Linda's Marketing Leverage Blog

Driven to Distraction

In preparation for California's new hands-free cell phone law on July 1st, I finally broke down and bought a bluetooth wireless device.

Well, I actually bought my second bluetooth wireless device. I had bought one a couple of years ago, found it to be terribly annoying and not very useful and quite promptly lost it. This time I bought one of the more advanced models, the Jawbone, and I find it to be terribly annoying and not very useful. The good news is I haven't lost it yet.

For the last week or so, I've been walking around with this thing in my ear trying to get used to it. What I find is that I am significantly more distracted using this thing than I ever was either holding the phone in my hand or using the speakerphone. First I had to try two different earpieces and three different earbuds till I got a set that seems to sort of fit my ear somewhat. Then I have managed to either disconnect people who call, call people I don't mean to,  or try to talk out of the phone when the call goes to the headset or vice versa. I can't figure out how to make the volume go up and down in real time, and any advanced features are way beyond me.

This has got to be the law of unintended consequences to the max. Here's the story. I do believe there are some people who are very distracted when they talk on the cell phone, and many of these people talk and drive at the same time. I've seen them and so have you. However, I don't for a second believe that these folks will be any less distracted because they have this thing in their ear.

I also believe that these are the same people who long before cell phones were distracted by everything from the car radio to their kids in the back seat, reading the paper, looking at a map or GPS, etc. In other words, some people are just plain distracted. These are also the folks who probably can't multitask on even simple tasks. That's ok. They can work serially one task at a time.

The rest of us who can multitask fairly well and are even wired to perform better when we're multitasking are now stuck with a regulation that makes our lives more complicated and IMO less safe.

The CHP is supposedly sitting with baited breath just waiting to start citing people who are not hands-free next Tuesday. I just hope they will also take the time to stop all those people who are distracted by other things beyond cell phones, as well as those who are incapacitated and really shouldn't be driving in the first place.  But it might be too distracting to ask them to focus on more than one thing at a time.

The Most Expensive Five-Cent MasterCard Bill in History

Case Study in how not to do customer service...

My mother recently received a Citibank MasterCard bill for five cents. No, that's not a typo. The bill, which arrived via US Mail was for five cents, as in one single solitary nickel.

Her first thought was this must be a mistake. Then she realized what happened: She had gone to the automated postage machine at the post office to buy stamps when the postage rate increased last month. The machine took only credit cards. She swiped a credit card and attempted to buy several types of stamps, starting with five one-cent stamps to cover the new rate. The problem was the post office machine only allowed one purchase per credit card swipe, so she took her five one cent stamps and left, rather than spend all day at the machine generating multiple small transactions to get her stamps.

Fast forward to this week. A MasterCard bill arrives with this single five cent transaction on it. She calls Citibank where one of those paid-to-read-the-screen, not-to-have-an-original-thought call center representatives tells her she must pay the five cent bill by the due date, there are no options. The account rep does tell her that yes, there is another transaction that will appear on the following month's bill, however it is not acceptable to wait until the following month's billing to pay this month's five cent charge together with next month's charge. If she does this, the account will be considered overdue and both interest and late fees will apply. (Most credit card late fees start at $29/month; some are even higher.) Furthermore, in this age of subprime mortgage crisis, if her payment is late, her account will be reported as delinquent.

A long conversation ensued in a futile attempt to convince the rep how ridiculous this is (not to mention how costly to the credit card company as well as to the consumer). Still no luck. Finally, my mother says, fine, if that's the way you insist on treating me, cancel the credit card.I have plenty of others I can use.  Immediately, the rep's attitude changes and she transfers her to someone in card retention.

