Tag: customer service

Categories
business

O Customer, Where Art Thou?

KolejkaI really really REALLY don’t think there will be only one post about customers. Really. But I had to start somewhere, so here goes.

The way this laser hair removal place started acquiring customers was rather funny. The owner worked on the fifth floor of the same building in the similar laser hair removal place (only smaller and less clean) when suddenly the owner decided to call it a day. His customers were left out in the cold, many of them in the middle of their voucher deals or packages. The guy pretty much just packed and went home. Given that technicians (there were two) were in charge of their schedules, it was only natural that most of the customers had their personal cell phone numbers. So when the business closed they started ringing up the technicians. Instead of brushing off they decided to explain the situation and offer these customers an option to wait until this new business is up. Since all of this was happening during summer – not the best time for laser skin treatments – a lot of customers agreed to wait it out. There were some misunderstandings and a lot of angry words exchanged, but at the end of the day most of it got resolved.

Once the place was up and running the owner got on the phone again reaching out to old customers. Of course, it wasn’t overly smart to offer them to complete the treatment for which they paid someone else. However, the thinking was that a couple of sessions wouldn’t be that big of a price if the owner would be able to sell them a package of her own. It didn’t always work, but the place got their schedule up and running pretty quick and people were coming in every day.

customer_queueWe started ringing up deal sites. It was a bit unexpected (although understandable) when some of the sites refused to deal with a new business because it was new business. Other sites couldn’t care less. Groupon was the first to take us on, their only focus was pricing – they low balled us to something almost totally outrageous. We haven’t had much experience with any deal sites from the merchant perspective, so it was sort of a revelation to find out how these sites treat both merchants and customers. Words like “customer loyalty” and “quality customer base” started making a whole new world of sense.

One of the sites (I think it was LivingSocial) flat out told us to go and buy likes on Facebook (either through FB’s own ad campaign or otherwise), because they will only deal with us if we have at least 100 or so likes on Facebook. Not a big deal, but if you had your company opened a week ago a hundred likes might seem like a problem. Amazon Local demanded a certain rating on Yelp in order to run our deal. When I flat out asked “So you’re Yelp’s bitch now?” they really had nothing to say except “effectively – yes”. One of the largest deal sites on the market being subject to restrictions of another company, well known for their shady practices of falsifying a businesses’ ratings and reviews – that was just too funny.

Still we managed to get some of our deals up on Groupon, Lifebooker, KGB Deals and, eventually, Amazon and LivingSocial – some time later. That’s when the “customer quality”, “customer loyalty” (or “customer retention”) started making all kinds of different sense.

Let me get this out of the way. 90% of coupon customers aren’t worth the time you spend with them on the phone to schedule an appointment. It’s the other 10% that are the reason for doing the coupon site deals. Each category, obviously, deserves a separate post – which I will probably have to do, eventually.

Strange as it seems there actually is a difference between clients coming different coupon sites. The deep dive probably deserve a separate post altogether, but in a nutshell – we’ve seen the worst coming from Groupon and Lifebooker, the rest are marginally better. One thing where you may regret having loyal coupon customers is when they like you so much they keep buying vouchers all over the place – whatever it takes as long as they keep getting treatments at your place at coupon price. They will never convert and they keep bringing more loyal coupon users, so we decided to force “New customers only” rule on most of our deal contracts after the first wave. It may not sound nice to customers, but it’s a way to cut losses. If they like our services so much they should definitely try to negotiate a deal (and it’s always a possibility with the business like this), instead of trying to cheat your way through.

Here’s a little story to explain.

We had one customer who absolutely loved our service. At least that’s what she said during first five sessions of her coupon treatment. She went and bought four more vouchers (from the same deal site – we didn’t have any other deals running at that moment) – using friends’ credit card with option to “gift” a voucher to someone else. When we pointed out she was effectively cheating the coupon site and gaming the system and that we refuse to honor more than two vouchers out of all five she owned (a perfectly legal move based on our contract with coupon site which stated “one voucher per client plus one as a gift” – or something like that) she decided that we have the worst place ever. She complained to deal site – and they confirmed we did the right thing and warned to ban her AND her friends from the site for cheating. She demanded that we provide her with free session for this occurrence of horrible customer service. She promised she will write a negative review on Yelp – which she did, calling us liars for not honoring a single voucher. Not that we care much about Yelp (we’re not paying them to remove bad reviews, so there’s that), but we took note and responded to review, of course, explaining what exactly happened and how the customer was in the wrong. Given that you can’t really inject any brains or conscience into such customers we decided to implement “new customers only” rule. At least it saves us from drama at the office.

