Thursday, July 19, 2018

Best Buy takes a page from 'Build a Brand Like Trader Joe's' to defy Amazon, and expectations...

Bloomberg just put up a terrific story about the way that Best Buy uses its front-line customer service staff to fight off bigger and richer rivals, like Amazon.

If you're a fan of Trader Joe's, you'll recognize Best Buy's secret -- which is to empower front-line customer service staff to do what it takes to make customers happy.

Even after all these years, I'm still surprised this sure-fire brand-building method is something of a secret.

Monday, July 2, 2018

Check out this great podcast all about Trader Joe's

I was flattered to be asked to contribute to this great podcast, sponsored by Zendesk, on the topic of great customer service. The first episode is, in fact, all about TJ's. Check it out and let me know what you think...

This episode is entitled "Beyond Cookie Butter: The secrets behind Trader Joe's great customer experience.

Monday, March 5, 2018

What Delta Airlines could learn from Trader Joe's


A Delta Airlines flight from Kansas City to Atlanta landed 43 minutes late, leaving us with a very tight connection. After running through the airport, my wife and I found the once-daily flight to Turks & Caicos had left early. Then, the harried and overworked personnel at the 'Need Help' desk made matters worse by failing to display any empathy at all.

In 'Build a Brand Like Trader Joe's' I wrote about Gardiner's Fourth Law of Marketing, which goes, "No one loves you as much as a customer who just hated you." 

What that means is, when a customer's been wronged and has a complaint, as a brand, you have that customer's full attention. By caring, and making things right, a brand can turn a disgruntled customer into a real evangelist.

That's a lesson lost on Delta.

We did ultimately get 'assistance', I suppose. But this sign would be more accurate if it read, "Need Help? Good luck."
We booked a journey from Kansas City to Providenciales, Turks & Caicos. Since our Kansas City flight left at 0600, we took the precaution of booking an airport hotel the previous night. 

Although our flight boarded on time, it took off significantly late after a 20-minute wait for deicing—something that surely should have been anticipated in Kansas City in February.

Very late in the approach to Atlanta—within sight of the runway, long after the gear had gone down, at an altitude that, according to FlightAware must have been less than 500 feet—the pilot waved off the landing. Neither my wife nor I are particularly nervous flyers, but that was a first for me. After a long, long time, we were told that the landing had been aborted due to rain on the runway, and we were “in vectors”. The net result was that we arrived 43 minutes late. That left us less than half an hour before our second flight was scheduled to depart.

One large group flying to a wedding in the Caribbean was told their plane was waiting for them.It would have been very helpful if Delta personnel on the flight could have made an announcement asking people traveling to Atlanta, or with reasonable connections, to let people with tight connections leave the plane first. There was no effort to expedite deplaning for those of us with tight connections.

We ran through the airport, and arrived 8 minutes before scheduled departure, only to find the door to the jetway closed with the jet still there. According to FlightAware, Delta 509 departed early, even thought the crew had to know that there were transferring passengers on the ground. Let that sink in: someone at Delta decided to leave early, while there were passengers running to the gate.

What could we have done, yelled at someone at our arrival gate, to phone ahead to our departure gate? Would they have done so? Earlier that morning in Kansas City, Delta ticketing personnel told us they could not give us a seat assignment for our flight from Atlanta to Providenciales. If we had seat assignments, would they have held the plane? That lack of a seat assignment was certainly not our fault; we’d gone to expense and trouble to ensure we could check in in Kansas City in plenty of time.

Later on, a Delta customer service agent informed us, “They just told us that they weren’t going to hold flights for just two or three people any more,” but is this a reasonable policy when there's only one flight a day?  Note that the door to the jetway was closed and there was no Delta personnel at the gate eight minutes before the one departure for that day. Less than five minutes would have made a difference of 24 hours for two of the passengers.

We watched helplessly while the plane stayed attached to the jetway for several more minutes; my wife ran to the nearest staffed gate, where she was told, “Go to the ‘Need Help’ sign.” Then the jetway moved back off the plane and it left, without us, for Turks & Caicos.

An added layer of irony comes from knowing that Atlanta is Delta's headquarters, and the airport's the airline's biggest hub by far. If Delta can't provide good customer service here, where can it do so? Most of these passengers are in this line because inbound flights were delayed. The implication is that Delta should be able to forecast demand at this desk hours ahead.

