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Service Failure: Samsung June 19, 2013

Posted by David Dirks in Building trust, Customer Service.
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DirksProPhotoI own a great Samsung DLP TV and have had it for about five years.  Just recently the color started faltering so I went online and sent a request on the Samsung service site for some…service.  A few days later I received an email from someone from the CA offices of Samsung.  Their email stated in part that they would make three attempts to contact us to arrange service.  He noted in his email that this was their first attempt.  So…I emailed him back the same day – thinking time was everything.

The next day – after only the first attempt – Samsung sent me an email to let me know they cancelled my request for service.  No reason.  Just canceled.  So, I emailed the nice fellow (had no phone number or otherwise I would have just called him).  I let him know that I had just rec’d a note from Samsung stating they cancelled my service request and that I in fact WANTED service – a paying customer!

Result:  Nothing.  No email response.  No nothing.  And of course, no service.  Well, that was the end of my efforts to work directly with Samsung and their dedicated service provider.

Ok.  So the next day I go online and find a local TV repair service.  I fill out the service request form and send it via  their website.  Result: No call since and it’s been three days.  I guess they are just too busy for a PAYING CUSTOMER like myself.  What business are these people in?

What to do?  I turn to Sears.  I go online and within a few minutes am able to schedule a service appointment.  Done.  Now let’s see if they show up.  I’ll let you know how this saga plays out in a subsequent blog post.  Stay tuned.

UPDATE 070213: So Sears won the day.  Not only was I easily able to set up an appointment for a repair person to come out to my house they also called to confirm the appointment (on top of the email confirmation).  The repair person was professional, clean and knew his stuff.  Problem solved for only $99.00 (which is credited to any repairs too).

Those other guys who never called me?  I found out later that they are just about out of business.  No wonder.

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Community Marketing: Fact vs. Fiction April 12, 2013

Posted by David Dirks in Community Marketing.
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David Dirks

David Dirks

One underutilized area of marketing is where a business supports one or a few local community events and/or organizations.  I say it’s underutilized primarily because most businesses I know are often not quite sure how to relate support with business needs.  Then there’s the issue of why it’s good business to support local organizations and what are the best ways to support them.  Here’s my list of ‘fact vs. fiction’ when it comes to what I call community marketing:

Facts:

  • Community marketing can be strategically important to a small businesses.  Sure, you can ignore the world around you but smart businesses who support community events and organizations reap the benefits of establishing additional good will and brand equity within the community.  Helping non-profit organizations in a real and genuine way raises your stature and your businesses stature in your community.
  • Focusing on the “giving” part means that the business benefits to you take care of themselves and accrue in different ways.  Most people can see through a person and/or business that’s clearly providing community support in the interest of only getting more business for themselves.  Be selfless in this case.

Fiction:

  • You have to spend money to support community-based organizations.  Yes but often they want your time as a volunteer to sit on a board or committee…they really could use your brainpower but the money helps too.  Perhaps you support them by lending them some manpower from your business for an event.  Whatever it is, it isn’t just about supporting with direct dollars.
  • Buying ads in community-based events will drive business.  No, it won’t.  You have better chance of winning the Powerball.  Why? First, ads in community-event flyers have a life expectancy of about 10 seconds.  Don’t believe me?  Where do you think these printed booklets often go?  On someones coffee table?  On their fridge?  Taped onto a wall? In their purse?  No, most are left on the floor or table on the night of the event.  Secondly, it takes more than one ad impression to get people to respond to your ad.  In fact, it takes at least 3 impressions to get anyone to notice you at all.  So you think that one 5 x 5 ad in the community flyer is going to drive your business? Make the phones ring?  Rookie mistake.  The real reason you buy ads in community events is TO SHOW YOUR SUPPORT AND PROVIDE THEM WITH A SOURCE OF FUNDING.  That’s it.
  • Advertising in community based publications is branding.  No, it’s not – at least not like Nike.  You’re not Nike and spending a few hundred dollars per year to maybe $2k or $3k won’t make you a household name either.  Why?  Again, because the life expectancy of most community publications is minute and the amount of people who actually bother to look at the ads is even less.  If advertising is your focus for branding or business development, you’re focusing on the wrong thing. Instead, build your business brand by building strong and positive relationships as you network through the community.
  • You should never expect any business resulting from your involvement in a community-based organization.  Wrong.  The difference is that you should never hold your support for any community-based organization hostage to your demand to drive business in your direction. People will see through your real motives and your reputation will be tainted as such.

