August 24, 2007

I’d like to thank our detractors for all their support…

Palm, Inc., Your Destination for Handhelds, Mobile Managers, Smartphones, Accessories and Software TitlesIt’s easy enough to thank the folks that say nice things about you. But it takes real wisdom to embrace your critics. Recognizing that it’s passion, whether positive or negative, that fosters forward progress, Palm Computing’s CEO Ed Colligan has paid real respect to those who are clobbering his company with the truth.

In “Dear Palm: It’s time for an intervention“, Engadget’s Peter Rojas basically tells Palm that it is falling apart and better fix itself before it’s game over. It’s a detailed laundry list of things the company needs to do, and analysis on what it’s done wrong. All in all a very tough review.

What’s remarkable is the grace by which Ed Colligan accepts this very public feedback. The traditional approach is to ignore negative press like this, as if by not acknowledging it will become less credible. But Colligan instead expresses his gratitude, then reinforces the criticisms as a way of expressing his seriousness of intent:

I really appreciate the fact that you guys and others care enough to take the time to write such a comprehensive list of actions. I forwarded it to our entire executive staff and many others at Palm have read it. Although I can’t say I agree with every point, many are right on. We are attacking almost every challenge you noted, so stay tuned.

This is a Judo move worthy of a master.

By Thor Muller | Posted in Judo move, case studies, reputation | Comments (3)
August 10, 2007

Announcing our first “Customer Service is the New Marketing” Summit.

Since Thor first presented on “Customer Service is the New Marketing” at SXSW and then followed up with a post about it here on our blog, we’ve had a steady drumbeat of interest on the subject from people across a wide spectrum of industries, companies and job titles.

Clearly, the topic has struck a nerve. We knew it was a subject we were obsessed with, but we had no idea so many people felt so passionately about what at a glance seems like it might make for pretty mundane subject matter. People from all sorts of industries have contacted us, wanting to share their stories about make customer service a better experience all around, or asking for tips and suggestions about how to get their own organizations to do customer service differently.

And, hey, we’re a customer service organization, right? Give the customers what they want, and what our community wants is a chance to learn, organize, and share around some of these emerging ideas. And so we’re announcing our first “Customer Service is the New Marketing” Summit, to be held in mid-November here in lovely San Francisco, California (exact date and location to be determined shortly.)

We’re currently hard at work putting together a full roster of speakers, pulling from a variety of industries (and not just the usual Web 2.0 crowd, though we’ll have some of them, too), all of whom are finding ways to make customer service more meaningful for their organizations. We’ll round out the day with some collaborative workshops, some probing interviews, some group discussion, plenty of food and of course the opportunity to mingle and network. More information on all this soon, we promise.

But first, of course, we want to hear from you: Is this something you would be interested in? Who would you like to see speak? What kinds of other attendees would you want to meet? What topics would you find the most valuable? Your suggestions more than welcome in the comments below or, even better, in the discussion over on Satisfaction.

By Lane Becker | Posted in case studies, community, conferences | Comments (3)
August 7, 2007

Customers helping companies help themselves

Satisfaction is based on this crazy idea that customers themselves are the answer to getting better customer service. But this doesn’t mean that customers always have the answer–often only the company itself can fix the problem, implement a feature, reset a password. We have this theory that Satisfaction can help make companies a bit more responsive by making their customers’ needs more transparent. And in the process make the company a lot more accountable.

Though we haven’t publicly launched the service yet, our early tests are proving our theory true. Last week, for instance, a problem that had been reported directly to the company in question had repeatedly gone unresolved. The dedicated customer support rep (likely awash in a sea of trouble tickets) had responded in a kindly, but ultimately unsatisfying manner:

It’s a bug we’ve been meaning to fix, but it’s fallen behind bigger priorities; very good point though. I’ve shared your comments with the team.

This inspired a user to post this issue as a problem on the (beta) Satisfaction site for this company, and within a day or two several people had piled on, providing details about their issue and how they had reported it via email to no avail. They also noted the lack of resolution achieved through official channels. Already Satisfaction was serving the dual purpose of a.) comforting people with the knowledge that they weren’t alone in the problem, and b.) publicly elaborating on the critical issue.

This proved strong bait, and soon one of the company’s executives was circulating on the Satisfaction site asking questions of the users, probing for details of the problem, and ultimately announcing that he would spearhead getting the fix done. And within hours it was fixed, to the surprise and joy of the users. In the words of a “satisfied” participant in the process:

…my pal cam twittered that he was having this same issue and was doing about something about it using the new project he’s involved in called satisfaction. about 4 people posted to the issue and explained the problem in detail and a representative followed up. and goldtoe got us a heckuvalot more satisfaction than the original support rep…and so now, [the product] is perfect.