We waited at Delta's ‘Need Help’ desk for over an hour, while a total of three customer service agents worked at a counter with a dozen work stations. We didn't have any other flight options, but other people in line did, and some of their options vanished while they waited. There was one customer service phone position, and we overheard someone say that hold times on the phone were over two hours.

At one point, a customer who had just walked away from the Need Help desk turned back to ask one more question, to which customer service employee sternly replied “Ask Delta!” 

“Ask Delta!” said the person who was the face of Delta at that moment.

When we finally got our turn, a harried and overworked customer service agent then told us, we’d get a hotel voucher but no food allowance—"We don’t do that any more.”

What’s the rationale for that? We do provide accommodation, but we expect you to spend 24 hours waiting for the one flight a day without eating? It defies logic.

We were told our suitcase was going to the warehouse. We had a choice of waiting several hours to have it retrieved, or spend 24 hours in some airport district hotel with only the clothes on our backs. 

The following day we arrived early only to find that due to mechanical problems our plane had to be changed, resulting in what was initially forecast as a 20 minute delay. When Mary wanted to ask a question about the delay, three Delta employees at the gate desk stared at their personal phones for 45 seconds before even acknowledging the presence of a paying customer at the desk.

Then when we’d boarded, we were told the catering crew didn’t supply enough bottled water for the flight causing another delay. After a total of two hours’ delay and after takeoff we were informed that they hadn’t filled up the plane’s drinking water tanks, so there would be no coffee service, and there was no water available for hand-washing in the bathrooms.

We are independent contractors, we don’t get paid vacations. That means that every vacation day is precious. And, a wasted day in Atlanta is effectively a day that we could have been working.

  • We rented a car and hotel room that went unused, which begs the question: Where could Delta have done better?Why let us book a tight connection to a destination with one flight per day, with such foreseeable delays, without at least warning us?
  • The pilot took a long, long time to explain the baffling first attempt at landing, which was waved off in sight of the runway at  an altitude of less than a thousand feet.
  • Why not at least try to let passengers with very tight connections get off the plane first?
  • How hard would it have been to contact crew of next flight to say, Hold for these people who are late through no fault of their own? Or least, don’t leave early!
  • Isn’t it reasonable to use a different standard in terms of holding for delayed passengers, when the destination is served by only one flight per day?

Ironically, I’m the author of popular business book on the topic of customer service. In ‘Build a Brand Like Trader Joe’s’ I devote a chapter to ‘Gardiner’s Fourth Law of Business’ which is; “No one loves you as much as a customer who just hated you.” You guys could have made all this right with an empathetic customer service agent empowered to make a difference, or even providing a human email address when I specifically asked for one.

All along the way we were met with cold, defensive employees who had no time to listen to our concerns and were only interested in divesting themselves of responsibility. Obviously, Delta has not empowered their employees to care for their customers. Your investment in advertising would generate better returns if it was allocated to better equip employees with soft skills like empathy and compassion. 

The way we were handled added to our distress causing us to feel helpless instead of valued. Mary posted about our experience on FB and it garnered many comments from others saying they’d had similar experiences. Imagine if you could turn those people into fans rather than disgruntled former customers.

So, what did this debacle cost us?
  • The night we spent at the airport Marriott in Kansas City served no purpose: $77.77
  • Uber to the Kansas City hotel, because we were only going there to sleep and it was too late to ask a friend for a ride: $25.87
  • AirBnB night in Turks & Caicos: $276.64
  • Meal in Atlanta: $36.22
  • Breakfast in Atlanta airport: $13.22
  • One sixth of our vacation, the first in years: Priceless

I'd honestly like to see Delta do better, and help them do better. In my time at Trader Joe's, I came to realize just how much of an impact front-line customer service staff have on brand value. This is precisely the kind of thing companies pay me to help them with: choosing, training, and empowering employees to show empathy and build strong relationships with customers.

Wednesday, August 9, 2017

Eater unmasks a bunch of TJ's secret suppliers

It was fun helping the guys at Eater dig into who, exactly, supplies Trader Joe's house-brand products.

I gave them the lead to look into lawsuits and recalls, and they took it to the next level, filing a Freedom of Information Act request for all the suppliers listed in recall orders!

To learn a bunch of TJ's suppliers and see how a taster panel compared TJ's vs. name-brand products, go to Eater, here.

Friday, June 16, 2017

Amazon shops at, no, FOR Whole Foods!

Amazon has taken control of Whole Foods, a publicly traded company. Amazon's offering a 27% premium on shares -- $42 per share, for a total of nearly $14B -- making this a big deal in both senses of the word. In fact, the biggest deal in recent memory, in the grocery business.