Want to know how the real community players (I mean that as professional business people who are genuine in their support) get more business?  They network.  They development genuine professional relationships with other business people.  People like to support other people who have like-minded interests.  You can get more business by being a consistent and genuine supporter of community organizations if you focus on helping the organization and leveraging the relationships of the people you meet along the way.

Learning point:  If you want to meet other successful business owners and other key community influencers, working to help better community-based organizations is where you will find them.  Just look at the boards of some of your community organizations?  Whose on them? Losers? I think not.

Supporting community-based organizations can be a very smart investment of both time and money if you are genuine and really committed to helping them.

Driving Foot Traffic: Woolworth’s Style December 14, 2012

Posted by David Dirks in Driving Store Traffic, Retailer Store Strategies, Sales Strategy/Tactics, Solving Business Problems, Strategy.
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David Dirks

David Dirks

It took the latest issue of Businessweek to remind of that oftentimes what is new is old.  Case in point: the Woolworth’s food counter.  Remember (for those of you who are old enough to) the days when you local Woolworth’s store had a lunch counter where great, cheap hamburgers, fries and a great milkshake where just across from those square product bins that checkered the store?  Woolworth’s was a pioneer in creating a way to drive foot traffic with something that had nothing directly connected to the products they sold.  By having a soda fountain style lunch counter, there sales per square foot where for a long time better than average.

The lunch counter couldn’t save Woolworth’s from going out of business after decades of success but the idea of driving traffic by providing food lives on.  Nordstrom operates about 200 restaurants of one kind or another, including coffee bars.  Barnes & Noble developed its coffee bar concept to drive traffic and create a reason for people to hang around the store longer.  You’ll also notice that the coffee bar is a place where people meet to socialize.  They know what Woolworth’s long understood: The longer they stay, the more chance they will buy.

So am I suggesting that brick & mortar store owner rig up the BBQ and serve up some burgers?  Not exactly.  What I am suggesting is that in the battle of driving foot traffic it might be that food or drink (coffee bar?) might just do the trick.  As I always say, there is no magic bullet for creating foot traffic – only hard work and great execution wins the day.

What can you do to create ways for people to want to come to your store and stay a bit longer?  Think about it.

On Being “Creative” October 27, 2011

Posted by David Dirks in Innovation: Not Just for the Big Dogz.
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“People who earn the label ‘creative’ are really just people who come up with more combination of ideas, finding interesting ones faster, and are willing to try them out.  The problem is that most schools and organizations train us out of these habits.”  (Scott Berkun as interviewed by Guy Kawasaki in his excellent book, Reality Check).

For as much time as we all seem to spend trying to get to the essence of innovation in ideas, products, services, or whatever, it really does come down to being willing to mix and match different ideas, concepts, thoughts, and experiences and culling out of that process the best creative ideas.  The reality though is that not everyone has that ‘mix & match’ mentality built into their thinking processes.  I also think there are a couple of important components to what Berkum noted.

We can fall victim to our own experiences…good, bad or indifferent.  Being able to step out of your own viewpoint is not easy to do but vital if you want to get beyond the concreteness of your own perceptions on any subject.  By training, we try to put every idea and thought into a category box that we think it fits in.

There is creativity in numbers (but not too many).   The power of one is never better than the power of many but you can over do that like anything else.  Over the years, I’ve found that a rule of thumb for creative problem solving is at least 5 but no more than 10.  And when you can pick a team, pick from a variety of backgrounds and areas of knowledge.  Variety is the spice of creative and innovative thinking.