Categories
business

Truth About Deal Sites. Part 2 – While You’re At It

Dealing with clients who are coming from coupon sites is a whole different can of worms compared to regular clients (and a form of entertainment – if you are into that sort of thing). The mentality of a person, buying under-priced deals and expecting same or better level of everything: service, attention and respect is beyond me. If you are buying something tangible (say – a tablet or another gadget) with 80% discount, you can realize that you are buying a four-year old model that someone overstocked on awhile ago. You get what you pay for. When it comes to services this understanding goes away. People expect getting $600 worth of service for $99. Let me break a hard truth to you – if a company is providing a six-hundred-dollar service exactly the same way for a hundred dollars they are either selling an overpriced service or they are losing money.

Let’s look at it from money perspective.

Most of laser hair removal treatments come in packages of six. Let’s say you purchase six sessions on a small area for $99 on a deal site (the most common purchase so far). Looks reasonable, right? Only $16.50 per session – close to lunch money, if you’re in Manhattan. With coupon sites splitting the check around 50/50 (they get half and merchant is getting half – or close to that), the business only sees half of the money you paid. Which means they are making $8.25 per treatment.

An average laser technician is making in the vicinity of 10 – 15 dollars per hour. Some places pay a percentage off of each treatment on top of that. Some let the technician keep all their tips (instead of, say, sharing all tips across all technicians who worked that day) and allow them to sell and make a percentage off the sold treatment. But for the sake of simplicity let’s settle on $15 per hour as a close approximation to hourly rate and percentages. Surely, a small area doesn’t take an hour to do, but even the busiest places can hardly squeeze a small area into less than 10 minutes – with client getting in, prepping or applying gel, treating, signing consent form, removing gel, etc, etc. Facial treatments are even longer, because you have to be more careful with the treatment itself. So we can expect an average technician to perform about five small area treatments per hour if she worked like a factory worker at a conveyor belt. Let’s not discuss the fact that you don’t want to be treated like a piece of machinery, but rather like a human being. So an hour of one technician’s work can generate close to $40 of revenue. Out of which $15 dollars is her salary alone. Which leaves business with $25 per hour to cover the rest. There are lost appointments (when customer cancels or reschedules at the last minute and there’s no one else to put in his/her appointment slot), laser machines payments (a single good laser machine can cost up to $200,000 plus its own maintenance and insurance plans), supplies, utilities, rent, business insurance, maintenance, salary of the receptionist (if there is one) to consider as well. If you add all costs together, a business can consider itself lucky if they break even on a coupon sale. It gets worse if a deal site starts competing with another deal site and tries to bring your coupon price from $99 to $79 (for the lazy – a business is then makes $6.58 – just over a price of cup of coffee at Starbucks). It gets worse on larger areas, that’s why most of businesses stopped selling large areas on coupon sites. In other words – it’s next to impossible to make money on coupons, your best bet is not to loose money on it and hope to convert.

Given that, business owners are doing two things. First and foremost – they are trying to upsell coupon customers – obviously. A converted customer is the only way to make money on a coupon sale. Recently we noticed some coupon customers complaining on Yelp that businesses are trying to sell them other packages. How dare they! The fact that Yelp decides to publish these reviews also tells you about the overall quality of their review system. But that’s whole another story.

Second thing any reasonable business owner would do is to try and minimize his costs on coupon customers – especially those who don’t convert. Given that each customer gets six treatments, a business has about four to five chances to sell to one particular customer (it’s almost impossible to sell on first visit or two, so I am discounting for that). Some customers complain that their treatment at our place took longer than at other places. That’s because at their previous place they weren’t converting and that business owner decided not to waste technician’s time on these clients. They still got their treatment, but without the regular zeal and a lot faster – as their own words confirm.

Speaking of mentality of coupon buyers even coupon agents themselves note that customer loyalty on coupon sites doesn’t exist. The whole coupon industry have groomed a special kind of customers who shop based on price alone. In my many negotiations with deal sites one of the reasons cited to me was literally “if we make our coupon one dollar more than competition – no one will buy, they will go with the lowest price”. It’s not necessarily the absolute truth, as we found out in our running, but it is the general case.

Another edge of this, apparently, multiple-edged knife, is the next level of deal-searcher. They like a place, but really don’t want to spend money. They load up on coupons purchased through multiple credit cards so that coupon site cannot track and enforce their “one voucher per customer” rule and show up at the door with stack of vouchers (the most we have seen so far was six vouchers for one client – all purchased through multiple accounts with slightly different name) and demand the service because they “have a voucher you must honor”. If for some reason a business owner isn’t around to intervene – they have a chance to succeed in getting their treatment, because a technician or receptionist don’t have any say in these matters. The proper course of action, of course, is to call the coupon site’s customer service and let them deal with a cheater. From my experience most of deal sites do their best to protect merchants in such cases, but it requires some effort.

