FTD’s Big Mamma’s Day #FAIL

No FTD

Much of the digital marketing discussion revolves around which brand or campaign is getting this or that digital media discipline right. But there are even more fundamental issues and lessons that have to be learned and re-learned by many brands. Basic customer service is unfortunately one of them.

A case-in-point: my Mother’s Day experience with FTD. There were multiple points of failure up and down the line. It’s almost a case study in how to alienate a customer.

For roughly ten days prior to Mother’s Day I was hit with FTD emails. I decided (on May 5) to send flowers to my mother. I specified that the arrangement be delivered on Saturday (May 7) to avoid any problem with the Mother’s Day delivery crunch. As I was about to check out on FTD.com, I saw that $35 of my order was taxes, fees and delivery charges — about 30% of the total order value.

Before I pulled the e-trigger, those service charges gave me pause. I thought I would probably get more value and better service from a local florist in my mother’s area. Yet against that intuition, I went ahead with the order.

I assumed the flowers would be delivered on May 7 as specified. On May 8 (yesterday) I called my mother. In the early afternoon she called me back and left a voicemail. There was no mention of the flowers and I inferred they had not been delivered.

Fearing some sort of screw up, I went to FTD.com to check order status. After inputting the order number the site returned a message that said, essentially, the company was too busy to provide specific order information. I then called customer service.

That’s when things took a turn for the worse. Indeed, sometimes talking to a poorly trained customer service rep, or one that has little or no authority or incentive to really help, is worse than no interaction at all. Bad customer service will damage the value of a brand.

It was then about 4 pm Pacific Time and the call was answered by an offshore call center. After providing my order number I was told the flowers would be delivered by 9pm. WTF: this was both surprising and frustrating. I asked for identification of the local florist involved to get more precise information, but that was refused “for privacy reasons.”

After additional, fruitless discussion I asked to speak with a supervisor. That request was resisted multiple times (it was clear there was a policy of trying to deflect these requests). I was put on hold for about 15 – 20 minutes. The supervisor was less scripted and spoke better English. She told me the order was “out” and would be delivered soon. She couldn’t be more precise about status and also wouldn’t give me the identity of  the local florist fulfilling the order.

During my roughly 40 minutes of elapsed time on the phone with these offshore agents, I started tweeting my frustration (see, e.g., above). However, nobody from @FTD ever responded on Twitter.

Once I got off the phone I went to Facebook and complained on FTD’s wall. There was a rapid but mostly impotent response. Late yesterday evening I got a voicemail from an FTD rep on the East Coast, whom I spoke with today. Someone must have escalated my complaint.

Eventually, the flowers were delivered, more than 24 hours late — though still technically on Mother’s Day. As I explained to FTD on the phone today, there were multiple points of failure in my interaction with the brand:

  • The mediocre e-commerce experience
  • The unrelenting “buy now” emails that continued after I placed my order
  • The lack of any updates prior to delivery
  • The failure to provide tracking information on the website on the critical day
  • The use of tone-deaf offshore reps reading from scripts, who provided boilerplate responses
  • The failure to respond on Twitter

My service charge was refunded, which was not offered but which I affirmatively demanded. The person I spoke to today (in the US) was sincerely apologetic and thanked me for my feedback. However I simply won’t use FTD again.

Next time I will heed that internal voice and go directly to a local florist (search: “florists” “city name”). That’s who’s doing all the work anyway — and that’s who should get my money.

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Yelp: Average Yearly SMB Ad Spend Is $3,204, 76% Retention, 269% ROI

Yelp

B2B social network Alignable ranked Yelp at or near the bottom of its Trust Index as measured by NPS ratings. There’s also anecdotal evidence that many business owners hold negative views of Yelp or harbor conspiracy theories about review manipulation for ad-sales purposes.

There are also critics in the industry who argue Yelp ads deliver a poor ROI. But yesterday Yelp reported Q1 earnings that were better than expected. The company said it had 121,000 local advertiser accounts, representing 34 percent annual growth. It also cited a 76% percent year over year advertiser repeat/retention rate.

Yelp ROI

It presented the chart above in its earnings slides, showing an average advertiser ROI of 269%. That’s based on average monthly spend of $267 and $983 in revenue from Yelp leads. How the company determined revenue per advertiser wasn’t disclosed.

Yelp also said that it had roughly 2.8 million claimed Yelp profiles/accounts. This means that Yelp’s existing advertiser base is about 4% the number of claimed accounts. That represents a significant growth opportunity, putting aside the larger SMB marketplace.