Defining the problem or challenge clearly and concisely a must.  We’ve all been in those meetings where we are trying to tackle a problem but keep going in circles, never quite getting at the kernel of an idea that could potentially lead to a workable solution.  In most cases, the cause for this cluster is a lack of problem definition.

Capture every kernel of an idea or thought.  I’m a big flip-chart guy.  Put me in a room with people and flip chart and I’m capturing thoughts, ideas, and anything else that moves in that room.  It doesn’t’ have to be neat.  You can always go and sort things out later.  But capture as much input as develops during the course of the discussion….AND DON’T EDIT.  Make sure you are capturing the thoughts and ideas of others in the context they mean it in…instead of slanting it in the context you want.  After a problem solving type meeting, I like nothing better than going back to my office and paper my walls with the charts and just stare at them for a while over a few days.  That’s when ideas start to form and gel.

Prototype and test.  Fast.  Berkun notes, “The best bet is to be an experimenter, a tinkerer — to learn to try out ideas cheaply and quickly and to get out there with people instead of fantasizing in ivory towers.”

Look, there’s no ‘secret sauce’ to creativity and innovation…just plenty of hard work & trial and error.  That’s why we love to solve problems, isn’t it?

When Getting Bigger Isn’t Better March 14, 2010

Posted by David Dirks in business strategy, Diagnosing performance problems, Fixing performance problems.
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A recent headline in the Wall Street Journal: Monster to Acquire HotJobs.  As soon as I read that headline, I knew it meant trouble.  Let me put this headline into context for you: When companies run into major challenges (aka trouble) and can find few answers to meet those challenges, they resort to buying another big competitor.  Remember when HP bought Compaq a few years ago?  HP was trying to find it’s way through a dismal personal computer market and groped for an answer by buying Compaq, which was also groping along.  Two gropes do not make for a good business strategy.  Result for HP?  The CEO was ousted after the HP board ran out of patience waiting for good to come out of that mega-merger.

On the surface, its very tempting to buy a rival who sometimes can be bought cheaply…sometimes not so.  The typical formula is this:  merge – cut costs wherever possible during the merger + instant market share = profits that flow from being bigger.  Well maybe.  In too many cases, buying another competitor to gain market share and profits means more of the same problems just in a bigger package now.

Sears buying Kmart is another great example of when getting bigger is not better.  Sears has been looking for a purpose for decades now and was already sickly.  At the time of the merger, Kmart was just about on a death watch from a retailing perspective.  The result?  The disease never went away.  Sears and Kmart are just as dismal performers than ever.

The giant job search database called Monster has seen it’s market strength zapped by low-cost players like LinkedIn and by savvy recruiters who now use business networking and social media platforms like Facebook to find great job candidates.  More companies are providing financial incentives for their employees to enlist their help in the recruitment effort.  Monster, once the king of the job search road, has found itself searching for ways to grapple with declining revenues and aggressive social media competitors.  The landscape for job search databases is forcing change.

For its part, Yahoo is looking to shed assets for cash but ends up the real loser.  According to the WSJ, Yahoo bought HotJobs in the heat of the dot com era for $436 million and is now selling it to Monster for a mear $225 million in cash.  Nice going Yahoo.

Getting bigger as a way to answer for declining revenues and market share is generally not a good business strategy.  History is full of great examples of this strategy.  Despite the hindsight, companies continue to grope for answers by spending money that could probably be used elsewher

What’s Your Profit Strategy? November 27, 2009

Posted by David Dirks in business strategy, Management, Solving Business Problems.
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The headline from a recent article in the Wall Street Journal:  “PSA Chief Unviels Profit Strategy”.  It seems that PSA Peugeot (the car maker), reeling from the car industry woes, is about six percentage points below the average operating margins of five of its best competitors.  The new CEO has declared that 55% of his project increase in profits over his 3 year plan will come from general cost cutting.  The balance of his estimated increase in profits will be generated by increased sales in high growth markets and better sales performance in Europe.

I noted a couple of simple things.  When a business is in dire trouble from a profit point of view, the 911 is on creating a ‘profit strategy’ that is designed to get a business back on the right track.

