Archive for the ‘Loyalty’ Category

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Can Social Media Build Loyalty?

by on Tuesday, November 22nd, 2011

Pitney Bowes recently released the results of a large-scale, multi-country online survey (PDF) about which specific engagement techniques encourage consumers to “continue using a business and maybe buy more from them.” The key finding of the study, as reported in MediaPost and elsewhere, is that social media has little effectiveness as a channel for building loyalty: “Only 18% of consumers believe that the ability to interact with a large company on social platforms would encourage them to buy from that company. This average drops to 15% for small companies.”

Consumers were more likely to be loyal to brands that gave them more control over the shopping experience: “Being able to choose home delivery; choosing how to interact with a company (which communication channel); controlling the frequency of those interactions; and having a say in the company’s development of products and services.”

Social Sharing (via Elmo H. Love, Creative Commons)

So, does that mean that social media is a waste of effort for brands that want engage with consumers? Not at all. Although the underlying survey data hasn’t been made public, the survey as reported reflects a very narrow understanding of social media and how it can be used to promote customer engagement.

The survey report focuses primarily on the use of social media as a communications channel between the brand and the consumer – a cooler but less measurable version of email. Viewed that way, it’s easy to conclude that social media doesn’t offer much as an engagement vehicle. But the potential of social media lies in so much more than its use as yet another top-down channel in which brands say a lot but don’t listen much.

One of the most fundamental recent changes in consumer attitudes and behavior is the decline of the brand as authority figure and the increased consumer preference to be in control – something reflected in the Pitney Bowes survey itself. But another aspect of this paradigm appears to have been ignored: Consumers who formerly relied on the brand as authority now are more inclined to rely on each other.

The online retail space is full of brands that facilitate interactions among consumers, not just between the brand and consumers. Kaboodle is a women’s clothing site that invites consumers to “Shop and share your style with friends.” Users share their style tips and can in turn be followed by other consumers. Kaboodle’s merchants rely on these interactions in making selection and stocking decisions. ModCloth has a similar social shopping model, including a “Be the Buyer” tool that lets users directly affect the merchandise that is carried.

Both of these sites facilitate consumer control, but the social context adds a dimension that arguably makes the relationship stickier. According to one customer: “I love Kaboodle because now I have people from all over the country (who used to be complete strangers) as shopping buddies! This is my new favorite way to shop.” Note, too, that most of the social interactions take place on these companies’ respective sites, not on social media platforms, although the ModCloth page on Facebook has almost 375,000 likes.

The Zavee takeaway:

  • Social can build engagement and loyalty, provided it’s used creatively. It isn’t just another form of email.
  • The genius of social media is that it puts consumers in charge – and lets them learn from and help each other.
  • Social sharing is a paradigm, not a technology. It isn’t limited to Facebook and Twitter and might best be implemented on your own site.

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Loyalty Marketing [INFOGRAPHIC]

by on Thursday, September 22nd, 2011

Sometimes they are brilliant and sometimes they are useless, but infographics are almost always fun. Here is one about brands and loyalty programs, courtesy of Get Satisfaction.

One of the most interesting factoids is that 60% of respondents intend to use the social web and networking tools to derive ROI from loyalty programs. If so, that would be a significant change from how the loyalty industry’s historically slow adoption of technology.

Enjoy!

via getsatisfaction.com

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Ron Stack of Zavee to Speak on Marketing for Shopping Center Retailers

by on Thursday, July 21st, 2011

I will be speaking tonight on a panel sponsored by the Broward County chapter of the International Council of Shopping Centers (ICSC). The ICSC is the world’s largest shopping center trade organization.

The topic for the evening is “Shopping Center Marketing and Networking Trends” and I will be speaking about how Zavee expands the reach of merchants’ word of mouth marketing, offers effective, affordable, easy-to-use loyalty tools, and provides actionable data about merchants’ customers and their purchasing behavior. More generally, I will be discussing how technology like the Zavee platform and the wide adoption of social media offer local merchants effective and affordable new ways to build their business.

Also on the panel will be several shopping center professionals plus a representative of Living Social. One of the points I intend to make is that Zavee’s social loyalty platform combines the social media tools that have helped Living Social and Groupon grow so quickly with the core loyalty marketing strategy of building long term value creating relationships between merchants and their customers. This gives merchants the best of both worlds: social shopping that builds loyalty as well as traffic.

