Posts Tagged ‘Nordstrom’

CUSTOMER SERVICE CHAMPS

February 24, 2009

First, did you all catch the Senate hearings today on the Live Nation / Ticketmaster merger?  It was weird seeing people you have known well for 20-years testifying on Capital Hill.  Thought Irving was…well Irving and handled himself well.  Seth Hurwitz did a really good job.  Well spoken, facts at the top of his head, he represented the independent promoters well.  Although most senators present seemed to be negative towards the merger, it will probably still pass scrutiny, so everyone keep moving forward. 

My friend Scott Perry who writes The New Music Tipsheet http://www.newmusictipsheet.com/ sent a note about the March 2nd issue of Business Week.  The cover has SPECIAL REPORT printed on the top.  The topic, “Extreme Customer Service, In A Tough Year, 25 Companies That Get It Right”.  So what can we learn from these companies?  Just looking through the list will probably give you some ideas.  I’ve added some fun facts from the Business Week article to help.

  1. Amazon –“Some 30 % of sales come from outside retailers who sell goods on Amazon.”  Although there is more to that paragraph, you can take a lot just from that one sentence. 
  2. USAA Insurance –“Financial services firm for military families handled 150,000 catastrophe claims in 2008, double its average, as events such as Hurricane Ike destroyed customers’ homes and autos.  Still, USAA retained 96% of customers”
  3. Jaguar – “…Jaguar’s field teams for customer service were recently ranked best in the auto industry by the Nation Automobile Dealers Assn.”
  4. Lexus “…awards cash each year – as much as $50,000 – to dealers who have the best new service ideas.”
  5. The Ritz-Carlton – “To lure corporate event planners worried about high-end confabs amid the recession, Ritz will donate 10% of corporate meeting fees to charity.”
  6. Publix Super Markets – “To ensure customers always find what they come looking for, upscale Florida-based grocer Publix adopted an “automated replenishment” system in 2008 for fresh items.  Scanners indicate when inventory levels are low, and software automatically orders replacements.”
  7. Zappos.com – “With no monitoring of call times and no scripts, call centers have so much power it’s critical to make sure they’re a cultural fit.  To do that, CEO Tony Hsieh offers new customer service agents $2000 to leave the company after an initial training period if the new hires don’t think they mesh with Zappos’ zany culture.”
  8. Hewlett-Packard – “In 2008, Hewlett-Packard opened eight new customer service centers worldwide, including two in the U.S.”
  9. T. Rowe Price – To meet the customer service questions that flooded the company following the start of the financial crisis, “the company tapped 300 employees who formerly worked the phones to help meet call demand.”
  10. Ace Hardware – “…rolled out new technology that analyzes past shopping patterns to tell store managers what time of day is quietest for tasks like shelving products and cleaning rest rooms.”
  11. Key Bank – “In the past year, the bank unveiled new online tools that give entrepreneurs many of the cash-management services long reserved for large companies…”
  12. Four Seasons Hotels & Resorts – “…is outsourcing laundry to third parties at some properties and combining some hotel management roles to help save labor costs.”
  13. Norstrom – “Nordsrom’s famous return policy lets customers return any item at any store…”
  14. Cadillac – “Despite General Motors’ cash crunch, Cadillac has not scalled back on guaranteeing loaner cars to customers while their cars are in the shop.”
  15. Amica Insurance – “…CEO Bob DiMuccio says what sets the company apart is decades of investment in the staff, which has a turnover rate of less than 7%.”
  16. Enterprise Rent-A-Car – “…management pay and promotion are directly related to a store’s service performance.”
  17. American Express – New compensation model for call center agents…”offer them incentives tied to satisfaction scores and the flexibility to trade shifts.”
  18. Trader Joe’s Supermarket – “Some 99% of employees work in the stores, and even CEO Dan Bane doesn’t have an assistant.”
  19. Jetblue Airways – “…Jetblue created the industry’s first Customer Bill of Right – which includes providing compensation for passengers affected by problems caused by the carrier.”
  20. Apple – “Last year the company posted the largest one-year increase ever in the University of Michigan’s closely watched American Customer Satisfaction Index.”  Can you say Genius Bar?
  21. Charles Schwab – “A push to reduce the number of steps it takes to open new accounts has helped to shorten some call times, freeing up reps to answer calls faster.”
  22. BMW – “Now BMW ties rewards to how well dealers look after dissatisfied customers.”
  23. True Value – The company is expanding its online survey capabilities.
  24. L.L. Bean – “A simplified software system for entering orders has greatly reduced the training time for new hires.” 
  25. JW Marriott – “… tried to improve service by cross-training employees such as administrative assistants, who have been taught to serve food at banquets.  That keeps service leves high without having to hire more staff.”

