Why do companies hate their customers?

This is one of those “well, duh” issues, I guess, but the dichotomy between what companies say and what they do is simply astounding to me. Much like what the dichotomy between what politicians say and do. And we all hate politicians, but we can vote against companies (and their practices) with our dollars and yet, apparently, we don’t.

If you look at virtually any company’s website or annual report, you can find their mission statement and after you get done with the junk about “empowered employees saving the earth” you will find out that they really, really respect and cherish and love their customers. Turns out what they really, really respect and cherish and love is their customer’s money. And they will lie and cheat and deceive to get it.

Now you’d think that all this lying, cheating and deceiving would be kind of a turn off for customers, not to mention kind of illegal. But no.

For instance, how are rebates not a “bait and switch”? Did we say that was $49.95? Well yeah, you pay us $150 today and if you complete these seven steps in the exact order we tell you and slice and dice the box it came in just so and send the whole mess in before midnight tonite to Young America, MN, we might send you a check for $100.05 in 4 to 6 weeks. So obviously the $49.95 is a lie. If the real cost, across the board was $49.95, that’s what you’d pay at the store and be done with it.

People don’t complain about this because they’re all sure that they’re gonna do the seven steps, etc. But we all know that the only reason companies do this is that some good portion of the populace won’t do the seven steps before midnight tonite, so the company gets to keep the $100 and 50 cents. If you really loved and cherished those folks would you be trying to hose them out of $100.50? You would not. Clearly your money is more important than you are.

My last point on rebates is this: it’s not like just one or two companies are doing them, there’s hundreds. And they ALL think you’re a schmuck. How does that make you feel? Cherished?

OK, rebates are an easy target, but there’s tons more proof that there are companies that hate you and will do virtually anything to get a few more bucks from you, while at the same time proclaiming their love for you.

OK, time to name names (but just for illustrative purposes):
Macy’s – my wife is a fine and long-term Macy’s customer and constantly gets 15% or $10 off coupons. Can she use them? Of course not, because the things she’d actually like to buy are excluded from the coupon’s discount. Would it kill Macy’s to give out a 15% off coupon with no limitations to its good customers? It would not. But why do that when you can lure them into your store and wring out a few more dollars?

Wireless Companies – I was gonna say AT&T, but they’re all the same. Is there a real problem with offering a plan with 1500 minutes for, say, $99,95 month, all in? Of course not. They advertise $99.95, but is the actual bill ever $99.95? It is not. If you respected your customers, you’d actually give them what you advertise. And make sure that you let them know before they ran up a bazillion dollars of overage charges. I’ve gotten text messages from AT&T advertising stuff but never to alert me that I’ve gone over my monthly allowance. Technologically impossible? I think not.

Credit card companies. You probably think I’m going to rail against 20% interest rates or the fact that years of loyal card-ownership go out the window if you’re three days late one month. Well there are those things, but frankly we all know those things going in so they don’t really fall into the “screwing your customers with malice aforethought” category. But this does: You know those checks you get, monthly, offering low, low interest rates if you use them to pay off other high-rate cards? Turns out that this is not the great deal you’d think – it’s a ploy to insulate, and increase, the debt you owe (at 20%) from ever getting paid off. How’s that work? Here’s the fine print - the debt you roll over at 2.99% gets paid off first, so that $500 you send in every month doesn’t reduce your high-interest debt at all. The highest rate debt gets paid off dead last. Nice.

Now believe me, I get the profit motive (business major!) and I also know that these companies have probably done cost-benefit analyses that support, on paper, screwing over your customer base to make a few bucks.

What I just really just don’t see is why companies feel they’ve got to lie to be profitable. And here’s my real problem – there are people (not companies) making these decisions. Do the people making these decisions know the people who write the mission statement? My fear is that they’re the same people.

It just goes to prove that Mencken’s phrase “no one ever went broke underestimating the intelligence of the American public” is, sadly, still true and that, sadly, there are still people willing to exploit that fact.

The Metrics of Metrics

We all know that using metrics in a sales organization can be a great thing. After all “what gets measured gets done”, and there’s lots of things we need to get done in sales.

So naturally the first issue is figuring out what you want/need done. Closing more sales is usually the main objective, but there may be others – customer satisfaction, brand awareness, functional cross-selling etc. that may need to be done either on an on-going basis or for limited periods of time. So what you want done can change over time. The next step is figuring out a) which activities directly contribute to your end goals, b) which of those activities are measurable, c) what the measurement is gonna be and d) lastly which activities will get done anyway even if you don’t measure them. This last one may seem weird but you can’t measure everything so why bother your reps having them track something they’re going to do anyway. You also don’t want to be redundant in asking your reps to measure something you can get from other sources – for example, if you get a report showing how many quotes each rep has, you don’t need a metric for that; you already have one.