The seminar is today at 5pm at the Hard Rock in Hollywood. If your business is in a strip center, why not call your landlord and suggest that they attend. What they learn can help them market better – and that can help you.

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Airlines and Loyalty … It’s Not Getting Better

by on Wednesday, June 29th, 2011

Bill Hanifin of Loyalty Truth recently posted about airlines and customer service, a post prompted by his trip around the world (Malaysia and back – that qualifies). My trips are rarely as exotic but I fly almost every week, primarily between Newark and either FLL or PBI, and primarily on Continental. Like Bill, I have a soft spot for airlines, having begun my career in aircraft finance. Again like Bill, I am amazed – and not in a good way – by the unforced errors airlines commit when it comes to customer service.

Bill writes that airlines should be using the wealth of data available to them to build in more flexibility in dealing with customers, some of whom may be very valuable to the airline. I agree, but I think that ignoring their own data is only half the problem. A lack of empowerment is the other. Associates can only be as flexible as the rules allow. And I have a hunch that consolidation has made carriers more rigid and reduced employees’ sense of ownership (anyone have similar – or different – experiences at newly-merged carriers?).

Bill isn’t a fan of unbundling, but my view is mixed. I think baggage fees are a slap in the face to passengers. Airlines ask us to cooperate in limiting what we carry aboard, then charge us for our cooperation. Nice. On the other hand, unbundling food is a win-win, because concourse food concessions are improving steadily at many airports just as on-board food is disappearing. Carrying on our own food is one of the few freedoms we have as passengers, and I wouldn’t want to turn back the clock.

via Flickr - where are the jonses

Maybe it’s because there aren’t any bosses or unions at 35,000 feet, or maybe it’s because the airlines know how to hire for the cabins, but most flight attendants do a great job despite more crowding and fewer amenities. One recent flight departed “on time” by pushing back before the aircraft was fully catered. Not surprisingly, grumbling ensued. Very surprisingly, the flight attendants up front decided to open bags of almonds left over from the inbound flight and serve them in wine glasses. It showed that the flight attendants cared and it put a smile on every face in first class. Airlines can’t teach that kind of resourcefulness, but I hope they reward it.

One of the biggest customer engagement problems the airlines face as they impose more rules, charges and limitations is that the customer-facing staff is constantly required to disappoint or frustrate the customer. The trick, whether in the cabin, at the gate or at the ticket counter is to avoid turning delivering bad news into delivering bad service. Being told your bag has to be gate-checked is bad news; being made to wait for it at baggage claim is bad service. Being handed your bag at the Jetway is a smart way to ease the sting.

Flexible rules, empowered associates and a premium on resourcefulness can do wonders for an airline’s word of mouth. At a time when consumers are increasingly willing and able to share their experiences effectively, bad service is just reckless. If I hated Continental – and I don’t – I’m sure I could find a different way to get to Florida every week. Travelers under fewer constraints can drive to a more distant airport or just drive to their destination. And many people would just as soon stay home. Customers like me who really have to fly can use social media to make sure that everyone in our social graph – including whoever runs social media at the airline – knows exactly how and what the airline is doing.

The Zavee takeaway:

  • Airlines need empowered, resourceful associates applying flexible, data-driven rules. The alternative is an ongoing low-intensity conflict with customers that the airlines can’t win.
  • Every customer has an alternative to a bad airline, even if it means staying home.
  • Social media levels the playing field for airline customers. They can sit us down, but they can’t shut us up.

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Building Loyalty with Customer Reviews

by on Wednesday, February 23rd, 2011

Kevin Stirtz of Amazing Service Guy has an outstanding post in The Social Customer called, “10 Ways to Turn Online Reviews into More Loyal Customers”. Kevin’s advice is not just smart, it’s easy for any merchant to adopt. Things like, respond to every review; when you’re wrong, apologize; stay positive and consistent. Simple points, but they get at what makes a review platform like Zavee so powerful for local merchants.