How does that profit strategy take shape?  If you study profit strategies of companies seeking to climb out of losses and into the green of profitability, you begin to see a few basic ideas:

1.  Wringing excess out of the overall cost structure of a business wherever possible. This is typically where the bulk of profit improvement generally comes from.  The responses to this strategy run the gamut. Some businesses undertake a slash and burn process without much thought to the what, why, when, where, and how of cost cutting.  That results in sometimes creating more weakness in the business by cutting out things that are critical to operational effectiveness the real excess.

The other side of the equation are those businesses that are slow to make the needed cuts that gives them the ability to redirect resources to other key areas of their business.  That slow response to incrementally reducing costs over time can lead to a sudden rush to implement draconian cost-cutting measures of all shapes and sizes.

There is no easy answer to how to approach cost cutting as a strategy for managing a business.  If you think about it, shouldn’t we always be looking for opportunities to wring the waste from our businesses wherever possible?  Companies like Walmart have created a culture of making sure that expenses are always measured and alternatives can be generated to reduce them.

Unfortunately, that’s not how many businesses operate.  I was once told that profitability can cover a lot of mistakes.  True enough, when times are good and cash flow is everywhere (the good old days!), we can be much more liberal in our overall spend.  Sometimes, our businesses can suffer from ‘cost structure creep’.  One day you wake up and wonder how you ended up with such bloated pockets of expenses.

If there are any redeeming values for an economic downturn is that it creates an opportunity to manage expenses like we should have done anyway.

2.  Selling assets to pay down debt & refinancing short term debt. AB InBev, the firm that bought the mega American beer maker Anheuser-Busch did just that after the merger and the economy created a drag on profits.  That strategy lead to a healthy increase in overall profitability despite a decline in overall sales of about 10% worldwide.  Getting rid of assets that are not essential and/or central to the core business you are in is always a great way to reduce expenses and, most importantly, re-direct resources to those areas of the business that need it most.  In the case of AB InBev, the need to increase sales volume and protect its most valuable brands, like Becks, Bud, and Stella Artois is going to take some additional investment…investment that will come from the increase in profits that can be redeployed for those efforts.

3.  Cost cutting is never a substitute for investing in your core business. AB InBev has opportunities to sell more of its Budweiser branded beers in different markets where they have an already well-established marketing and distribution platform.  They are also introducing some new beer products like Bud Select 55 and Bud Light Golden Wheat.  Those are key strategies and initiatives that require investment in their core business and brands.

Another example would be Chrysler.  There is a company that could probably cut costs all day long and never approach profitability.  Aside from their auto industry and economy woes, Chrysler forgot (or perhaps it’s last owners, Mercerdes Benz, ‘forgot’) to invest in new products to help it stabilize and maintain market share.  Instead, Chrysler now has the least amount of product coming through its business compared to just about any other competitor.  Cutting investment in their core business and reducing the percentage of their car line that they replace over time with newer models was clearly not an effective cost cutting tool for them. The result is continual bleeding of profits and loss of market share in an already troubled industry.

4.  In times of peace, prepare for war.  In times of war, prepare for peace. I’m not sure who said this statement but I didn’t create it.  However, it does have immense implications for how we deal with economic upturns and downturns.  In times of robust economic growth, particular focus needs to be paid to how we manage our expense structure and how we allocate investments in our core business.  When the economy turns sour and if we have been diligent in managing our costs, we’ll have the ability to invest in our core business (creating new products, expanding into new or emerging markets, buying additional market share through acquisition, etc.) when everybody else is scurrying to cut out or drastically reduce costs and investments into the core business.

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We’re quick to focus a lot of our energies on the usual suspects of strategy:  product, competitive, marketing, sales, and operation.  I would also include making an investment in a ‘profit strategy’ as well as an overall guiding influence over all other strategies.  A profit strategy should answer to basic questions:

  • Where are we going to wring out excess in our business and why?
  • What areas of our business deserve additional investment to help us meet our profitability targets?

Both of these questions have implications for the short, intermediate, and long term health of our business.