The sign that the end is near

Circuit City announced recently in a press release one change “to improve [it’s] financial performance”:

The company has completed a wage management initiative that will result in the separation of approximately 3,400 store Associates. The separations, which are occurring today [April 28th, 2007], focused on Associates who were paid well above the market-based salary range for their role. New Associates will be hired for these positions and compensated at the current market range for the job.

Ouch! What a slap in the face.

The only reasons I could think of that an employee would be paid “well above the market-based salary range” would be:

  1. Their expertise in the industry
  2. Their longevity in the industry
  3. A combination of 1 and 2

In other words, get rid of the best employees and make a company that is destined for failure. It may be too late, but what if Circuit City would have taken the opposite approach to differentiate itself? Instead of firing the best employees, get rid of the employees that did not provide the optimal customer experience and replace them with employees who would. I’ll tell you why…Circuit City must think of itself as a commodity with nothing to differentiate itself. It’s vanilla.

I think the end is near my friends!

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Customer Service is dead

Tom Asacker delivers another thought provoking piece in his article, Customer Service is Dead!. Here is just one quote to get you started:

Customer service should now be thought of as the customer experience department, and its mandate should be to purposefully and tenaciously help the organization design the best darn customer experience possible. Customer service is, in fact, dead. Long live the customer experience!

Happy reading!

The great business Easter egg hunt

Ah, yes. Springtime in the US– A time for baseball, time spent outdoors and of course Easter egg hunts. We can learn a lot about business by watching children during an Easter egg hunt.

Easter Egg HuntRemember as a kid when participated in an Easter egg hunt? You heard the magical word “go!” and your heart raced as you headed for the middle of the lawn where the eggs were easily seen. However, since most of the other kids also gravitated to the middle of the lawn, you were often met with sharp elbows, pushing and shoving and other scenes that were better left for WrestleMania. If you were a bigger kid or a bully (heaven forbid!) you did quite well in the middle. However, most kids that headed for the middle of the lawn came away with little or nothing at all because the competition in the middle was fierce.

Contrast this to the children who looked to the boundaries of the lawn. They often found little or no competition. They were left to themselves to grab the hidden gems in the cool grass of the edges of the lawn.

Your market is like a large Easter egg hunt -most companies fight for the middle of the market, the mass market. The middle looks very tempting because of its size. However, there is nothing exciting about the middle. This market often only contains homogeneous, morphed products or services that try (unsuccessfully) to be all things to all people. Instead, look to the boundaries (or the extremes) of your market – become über-luxury (Starbucks), über-inexpensive (Wal-Mart), über-fast (FedEx), über-customer friendly (Nordstrom), über-small (the Mini), über-big (the Hummer) or über-different (Apple).

Whatever you do, just get to the boundaries first and become the best in that category. The boundaries are where the flagrant (or “obviously inconsistent from the norm”) products and services can be found getting most of the word of mouth on the playground.

A must read

If you haven’t stopped by the Gaping Void lately, there is a must read about corporate blogging (or blogging in general). Enjoy!

When a crisis happens

Menu Foods, a Canadian pet food manufacturer, distributes dog and cat food sold under Wal-Mart, Safeway, Kroger and other store brands. Last Friday it recalled 60 million containers of wet pet food Friday after reports of kidney failure and deaths.

In an attempt to calm fears and answer frantic questions, Menu Foods has set up a website and toll-free number for consumers to get answers to their questions. However, the website has minimal information and according to some pet owners, conflicting information. As for the toll-free line, it is constantly busy. From a marketing and public relations point of view, Menu Foods is leaving many pet owners in the dark.

Leaving your customers in the dark will only lead to fear and misinformation. When the lights come back on, you may only be left with a “trust account” that is overdrawn.

In case you find your company in a crisis, this may is a good time to go over the 10 steps in crisis communications:

  1. Be prepared – Have a crisis plan before the crisis. Identify possible courses of action, a spokesperson and communication avenues.
  2. Act fast – Gather information quickly and spread it to as many consumers as possible.
  3. Be proactive and not reactive – Deliver the bad news yourself. Don’t let others be the first to discover the bad news. Take responsibility and start the communications process.
  4. Make yourself available to consumers – Now is not the time to hide. Have as many communication avenues available to consumers as possible. Keep these avenues well maintained and give as much information as possible.
  5. What’s next – Tell the public the next steps that will be taken during the crisis.
  6. Tell the truth – Covering the truth will only severely compound the problem.
  7. Show compassion to those involved – In order of effectiveness, this is best done in person, by telephone, and lastly by written word (web site, press release, etc.).
  8. Put people ahead of profits – This is not a time to think of profits.
  9. Follow-up – After the crisis, tell the public how you will prevent the crisis from happening again in the future.
  10. Turn crises into opportunities – Seek out any silver linings.

Must see Godin

If you have not seen the Seth Godin Video Brochure, I would highly recommend it as it contains a few Godin gems!

Guilty by recency

lost luggageUnfortunately for JetBlue, another storm hit this weekend. The storm left a lot of customers stranded but it seems to have done more harm to the US Airways brand than to JetBlue. The problem for JetBlue is that this negative customer service experience hit so soon after their recent problem.

The fact is, when you experience a disastrous situation and something similar happens again shortly after, the media reminds the public of your past problem and couples it with the recent problem. For example, in the headlines this weekend you could find sandwiched in the articles about the trouble at US Airways:

“Just last month, JetBlue stranded passengers on several planes for up to 10 1/2 hours during a similar storm. At the time, the airline said its inability to get planes deiced in accordance with the new FAA rules was a factor.” – SmartMoney

“Airlines, hoping to avert the type of storm-related service meltdown that stung JetBlue Airways Corp. in New York a month ago, began canceling flights on Thursday.” – Reuters

Once you have a major customer service meltdown and you begin the steps to recovery, you had better pray that the situation does not happen to you again (or to anyone else in your industry) in the near future or you’ll be thrown back into the negative press pool.

On a related note: KFC had better hope that McDonalds or Burger King does not have rats (or any other animal for that matter) running around in their restaurants in the near future!