To add injury to insult – the coupon clientele is the most vocal when it comes to complaints. If you cannot accommodate their appointment this week they will call the voucher company and tell them they can’t get in touch for weeks (this is mostly entertaining when they have purchased their voucher a day ago) with you or you’re booked for three months or some such nonsense. Surprisingly, people who are purchasing direct (even if with a discount) are usually very respectful and a lot easier to work with. Guess they understand the concept “you get what you paid for” much better.

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    Categories
    annoyances

    UPS – Just When I Thought I’m Out They Pulled Me Back In

    UPS Troubles
    UPS Troubles

    Just when I was about to write how our local UPS office picked up the ball after main office dropped it – they blew it above the sky. Hour later I got a call from our local UPS office and nice lady promised that driver would contact me about an hour before dropping off my package AND drop-off will happen after five. Well, I said, thank you, this really saves me a lot of trouble.

    I got home something before six o’clock and find a third UPS InfoNotice flying on the floor. Which means that driver didn’t call me, at least I haven’t seen any missed calls on my phone. Tough luck, I said, and drove my 30 minutes to UPS pickup location. Today was a lights-on day, since the garbage truck garage across from UPS yard was lit to its fullest. Nice teamwork! Got inside at around 9:30pm – and the line was worse than those at the airport on Thanksgiving. In just under 30 minutes I got to the clerk who grabbed my InfoNotice and went after my package. In about two minutes he emerged back only to tell me that… they lost my package. “It’s somewhere in the building, we just can’t find it”. Nice. The guy seemed upset that I came over for the missing package and I kind of agreed that I was better off picking up the package that wasn’t missing. But this is life and my package that UPS was trying to deliver three times got lost. Guess it got upset too.

    Now to the brighter part. Few hours after I’ve published the previous post I got a comment from UPS’s PR lady. I held off the comment until I came back from pickup to at least say that the problem got resolved. Well it’s not and it’s not actually my problem. Here’s why.

    UPS is best if you order something to the location where you are present during business hours. These guys probably great for serving businesses and all, but regular folks who work day jobs and hope they can get their stuff after hours get sidestepped. I’d rather take my wife to a movie or take her out on a Friday night than spend hour and half picking up stuff that was supposed to be delivered three days ago. So, here my words to Debbie, who wrote “you’ve really had a hassle with this shipment“. Debbie, I hadn’t had a hassle. It’s the way UPS works for all who can’t schedule a delivery to their work address. That’s the kind of service (or rather lack of it) that all those people in line at 10PM on Friday night are getting. It would be just honest to state right there on your brown web site: “We’re doing business from 9 to 5. If you want to pick up your stuff any other time – come and get it yourself, you loosers”.

    Rant mode off. Debbie, this is still for you, though. The economy is tough, and if tomorrow someone’s gonna start a shitstorm on Twitter about how not to use UPS but use FedEx or USPS instead – you gonna have a problem. I don’t depend on UPS in my ways of doing business, but I have plenty of clients who do and they aren’t all that satisfied either. Here’s the moment of opportunity and innovation for UPS. Google the term “cell phone”. I’ve heard they’re good in establishing a two-way communication between two people, in your case – the driver and dispatch. You can also google “blackberry” and “gps phone”. Sending one-way messages to driver’s pager is so last century. Call those guys at Sprint, AT&T or Verizon, get a contract. I’m sure with tough times like these you will have an upper hand in negotiation a good deal. Next step – map your drivers. Know exactly where they are any time of the day. If you need someone to do it for you – hire me, I can get this done for you. Next step (here comes the trick!) – ask your customers when they want their package delivered. Seriously. For real. Don’t just game the numbers (“we deliver more packages…”), but actually deliver them. When customers want. Here’s how: you have live traffic maps (Google does it as well as other providers) plus you have exact location of each of your drivers. You can minimize their time driving by reshaping their route in real time according to traffic patterns. This means less gas burned, less time wasted, less destinations visited multiple times. With the money saved ask a quarter of your drivers to work second shift – from 2pm to 11pm. You won’t need many people because I imagine most of the deliveries would still be within 8 to 6 time frame. You already charge a bit more for residential deliveries, so here’s a way to put those extras plus whatever you saved to good use. This will unload the 8 to 6 schedule somewhat and reduce return trips. I’m sure you can have your own quality improvement department cough up the real numbers to do the math. But in addition to this all – you will get a customer satisfaction beyond any imaginable level. Which means – more business for your company. Isn’t it a win-win?