How Not to Handle a PR Crisis

Right now, if you do an online search for "United Airlines crisis," more than 1 million results pop up.

That's an indication of how serious a PR crisis United Airlines is facing after forcibly removing a passenger from one of its jets to make room for crew.

The flight from Chicago was fully booked and even offering up to $1,000 in vouchers for future flights didn't bring anyone forward to volunteer. Airline employees said they would have to randomly select passengers to leave the plane.

Three passengers reluctantly agreed when they were asked to leave their seats to make way for United crew members. One refused. And so United's employees brought in the aviation police to forcibly remove the passenger. Things did not go well.

Others on the plane began to video the encounter and post to social media. Soon the entire planet could see how this passenger was being forcibly dragged through the aisle, his face bloody and his body limp. Millions of people viewed and reposted the videos. Many news media posted the videos and their comments. Social media memes popped up in the wake of the incident.

How did United react? Well, despite its stated commitment to customer service (see top), the airline simply didn't do a good job here.

Its CEO didn't know how or when to apologize and try to make things right. At first, he talked about "re-accommodating" the passengers--and that phrase was, of course, widely ridiculed. He then blamed the passenger for being belligerent, which not only contradicted the videos but also made the customer the bad guy in this situation. Wrong.

Finally, the CEO began issuing apologies and saying that all passengers on the plane would receive refunds. By then, United's stock had dropped and even competitors were taking some jabs at the company.

Now all of this is on top of the famous #UnitedBreaksGuitars video, when a musician couldn't get United to pay for a guitar it broke. He wrote a song, did a video, and posted it online. Yes, the hashtag and video went viral. United got the message.

Once again, United Airlines is in the midst of a PR crisis.

Marketing Nordstrom in Canada: Customers First

Based in Seattle, the upscale fashion specialty store Nordstrom sums up its marketing purpose this way:

Since 1901, we've been committed to providing our customers with the best possible service—and to improving it every day. 

Nordstrom has three full-service locations in Canada and three more on the way. First to open will be the new store at Toronto Eaton Centre in September, followed by the new store in Yorkdale Shopping Centre.

At left, one of the ads paving the way for these full-service store openings. You First is the message, reinforcing Nordstrom's marketing positioning and a key point of differentiation.

Nordstrom has a well-deserved reputation for service--which will help it compete in the increasingly crowded Canadian retail market. The company is also opening additional Nordstrom Rack stores with off-price/discount merchandise, adding to its strength in relatively affordable fashion.

A Closer Look at LEGO Serious Play

From LEGO Serious Play

LEGO Serious Play is a division of LEGO devoted to helping businesses and organizations build teamwork. The program "taps into your team's creativity to boost strategic problem-solving and enhance how it handles change."

LEGO isn't the only big name in children's entertainment to offer corporate programs. Walt Disney has a separate division to teach customer service skills and support service teambuilding. It also offers unique team-building opportunities for groups that meet at its hotels and resorts.

LEGO's division is marketing teambuilding activities built around using LEGO blocks to create structures - and, in the process, inject more creativity into working together.

Quoting from the LEGO Serious Play site: The metaphors in the models serve as the basis for group discussion, knowledge sharing and problem solving and help foster creative thinking and finding unique solutions. The idea originated in 1996 and LEGO Serious Play has now certified facilitators all over the world.

There's a book about this teamwork/creativity approach, in case your management wants to try this at home. The Chicago Tribune wrote about LEGO Serious Play in 2015, interviewing one of the book's authors. Others are using LEGO toys to unlock creative potential, as shown on this page about LEGO and Art Lab. And some companies ask job candidates to build LEGO structures during the recruitment process--so be prepared. These ubiquitous plastic bricks have value to people of all ages and at all levels!

Marketing in the Experience Economy

Way back in 1998, Pine and Gilmore's Harvard Business Review article about the Experience Economy outlined a four-step progression from undifferentiated commodity positioning/market pricing to the highly differentiated culmination of staging an experience at premium pricing. "To realize the full benefit of staging experiences, however, businesses must deliberately design engaging experiences that command a fee," the authors wrote.

Today, consumers are surrounded and distracted by more potential experiences than ever--facilitated by connectivity and ever-present digital devices. In a very real sense, then, marketing must be ever-present and available to reach customers and deliver experiences when and where desired.

In fact, material goods are so ubiquitous that consumers often crave an interesting or unique experience in conjunction with a purchase OR rather than the purchase of a tangible item. (Think "Spotify" instead of music download, for instance, Uber car service instead of a traditional taxi service.)

Not surprisingly, consumer behavior favoring experiences is having an effect on the retail industry. Stores can't simply be stores. Prices can't simply be prices. Showrooming and webrooming rule. The key to marketing in this experience economy is to understand your customers and adapt to their needs and wants--quickly--with appropriate/differentiated offerings and customer services that set the offering apart from competing offerings.