Whatever metrics you choose to implement should be designed to encourage the actions and behaviors you want in your reps – actions and behaviors that directly lead to more sales (or whatever else your desired end result is). If your best practices show that presenting a proposal face-to-face, rather than via snail mail or e-mail, results in higher closing ratios, measure f2f meetings. If your studies show that prospects close more consistently if you respond to their RFP in under 36 hours, make speed your metric. Whatever you want reps doing better and more consistently is a good activity to measure.

But there can be pitfalls to metrics, too.

First and most egregious, is making the tracking of metrics time-consuming and difficult on your reps. Many of your reps, especially the most successful ones are a) already doing most of these things and so see the tracking process as redundant or b) are successful without doing these things and can’t understand why you’re cutting to their selling time with new reporting. So it’s gotta be painless or so important that it’s worth the pain – theirs and yours.

Second and only slightly less egregious is instituting metrics that you can’t clearly show are valuable in closing sales. For example, making all the reps in your organization make 25 calls a week on an unproven sales channel is a recipe for disaster. Unless you know for a fact that firms have successfully sold essentially similar products in this manner in this channel (or better yet, you have reps that have successfully sold your product in this manner in this channel), do not make this a metric. Attempt it on a smaller scale in order to prove its success. Once you do that, you can roll it out to the company as a whole.

And don’t be afraid to change. If something starts working for one area of the company or one geographic location, spread it around!

Instituting good metrics is one of the best methods you have of ensuring the spread of, and consistency in, the use of your firm’s best sales practices so that everyone can perform as an “A” level rep.

A(nother) Sad Story

This is a true story – names have been changed to protect the innocent (and shield the guilty). There’s a very large, well respected company that has their reps use an internal Sales Force Automation System (SFA) we’ll call SalesSonar. This is a Siebel system, but I’m not gonna blame this on Siebel because I’m sure that, even though there may be some limitations in Siebel systems, most of the faults in this particular installation are self-imposed.

If you asked this company to define what the goals of this SFA system are, they’d say activity tracking, analyzing metrics and data integrity – the usual buzzwords. Let me tell you what they actually get.

Due to “data integrity” issues they’ve made it practically impossible for reps to change data already input, or to erase data. For example, there are three separate entries for one client, whom we’ll call ChoicePoint. There’s Choice Point, ChoicePoint LLC, and CHOICEPOINT. Now you’d think that, if you’ve ever Googled anything, in this situation you’d have been asked “Did you mean ChoicePoint LLC?”, so that you could choose something already entered. Can’t do that. Two of these entries have the same address, one has an old one. Each of the three has different listings of contacts, activities and opportunities. Can any of these things be changed by a user? They cannot. Suppose the firm moves – can one change the address? One cannot. How about if someone leaves one prospect and goes to another – can one move or copy all the previous activities so one can tell what the firm has already done? They cannot. Multiple entries, conflicting addresses and contacts and incomplete activity history. So much for data integrity.

And because the company has strange fears about security (this is a company that flaunts its client lists in its marketing material. Hello?) they refuse to web-enable the application, meaning that reps have to either be in the office or attached to the VPN to access it. And access it they must because the company bases part of a rep’s compensation on their use of the system, which is normally something I’d recommend.

However.

This compensation reduction is based on a rep having X number of “trackable activities” for the month, as reported as of the 10th of the following month. What this means in practice, because the system is practically unusable on an on-going basis, is that on the 9th of every month 90% of the sales force, hundreds of reps, sit in their offices all day inputting their monthly activities. That’s quite the loss of productivity, isn’t it? Considering that there’s ~ 20 work days a month, losing one day is the equivalent of reducing productivity by 5%. And these things are supposed to make us more productive, not less.

What’s more is that in terms of activity tracking, the company can only be sure of what it’s reps are doing, have done, that one day, the 10th. Since reps don’t use the system on an on-going basis, if the organization wants to know what everyone is doing this week (say) they can’t. The 10th of next month they can find out, but not today.

Now of course you’re thinking that this is an isolated example. Well this might be a slightly more egregious example than most, but there are hundreds, maybe thousands, of firms whose implementations of SFA have been so botched that any benefits that would normally be expected are non-existent.

And that is both a shame and a tremendous waste of time, money and talent.

Are Sales Reps an IT security threat?

