Our review of service stories kicks off with this most important concept:

Understand where your customers are complaining and what customer complaints are most prevalent.

I sat in a local government proceeding last month where a government employee asserted that there were no complaints about taxicabs in a jurisdiction serving more than one million people.  He finally acknowledged that there were likely issues, but that they didn’t bother consumers enough to complain.

The corollary is almost certainly true.   Consumers certainly received poor service and almost certainly complained about that service.  They complained to the companies involved, a different agency or to others who don’t record complaints.  But because those consumers had not complained in the way that the county dictated they should, county employees asserted multiple times that the county’s programs worked fine and consumers were pleased.

Such nonsensical thinking only occurs in bureaucracies where people don’t have to close the doors if they are wrong too often.  In a small business, pretending that unheard customer complaints means everything is okay is inviting disaster.  Many indicators exist to tell you about your service or product:  revenue, repeat customers, word-of-mouth referrals and proactive market research.

That’s right:  go ask customers how happy they are.

Your takeaway as a small business leader is that you can’t rely on your systems to tell you about service quality by telling you about their complaints.. Go where your customers share their experiences.  Listen.  Ask questions.  Repeat.  Ignore finding out about customer complaints at your own peril.

Customer service and consumer affairs contact centers are for problem resolution.  The very best among them measure customer satisfaction, but that’s usually a market research function.  A small business leader wearing both hats should already be asking these questions.

Sharing Business Value Reports

Antivirus company AVG pushed a great report to me earlier today called a “Threat Report”.   The security company with the ‘Freemium’ model wanted me to give them credit for protecting one my computers from a series of problems.  It’s a smart, relatively passive way for the company to prove its product’s worth to a user who is a potential up-sell.

silver-beacon-marketing-logoSilver Beacon Marketing does a similar thing, showing clients their return on investment (ROI) for advertising campaigns or other goals from our search engine optimization efforts.  That is proprietary data that few would publicize, but I’ve lost count of the number of times a referral has quoted their friend’s ROI to me. Sharing your business value is easy.

Bragging about the number of threats your computer stopped is something you might share with anyone.  The whole thing sounds like fun.  And even a small adoption rate can mean some great exposure.  Let’s say that the report showed your level of web savvy and a fun rating about your computer’s strength along with some Twitter and Facebook share buttons.  Your product gets valuable exposure every time someone sends that report to their Twitter or Facebook stream.

Enabling that sharing function is only a part of the battle though. Sharing has to be simple–absolutely frictionless–to get the best possible return.  And that’s what I experienced today when I reactivated a StumbleUpon account.

Signing up was easy–only four fields after I clicked “connect with Facebook”.  And the company was smart enough to ask, “Hey, since you’re recommending pages to strangers, how about recommending them to your friends?”

Why not?  That makes perfectly good sense.  And with each post to my Facebook page, StumbleUpon gets a big endorsement from me to anyone connected with me.

Asking that question is smart.  My Facebook friends might not have a StumbleUpon account, but all the work is done for me if I want to post a link to my Facebook page or other social media channels. That is completely frictionless.

Your takeaway as a small business leader is to consider how your company communicates its real business value to stakeholders.  Special bonus points if you make sharing that information easy.

Groupon is enduring some well-deserved criticism this week for its edgy Super Bowl commercial featuring actor Timothy Hutton that made light of Tibet’s struggles with China.  American consumers overwhelmingly rejected the ad while continuing to use the service (herein called The GoDaddy Effect) and the company best known for being the startup that earlier spurned $6 billion of Google’s money created another head-scratching moment.

But what impact does this company have on a small business, maybe your small business, when one of those 50% offers launches? Almost all Groupon customers ask for a second promotion according to a video on the company’s website.   Local merchants now receive mobile applications, free marketing copywriters and tools like a capacity planner.

But business owners often go online to complain about margins or are cautioned about exceeding capacity and cutting into margin.   WebProNews did a splendid piece about Groupon tackling the capacity issue head-on and suggested that Groupon should be able to help a small business plan for lots of new customers.

Capacity was the issue I experienced with local merchants.  The worst was a camera store with an offer that swayed me to convert some old film to DVD .  My son picked up the order and paid with the Groupon, which was about $6 more than the cost.  The cashier did not offer a store credit or offer to sell a second conversion and apply a $6 credit.  Nearly half of the $15 savings evaporated so I called the store. Pause and reflect.

Groupon brought me in when I wouldn’t have looked around for that old birthday party footage.  Then the store had a chance to wow me with their services and pick up a second conversion plus who knows how many more future orders? Instead the clerk said no.  The manager went further, telling me that “Not everything is free just because you have Groupon”.  Those frustrated line staff comments are common on web complaint boards.

But now I had a mission so I called the small chain’s headquarters and was told there was no customer service department and “these questions”  were best handled at the store level.  But now I was more focused on the store manager’s attitude and I ended up in the voice mail of someone in store operations.  That person never called back even after a second message was left.

So the fallout for the store is even worse.  Now I’m not only dissatisfied, but when someone comments on the DVD, I tell them to buy online because the local chain has “awful service”. That is the essence of a merchant’s Groupon dilemma.  The company says all will be well if the merchant is “honest” about their ability to handle big volumes and convert casual consumers to long-term customers.

Your takeaway as a small business leader is to think strategically, not about cash flow or other tactical matters, when considering any coupon service.

If you don’t have an upselling, customer-centric culture and your business has tight margins, inviting a horde of discount-loving customers who have no loyalty to your business is an ineffective strategy.

Source:  “Groupon.com“, ComplaintsBoard.com, 1/26/2011

Source:  “Hey, Ellen, Should We Do Groupon?” Restaurant Intelligence, 9/18/2009

Source: “Groupon Talks Managing Capacity…“, Web Pro News, 1/17/2011

Source: “Groupon Rejects $6 Billion Offer From Google“, MSNBC, 12/4/2010

Image:  Eugene Peretz via CC 2.0