I have only a few thoughts to add to Kevin’s. First, I absolutely agree with responding to every review, at least with a thank you. Depending on the platform, merchants can respond publicly (on the platform), privately (via direct message or email), or both. For example, I’ve seen public responses to reviews on TripAdvisor but not on Yelp. I’ve received private responses to reviews on Yelp. Zavee supports both public and private responses. Having access to both domains gives merchants a lot of flexibility but requires thought about how to use them. For example, a general statement of apology probably should always be public, but a promise of specific compensation might best be communicated privately.

Kevin doesn’t make the point explicitly, but underlying his comments is the notion that reviews can be shared socially. An inappropriate response can easily make the social rounds and do more damage than the review that the merchant was responding to. A gracious and informative response can be shared as well, but with the opposite effect. In other words, responses to reviews are marketing communications, and should be crafted as carefully as a news release or an ad.

Shout!

shout! (via Sandra Nahdi - Creative Commons)

Kevin rightly advises against writing fake positive reviews, calling them a distraction from the real work of improving the business. I agree that they are a distraction but I think another reason to avoid them is that they jeopardize the credibility of the review platform as a whole. Think of it as “Gresham’s Law” applied to content.

However, merchants frequently tell us they are more concerned about fake negative reviews, e.g., from a competitor or extremely dissatisfied customer. Merchants can never completely prevent malicious reviews but there are two things they can do to limit their impact: First, merchants should be extra vigilant about not rising to the bait and engaging in an online shouting match with the reviewer. Kevin makes this point about all negative reviews but it the more negative the review, the more important the merchant’s self-restraint. Second, merchants should trust their customers. They are pretty good about spotting outlier reviews, recognizing them for what they are and discounting their impact accordingly.

A more annoying problem for merchants is reviews that are stale. Restaurants that have changed chefs, hotels that have repainted their rooms, and stores that have changed suppliers have all been victimized by dated reviews. No one knows why anyone would wait months to describe a shopping, dining or travel experience they probably barely remember, but it is a common occurrence. Our attempt to limit the impact of both dated and false reviews is to permit shoppers to post a review only after making a purchase and within 30 days of that purchase.

The Zavee takeaway:

  • Respond to every review, if only to say “Thank you” or “I’m sorry”.
  • Treat every review as a marketing opportunity, to both new and existing customers.
  • Treat every response a marketing communication, one that may be shared well beyond merchant and customer.

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Is A “Deal of the Day” Right for You?

by on Tuesday, December 7th, 2010

Every year some online concept seems to catch on with users, commentators and venture capitalists alike. This year’s hot concept is the “deal of the day” pioneered by Groupon. The daily deal is a deeply discounted product promotion available for one day only. Groupon features the deal on its web site and blasts emails to users who have opted in. It can provide substantial exposure to a marketer or product, although it doesn’t necessarily pay for itself. Is Groupon (or one of its many imitators) right for your business and its products? As usual, it depends.

The marketing psychology behind Groupon’s deals is simple: an ultra-low price to stimulate interest plus very brief availability to stimulate action. You’ve seen the same thing on direct response infomercials on late night TV. But those infomercials work. And so, at least to some extent, do Groupon’s deals.

The New York Times business blog “You’re The Boss” recently analyzed the math behind a typical Groupon deal. Separately, a team at Rice University studied how satisfied merchants were with their Groupon experience, and how likely they would be to use a Groupon deal again.

via Sofianos Rezk (Creative Commons)

In the Times article the bottom line was whether it cost more to acquire net new customers via the Groupon promotion or through conventional channels. That like a perfectly reasonable metric, although perhaps not the only relevant one. In the Times’ example the hypothetical business spent about the same to acquire net new customers through the promotion as through other channels, which made the promotion a wash, but the author pointed out that even small changes to the many variables could alter the result significantly.

That’s important because the Times example described more than a dozen different variables, from the the percentage of coupons redeemed to the percentage of redeeming customers who were not previously customers of the merchant. Depending on these variables a Groupon program could be anything between a home run and a disaster.