Here is the short list of what I took from the top 25.  Some are the same old themes you always hear from me… I’m sorry, but it’s what I see above.

  • Use technology to serve customers, employees and save money
  • Hire the right people
  • Train your employees properly
  • Provide generous compensation packages for employees tied to customer satisfaction, not just sales
  • Have a philanthropic side that matches your customers’ concerns
  • Don’t keep customers holding!  Have a person answer the phone, not a machine
  • Treat your customers like gold…because these days they are worth a lot more

Talk with you soon…

Jim

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“IF I WERE…MICHAEL RAPINO

December 1, 2008

You can call me a sucker.  I bought Live Nation stock when it was at $20.  Friday it was trading at $4.89.  So why when Live Nation CEO, Michael Rapino had just announced that the company’s third quarter numbers were up significantly over 2007 would the stock price actually slip?  If you were to take out the sale of Live Nation’s motor sports division to Feld Entertainment, they were still up.  So why did the stock fall, and what can our friend Michael do to restore confidence on Wall Street?

In talking to friends who have also looked at the numbers, Wall Street just doesn’t seem to believe in Live Nation’s business model as it currently stands.  Their margins are just too small for analysts, investors, and if you own your own business, probably you too.  When Michael Rapino first took over as CEO of Live Nation, he spoke in public about the consumer’s “value proposition”.  Michael told us at conferences about his plans to make the “amphitheater experience” better.  He talked about food selection, price, the potential of taking out ARAMARK, etc.  Then what happened?  The realities of running a public company, quarterly numbers, and the like must have set-in.   That customer experience stuff was not heard about again.  Instead Live Nation’s message shifted to branding (Live Nation, Artist Nation, Fan Nation, House of Blues, Fillmore, etc), an international platform for brands to reach consumers (e.g. the Citi deal), and deals with Madonna, U2, and of course Carrot Top (just seeing if you were paying attention).  Brands, bands, and fans you might say.  Problem is the fans are last in this equation.  Now you add the Ticketmaster Entertainment scenario in there just for shits and giggles and it really becomes a migraine for Michael.

We will stay away from the Ticketmaster in this letter and just focus on Live Nation and Michael.  Starting with Jack Welch?  Well, Jack may be a business leader from the past, but his brave steps to form GE Capital and move General Electric away from less profitable businesses the company was known for such as small appliances (toasters, can openers, etc) make for a good example of what Michael and company need to do.  Live Nation needs to show Wall Street a plan and a leader that will get the company to the goal line.  So without further B.S., here are some of the things I would do…”If I were Michael Rapino”

·     HIRE SOMEONE FROM DISNEY PARKS TO RUN VENUE OPS – There needs to be a complete overhaul of everything (employee training, venue maintenance, F&B, VIP programs, ticketing, parking, security, transportation, etc).

·     BRING IN A CMO FROM A FORTUNE 500 COMPANY – Certainly Live Nation has its share of marketing pros to count on (Jim’s from the East, Brad in the West, Lulu in Texas, etc), but what our business needs is are marketers that are used to dealing with big ad agencies, big brands, big budgets, and have worked for publicly traded companies.

·     HIRE A CUSTOMER SERVICE CZAR – Disney, Ritz Carlton, Nordstrom, and other customer service culture oriented companies are great places to look.  Live Nation should stand for customer service.

·     TICKETING, OK I’M BREAKING MY PROMISE – Live Nation’s new ticketing system should bring them greater revenues from ticketing… in theory.  But with Ticketmaster Entertainment now owning a management company that supplies so much talent to Live Nation venues, Live Nation’s ticketing is looking much more complicated.  As stated in earlier LiveWorks Newsletters, Irving Azoff is an artist manager first and foremost.  So as an example, both Irving and his partner Howard Kaufman know that their client Jimmy Buffett is probably better suited to play outdoors.  The company Irving now runs makes out better (at first look anyway) if Buffett plays indoors.  Will Buffett play the amphitheaters next summer?  If he does, where do you think all the extra ticketing money Live Nation might be making on their new deal will be going???  Do you think ticket surcharges are going to go down?  Is it too late to talk to Irving about getting Barry Diller to buy LN out of their ticketing commitment???  Just asking.

