill to garner customer loyalty. Their drinks are creative and original, and their customer service is remarkable and touches upon the human connection. Starbucks claim they want to be in “third place.” What do they mean by “third place?” First place is home, second place is work, and third place is Starbucks – a place to visit, sit, relax and enjoy the warmth of the experience. Their skills, their transparency, and their willingness to apologize when they have made a mistake goes a long way in a world full of Goldman Sachs, Toyota, and BP. Don’t you think?

photo credit: Spirit-Fire

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