There’s an interesting disconnect between Yelp’s retention and ROI data and its critics’ claims, as well as the NPS scores reported by Alignable. I’m interested to hear what you think about:

  • The ROI figures cited
  • The 76% “repeat rate”
  • How Yelp can be having this sort of success with SMBs, given all the skepticism (and poor perceptions) that are out there

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Study Argues Most Current SMB-Focused Sales Efforts Are Completely Ineffective

local smb storefront

It’s very noisy out there in the world of SMB marketing services. It has become harder to get attention and stand out in a crowded market where many of the products and services sound very similar — and it’s not getting any easier for marketing providers.

Alignable just released some small business survey data that explore “how local businesses are being sold to by vendors and Sales teams, and the effectiveness of current sales methods.” The following were the questions asked:

  • How many times a week, on average, are you solicited to buy products and services from others?
  • How often do you respond to unsolicited outreach by a sales person?
  • What’s most likely to get you to engage with a sales person?
  • If a fellow local business owner wants to meet you, how do you prefer they initiate a discussion?
  • Does the amount of people soliciting you impact your willingness to reach out and meet other business owners?

In terms of sales-contact frequency, 59% of the respondents said pitches were coming at least 4 to 6 times per week; 37 percent (of that group) said more than 6x per week. That means many SMBs are being solicited by sales reps — some of this is probably email too — roughly 20 to 30 times, or more, per month.

The data also show that business owners are generally unresponsive to these unsolicited sales efforts. Just under 90% said they either never respond or respond less than 10% of the time. Furthermore, all the unsolicited sales activity has a negative impact on local business owners’ relationships with one another and their willingness to engage with other local businesses, according to the survey.

Alignable sales study

What would get these business owners to engage with a sales rep? A referral from another business/owner was the top answer. Presumably this also implicates reviews and testimonials, though those variables weren’t explored in the survey.

The other interesting response from the question above was: “ability to test product/service with little to no investment.” Accordingly, a free trial appears to be a must. This is consistent with what a number of local businesses told LSA about what would get them to engage with marketing services providers.

These findings suggest that much of the current sales activity aimed at SMBs is almost totally ineffective. Perhaps as a result of this, many marketing services providers are turning away from conventional outbound sales tactics toward “in-bound” marketing or content strategy designed to generate leads.

The Alignable survey didn’t explore specific sales tactics: email vs. telephone vs. outside sales. But the survey data suggest that email and cold calling are less and less effective (please argue with me). Outside sales probably remains fairly effective — SMBs value in-person meetings — however premise reps are costly and going to be reserved for higher value accounts.

What’s your experience or reaction to these findings? Do you agree or dispute them?

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Retailers Need to Step Up in-Store Game — Amazon Is Gaining

Prime Now

Last week on the LSA blog I wrote that Amazon Prime (Now) was emerging as a true existential threat to local retail. In addition to its Prime Now app, the company has launched PrimeNow.com.

The cost for two-hour delivery (where Amazon delivers) is nothing. For one-hour delivery it’s $7.99. Tipping the driver is optional but recommended.

Prime Now is currently available in roughly 25 cities and only applies to a limited (but growing) range of products.

Prime Now

The immediacy of Prime Now will cause more Amazon Prime members to turn to Amazon in situations where they might have gone to a local retail store. Part of this is because the experience in many retail stores is frustrating. Among other things, customer service is often poor and finding products can sometimes be difficult, causing customers to abandon stores even those the desired item might have been there.

A personal case-in-point: the other evening I was at my local Rite-Aid. I was looking for a particular medicine for my daughter. There were no customer service people on the floor and no in-store tools to help me find what I was looking for, beyond conventional signage. After about 20 minutes of diligently searching the aisles I called up Amazon on my iPhone, found the product and ordered it for next-day delivery.

Multiple studies have indicated how poor customer service in stores harms the customer experience, costs sales and even negatively impacts the retail brand. For years many retailers have focused on price competition and relied on low-paid, poorly trained employees simply to work cash registers.

This approach will no longer work and services like Prime Now will erode local retail sales because of the superiority of the overall experience.

What retailers need to do is improve the quality of the in-store experience in a fairly dramatic way. They should invest in training and provide tools for in-store shoppers to 1) find what they’re looking for and 2) get the product information they need to help make purchase decisions.