But running the numbers is not the only way to decide whether a deal of the day makes sense. The Rice University study led by Professor Utpal M. Dholakia (full pdf available here) reported a wide range of views from merchants concerning their satisfaction with the Groupon promotion and the likelihood of their using Groupon again. The three key predictors of repeating a Groupon promotion were

  1. Effectiveness in reaching new customers
  2. Percentage of Groupon users buying more than its value during the visit
  3. Employee satisfaction with the Groupon promotion

In other words, the promotion would be considered less than successful if it promoted trial but did not produce net new repeat business; did not result in substantial on-premises upsell of Groupon users; and did not satisfactorily account for reductions in commissions and tips. Merchants reported that unless these factors were present they would not be inclined to repeat a Groupon promotion even if their promotion had been profitable:

There is widespread recognition among many business owners that social promotion users are not the relational customers that they had hoped for or the ones that are necessary for their business’ long-term success. Instead, there is disillusionment with the extreme price sensitive nature and transactional orientation of these consumers among many study respondents.

Is Groupon too much of a good thing? The suggestion in the Rice study that Groupon shoppers are qualitatively different from ordinary shoppers would be troubling if true. This would suggest that consumers who are highly motivated by the brief availability of an extreme price reduction are not willing or able to see beyond the deal and are not particularly open to learning about the merchant or her (non-discounted) products.

Are there any benefits to a tool that brings traffic but maybe not genuine trial? It depends on the business. A retailer that does better when the store is full (e.g., because of a social element to the brand) may be able to leverage the traffic Groupon can bring. A restaurant that cannot adequately service a Groupon-driven wave of first-time customers (who may not be the best tippers) is likely to have an unsatisfactory experience regardless of the numbers. The key is to understand the process, understand the numbers and have realistic expectations.

The Zavee takeaway:

  • Groupon isn’t as much about promoting trial of your product as it is generating buzz about your brand.
  • For the right business, Groupon can result in incremental sales to one-time customers and an acceptable level of new customers, all without upsetting and under-compensating your staff. But it doesn’t seem to happen very often.
  • Brands aren’t built with magic bullets. Surprise and delight your customers, reward their continued loyalty, and make it easy for them to share their experiences.

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When Things Go Wrong, There’s No Substitute For The Human Touch

by on Wednesday, October 20th, 2010

Social shopping sites (like Zavee), as well as many merchants’ own web sites, provide tools that let shoppers “self serve” information they want to make an informed purchase decision. Some large merchants are also asking customers to self-serve customer service issues, too. Is this a good idea?

For product-related issues, it’s a great idea. Many manufacturers, such as Apple, now host libraries of information to help consumers use and, when necessary, troubleshoot their product. This system filters out customers with easy to solve (or at least common) problems and frees the customer service representative (CSR) to deal with more difficult (or less common) issues.

Not another customer service complaint! (via Star5112 - Creative Commons)

Some companies have an intermediate stage between self-service and a conversation with a CSR: live chat. Live chat uses an IM-like interface for online interaction with a CSR in real time. Why would a merchant use live chat rather than a live conversation? Most live chat software lets CSRs conduct several live chat interactions at once, while they can handle only one phone call at a time. This can result in shorter wait times compared to phone queues, which may make the more impersonal quality of live chat a fair exchange.

Are consumers equally wiling to self-serve when the issue relates to the company’s service? Recent research supports the unsurprising conclusion that when things go wrong consumers want to interact with a human, either in person or on the phone. But not just any human will do. Consumers want someone who listens, responds appropriately (rather than from a script) and is empowered to address the problem.

Speaking of Apple, I recently had a wonderful customer service experience at the local Apple Store. They made an avoidable mistake that delayed the servicing of my laptop. When I called and pointed out the mistake, the service manager immediately took steps to make it right. He didn’t even consult the store manager; he just made the decision on the spot. I’ve always been a “Mac guy” but now I’m more likely not only to buy Apple products but to recommend them as well. Great customer service will do that.

Best Buy explicitly treats customer service as a sales channel. Its twelpforce program puts sales associates on Twitter where they respond to customer inquiries, which range from questions about what to buy to troubleshooting assistance to service complaints. Why Twitter and not either live chat or a phone call? First, from a look at the Best Buy feed the interactions clearly are unscripted and one-on-one. Live chat isn’t as spontaneous or personal. Second, Best Buy doesn’t offer twelpforce as an alternative to telephone interaction with a CSR – it’s positioned as tech advice for the consumer (even though they handle service issues). Twitter also scales better than the telephone. Associates can switch between helping customers in the store and on Twitter; a voice solution would would take associates off the floor. Finally (and I’m speculating here), I think it matters that twelpforce consists of sales associates rather than CSRs. Associates’ only mission is to grow the business, which includes providing a customer experience that makes buying – and returning – more likely. CSRs also are (or should be) tasked with providing a quality experience, but they encounter customers when they want to complain, not buy. So it’s easy to understand why CSRs might be less customer-centric than associates.

