My Customer Experience – Inversely Proportional To Cost?

  • Posted on March 10, 2015
  • by Alan Blume

ThMarketing and Communicationis week I investigated purchasing four products or renewals. These include a healthcare plan renewal, a QuickBooks upgrade to the 2013 version, a Dell laptop and re-subscribing to Netflix. Each of these required a call to the respective customer service department. There was a massive discrepancy in wait time and customer service experience, and some might be surprised at the results:

Netflix won handily for wait time and customer service experience. Though their service is only about $100 a year, I was greeted by an automated voice stating my wait time would be about a minute, a representative answered the call within 40 seconds and spoke English perfectly. There was no background noise on the call (if it was a call center I couldn’t tell), and I was up and running within a couple of minutes.

Dell finished second, the wait time was a few minutes, and I was connected to a representative who had an accent, but was understandable. He seemed to understand my questions, was patient, and at the end of the conversation I placed an order for a new Dell XPS13 solid state laptop with Microsoft Office. Overall, it was a good experience, at a purchase price of about $1,300.

QuickBooks finished a distant third, with a very poor customer service experience. The wait time was about 15 minutes, and we finally reached what we assumed was an offshore call center with significant background noise. The representative had a very strong accent and was very difficult to understand. The call clarity was poor and the advice offered was questionable. We were uncertain if the representative really understood the question. A QuickBooks upgrade is about $240.

And in last place, far behind the pack from a wait time perspective, was my healthcare renewal. It took 28 minutes to connect with a representative to discuss the health plan options from Tufts Health Plan. Once through, the experience was much better than QuickBooks, in that the representative was easy to understand and proficient with the plans. That said, there were so many plan nuances, it was still challenging to discuss. The wait time was egregious, especially considering the renewal which is valued at around $14,000. There are at least two “big” issues here, with the vast array of plan options, the system is overly complex and too confusing, causing too many questions and service challenges. And with rapidly escalating healthcare costs, consumers are increasingly concerned, resulting in more questions.

The correlation is interesting here, with the worst wait time associated with the highest cost item, ten times the cost of the other purchases. The conclusions are obvious here, though the answer in one case is complex. I would order Netflix and Dell again based on these experiences. QuickBooks remains a concern, but we won’t likely switch (maybe they know that). And our healthcare system remains costly and confusing, still broken and in need of improved transparency and efficiency.

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Posted in: business, Customer Service, Home Office Business, Virtual Business
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Bank of America or Bankrupting of America?

  • Posted on May 14, 2010
  • by Alan Blume

We know a young couple living in Las Vegas; let’s call them Bob and Carol Jones. They moved there about four years ago pursuing job opportunities provided by the rapid growth in the area. As with many young couples, they wanted to buy a home (or condo) and invest in their future together. They shared an interesting story with me, an anecdotal example of the problems plaguing the real estate market in many areas including Las Vegas. They said that they used Bank of America to finance their home purchase. And if you allow me to reminisce for just a moment, I might be able to draw some interesting “then and now” parallels. About 30 years ago, in the Boston area, my wife and I decided to purchase a home. We were renting an apartment at the time and thought it would be beneficial to invest in a home, thereby investing in our future. Sadly, that’s where the similarity with these stories seems to end.

Our local bank required that we put 20% down, did a thorough check of our finances, a complete job validation and review, interviewed us as prospective mortgagees, procured a comprehensive property appraisal (and strongly suggested we do one too), and charged an interest rate befitting both the time and our first time buyer status, a whopping 13% on a traditional 30 year mortgage. We were required to pay principal, mortgage insurance, interest and taxes for each payment, and had to go through extra hurdles to ensure we didn’t need a cosigner. It seemed very challenging for a young couple to buy a home, our first home was purchased for around $100,000; we were given much scrutiny before the local bank forked over the $80,000 for our mortgage. How did we get the $20,000 down payment? Even though we both worked full time, we lived on one paycheck and saved the other, banking it every two weeks for several years until we had sufficient funds for a down payment. We were young and just out of college, so the sacrifices didn’t seem overly significant at that time in our lives, they included things like used cars, inexpensive home cooked meals, limited vacations, and a refrain from restaurant dining.