Many, if not most, employers arm their field sales folks with laptops so that they can be productive on the road, and more often than not these laptops are loaded with security software (virus protection, VPNs, encryption software, etc) meant to protect the corporate network from security threats. While this security software seems like a good idea there are instances where it may not be enough, due to the nature of the beast that is the field sales rep.
There’s a couple of fundamental issues with field laptops in general that are issues that don’t come up with corporate desktops. One is that while you can block websites and application loading when someone’s using a desktop on the corporate network, it’s trivial to just not launch the VPN and go and do, basically, anything you want to, unfettered by corporate Mom.
A more likely scenario in the case of sales reps is the checking of personal e-mail. While it’s not usually a big deal for Home Office employees to wait until they get home at night to check e-mail, if you’ve got a rep constantly on the road, they’re not likely to wait 3 or 4 days to do so. That’s especially true for reps with families, who likely use e-mail or chat to communicate with family members while they’re away.
Of course there are corporate rules against some or all of this type of behavior, but human nature being what it is, it will continue to happen, and locking laptops down even more is definitely not the answer. Right now I turn on CNBC and get a cup of coffee before I start booting up so I have something to keep me occupied while I’m entering passwords and waiting.
Sure you can scan for virus’ and rogue applications once reps get back on the network, but sometimes (as in the case of the Storm worm) that step might be too late.
What to do? I have a solution that I’d personally like to try, but so far, I’ve been unsuccessful in convincing corporate IT to let me do it. The answer of course is to let me use my Mac laptop. Since Windows based virus’ and worms don’t run on Macs, what I do on my laptop with the Mac layer on the road doesn’t threaten the network and I’d be happy to have IT control (and lock down) the Windows layer for corporate only use. I don’t need, or expect, IT support for the Mac.
This seems to me to be a good solution, but, obviously I’m missing something. What is it?

We apologize for any inconvenience …

Really.

Feel badly, do you?

This "We apologize for any inconvenience" phrase is rapidly becoming meaningless, seeing as how it’s both overused and usually immediately follows someone telling you the corporate equivalent of “go pound sand”. The truly irksome thing is not the insincerity of the sentiment, it’s that most of the time the inconvenience is, if not intentional, certainly not causing any sleepless nights over at the XYZ Company.

If you want to be truthful, the response should be “Yeah, we know it’s a pain for our customers. What of it?”

I imagine there really are some firms that are sincerely apologetic, it’s just the two I’ve recently been dealing with (Chase & Vonage) clearly aren’t. But it’s not just them, I see this phraseology all the time and virtually always with the same preceding “shove it”.

Listen, don’t fake sincerity. If the customer is wrong, you can point out their error, apologize for the misunderstanding and offer solutions to fix it. If the customer isn’t wrong, you need to make it right for them.

Case in point is the Chase situation. Their interpretation of their fine print (define “may”) and mine vary. Their corporate policy is to define “may” as “will”. Legal issues aside, they should either change their disclosure wording or acknowledge my understanding. Instead their response is “This the way we do it” (go pound sand) and “We apologize for any inconvenience”. It’s not inconvenient – it’s wrong and you should offer to fix it.

How about “We’re sorry you misunderstood what we meant, but you’re gonna have to live with it.” At least it’d be honest.

Fire the Coach?

It happens all the time in sports - at the end of a losing season, the manager or head coach gets fired. Obviously, that's easier than getting rid of all the players and, more importantly. it deflects responsibility for the team's failure away from management.

This same type of thing happens in the corporate world and for the same reasons. If sales are down, more likely than not sales management will take the heat and/or get fired rather than the sales reps and rather than senior management looking looking introspectively.

A case in point, from an anonymous correspondent;
"I work for a well-known East Coast based financial services firm and 2006 was a horrible sales year for our division. In December it was announced that our Sales Manager would be leaving and that our department would be rolled into a division that sells products complementary to ours. While none of this seems bad or unreasonable to the outside world, one key element was missing - any kind of real investigation as to why sales were down. The real problems were out-of-date products and horrendous service, problems upper management refused to fix, and therefore a terribly unmotivated sales force. The new management went into the change oblivious to what the issues were and treated us as if all we needed was a lesson in sales, some new laptops and a bigger quota. We don't want to be seen as crybabies or not as "team players", but until some of the underlying problems are addressed we still won't be selling and whose fault is that? I believe it's upper management's fault."

Now, I'm not sure the "management refused to fix" part is 100% accurate as it's likely as not that they were either unaware as to the extent of the problems or were unable (for one reason or another) to remedy them, but still. Even when the ball team's manager gets fired, usually management makes other changes to ensure that the new manager and the team is successful, or at least, more successful. Marching on as if the only change required is a change in middle-management is hardly ever the right approach.

If things are bad enough that team, or executive, management feels the need to fire the manager, you can be certain that other, more serious, problems are afoot and need to be attended to.