Smaller companies can’t (and probably wouldn’t want to) duplicate an enterprise level customer service structure, but there are lessons that small companies can learn from big ones. First, asking customers to self-serve on product issues can make sense and save money. It’s one of the smartest things you can do with your web site. Second, make sure that every customer-facing employee is trained to listen to customer concerns, respond appropriately and take prompt action (even if that action is to pass the customer to a more senior employee). Third, use customer service as a sales channel. Any action you take that goes beyond customer expectations – especially if you venture into “surprise and delight” territory – can increase that customer’s loyalty and create an advocate whose recommendations bring you new customers and more sales.

The Zavee takeaway:

  • Understand the differences between customer service issues that relate to the products you sell and the service you provide. Customers are more willing to self-serve product issues than service issues.
  • When things go wrong there is no substitute for personal interaction, the more personal the better. Especially (but not only) in smaller companies, everyone is a CSR.
  • Customers share their experiences, both good and bad, so every interaction can be amplified. Great customer service creates brand advocates who recommend you to others. Poor customer service has the opposite effect.

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4 Things I Just Learned About Location-Based Marketing

by on Tuesday, October 5th, 2010

As someone who enjoys – but doesn’t completely get – Foursquare and other “check-in” services on the Web, I was looking forward to the Location-Based Marketing Summit I attended last week in New York. I learned a great deal about this rapidly-growing field, and I had the chance to hear and speak with some of the people who are responsible for the latest thinking and most interesting developments in location-based services (LBS) and their application to marketing. Here are some of the things I learned at the conference:

via jorgempf (Creative Commons)

Check-in is only the beginning. Services such as Foursquare and Gowalla have received so much publicity lately that it’s easy to equate LBS with check-in. But LBS also includes maps and other query-based services (imagine wandering through a museum and using your mobile device to learn about the painting you’re standing in front of) and a variety of shopping platforms (mostly deals and discounts but also several loyalty platforms) as well as socially oriented services like Foursquare. What can LBS do for marketers? At least three things:

  • Grow loyalty. Some marketers, such as Tasti-D-Lite, are using LBS as a loyalty platform, where a purchase results in an automatic “check in” and a message to friends as well as an award of loyalty points. A new service called TopGuest drives enrollment in hotel loyalty programs by offering bonus points when a guest checks in (in the LBS sense).
  • Increase relevance. Adding time and place to any information increases its relevance. And almost any kind of information can be made more valuable by adding relevance. Location data can tell marketers about what people like to do and to buy, and when and where they like to do it. It can place consumer behavior in context: Is going to Starbucks after the gym the same as going there on the way to work? Is going to Starbucks because it’s convenient the same as going there because you like it? With more detailed and relevant information about the consumer, marketers can create messages and offers that are much more relevant to the consumer – and more likely to be acted on.
  • Provide data. Marketers also can use aggregated location data to make better decisions. Comcast, which uses Twitter as a customer service channel, has been mapping tweets as a way to learn where service resources are needed most and communicate with customers in those areas. Location data can also be used to map patterns of customer behavior, from which bars attract fans of what teams to which doctors are prescribing what medications.

Engagement is everything. The hype about check-in services has obscured the wide variety of location-based services that are already available. The common denominator among them is engagement. How can LBS create engagement? One way is to deliver relevant information delivered in real time. Or, as one speaker called it, earning attention by being in “the right place, right time, all the time.” Another source of engagement is providing an enjoyable experience, such as by including game mechanics. On a superficial level this is how the check-in services work. But the real value of these services is relevance: for avid users, where their friends are and what they are doing right now matters. Another way to create engagement is financial: location-based shopping services that provide deals and discounts certainly have an audience.