Now let’s fast forward to the young Las Vegas couple, circa 2006. Why save for a down payment when Bank of America will approve your loan with nothing down, that’s right, according to Bob and Carol, they paid zip, zero, nada. And why eat macaroni and cheese when Bank of America will float you a 40 year mortgage, no worries for today, your property will increase in value, so why not dine out on a steak and lobster dinner? You can do whatever you want right now! How long have you been in your jobs? You’ve just arrived, been here only a few days? Actually your wife doesn’t have a job yet but you said she will have one prior to the close date? Just have her bring a letter from her new employer and we’ll accept that as proof of employment at the closing! And speaking of the closing, we’ll float you the $160,000 mortgage over 40 years for your one bedroom condo, don’t worry – be happy.

Perhaps you might think this story is an exaggeration. Sadly, our source is legitimate, and they swear this is a completely true story. Thirty years ago, I had job tenure of about two years, and the bank expressed serious concern about my modest employment record at the time. Our Las Vegas couple, first time buyers Bob and Carol, had barely arrived in Vegas, and Carol had only been there a few days when she put pen to paper for her condo. It was truly challenging for us to qualify for a mortgage, yet to us, it sounds like Bank of America was throwing money at Bob and Carol. So, what happened? We sold our house near Boston a couple of years later for a good profit, bought another home with a 15 year mortgage and paid it off. Bob and Carol’s condo value started dropping like a rock thrown over the Hoover Dam, immediately after closing, and they are now severely underwater (meaning they owe more than their house is worth). That’s right, their $160,000 condo would be lucky to fetch $70,000 on today’s market, a mere four years later. It could be a decade or two before they are above water. And because of all the speculation and fancy lending practices, some experts estimate that today, up to 80% of all Las Vegas homeowners are now underwater (particularly ironic since some say Lake Meade could dry up in the next fifteen years). Listen to these somber statements from a Las Vegas Sun article By Buck Wargo, Friday, Aug 7, 2009.

“Las Vegas is at greater risk than other cities that its homeowners will walk away from their mortgages even though they could afford them, according to a study by two Chicago universities.”

“The median price of homes sold in Las Vegas has fallen more than 50 percent since June 2006, and in its most recent study zillow.com said 67 percent of Las Vegas homeowners are underwater — when the amount owed exceeds the home’s current value — and more than 80 percent of the homes bought from 2005 to 2007 are underwater.”

Are Bob and Carol an unusual case? Are they merely a spurious statistic, an anomaly in the general lending landscape that happened in Las Vegas? Based on the foreclosure rates and negative property values, they would seem to be good example of what happened, not an exception to the rule. Shall we hold Bank of America solely responsible for this plight? Surely other banks were practicing similar practices, and buyers must accept responsibility too. But in this case, our story is simply about this particular loan to Bob and Carol from BOA. In hindsight, which party is most responsible here in the Bob, Carol and BOA mortgage debacle and how do we avoid making the same mistakes again? Certainly we all must take responsibility for our actions, after all, it is buyer beware. However, in my opinion, most of the blame, in fact almost all of the blame belongs to Bank of America. It is they who are the experienced institution of lending; it is they who have the resources, the knowledge, the background, and the experience in these matters. It is they who should be safeguarding their shareholder value by loaning responsibly and intelligently. They should know better than to be lending out huge mortgages with nothing down to young couples with a limited employment tenure (sounds like a TV infomercial doesn’t it). They are the ones who should be exercising restraint and fiscally responsible judgment, and subsequently I blame BOA for 99.9% of this issue and for requiring $45 Billion in TARP money (from me and you) to bail them out. Three decades ago, in a town north of Boston, it took us about four months to qualify for a mortgage. It took Bob and Carol a couple of weeks. I realize times change, but this hardly seems like a change for the better.

When I look through my rear view mirror, it seems that there was rampant speculation and a general lack of responsibility. It seems like giant financial institutions were playing fast and loose with shareholder money. There were costly bailouts and record foreclosures. And there are now many young, first time buyers, like Bob and Carol, thinking about walking away from an untenable situation, massive mortgages, properties too small to start a family, with property values so severely underwater that they have no hope of moving on with their lives. Bob and Carol, like many other property owners are considering a walk away, handing over their mortgage and dealing with the credit related or bankruptcy related fallout that would subsequently follow. In a way, this is not surprising, with nothing down and essentially no principal paid off (the first four years on a 40 year mortgage is almost zero principal) Bob and Carol effectively, if not pragmatically, became renters, and BOA became the owners, not a good formula for success. Perhaps a few suggestions are in order for both parties here:

Thoughts for Bob & Carol
• If it seems too good to be true – it probably is – even if the loan is coming from a seemingly reputable source
• Beware of cycles – particularly with real estate and the stock market
• Take your time and seek advice on large purchases

Thoughts for Bank of America
• Zero down mortgages to condo buyers who were employed a few days or months – is this smart lending?
• Forty year mortgages in a past peak (bubble) real estate market? Is that sound lending?
• 45 Billion in TARP funds needed because of your seemingly stupid and shoddy lending practices? And American tax payers have to bail you out because of the lending practices described above? You need to exercise more restraint and better judgment.