A central part of this strategy involves mobile devices and indoor location (beacons, etc). But it also means taking a holistic approach to improving the customer experience. Except perhaps at places where price is the only thing that matters, failure to invest in the in-store experience, including better service, will only mean further gains for Amazon.

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Agencies, brands, retailers and marketers interested in hearing more about what’s working in proximity marketing, location analytics and in-store mobile experiences should attend The Place Conference, September 21 in Chicago.

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Service for a Price: Most Brands Take a Shortsighted Approach to Customer Care

Zendesk customer service

Customer service is one of my “issues.” Despite lots of data showing its importance to brands and marketers, it remains elusive — most customer service experiences (on the phone or in stores) are mediocre to bad. And most brands pay insufficient attention to service, despite their lofty rhetoric to the contrary.

What triggered this post is a piece in the NY Times about cruise lines and others increasingly creating segregated, exclusive experiences for the wealthy and providing perfunctory or basic experiences to everyone else. Here’s an example from the article, regarding customer service on Royal Caribbean cruises:

For example, room service requests from Royal Suite occupants are automatically routed to a number different from the one used by regular passengers, who get slower, less personalized service.

Another example is the exorbitant “VIP experiences” that theme parks are increasingly selling. If you’re wealthy and want to be separated from the “plebs,” I suppose these are great developments. If you’re part of the mass of those not accessing these privileged experiences they might inspire envy or resentment. However it’s part of a larger, disturbing pattern in the culture and economy.

Corporations and brands should be doing everything they can to provide great customer service across the board. Service is one of the few differentiators in a market of increasingly “commoditized” experiences. But because service is generally seen as expensive and not an integral part of branding or marketing, many companies are trying to minimize costs (e.g., offshore call centers, IVR-based call avoidance) or have a bifurcated system where the highest-spending customers receive a higher level of service and others get the minimum.

Zendesk customer service value

Poor service erodes brand value and has a direct impact on the bottom line. Good service experiences do the opposite and create loyalty. There’s plenty of evidence to support this. The graphics above are based on survey data collected by Zendesk. But there are plenty of other supporting findings.

Most obviously, bad service shows up in online reviews.

Given all the research and advocacy about the importance of good service at a time of declining brand value and loyalty I’m surprised that companies are A) not more focused on customer service as part of their marketing efforts or B) focusing largely on high-value customers to the neglect of the bulk of their customers (airlines are a great example of the latter).

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Coupon Sites Playing a Game of Search Arbitrage — and Should They Be Stopped?

I got an email today from Sports Authority and clicked through to their site. I decided to buy some discounted running shoes and before I checked out, like every other red-blooded American consumer, I searched on “Sports Authority Coupon Codes.”

When I did this I got a list of high ranking coupon/deal sites, including Groupon, RetailMeNot, Coupons.com and so on. Here’s the page:

Coupon spam

What’s increasingly true, when you click these links, is that there are no actual codes. They’re just a pass through to the site. For example, here’s what happens on Groupon:

Groupon code

Groupon code

This experience is essentially replicated on RetailMeNot, Coupons.com and the other sites. I’m sure these sites are collecting affiliate fees for this traffic, which is effectively “search arbitrage.” There’s no value being added for the consumer — unless someone went directly to one of these sites, discovered a sale and then clicked through and purchased without prior knowledge of the sale.

As I mentioned, however, the common pattern is to search for coupons just before checkout. So the retailer is likely paying for lots of clicks that aren’t new customers. And the consumer is not getting any additional value because she has probably already shopped the sale and is just looking for extra discounts before buying.

If we consider these sites to be “deals aggregators,” a case can be made that they deliver value to those consumers who look to them first. But, as I suggest, if the majority use case is just-before-checkout lookups then these sites are essentially spamming search results without offering value either to the consumer or the retailer.

I’m willing to allow that a percentage of the audience directly navigates to these sites as a way to discover sales. But if my experience as a consumer is consistent with others’, it’s more of a “bait and switch” experience.

Google has cracked down on search spam many times in the past. Directories that were only republishing business listings without any enhanced content have been demoted. Content farms that were just cranking out superficial articles to rank and monetize display ads were equally shunned in a past algorithm update.

I’m wondering therefore when the shoe/axe will drop/fall on these guys.

Let me know if you totally disagree. But if you agree with me, do you think that Google will act against them? And should the retailers refuse to pay?