Local is next. It’s easy to think of LBS as the province of large marketers, and it’s true that large marketers are better able than small ones to take the risk of jumping into LBS early. However, many of the speakers (and attendees) at the conference were talking about local applications. Why? One reason may be that, according to Google, one-third of mobile searches and 20% of all searches have local intent. That’s a big audience to overlook, and with the cost of technology decreasing, local marketers have a chance to engage with them using a location-based platform. Although local use of LBS is still in its early stages – for one thing, awareness of and interest in LBS is thought to be low among local marketers – look for substantial growth in this sector. And look for Zavee to be right in the middle of things.

Privacy is a transaction. This was one of the most eye-opening insights of the entire conference. No speaker disagreed that consumer privacy concerns were a legitimate issue for LBS and the marketers who use them. Several speakers, for example, were critical of Facebook for being insufficiently sensitive to users’ privacy concerns. But every speaker who discussed privacy at any length made the same point: While a service that exists only to push marketing messages will always have a privacy problem with consumers, a service that delivers a genuine benefit will find consumers more likely to share private information. The greater the benefit, the greater the sharing. This only works, of course, if consumers know what they are being asked to share – a potential issue with some advertising programs. All of the speakers at this conference, however, emphasized the need for LBS to be transparently opt-in with an easy way to opt back out. It will be very interesting to see, over the next several years, whether this transactional notion of privacy reflects consumer behavior or whether there are certain bright lines that no LBS can safely cross.

This has been a busy few weeks but our conference-going isn’t over: Zavee CEO Alan Pleskow and I are off to California for the Rise of Social Commerce Conference in Palo Alto – expect a post about it next week.

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4 Things to Consider About Negative Reviews

by on Wednesday, September 15th, 2010

Now that a New York court has dismissed claims against Yelp by a New York dentist based on a (very) negative review and on Yelp’s alleged removal of positive reviews, this might be a good time to think about what makes a review “negative” and what negative reviews mean to – and for – your business. You may think that negative reviews are just angry people taking shots at you. Here are four other ways to look at it:

via Marten Bjork (Creative Commons)

Readers recognize – and discount – outliers. Positive or negative, excessive emotions in a review diminish their credibility. It’s great to get an exceptional review for exceptional service. But if the glowing adjectives are out of proportion to a typical customer experience, readers are likely to apply the old saying: If something sounds too good to be true, it probably is.

Same thing with negative reviews. The surest way to lose credibility IS TO WRITE IN ALL CAPITAL LETTERS WITH LOTS OF PUNCTUATION!!! These are actually the best negative reviews you can get, because even if they are accurate, who will believe them? It’s true that some people write reviews to blow off steam, but readers know that, and respond accordingly.

Mixed reviews are not necessarily negative. Have you ever used Rotten Tomatoes to decide whether to see a movie? The site’s “Tomatometer” rating is based on whether published reviews were positive or negative. However, a review can only be either “fresh” (i.e., positive) or “rotten” (i.e., negative), no matter how mixed or qualified the review might be. For “Going the Distance” (51% rating), the fresh reviews include “solid but totally forgettable” and “hilarious in many individual scenes [but] less than the sum of its parts”. Rotten reviews included “funny but forgettable” and “The laughs kept me involved … but after I left the theater, it occurred to me that this slight comedy hadn’t gone very far at all.” Hmm. Many reviews – of anything – are mixed enough that it would be hard to give them either a thumbs up or thumbs down rating. So don’t consider every mixed review a thumbs down.

A mixed review is often more thoughtful, detailed and nuanced than an outright rave or pan. A customer who writes a review that contains some negative feedback isn’t venting, she’s helping. These are the reviews your customers will take seriously – and you should do the same. When you respond to reviews like these (easy to do on Zavee) you can use the review as the basis for an ongoing relationship. If you want a second chance at the customer and a more positive review the second time around, being proactive is the only way to get results.

Yes, competitors can try to hurt your business with fake reviews, but there are reasons you don’t hear about it happening very often. If you are running a good business deceitful reviews are unlikely to harm you, especially if you are actively communicating with your customers. Why? First, as discussed above readers will tend to discount rants whether or not they are malicious. Second, users of social shopping sites tend to be very skeptical of reviews that differ greatly from what most (real) customers experience. The unusual experience is another kind of outlier. On the other hand, negative reviews that go into detail about the experience and/or are written by a reviewer who has demonstrated credibility based on other reviews may well be taken seriously, but how many of your competitors are willing to invest that much effort just to undermine your business? If you are actively communicating with your customers you should be able to deflect even the most sophisticated malicious review. Finally, social shopping sites are trying to safeguard against malicious and fraudulent reviews. At Zavee, our system will reject a review unless the author has had a transaction at that merchant within 30 days of the review. Could a competitor jump through all those hoops just to hurt your business? Probably, but how many would bother?

