Caring: A Critical Factor in Business Success

by Dan Blank on December 21, 2009

Today, I want to share four stories. Each has the same lesson: why CARING is a critical factor in business performance. For those working to transition media from print to a multi-media world, these lessons are more apt than they may at first appear.

How often are you let down by a product or service? You know the type of situation, where you are surprised that an organization or person will not go even mildly out of their way to live up to the promise of their brand’s tagline, or do anything even a hair outside of their narrowly defined roles? Or how about a product that is so poorly designed and constructed, with a virtual assurance that it will not serve anyone’s needs. Like a cheap plastic garlic press that will break under the mildest amount of pressure, or pants with flimsy single stitching along critical seams or an expensive watch that will surely fall off due to its cheap clasp.

As media companies look to create new products, new business models and new revenue streams to serve the changing behaviors of their markets, let’s take a look at how four companies in other fields are serving their customers.

Story #1: Seeing Opportunities as Problems

Dan Lyons posted something important that speaks to broader trends that affect many companies that you come in contact with.

The context of his post requires some explanation: Dan posts a blog pretending to be Apple’s CEO Steve Jobs, and in the blog post referenced below, he was responding to statements by their iPhone business partner AT&T. Someone had recently made some comments that iPhone users had been using up a lot of AT&T’s bandwidth, so AT&T would be teaking steps to discourage iPhone owners from using their iPhones in this manner. In the piece, "Fake Steve Jobs" is specifically addressing AT&T executive Randall Stephenson.

I am including long excerpts below that clean up the language, which was full of expletives in the original version. So here is Dan Lyons as "Fake Steve Jobs" addressing AT&T and talking about Apple, AT&T and the iPhone:

"And when I say that “we” have a hit on our hands, I’m really giving you [AT&T] way too much credit, because let’s be honest, the success of iPhone has nothing to do with you. In fact, iPhone is a smash hit in spite of your network, not because of it. That’s how good we are here at Apple — we’re so good that even you and your team of Bell System [employees] can’t stop us. You know what it’s like being your business partner? It’s like trying to swim the English Channel with a boat anchor tied to my legs. And yes, in case you’re not following me, in that analogy, you, my friend, are the boat anchor."

"So let’s talk traffic. We’ve got people who love this phone so much that they’re living on it. Yes, that’s crushing your network. Yes, 3% of your users are taking up 40% of your bandwidth. You see this as a bad thing. It’s not. It’s a good thing. It’s a blessing. It’s an indication that people love what we’re doing, which means you now have a reason to go out and double or triple or quadruple your… network capacity. I can’t believe I’m explaining this to you. You’re in the business of selling bandwidth. That pipe is what you sell. Right now what the market is telling you is that you can sell even more! Lots more! The world is changing, and you’re right in the sweet spot."

On innovation and building something of lasting value:

"While I’m ranting, let me ask you something, Randall: what has gone wrong with our country? Used to be, we were innovators. We were leaders. We were builders. We were engineers. We were the best and brightest. We were the kind of guys who, if they were running the biggest mobile network in the U.S., would say it’s not enough to be the biggest, we also want to be the best, and once they got to be the best, they’d say, How can we get even better? What can we do to be the best in the whole world? What can we do that would blow people’s minds? They wouldn’t have sat around wondering about ways to [mess with] people who loved their product. But then something happened. Guys like you took over the phone company and all you cared about was milking profit and paying off [folks] in Congress to [mess with] anyone who came along with a better idea, because even though it might be great for consumers it would mean you and your lazy pals would have to start working again in order to keep up."

"And not just you. Look at Big Three automakers. Same deal. Everyone focused on just getting what they can in the short run and who cares what kind of [horrible] product we’re putting out. Then somehow along the way the [people] on Wall Street got involved and became everyone’s enabler, devoting all their energy and brainpower to breaking things up and parceling them out and selling them off in pieces and then putting them back together again, and it was all about taking all this great [stuff] that our predecessors had built and “unlocking value” which really meant finding ways to leech out whatever bit of money they could get in the short run and [with little regard for the future.] It was all just one big swindle, and the only kind of engineering that matters anymore is financial engineering."

"And now here we are. Right here in your own backyard, an American company creates a brilliant phone, and that company hands it to you, and gives you an exclusive deal to carry it — and all you guys can do is complain about how much people want to use it. You, Randall Stephenson, and your lazy company — you are the problem. You are what’s wrong with this country."