·     MARKET THE EXPERIENCE – Maybe I sound like a broken record, but in this case LN has something special.  I believe strongly in the amphitheater experience… at least the old one.  Yes, for acts that carry huge productions, they may not be the best places to play.  But for the fan experience, when done right, there is noting like seeing a concert outdoors.  Just ask a Buffett, Dave Matthews, Grateful Dead, Tom Petty, James Taylor, Warped Tour, or any other artists’ fan that has frequented the “sheds” over the years.  Same can be said for many Live Nation clubs.  Have your newly hired CMO come up with some kick-ass marketing that reminds fans how much fun it is to be at a concert with your friends, family, etc.  It brings people together.  Gives them something to share.  That’s why fans buy the event shirt.  So they can show all their friends they were there.

·     FORBID PAPERING – Papering a show (giving away free tickets for gig that doesn’t sell) or selling-off lawn tickets for $10 after the show goes on-sale should not be allowed at any Live Nation show.  As Gene Simmons put it in his Keynote at the Billboard Touring Conference, “it is like letting the fox into the hen house” (can’t believe I just quoted Gene).   Fans find out about these things real fast, and the ones that paid full-price this time will wait for the free tickets or the fire sale the next time the act is through.

·     HIRE A CHIEF TECH OFFICER – This isn’t an IT guy.  This is someone like Joe Rospars.  Joe ran the tech side of Obama’s campaign, while the company he founded with his partners, Blue State Digital was responsible for the online fundraising.  Live Nation needs someone that can speak to music fans and figure out a way get those fans to help make new ones.  Fact is, in 2003 when Ann Marie Wilkins called me to contribute to Obama’s Senate run in Illinois, I had never heard of him.  He is now President Elect of the United States.  In early 2007, most Americans still hadn’t heard of our new President.  Guys like Joe can do a lot for our business.

·     BUY METROPOLITAN AND JAM – I know they certainly don’t want to sell to you and you may not want to buy them, but John, Jerry and Arny are all legends in our business with great relationships your people don’t necessarily have.  Do you really need one more competitor in markets that has seen nothing but turbulence?  Imagine the artists you could potentially promote in NY and Chicago with those guys on your side.  This seems like a no brainer to me…other than getting them to do it.

·     GO ON A ROAD SHOW – All of the above cost money and in the short term, earnings will suffer.  This could be hard for investors and analysts alike to swallow but you must remain strong.  Put a plan into place and then go out on the road and sell it to your entire staff, local “town hall meetings” and finally, Wall Street.  But don’t just go to NY.  Speak with analysts, traders, and business leaders in every community you do business in.  Let consumers see a face to Live Nation.

·     PRICES – We all know that on top of tickets, the prices for concessions, parking and merchandise are just too high.  With that said, it is funny that an act will make a comment on stage about the price of a beer, popcorn, or parking at a Live Nation venue but won’t say a word about those same prices (or even higher) in the arena.  Why is this?  In many cases, the fans feel ripped-off, and the bands feel they are being ripped-off.  This is a huge perception problem.  The answer is probably going to have to be a combination of dropping your prices to increase volume and positive PR in the short term.  Long range, we need to work on the “value proposition” because for whatever reason, our fans seem to have a problem with the $8 parking at your venue while football fans pay at least twice that and don’t seem to complain.

We have probably covered enough.  Again, my disclaimer is that I’m a Monday morning quarterback.  I don’t have to sit in Michael’s shoes everyday.  But I do feel that Jack Welch’s example is a good one here.  If you are really in this for the long term Michael, some of what is written above just might make sense to you.  To bring the live business back to health we need to think less about gross and more about number of tickets sold.  In the long run, getting more fans through the doors to experience live entertainment is the only way to win.  The concept of fewer bodies at a higher ticket price can only work for some acts and for so long.

Talk with you soon…

Jim