A negative review is a positive experience. On the most basic level, a thoughtful review that recounts a negative experience provides valuable information for your business. You can’t be everywhere, and if a waiter or a sales associate didn’t behave appropriately, or if a product or service fell short of expectations, wouldn’t you want to know? Of course you would prefer to hear it privately, but in our increasingly social world these conversations are being held in the open. That isn’t necessarily a bad thing. A negative review can be a positive experience because your handling of the situation – again, in public – gives you the chance to move the conversation forward: increasing customer engagement and loyalty, building your reputation and your brand, and even persuading non-customers to give you a try.

The Zavee takeaway:

  • Readers are smart, and they are good at recognizing which reviews to take seriously.
  • Negative reviews can hurt your business only if you ignore them or react passively. Especially on Zavee, where we make it so easy for merchants to interact with customers, make sure you respond to every review.
  • Always follow through on anything you promise – and don’t forget to talk about it.

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What Can We Learn From Airline “Unbundling”?

by on Tuesday, August 24th, 2010

Anyone who has flown recently has experienced what the airlines call “unbundling”: separate fees for optional services that used to be bound up in the ticket price. Unbundling means, for example, that a passenger who flies with just a laptop bag will pay less than a passenger who checks baggage in the hold. The passenger who fills up at McDonalds or Starbucks before boarding will pay less than the passenger who wants an airline meal. The economics of unbundling fees for ancillary services have been amply discussed elsewhere: The airlines do well and the passengers … well, it depends.

From the passenger’s perspective, unbundling works best when (1) the service really is optional (i.e, the passenger isn’t coerced to to incur the fee) and (2) the fee itself doesn’t seem like an unreasonable money grab by the airline. Airlines are most likely to be successful unbundling services that a substantial number of passengers either don’t want or need or that they can easily live without or replace on their own.

Suitcases (via Malias - Creative Commons)

Airline food is a perfect candidate for unbundling: It’s easy to get cheaper and better food on the concourse and the airlines no longer forbid passengers from bringing their own on board. Seating is another example. Want a reserved seat? Pay for it. Willing to take your chances on your seatmate? Save your money. Some airlines charge more for seats that are larger or closer to the exit. Worth the extra fee? You decide. These fees are relatively easy to explain to passengers, but airlines on the whole have been lax in communicating with their customers.


Checked baggage fees are also economically defensible, since every piece of checked baggage adds to the fuel required for the trip and thus to the airline’s cost. But airlines are fooling themselves, and doing a disservice to their customers, if they think the economic rationale is self explanatory. While many passengers, especially those on business, don’t check bags and don’t pay the fee, other passengers, especially families, find the policy coercive. One unintended consequence is that passengers have an economic incentive to carry on bags they might otherwise have checked. As the Steven Slater incident reminds us, trying to stuff oversized carry-ons into undersized bins can end badly.

As Bill Hanifin points out, it’s essential that airlines communicate the policy both on the plane and via social media. This is especially important with airline policies that are new, subject to change and may be perceived (rightly or wrongly) as unfair to the passenger. Why are airlines so lax about communicating with their customers? One guess is that there hasn’t been a storm of complaint about most of these fees. But the likely reason for such acquiescence is not consumer satisfaction, but its opposite. As a frequent flyer I hear a lot of grumbling, but most of it sounds more resigned than angry. Many airlines survive consumer dissatisfaction, but only because consumers often have few alternatives and, except for the most egregious service issues, have simply given up. This is the sign of an industry in trouble.


The Zavee takeaway:

  • Communication of any significant business change is essential. Customer dissatisfaction will fill the void if you let it.
  • Don’t assume that customers understand the economics of business decisions that affect them. They aren’t stupid, but economic rationales require explanation.
  • Don’t confuse the absence of complaint for approval. In fact, if you do something that should generate (some) complaints and don’t get them you have a problem that you need to address immediately. Unlike airlines, few small businesses can count on getting away with taking their customers for granted.

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