"I stopped, then. There was nothing on the line. Silence. I said, Randall? He goes, Yeah, I’m here. I said, Does any of that make sense? He says, Yeah, but we’re still not going to do it. See, when you run the numbers what you find is that we’re actually better off running a [bad] network than making the investment to build a good one. It’s just numbers, Steve. You can’t charge enough to get a return on the investment."

"Now there was silence again. This time I was the one not talking. There was this weird lump in my throat, this tightness in my chest. I had this vision of the future — a ruined empire, run by number crunchers, squalid and stupid and puffed up with phony patriotism, settling for a long slow decline."

Dan Lyons is clearly going for a blend of comedy and commentary, but he touches on a few key points that hamper product developers as well as customers in meeting their goals. Gizmodo goes a step further and looks at how AT&T is scaling back efforts to upgrade their network.

This same thing is part of the reason for the decline of the music industry, as described by Kyle Bylin: it wasn’t digital music or file sharing that is responsible for the decline of the music industry, but their exclusive focus on "music as commerce" and ignoring "music as culture." Doing so meant that record labels were operating with blinders on, and again and again missed the opportunity to evolve and innovate. This created gaps that others – such as Apple – could fill.

The implosion of the music industry would have been hard to comprehend a decade ago, and should serve as a warning to those in other forms of media. As book publishers begin delaying ebook availability, you have to wonder if they truly understand what motivates book buyers, book sellers, authors and the larger ecosystem of the publishing community. Treating the product as nothing more than a commodity is not the way forward.

Story #2: Failing to Live Up to a Brand Promise

But let’s just say that a company has a fine product – something straightforward and useful. Here is an example from brand designer Alona Elkayam of a company who seems to go out of their way to make a customer’s life miserable:

"My two faced bank, Chase Manhattan, and I broke up last week. They slapped me with three $150 overdraft charges back in July and while it is obvious I don’t watch my account too closely, I happen to know that they do. I get calls from them often such as, “Hi, I have reviewed your account and noticed you might benefit from X Product or how about Y Product.” But, not once, not once has my Chase ever called me to say, “ Hi, I have reviewed your account and noticed you have excessive overdraft charges. Let us help you avoid these charges in the future.” So after the charges, I called them and asked them to please credit my account and please help me avoid these charges in the future with whatever tools they have (like mobile alerts or sweep accounts). Since I am a longtime client of fifteen years and they talk about “Relationships” all the time, surely they would help. They ended up crediting me a portion of the charges, but no one ever called me to restructure my account. You can imagine the phone shaped hole in my wall from my powerful thrust after I called them in response to overdraft charges in October 2009 in the amount of $801.00. I spoke to them about their slogan, “The Right Relationship is Everything” and how can “you and I be in a relationship if you win all the time.” A company can’t just talk about being human and building relationships, they actually have to be human."

What could Chase have done to keep this customer and live up to their brand promise? Seemingly – anything. What barriers were in their way? I’m sure they would have a long list. But read the next story to find out why none of these barriers really exist.

Story #3: Serving Customers’ Needs First

I had a surprising experience with Zappos recently – because again and again they surprised me with kindness and found ways to make it not just easy to attain my goals with them, but actually make it pleasant and fun. Yes, this is a story about buying shoes.

  • I purchased a pair of shoes from Zappos. When I tried them on, they seemed to fit fine.
  • After wearing them once, I noticed they chafed in annoying ways and were uncomfortable.
  • Assuming a break-in period was required, I wore them a few more times. But, the issue never went away, and they became downright painful to wear.
  • Knowing I would never wear them again, I figured I had nothing to lose in reaching out to Zappos.
  • I got on their online support chat system and said: "This is a silly question, but the shoes I ordered & wore several times hurt my feet so much, I won’t be able to wear them anymore. I know this is 100% my fault and you owe me nothing, but is there anything you can do?"
  • The online agent immediately said "yes" and told me to call their customer service phone line. (when was the last time ANY company you already bought something from TRIED to get you to call their customer service agents?!) She also indicated that they would be able to give me my money back.

  • I called their customer service line, and sure enough, the woman told me that not only would they be able to refund my money, and ship back the shoes for free, but that she said all of this in a pleasant voice and without any prodding on my end. And, they never put me on hold. My call was immediately connected, and never transferred between departments.
  • Instead of returning them, I exchanged them for a different shoe. This was 7pm the day before Thanksgiving. Unbelievably, the new shoes were on my porch the morning after Thanksgiving. I literally said "wow" when I saw the box on my porch. And, it was free shipping!