What’s phenomenal is that once the problem was resolved in this utterly public environment customers were more enamored of the company than ever, to the point of publishing adoring blog posts and (practically) swearing their undying loyalty. The fact that the company had initially stumbled didn’t matter at all once Satisfaction got everyone talking, solving real problems in real time.

By Thor Muller | Posted in case studies | Comments (1)
June 4, 2007

Burning down the house

It keeps happening: high-profile online communities revolt after being “disrespected” by their host sites. There was the infamous Digg imbroglio, of course, and in the past few weeks there were flare-ups at Flickr and JPG Magazine. In Flickr’s case the deletion of a photo (and associated comment thread) led to escalating accusations of censorship. Simultaneous to this, 8020 Publishing, publisher of JPG Magazine, was publicly accused by its co-founder and ex-community manager, Derek Powazek, of mistreatment. The result was an escalating solidarity movement of JPG members who ditched the community alongside Derek. In each case, the company’s response was delayed, further inciting the anger of the crowd. Flickr’s Stewart Butterfield effectively defused their situation with his response full of humility, transparency and a policy change. 8020 had a harder time overcoming their backlash with this polite but terse response.

riotsWhy are communities so willing to attack their beloved host sites with such viciousness, even when the violations are unrelated to their own personal concerns? Do these rebellions have something in common with Detroit’s 12th Street Riot, where a community became so enraged by a late night raid by an overzealous police force that they burned down several thousand buildings in and around their own neighborhood? Though the insurrection is traced to the anger of black residents towards the mostly white police force (a symptom of the broader race issues of the time), “black-owned businesses were not spared. One of the first stores looted in Detroit was Hardy’s drug store, owned by blacks, and known for filling prescriptions on credit. Detroit’s leading black-owned clothing store was burned, as was one of the city’s best-loved black restaurants.” [Wikipedia]

These examples are worlds apart, of course, but they each beg the question of when it is rational or irrational for a community to attack–possibly even kill–their host environments. In The Wisdom of Crowds, author James Surowiecki describes the common phenomenon of people acting outside of their own immediate self-interest. He first mentions the mainstream public furor over Richard Grasso’s $139 million CEO payout by the New York Stock Exchange, a broadly expressed outrage that ultimately led to his firing by its board of directors. Why, Surowiecki wanted to know, would so many people care when they weren’t at all directly affected? Since most economists assume that humans are fundamentally self-interested and make rational decisions on that basis, this question is especially interesting.

To answer this question Surowiecki describes a well-known experiment called “the ultimatum game,” an exercise used in behavioral economics. The game, often played in university economics classes, divides people evenly into two groups. One group’s members (the “proposers”) are each given a monetary sum, say $10, and are paired with a member of the other group (the “responders”). Each proposer must make a monetary offer to their responder, any amount at their full discretion. If the responder accepts the offer then each side keeps the proposed money. If the responder rejects the offer then both sides get nothing.

The rational outcome is for proposers to offer $1 (keeping $9 for themselves), since proposers should want to maximize their take, and a responder should accept the offer because $1 is better than nothing. However, as Surowiecki explains:

In practice…this rarely happens. Instead, lowball offers–anything below $2–are routinely rejected. Think for a moment about what this means. People would rather have nothing than let their “partners” walk away with too much of the loot. They will give up free money to punish what they perceive as greedy or selfish behavior. And the interesting thing is that the proposers anticipate this–presumably because they know they would act the same way if they were in the responder’s shoes. As a result, the proposers don’t make many low offers in the first place. The most common offer in the ultimatum game, in fact, is $5.”

It turns out that this behavior is essentially universal, even exhibiting itself in monkeys. And there’s a term for this, “strong reciprocity,” which is the “willingness to punish bad behavior (and reward good behavior) even when you get no personal material benefit from doing so…individually irrational acts, in other words, can produce a collectively rational outcome.”

Mikey Tom MarketIn my San Francisco neighborhood of Noe Valley we’ve experienced the power of strong reciprocity. A beloved local grocery store, Mikey Tom Market, famous for its organic food and fresh baked goods, was forced out of business by a landlord that jacked up the rent nearly 300% overnight. The community decided this was onerous and started a campaign to save the store, culminating in a six-month boycott of future tenants. “We want to take the profit motive out of closing Mikey Tom down,” said Daniel Mark Jackson, who organized the protest along with several other neighbors.

It worked. The store closed in 2003, but the retail space is still empty, an iconic statement against greed. The neighborhood’s discontent with the landlord made the building untouchable. While it may be more “rational” to get another vendor in that space as soon as possible, we’ve collectively made it less likely that evil business practices will rule in our neighborhood.

Chalk another one up for irrational behavior!