Lastly, a few suggestions for a new Bank of America (BOA) company name:
• Bankrupting of America (and the acronym still works) BOA
• Bank Un-American (shows how a company can embrace capitalism yet the results can still be un-American at the same time) BUA
• Bank of Dumb Lending in America (OK, it’s long, but it is accurate) BDLA

If any of you have similar stories – or simply a different perspective, please feel free to comment. For all of those who do not favor Wall Street/Banking regulations – please reread this article, particularly the part about Bob & Carol, arriving in Las Vegas a few days/weeks before being given a $160,000, zero payment down, 40 year mortgage, on a one bedroom condo, after the market had already peaked.

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Insurance agencies have long been in the relationship business and most would agree they are in a rapidly commoditizing business. And that creates an inherently challenging scenario, for commodities ultimately get purchased on price and availability, ease of access and simplicity of transaction. Another challenge faced by insurance agencies revolves around insurance agency marketing. After all, if you’re in a relationship business, you need to drop by, shake hands, build rapport and grow the relationship. For many, however, those days are ending. Yes, referrals can help with insurance agency marketing, but often these referral methods lack consistent pipeline growth effectiveness, or add insufficient opportunity to sustain effective growth.

As we move into the era of Generation Y purchasers, instant access, pervasive connectivity and comprehensive comparative information available at the touch of a button, sales and marketing methods must change to conform to the new model. For example, I purchased my company’s health insurance plan without ever having met with my insurance agent. After all, why would I need to, and to be candid, why would I want to take the time to do so? Granted, larger plans with more employees, particularly plans which insure 100, 500 or 1,000 or more employees, encompass greater complexity and cost, and these types of purchases often warrant an on-site visit. But even these visits are now often preceded by a web meeting or web seminar, few executives these days want to invest 30 minutes or an hour with a prospective insurance agency representative chatting in their office.

Current insurance agency marketing methods are trying to embrace this virtual paradigm shift. Recently agencies have started to update their web sites and embark upon eMarketing, web seminar marketing and even SEO (Search Engine Optimization) campaigns. This is an important first step, though it is a step that many consider to be happening very late in the current marketing evolution. Sadly, some of these insurance agencies are embracing poor practices, the foremost of which is the “talking head”. One of my pet peeves is the talking head, a cyberspace insurance agent who automatically screams at web site visitors as soon as they navigate to an agency web page. I use the word scream, because the volume is often poorly calibrated and the cyber agent automatically yells at the website visitor while said visitor scrambles to turn down the volume or find a way to make the virtual agent “shut up” virtually and pragmatically. It’s bad enough when your PC speakers are on, but it’s even worse when you are using a PC headset – think of this as placing iPod headphones on your head while somebody immediately turns the volume to the highest level, playing a head banging, hard rock group. Why do agencies think talking heads are appealing to their existing or prospective clients? Have they ever heard of the term “interruption marketing”? This is interruption marketing at its’ worst, after all, I never gave this cyber space insurance agent the right to scream at me! Seth Godin’s blog says, “Permission marketing is the privilege (not the right) of delivering anticipated, personal and relevant messages to people who actually want to get them. It recognizes the new power of the best consumers to ignore marketing. It realizes that treating people with respect is the best way to earn their attention.” These screaming cyberspace agents don’t seem to be giving me, or other visitors, the respect we deserve!

Recently I was speaking with a West Coast Insurance Agency CEO and we were discussing eMarketing. He lamented that, “I sent out 30,000 emails about our insurance offerings to prospects and received no response, no results at all from my email campaign.” I tried to break the news gently. “You shouldn’t send out unsolicited emails, you should never try to sell something in your initial offering, and you should always provide an educational opt in opportunity when approaching prospective clients via email marketing.” Where did you get the emails I asked? “I just bought them from a vendor, he said, my eMarketing company offers some list brokers to contact.” This is a good example of having the tools, but not understanding of how to use them. Think of this as if your agency is handed a scalpel and medical monitor to operate on a patient, but has not been provided with any surgical training.