7 Comments »

When Market Forecasts Go Bad — IDC, Windows Phone & BlackBerry

mobile

Almost daily there’s a press release or marketing deck touting some analyst firm’s massive figures for anticipated growth in this or that market sector ($X billion, $Y zillion). Most of these are built on assumptions only loosely grounded in reality.

These numbers are almost always inflated because nobody gets media attention with moderate growth. Accordingly, there are many inherent biases in the business of forecasting.

For these and other reasons — a market is too young or speculative or some necessary development doesn’t happen — forecasts more often than not turn out to be wrong. Nobody’s really keeping score so we only see the numbers as they’re released but almost never in hindsight.

However I came across a fascinating example of a forecast that was way off other day: the 2011 IDC smartphone forecast for global markets.

Global smartphone market share 2011 – 2015

IDC 2011 smartphone forecast

Source: IDC smartphone forecast 2011 – 2015

The firm estimated that by 2015 Windows Phones would overtake the iPhone in global market share. It also assumed that BlackBerry would still be going strong in 2015.

Windows Phones were supposed to have 20.3% global share by 2015 and BlackBerry was going to suffer only modest declines, from 14.2% in 2011 to 13.4% share by 2015. Instead BlackBerry is dead and Windows Phones are all but dead. Globally Microsoft’s mobile share is well below 2 percent and CEO Satya Nadella has said that the company’s current mobile market position is “unsustainable.”

Indeed, Microsoft is rumored to be introducing a “Surface Phone” aimed at creating a new smartphone brand for enterprise customers. In 2015 Microsoft wrote off its Nokia acquisition to the tune of $7.6 billion.

Notwithstanding any impending Surface Phone there are two operating systems in the smartphone market: iOS and various flavors of Android. It won’t always be this way of course but for now that’s the market. Whatever assumptions IDC made about enterprise-driven smartphone purchases or other assumptions proved to be wildly inaccurate.

In fairness to IDC I’ve created forecasts myself that were way off (an early PPCall forecast comes to mind, which assumed Google would roll it out). But this is an interesting example of getting something very wrong in more than one way.

I suspect if we went back and exhumed numerous projections and forecasts we’d find more than 75% of them would be off in some significant way. These forecasts take on a life of their own as marketers pick up those that suit them, pop numbers in decks and give them credibility through repetition.

The only problem is that most of these numbers often have little relationship to reality.

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Why We Should Treat Most Commercial-Intent Search Queries As ‘Local’

local smb storefront

Google admits it doesn’t really know how many local-intent queries come through its search box. That’s because there’s often ambiguity in the string. Long ago now Google said that about 20% of its desktop searches carried a local intent.

In the past couple of years, at different points, Google speakers at conferences have said that between 30% and 50% of mobile search queries have local intent. The company’s official number is 30%.

The desktop figure has always been way too conservative and reflects disambiguation challenges. The mobile number is also conservative. At LSA16 Google director of engineering Chandu Thota said that Google has to be ready to serve local results to most mobile queries because of the “near me” nature of mobile search.

If we take the 20% and 30% figures and map those to comScore traffic data, it would mean there are nearly 5.5 billion monthly “local searches” across the desktop and mobile in the US on Google. That’s more than enough to go around.

But a probably better way to look at this local vs. non-local question is in terms of outcomes. If roughly 92% of US retail sales are conducted in stores — and numerous other kinds of transactions including services and entertainment happen offline — we must assume that a majority of commercial-intent searches conclude in the physical world.

There’s no data I could find about what percentage of overall search traffic carries a commercial intent. Yet most product searches as well as searches on traditional local “headings” (e.g., restaurants, automotive, medical, etc.) would be commercial intent searches because a transaction will ultimately result. And that transaction will in all probability happen offline.

If we take this “real world” view of search, what emerges is a kind of inversion of conventional thinking. Most search queries that carry any buying intent are going to be “local” because their fulfillment will likely be offline. Accordingly the Google “local” numbers should probably be set north of 50%.

Imagine how that would change the conversation around SEO and paid-search if Google were to come out and say something like “70% of search queries have a local commercial intent.” I’m curious to hear your thoughts about this way of looking at things.

10 Comments »

Google Is Gradually Turning Mobile Search into an App-Like Experience

Google Now

People often think and talk about Google in terms of ulterior motives. There’s the official position and then “what’s really going on.”

I’d observe instead that Google typically acts in self-interested ways, though it often presents its choices in terms of broader market benefits. This may fuel some of the conspiracy theories around Google.