By Thor Muller | Posted in case studies, community | Comments (4)
May 23, 2007

Even rock stars are struggling with customer service

Sensitive indie-laptop-pop troubadour with the heart of pixel poet by hfabulous

There are more than a few Internet geeks who have chased the life of a rockstar. It’s a bit of poetic justice, perhaps, that the daily existence of more and more recording artists resembles that of an Internet worker. Clive Thompson (the endlessly insightful writer who penned the excellent Wired article on the See-Through CEO) exposed this new reality of emerging musical artists in his recent article in the NYTimes Magazine, Sex, Drugs and Updating Your Blog.

The article explores how remarkably different the music business is for Internet-enabled artists as they seek to grow their fan-base, develop income streams, plan their tours, and really, everything else. In fact, these artists have everything in common with the companies we talk about on this blog, the ones that are enmeshed in the life of the Web, actively engaged with their most passionate customers and fans. Surprisingly, they show that even rockstars need better ways to handle their own customer service (or “fan” service, if you will). Jonathan Coulton, a singer-songwriter from New York is a good example:

Coulton responds to every letter, though as the e-mail volume has grown to as many as 100 messages a day, his replies have grown more and more terse, to the point where he’s now feeling guilty about being rude.

And he’s not the only one:

When the Hold Steady formed four years ago, [guitarist] Tad Kubler immediately signed up for a MySpace page, later adding a discussion board, and curious fans were drawn in like iron filings to a magnet. Now the band’s board teems with fans asking technical questions about Kubler’s guitars, swapping bootlegged MP3 recordings of live gigs with each other, organizing carpool drives to see the band…[But] the Hold Steady’s online audience has grown so huge that Kubler, like Jonathan Coulton, is struggling to bear the load. It is the central paradox of online networking: if you’re really good at it, your audience quickly grows so big that you can no longer network with them…Virtually everyone bemoaned the relentless and often boring slog of keyboarding. It is, of course, precisely the sort of administrative toil that people join rock bands to avoid.

The flip side is that artists are innovating in how they interact with their audiences, and we should all be paying attention to how they’re doing it. Artists are developing truly symbiotic relationships with their fans. Here are a few observations on the practical ramifications of this:

  • The more successful they are, the harder it is to keep up with the customer interaction (whether it’s email or MySpace friend requests)
  • While there is increasing transparency with fans via blogs and discussion boards, it’s hard to always know how to behave without traditional boundaries
  • When given the chance, fans will act as the artist’s “promotions department”
  • With minimal prodding fans will provide endless tips, suggestions, artwork, music videos, web site support, and business advice
  • Using polls of fans’ from each geographic area, artists can plot tour schedules that are virtually guaranteed to reach a critical mass of fans

This reminds me of a graphic I posted a while back showing how different kinds of companies interact (or don’t) with their customers:
passion_chart.png

That’s not quite right given what we’re learning here. So here’s an updated graphic that reflects how this new generation of artists are interacting with their fans. Emerging artists are gaining a unique advantage vis a vis stadium-filling superstars by doing what they could never hope to do–engage directly with fans.

passion_chart_artists1.png

Some artists, like Jane Siberry, have embraced transparency and fan cooperation to a remarkable degree. She’s created an honor system for selling her music that not only replaces DRM with trust, but avoids fixed prices altogether.

[Sibbery] has a “pay what you can” policy with her downloadable songs, so fans can download them free — but her site also shows the average price her customers have paid for each track. This subtly creates a community standard, a generalized awareness of how much people think each track is really worth. The result? The average price is as much as $1.30 a track, more than her fans would pay at iTunes.

All this artist-community collaboration sounds great, except it’s not as easy as it sounds. The pressure to stand out, compete with other bands, and figure out what works can be crushing.

Performing artists these days, particularly new or struggling musicians, are increasingly eager, even desperate, to master the new social rules of Internet fame. They know many young fans aren’t hearing about bands from MTV or magazines anymore; fame can come instead through viral word-of-mouth, when a friend forwards a Web-site address, swaps an MP3, e-mails a link to a fan blog or posts a cellphone concert video on YouTube.

Myspace has provided a more focused environment for artists to reach out to fans, but even here the social dynamics can spiral out of control quickly. Thompson calls it an “arms race for fans,” and when a band is successful it can lead to tens of thousands of new fans. So many, in fact, that these overwhelmed artists are starting to use software robots to auto-approve all the incoming friend requests.

For the artists that don’t get this kind of traction there is also an alternative: software robots that create fake MySpace users whose sole purpose is to friend-request the band. And while these “fans” won’t do much for record sales, at least they won’t contribute to the anguish of email overload.

By Thor Muller | Posted in case studies, customer service | Comments (2)