Later that day, in a discussion with a different insurance agency, a marketing manager was asking questions about insurance agency SEO (Search Engine Optimization). The marketing manager said she had brought aboard an advertising firm to work on their SEO. “Great idea”, I said. “Let’s see how you’re doing – what are your keywords?” I typed in a few keywords in Google, and the agency wasn’t appearing until the fifth page. I repeated this a few more times with other keywords, but the results were no better. All of these searches were happening in a real time web meeting, so the marketing manager was viewing the results as I executed the searches. The insurance agency marketing manager said, “But we’ve only been working on this for the last four months.” The good news, I said, is that you’re working on it. The bad news is that your current results are really poor. In my humble opinion, a modest insurance agency SEO effort, particularly for local or regional placement, should result in organic Google search placement in the first two pages within 90 days (and in many cases, an insurance agency can be listed on the first page within 90 days). This is the result of both on page and off page optimization efforts, the latter of which came as a mystery to the insurance agency marketing manager with whom I was conversing.

It’s great to see that insurance agencies are beginning to update their marketing and sales methods using new virtual tools, but even with updated tools, they need to leverage the experience and know how to use these tools professionally and effectively. In conclusion, I’d just like to say to all those cyberspace talking heads on those agency websites, “please – STOP SCREAMING AT ME!”

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Posted in: business, Customer Service, Insurance Agency Marketing, Virtual Business
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Good for GoToMeeting

  • Posted on February 17, 2010
  • by Alan Blume

I can host unlimited conference calls, unlimited web meetings and unlimited web seminars for less than $3 per day. Let’s look at what this means to any business:

• Unlimited conference call #s are generated at the touch of a button (phone or PC based access)
• Unlimited Web Seminars (show anything on your PC to as many as 1,000 other people – anywhere in the world)
• Custom landing pages for your web seminar registration and virtual waiting room
• Automatic registration for your web seminar, selecting required or optional registration fields (name, email, phone might be required, but city, state and zip code are optional)
• Detailed registration and attendance reports
• Record the presentation and audio for training, future presentation use or load onto your web site for viewing
• Real time collaboration (sharing) of information – work on the same document at the same time – from anywhere in the world
• Ability to view other people’s PCs (they can show you anything they like on their PC)

That’s a lot of computing power for three dollars a day – perhaps too much? GoToMeeting recently sent an email that they were going to increase prices for companies requiring larger 500 and 1,000 attendees meetings – BUT – they were not going to increase prices for existing customers. That’s a good, customer oriented attitude that shows their loyalty to customer and earns the same in return. Cloud computing solutions like this are relatively new, but great customer service has been around for a long time, virtual or not, for those who understand the importance of customer loyalty. Good for GoToMeeting/GoToWebinar/Citrix – seems like they get it.

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Posted in: business, Customer Service, emerging business, Entrepeneurship, Home Office Business, Insurance Agency Marketing, Virtual Business
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TKO – Client Always Wins – Virtual or Not

  • Posted on February 11, 2010
  • by Alan Blume

I recently ran into a dispute with a vendor I use. I use the term vendor in this case, because during the dispute my perspective about them changed from a partner to a vendor. I had signed a one year agreement with them at price point A, and when I went to reorder, they asked for a new price higher then price point A. I was working with a new sales person; my original sales person had departed for parts unknown. The new sales guy towed the company line, leveraged all the standard catch phrases like undervalued, new pricing parameters, top down management directive. These probably made perfect sense to him but I thought I signed a one year agreement. Technically – he said, I didn’t have a one year contract – reorders weren’t actually part of the agreement. Hmmm… in a way, he was going to win this dispute. After all, I wasn’t likely to sue his firm. But what he and many others don’t realize is that you can’t win an argument with a customer on a technicality (I would simply say you can’t win any argument with a customer – you lose as soon as you start arguing).

I asked to speak to his manager – was initially told that wasn’t necessary. In today’s virtual world, however, shielding management doesn’t work if a customer is really ticked off. So, I simply went to LinkedIn, searched for senior managers at the firm, and reached out to them. To their credit, they responded promptly, and honored the intent of my agreement. If things continue on a positive path, they might regain my complete trust and loyalty. If there is any hiccup of any type, I’ll move my business right away. In this virtual world, if you are a customer service person, a sales representative or simply a customer, you should always assume that the senior most management of your company or almost any company is just one or two degrees away – easy to contact from a virtual and pragmatic perspective.

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