Surely there is a cost to doing business this way – Zappos is now left with a pair of shoes that they can’t resell and they spent money on shipping three separate times. But what they gained is something more than all the ads and billboards in the world could buy them: a loyal customer is who is very engaged with their brand and willing to go out of their way to evangelize on their behalf. After this experience, I also took the steps to add product reviews to their website, something I never had an interest in doing before. All told, they are creating an ecosystem around their company, and making their customers truly feel a part of it.

A simple Google search on "Zappos" and "customer service" gives you a list of articles that features stories just like this one. This is clearly a company that not only "cares," but delivers.

What was surprising to me was that it seemed as though every other retailer has spent my entire lifetime – 36 years – trying to prove to me that there were very strict limits on customer service. Zappos blew that up in one phone call.

Story #4: Creating Balance

The New York Times takes a look at the surprising success of a burger stand in New York called Shake Shack. What started as a whim by restaurateur Danny Meyer is turning into a very different kind of fast food chain.

Four Shacks will open in 2010, and a long-range plan calls for even more — will be persistent. Thoughtful. Considered. Crafted. Correct. In short, exactly what might be expected in a venture where the entire burger-management team honed its skills in three-star restaurants.

“A hamburger stand is a very democratizing amenity,” [Danny Meyer] said. “We hope that each new Shake Shack can become both a citizen of, and mirror of, their communities.”

He has put David Swinghamer — his longtime business partner — in charge of the Shacking of America. As Mr. Swinghamer says of the ramp-up: “This is not a formula that anyone else has, or would do.”

Shake Shacks “are profitable,” Mr. Meyer said. “They don’t need a robust economy to work. They have a highly focused menu. They are replicable. There is no reservation operation. There is no florist. And it’s a fun thing.”

Remarkably, with more than $4 million in yearly sales, each of the Manhattan Shacks outdistances both premium and mass-market burger chains. McDonald’s, for example, has an average of $2.29 million in yearly revenues from each of its 13,958 outlets, according to Technomic, a Chicago-based restaurant consultant. The Shacks also outdo a premium-burger legend, the Virginia-based Five Guys Burgers and Fries; its 535 stores each average $1.03 million in sales."

Mr. Meyer commented that “we will grow as broadly as we can, without losing the quality, the hospitality, the community. And the sense of humor.”

Compare this with practices of other well-known fast food chains, which are outlined in movies such as Food, Inc. and the book Fast Food Nation. The differences are profound in their affects on our communities and environment. Clearly, Mr. Meyer’s business is not the only way to go, but it is a great example of a business that is balanced, and wildly profitable.

Conclusion: Why Are You Here?

For some brands, an analysis of their practices leaves you feeling that they are committed only to revenue generation, regardless of how this affects the communities they serve. Even Harvard Business Review is exploring issues like this – how a focus on profit alone may not be the best way to actually realize that goal. Surely, many people have questioned the goals and purpose of the financial industry in the past 18 months – are they serving the needs of the few or the many?

When considering this for your own brand or product, one must consider if the concept of "commitment" has a boundary. Are people operating within narrowly defined roles, without concern for moving across barriers to actually service their customers? Does too close of a measurement of efficiency and return on investment mean that you are crippling your ability to create a truly remarkable product and experience?

Again and again I have come back to this interview with Russell Crowe about his definition of commitment and its affect on the end product. (Regardless of how you feel about him or his acting, it is worth seeking out that full episode of Inside the Actors Studio.)

Everyone in media needs to answer this question for themselves:

Are we rushing towards solving needs, creating brilliant products and getting people to love us? Or are we creating barriers, roadblocks, and tolls – and at each one, siphoning off more "value" in terms of incremental revenue? Is this the inspirational path to success – to making people fall in love with your product, your brand and your purpose? Are you a speedbump in the lives of your customers, or are you enabling their business, their dreams, and leaving them with smiles on their faces?

  • http://johnwlewis.wordpress.com John W Lewis

    Very well said, and written! For me, this touches so many points that I cannot hope to cover them in one comment; so a brief list follows.

    Having, from time to time, had customer service experiences which were similarly moving (in both directions!), it is obvious that serving the customer is the purpose of customer service! My examples: Dell (in its heyday), QA Training (in its heyday), Riverford Organics (today).

    As many have discovered, loyalty is the key: see books by Frederick F. Reichheld.

    It is so true that: “They don't care how much you know, until they know how much you care!”

    Enjoying your other posts too,
    John

  • http://www.danblank.com DanBlank

    Thanks John!

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