Even purchases like Uber rides are actually experiences, especially since both driver and passenger rate the experience. Bad experience? Bad rating. Good experience? Good ratings add to the potential for further differentiating this offering and charging more for the experience.

Yoox + Net-a-Porter = Upscale Fashion E-tail Power

Italy-based luxury e-tailer Yoox just arranged to buy the London-based fashion e-tailer Net-a-Porter. The deal moves Net-a-Porter from Richemont (which owns Cartier and other lux brands) to a new owner that debuted online during the same month and year as Natalie Massenet's brainchild--June, 2000.

Yoox has succeeded where the late Boo.com did not...with a form of off-price retailing that allowed upscale fashion brands to get their out-of-season styles into the hands of tech-savvy consumers with clicks, not bricks. Yoox's founder, Federico Marchetti, knows finance and had a vision of e-tailing that, just before the dot-com bust of 2000, was ready to gain a foothold.

Now Yoox is adding its logistical power and Big Data capabilities to the cachet and service responsiveness of Net-a-Porter, aiming for more momentum in the increasingly competitive online fashion retail space. Yoox's founder says:

E-commerce is a very analytical and process-driven business, while luxury is very visual — it’s all about creativity, the content and image.

Customer Satisfaction Rankings of Fast-Food Chains

The latest rankings are out from the American Customer Satisfaction Index, and McDonald's is at the very bottom of the US fast-food restaurant industry for 2014. According to the ACSI, McDonald's has improved its US satisfaction rating since 1995--but it still is at the bottom for 2014.

Worldwide, McDonald's has more than 35,000 restaurants, so keeping every customer happy in every outlet, every day, is a challenge--especially in a chain so heavily dependent on franchised operations. As the McDonald's director of media relations says: "We are always listening to our 27 million customers every day and appreciate hearing feedback from them and other sources as it helps us improve and evolve." The McDonald's annual report notes that the company is focused on improving service and satisfaction at each "moment of truth"--each interaction or touchpoint between the company and its customer.

Interestingly, the ACSI shows that smaller US restaurant chains such as Panera and Chipotle have higher satisfaction ratings.

In 2014, the top five US fast-food chains, ranked by customer satisfaction, are:

• Pizza Hut
• Papa John's
• Little Caesar
• Domino's Pizza
• Wendy's

In the UK, the customer satisfaction index for 2013 (most recent year available) covers a slightly different group of restaurant competitors. McDonald's is next to last in the UK, just above Burger King.

The top five UK restaurant chains, ranked by customer satisfaction, were:

• Gregg's
• Subway
• Costa Coffee
• Starbucks
• Yum! Brands (KFC and Pizza Hut)

Fast Food in 2014: Make It Snappy, with a Smile and an App

Fast food is getting faster by the minute--literally. A recent Bloomberg Businessweek article explains how the Little Caesars pizza franchises owned by Valor Equity Partners use detailed day-by-day sales projections to prepare pizzas, wings, and other foods in anticipation of customer orders, 30 minutes at a time, based on sales history and sales projections.

For example, from 6 to 6:30 pm at a Little Caesars in Salt Lake City, the staff will have ready 67 pepperoni pizzas, 39 cheese pizzas, 6 Hawaiian pizzas, and so on. Picking up the pace is pleasing customers: The dollar value of the average customer order here is nearly 8% higher than before the projections and efficiency fine-tuning went into effect. The bottom line: Shaving even a few minutes off the waiting time can be a competitive advantage when targeting consumers who value speedy service.

The idea is the fast-food equivalent of Amazon's possible plan to "pre-ship" merchandise that consumers look at (or even pause the mouse over)--before an order is placed. Consumers want what they want, when they want it, as Amazon and Little Caesars know.

On the other hand, drive-through performance is affected by the number of cars and the complexity of orders being prepared. Last year, a study reported in QSR magazine found more cars in line at Chick-Fil-A drive-throughs. Chick-Fil-A says that the increase in specialty menu items means it takes more time to get each order right.

The relationship factor is also a consideration for this fast-food marketer: "When you have Chick-fil-A team members who are making eye contact with you and listening to you, even through a speaker box, they’re more attentive, they’re more focused, they’re more likely to get it right … and they’re also more likely to get it out with much more grace and efficiency."

Still, for most drive-through customers, speed matters. McDonald's is adding a third drive-through lane at its busiest locations to accommodate customers in a hurry. And now, here comes the fast-food ordering app--for customers who want their orders ready for pickup without waiting. 

Survey Says: Listen to Your Customers!

Today's Wall Street Journal has a long story headlined, 'Dear Airline, Here's the Problem...'

The point of the article is that "some carriers actually pay attention to the results" of their customer surveys.