The Google-led AMP initiative is a good example. The company is encouraging the publishing standard as a way to improve the mobile web user experience: faster loading pages, with no annoying pop-ups. AMP holds promise for a better overall content experience on the mobile web.

Yet Google also wants the mobile web to be more user-friendly because if mobile web usage declines (for whatever reason) Google’s revenues will likely decline. Call it “enlightened self interest.”

Turning to the topic at hand, Mike Blumenthal wrote a post that discusses Google’s increasingly “immersive” local search experience:

On mobile, Google has been slowly moving towards “immersive search” as the local search experience. Google’s goal is to allow the user to get all of the information that they need via Google, never having to leave for another site.

Some continue to see this kind of move as a betrayal of Google’s original mission and effort to create a kind of anti-competitive barrier. I see this rather as an effort to match the utility and functionality of apps. Traditional Google search results have limited value in a mobile context. What users want is more complete solutions that offer more end-to-end capabilities. Evidence of what I’m saying is reflected in some of the Localytics data below.

Localytics want people want from apps

Smartphone owners fundamentally don’t want to bounce between a list of mobile search results and individual websites and back again. They want more functionality in a simpler environment tailored to the smaller screen. The want “answers.” They want to complete tasks and transactions without using multiple sites.

This is why apps are winning vs. the mobile web. Only 5 percent of mobile media time now is spent on the mobile web according to Yahoo-Flurry. For the most part apps do a better job meeting user expectations and providing a good experience vs. mobile sites. There are of course great mobile sites and bad apps. But the generalization holds.

I see Google trying to straddle the web-app divide by continuing to organize mobile web content but providing more “answers” and a more “complete” (or immersive) experience that is increasingly app-like. These are survival moves by Google in an effort to adapt to a fickle and rapidly changing consumer market.

Do you disagree?

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No Longer Any Separation between User Experience and Brand Perception

Confusion

UX is the new branding. And just as marketing and media spending must now be addressed holistically, companies must consider customer experience and increasingly the digital experience as the core of their “brand strategy.”

In the pre-internet heyday of traditional media, brands and their user experiences were largely separate. Corporations carefully controlled brand perception and spent hundreds of millions on developing and grooming their brands. This sometimes made brands impervious or at least resistant to “facts on the ground.”

We then entered the digital era and, with the rise of social media in particular, companies lost control of their brands and reputations — though they’re still spending vast amounts on “branding” and awareness advertising. If there was a major gap between a brand’s image or promise and some real-world experience, that surfaced in online reviews or conversations that were then discoverable via search.

Searches for Company XYZ immediately often yielded consumer opinions within one or two search results of the brand site. Hospitality, restaurants and a few other industries are intimately familiar with this.

One of the big lessons of the past decade is that brand marketing and advertising and post-purchase fulfillment and customer service are now effectively joined at the hip — or should be. However most brands haven’t fully assimilated that lesson with its corresponding organizational and customer service implications.

There’s another wrinkle I’ve been thinking about recently, mostly in a mobile context. That is: how the moment-to-moment user experience builds or destroys brand value. This is a different spin on Google’s “micro moments” concept, which is largely about persuasion and spontaneous purchasing.

While a poor product or terrible customer service will degrade brand equity, so too will a bad mobile web or app experience. Great usability enhances a brand and brand perception (or can help build a brand). An awkward, slow or poorly designed user experience will correspondingly diminish it. Uber is an easy top-of-mind example. Uber raised tons of money but it built its brand entirely around a great mobile user experience — a kind of “ground up” approach.

In a more traditional retail or hospitality context there are many things that contribute to brand perception: selection, pricing, store/hotel experience, customer service and so on. But that brand identity extends into digital, and in many ways, is determined by it.

So when a retailer or hotel brand (e.g., IHG) delivers a weak or substandard user experience, especially on mobile, it degrades brand perception — sometimes very quickly. This point has been made in the past — and I may not be conveying what I’m trying to very well — but there’s an important lesson in here.

Companies that hope to survive, let alone thrive, must invest in digital assets (and service) as though their very existence depended upon it. They must deliver a great customer experience across channels before, during and after purchase. But because digital and mobile in particular are now the center of the customer experience that dictates a radical shift in thinking and attention.

Often companies treat their digital assets as though they’re simply tools or utilities or add-ons or necessary evils. But there’s something more fundamental I’m trying to say. There is no longer any separation between digital experience and brand identity.

Websites and apps aren’t merely tools that enable completion of some task, they are the brand.

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