Whole Foods has struggled for years with its "Whole Paycheck" reputation, and in almost any discussion of what Whole Foods could or should do to revitalize itself post-Recession-of-'08, Trader Joe's has been the elephant in the room.

Basically, every one of those conversations revolved around, "What can Whole Foods do to be more like Trader Joe's?" Whole Foods sharpened pricing on their in-house branded products, and experimented with some smaller stores.

But now, the question is, what can Amazon do that Whole Foods couldn't have done on their own?

Analysts are saying that the Amazon deal will enable Whole Foods to lower prices, but so far I've read no explanation of how that will happen. It's easy to imagine Amazon pushing the whole grocery business into the online realm. So far, U.S. consumers have been slow to shop for groceries online. I haven't been tracking reported online sales, but a quick check suggests that a large majority of food purchases are still made in person, and carried home by the shopper.

This is one online market in which the U.S. lags. I've seen statistics that claim nearly half of U.K. grocery shoppers have at least experimented with online purchasers, and that over 10% of U.K. grocery shoppers buy all of their groceries online. I believe that; my sister lives in London, and does virtually all her grocery shopping online.

If I had to guess, I think Amazon feels it can achieve that kind of market penetration here too.

About 15 years ago, Jeff Bezos said,
I don't know about you, but most of my exchanges with cashiers are not that meaningful... "Have a nice day"... "You're welcome"... "No, we don't take credit cards." I mean, I love browsing around independent bookstores. But even there, the store doesn't instantly customise itself to suit your interests the way ours does and no one can tell you what other people who buy the books you're buying also bought. And you can't read your neighbours' reviews the way we allow you to. Those kind of community features can only be done online. And you can't have universal selection in a store, however big it is.'

Trader Joe's has built its brand on the strength of millions of direct, personal encounters between its famously cheerful and helpful staff and its zealous customers -- many of whom do feel that those interactions are meaningful. That's almost directly opposed to the appeals of online shopping. But crowded stores and famously congested parking lots are also part of the TJ's brand.

So it remains to be seen how much Trader Joe's business would suffer if Amazon made shopping online for Whole Foods groceries a real 'thing'. And, of course, this begs the question of whether the usually-slow-to-try-out-new-technology executives at TJ's will try to build an online shopping forum of their own.

Wednesday, April 12, 2017

If you're in advertising, United's fiasco should make you want to slit your wrists

Unless you've been hiding out in Tora Bora for the last few days, you know all about United Airline's PR fiasco. Last Sunday, an overbooked flight between Chicago and Louisville led to the "reallocation" (United CEO Munoz's choice of words) seen around the world.

But here's the thing: After that PR disaster -- hell, United basically detonated an atom bomb under its brand -- the company's stock dropped sixteen cents. Considering that the starting price was over $70, the effect of all that incomparably negative publicity was impossible to spot in amongst the normal daily standard deviation in UAL shares.

"Brand value? We don't need no stinkin' brand value!" says the market, as UAL's price rebounds to within a day's standard deviation of where it was before Chicago cops showed airline passengers they've forgotten nothing since '68.

If you're in advertising, you've spent your working life arguing that your clients' brands are among their most valuable assets. And you've almost certainly positioned yourself as a skilled steward of those brands. But would you dare suggest that any ad campaign could counter United's fiasco? Would you dare suggest that anything -- ANYTHING -- you'd ever do could help United or any other client, as much as that fiasco hurt them?

Of course you wouldn't. There are limits, even to the hubris of ad guys.

And yet at the end of the day, the markets have decided that blowing up United's brand was trivial.

I'd ask, "What does the stock market know that we don't know?" but at the end of the day, I suspect the market's placing about the right value (cost) on this worst-corporate-PR-of-the-year moment.

The truth is airlines' customers have, by and large, adopted one of two operating modes (or, they're combining those two.) Some are pure price shoppers, and they'll buy the cheapest ticket they can find on any given day subject to their personal willingness to endure things like multiple or long layovers; others are points-gatherers who have picked an airline and are sticking with it.

Millions of people have posted, "I'll never fly on United again!" on Facebook. If you're one of them, the market's called bullshit on your threat. If you're in advertising, the market's blithe evaluation of the impact of that event on United's brand, or -- take your pick -- the fact that the market basically doesn't value brands nearly as much as you do, you pretty much have to slit your wrists right now.

While I have to believe that there are still a bunch of companies that thrive because of great customer service, there are clearly plenty that don't.