Imagine: American, Delta, United, JetBlue, or some other carrier asks you to fill out a questionnaire about the flight you just took, seeking your opinion about the service or the meals or the baggage handling, and so on. You, the customer, are happy to give the airline an earful about some glitch, or maybe you have a compliment for a staff member. You submit the survey and you feel good that you've added your voice to the mix. And that's one very good reason to request feedback, says Delta's director of customer experience: to "give people a chance to vent so anger doesn't build up and turn into something more."

American Airlines Is "Listening to Our Customers"

Airlines ask for feedback in a variety of ways. For example, American Airlines has a web page explaining that it surveys 250,000 customers online each month, now in Spanish as well as in English, to find out what passengers like and don't like and to gauge response to new service initiatives. The page also mentions American's social media feedback programs, how it reads customers' letters and e-mails, and its use of focus groups and employee comments to analyze customer satisfaction and needs. 

Outside surveys indicate that in general, the airline industry has a long way to go in improving service and satisfaction.

• One recent survey found that the airline industry ranks #15 out of 19 industries in customer satisfaction, on average. This Temkin survey says that Alaska Airlines and Southwest Air are tied for best customer satisfaction experience among US airlines.
• In last year's American Customer Satisfaction Index, United ranked at the bottom of airlines (Southwest and JetBlue were at the top of the list for customer satisfaction, but Southwest's score in 2012 was slightly lower than in 2011.)
• In last year's J.D. Power survey, results showed that "traditional carriers still struggle to meet travelers' expectations." As of June 2012, the carriers at the top of this satisfaction survey were Alaska Airlines and JetBlue.
• Deloitte & Touche's recent survey found relatively low levels of customer loyalty among airline and hotel customers, especially problematic because of the money being spent on frequent flier/travel rewards programs.

Given the intense competition among carriers, doesn't it make sense to listen to your customers?

Bad News Travels Fast--So Be Good

News about bad customer experiences travels faster and farther on social media than ever before. A new American Express survey shows that people who use social media will tell 53 people about a bad customer service experience but tell only 42 people about good customer service.

The top four complaints about customer service: (1) rudeness, (2) being passed from department to department without resolving the issue, (3) having to wait too long for resolution, and (4) forcing consumers to repeatedly follow up to get a problem resolved.

This global survey revealed the increasing use of social media worldwide for customer service. In India, for instance, more than half of the respondents have tried social media to get attention for a service problem.

Take a cue from Zappos, which has a dedicated Twitter customer-service account, and more than 12,000 followers (and following). When problems crop up, as they do, Zappos uses every communication tool to inform and reassure customers. After Zappos was hacked and millions of customer names were exposed, the company first alerted employees to the problem and then publicly posted reports about what had happened and what the company was doing to fix things fast.

The bottom line for company bottom lines: Do your best on customer service and when problems arise, get them resolved as quickly and politely as possible.

Top 10 Leaders in Retail Customer Service

The National Retail Federation just released its ranking of retail service leaders, based on a survey of 9,300 consumers. The top 10 are a mix of bricks-and-mortar and online/TV retailers:

1. Amazon.com (up from #2 last year)
2. L.L. Bean
3. Zappos (before the revelation of its recent hacking problem)
4. Overstock.com
5. QVC
6. Kohl's
7. Lands' End
8. J.C. Penney
9. Newegg.com
10. Nordstrom

USAA: Tops in Customer Service

USAA frequently ranks as one of the top US companies for top-notch customer service. The financial services firm, based in San Antonio, Texas, was #1 in a survey released just this week by Nunwood. Why?

One reason is that USAA's employees receive intensive training--not just in products but also in understanding their customers' needs and situations. Newbies receive weeks of training before they start to serve customers. And the work force is treated to ongoing development to keep their skills polished.

Another reason is that USAA has redesigned its back-office systems to allow employees to serve the needs of customers in a life-cycle way. In other words, customers don't have to think about whether they're contacting the banking department or the insurance department or whatever. USAA instead takes a broader perspective (the customer is being transferred and how will that change his or her needs and how can USAA help meet those needs?).

USAA is social media-savvy, with a presence on Facebook, a Twitter account, and a YouTube channel too.

Helping Customers Through a Crisis

The Japanese earthquake, tsunami, and nuclear problems have created an unprecedented crisis for people and businesses in Northern Japan. This is where customer service takes on new meaning. Any number of businesses have stepped up to help their customers through this terrible crisis.

For example, Otis Elevator immediately sent technicians into Northern Japan to make repairs and restore service to 16,400 of the 16,700 elevators that had seismic detectors and had automatically stopped operating until they were checked and cleared by the company.

Telecommunications firms offered free phone and text services to customers calling Japan. No word on how many customers took advantage, but the offer is thoughtful and helps ease anxieties of people who want to check on friends, family, and colleagues in Japan.

The public relations payback is a plus but the biggest benefit of helping customers through a crisis is reinforcing their loyalty. Customers have long memories. A company that gets them through a challenging period will earn their loyalty for a long time.