The next conversation goes something like this:

Card Retention Rep: I see you have been a card holder with us for over 22 years.
My Mother: That's correct. And you can also see I always pay my account on time, which is why I think you should just wait till next month for the five-cent charge.
CRR: I'm sorry ma'am. We can't do that. [Sort of reminds you of the computer HAL in 2001: A Space Odyssey, doesn't it?]
Mom: I don't understand why. It obviously cost you more than 5 cents to generate the bill, it will cost me more than that to mail the check, and it will cost you more than that to process and deposit the check. Why can't you add this to the following month's bill?
CRR: It's not in our policy.
Mom: Well, like I told the last rep,  your policy is pretty stupid. It is costing both you and me money so why don't you just cancel my card.
CRR: We really don't want you to cancel your card. Maybe I can look into this. Can you call back next week?
Mom: Why? What will be different then?

As of now, the situation is unresolved. In the meantime, Citibank has spent a ton of money on bill processing, payment and call center resources, a long-time cardholder is mad as hell and not willing to take it anymore, and, as mistreated and frustrated customers usually do, she is telling everyone she knows about this ridiculous situation. And, I, in turn, am telling you. All for a lousy five cents, which is less than 1/8th the cost of a first class stamp to begin with.

Here's how I see it:

Cost of five one-cent stamps                                                                                                                                           $.05
Cost to process statement for five cent balance                                                                                                   Several dollars at least
Cost for Citibank Master Card to mail statement for five cent balance                                                     $ .42 (slightly less if bulk mail)
Cost of toll free number and at least two call center resources tied up for over an hour on this call                          $100? Maybe more

Cost to Citibank MasterCard of alienating a long-term customer and propagating this stupidity through the blogosphere...          PRICELESS.

What's Wrong With Net Promoter Scores

The cover story of the June issue of Fortune Small Business (FSB) is about a customer metric called Net Promoter Score (NPS). NPS, championed by Frederick Reichheld,  measures customer satisfaction and referrals by calculating the promotion of customers who are promoters minus detractors.

As I noted in feedback to FSB, it is amazing to me how many people are reaching for the magic potion to solve their customer satisfaction issues.

If only customer satisfaction could be “fixed” with a simple number like NPS.

But life isn’t that easy. In the early 1990s , I helped build the customer loyalty program for a Fortune 500 computer systems company. We looked at various components of satisfaction and loyalty and we asked the NPS questions that Reichheld is now championing as a panacea.

What we found is that recommendation levels are very much culturally dependent. That means in certain countries or with certain ethnic groups scores will be inherently low or high, based on cultural norms, and there isn’t much you can do to change them.

For example, we had a huge market share in Japan and an extremely loyal customer base that was eager to repurchase our products. However, our lowest recommendation scores *worldwide* were always in Japan. Why? We began to realize that the Japanese are not likely to offer recommendations to anyone on anything--even when they love the product. Similiarly, we had extremely high recommendation scores in Latin countries, where customers are more open and more likely to make recommendations, yet this didn't necessarily correlate to market share.

We also found that what gets measured, gets managed. A focus on improving those recommendation scores that could be influenced distracted resources from fixing the real problems driving satisfaction and loyalty. When compensation is tied to a metric, employees will find a way to help move the metric--regardless of whether or not that achieves the bigger issue of increasing customer satisfaction and loyalty.

Since then, I’ve had the opportunity to do business with organizations that use NPS as a key metric. Heaven help you if you are ever labeled as a negative promoter (as I was with one rental car company who prides themselves on their adoption of NPS). The customer service I received was horrendous and all my attempts to get the situation resolved--up to the president of the company--were met with a cold shoulder. I was labeled a detractor and the system is set to reward those employees who move moderately happy customers to promoters, not to worry about those who are obviously unhappy. Interestingly, unhappy customers are more likely to tell many others about their bad experiences, and no one bothered to consider what the cost might be to ignore a detractor over the expected lifetime of my car rental experience. Let's just say, it's been their loss.

There are no magic potions. That’s true whether we’re talking about losing weight, getting rich, or increasing customer satisfaction. The simple truth is that nothing substitutes for hard work and discipline to attack the root cause of a problem. Be wary of those who promise to solve also your problems with one simple solution. Caveat emptor. 

We're Quoted in Business Week

Our post on the Invincibelle blog about Business Week's recent story comparing how men and women are weathering the current business economy was in turn picked up and published in Business Week's June 2nd Feedback column (online and in print).