A few days ago, an ad came on Hulu where Tom’s of Maine talked about their company’s philosophy. I’ve always loved this company, find their products to be top notch, and admired their philosophy. Though I’ve become increasingly irritated with companies lately making open promises about becoming green, caring about the environment and helping communities. Read more
Month: December 2010
Ecommerce and Tolerance
I’ve ranted verbosely in the past about the customer service industry going down the tubes (Adventures in Small Business Banking, One Voice, A Representative Will Be With You Shortly, Network Solutions is Utter Garbage, and recently, Guaranteed Value vs. Value Assessments) where much was stemming from experiences with online orders, so the following short tirade will certainly not seem out of character.
In an industry where 90% of the transaction is automated and inexpensive, unlike that of real estate, used car sales or even graphic design, it would seem pretty obvious that the best way to retain ecommerce customers is through a gratifying and easy online experience. If I collected money from a client under the agreement that I would deliver a design work on-time, I could assume the client would be dissatisfied when I followed up with a form letter informing them of upcoming truancy.
Their anger might even be compounded if the letter was cold, impersonal and offered no explanation for the reason of this delay—other than the fact that the issue was on my end and I’m working on it. To further add insult to the client, I might also include that I couldn’t tell them how long the delay was, except that it could be as short as 12 hours. Not communicating the reason for an issue, but sending a templated response informing the client of the second best possible scenario (other than the product being delivered on-time) is an empty method to pacify the disgruntled. I certainly understand that not all industries can quantify this equally, so providing graphic design services and mailing a widget from a colossal warehouse do not perfectly correlate. However I do think that expectations correlate, customers—particularly in a competitive market—correlate, and the services-for-cash system correlates.
Guaranteed Value vs. Value Assessments (or MyPanera vs. My Starbucks Rewards)
Due to recent conversations that I’ve had with clients in friends, I’ve been thinking a lot about consumer behavior surrounding discounted items. One of my clients attests the following, which I found the be pretty interesting:
The current emphasis on web coupons and social site tie ins neglects another fundamental rule of retailing: guaranteed value. We tend to buy high-priced items at discount because we perceive that we are getting a good deal. But the same psychology works in reverse sometimes. We believe we are being overcharged unless we are getting a discount. Without guaranteed value, we tend to decide to purchase at the last moment, or decide not to purchase in advance because we assume or fear the price will be too high.
In this argument, he goes on to note spending habits on airline tickets, hotel rooms, Netflix and other luxury items like those offered by Groupon. Granted, I’m giving you a snippet of this client’s argument without the full context, but the point is pretty clear. The notion of discounts genuinely changes buying habits for certain items and services. It’s absolutely true that I may decide which mode of transportation (much less which airline) to book for a family vacation. The airline industry, particularly with the emergence of discount fliers like Ryan Air and jet blue, show a pristine example of buying habits and how discounts dissuade consumers from spending money on what once was a pretty average price. However, this mentality certainly doesn’t work for all purchases. Read more