In the Corporate World, Is Bigger Badder?
Doing business with the little guy is probably a good idea
Oct. 4, 2005: Vol. 1, Issue #36
IN THE NEWS
With his father, W. K. Swan, Ken Swan was the creator of discovery cruising. From the early 1950s, Swan Hellenic offered excursions, led by scholars, diplomats, clerics or naturalists, to historical and archaeological sites-initially around the Mediterranean, and, after 1980, farther afield.
--"Ken Swan, OBE, former managing director of Swan Hellenic, was born on April 3, 1919. He died on Aug. 21, 2005, aged 86."
The Times of London, Sept. 30, 2005
Chuck Williams, who turns 90 on Sunday, is credited with introducing American consumers to restaurant-quality European cookware and small appliances and displaying them in a glamorous setting.
"The King of Cookware: Williams-Sonoma Founder, Turning 90, Put Pots and Pans On a Pedestal"
The Washington Post, Sept. 28, 2005
Every Thanksgiving at the home of my cousins, Jim and Twink Wood, in Mount Kisco, N.Y., my wife, Peggy, and I would find ourselves in conversation with a wonderfully low-key, elegant and affable couple, architect Edward Larrabee Barnes and his wife, Mary.
At a gathering in the late 1970s, Mary regaled us with tales of Egypt, urged us to go, and strongly recommended that we travel with Swan Hellenic, a family-owned British company.
We did that, signing up with Swan Hellenic for a two-week trip the entire length of the Nile, starting at Aswan and ending in Cairo over Christmas in 1980.
After touring Cairo for a couple of days, we were shepherded to the airport for a flight to Aswan. The little EgyptAir 727 had a slight crack in the windshield. Upon take-off, the plane hit a duck in flight, destroying the windshield entirely. We landed safely in Luxor, which was the next scheduled stop. The injured jet plane was a puddle jumper that picked up and discharged passengers along the Cairo-Luxor-Aswan-Abu Simbel route and back again.
With no windshield, the plane was grounded, and travelers were backing up at all the various airports.
After spending eight hours on Christmas Eve day in the Luxor airport, an angel gently descended from the sky and rescued us.
Ken Swan, Master of Customer Relationship Management
Peggy and I were good and stuck in the Luxor airport. Our courier, a vivacious blonde Brit named Stella, thought briefly about chartering a bus to take us the rest of the way down the Nile--an option Peggy and I would have welcomed. Instead she remembered that Ken Swan was in Cairo negotiating for new bathroom fixtures for his new boat, the Nile Star, which we should have been embarking on at that moment.
Sans cellphone (this was 1980) but with beaucoup ingenuity and smarts, Stella managed to contact the owner of the company in Cairo. A few hours later, a beautiful white 707 landed at Luxor. We were herded aboard--with all the other stacked up travelers--and took off for Aswan, eight hours behind schedule. Over the intercom came the calm, cool voice of an American pilot, with a gentle Southern accent, apologizing for the inconvenience and saying he would get us to Aswan very shortly.
This was a private, American-owned 707 charter jet under contract to Air France that Swan had found in Cairo and commandeered.
What could have been a dreadful beginning to the trip turned out to be but a blip in a splendid, informative and fascinating two weeks.
The following day we flew to Abu Simbel to see the great temples of Ramesses II and his wife, Nefertari. Upon our return, we learned that Egyptian President Anwar Sadat was in Aswan, and so we would not be allowed anywhere near the main terminal. On landing, we saw the airport was ringed with the presidential guard--a seedy collection of slouching, slovenly, unshaven soldiers, many with unbuttoned blouses and cigarettes hanging out of their mouths. I remember thinking that if this was the caliber of men protecting the president, he had problems. (Sadat was assassinated the following year.)
We taxied to the farthest end of the airport and rolled to a stop. The stairway was lowered, and as we descended onto the tarmac, the Swan motor coach pulled up and we boarded it. All the other non-Swan passengers who would have been stranded miles from the terminal were invited to join us.
During our trip on the Nile, a virus was running around the ship and Peggy got hit at Luxor and was out of commission for four days. The staff was wonderful, bringing her chicken soup and seeing to her every wish. If you are going to be ill on the Nile, a Swan cruise boat is the best place to be.
This was small stuff to Swan--business as usual. Several years prior to our trip, a Swan cruise boat sank in the Nile during a sudden and violent storm. The crew got all the passengers safely ashore, and found them clothes, lodging and transportation. The tour continued as though nothing had happened.
The Williams-Sonoma Experience
With Chuck Williams turning 90, I am reminded of a 1995 story of Betts and Don Jackson. Don and I are co-authors of "2,239 Tested Secrets for Direct Marketing Success."
For Christmas 1995, Don and Betts decided to give each other $1,500 worth of cookware from the Williams-Sonoma catalog. Don placed the order in plenty of time for Christmas arrival.
The order never came. The gift pile under the tree was meager.
The following day, Don called Williams-Sonoma and reached a telephone rep. He was upset, because a slew of clients, neighbors and the local Rotary and Lions clubs were coming for a big buffet just before New Year's. They had planned on using the new cookware for the event.
A combination of circumstances had worked against them: a snafu in the Williams-Sonoma computer system, a Federal Express pilot slowdown and foul weather.
Without missing a beat, the Williams-Sonoma rep promised to take four immediate actions:
1. He promised to reassemble the order and overnight it via FedEx for delivery the following day.
2. Included in the order would be postage-paid merchandise return labels. When the original order drifted in, Don and Betts merely had to slap them on the boxes and call FedEx to take them away.
3. All shipping charges would be forgiven, a saving, Don figured, of about $150 (two shipments plus one return shipment).
4. Finally, as a reward for their patience, Don and Betts would receive a thank-you gift.
Don hung up feeling good about Williams-Sonoma. He and Betts felt a lot better when the order showed up the next day along with the merchandise return labels and the promised gift--a handsome glass turkey baster with a big blue rubber bulb.
"Often it is only in times of disaster that you can show your customers how much you really love them," direct marketing guru Malcolm Decker said.
The Nastiness of American Express
I have been an American Express card member since 1964. One year when Peggy and I were running Target Marketing magazine and scurrying around the country drumming up stories and ads (and taking an exotic African safari with the Bronx Zoo), I opened my year-end platinum card accounting and found we had spent an eye-popping sum.
Several years ago, Peggy got a corporate American Express card so she could keep her business expenses separate from our personal stuff. Last week, her corporate accounting office called to say she had missed an American Express payment of $35. Not true, she said. She was sure she was paid up. On examining the bill, she was indeed paid up.
She called American Express and was shunted to a telephone rep with a foreign accent. When Peggy tried to ask him to look at the bill with her and explain where the $35 charge was, he simply repeated over and over again, "You owe American Express $35, and you must pay it at once." When she tried to ask a question, he repeated his threat. And repeated it again.
Finally she said, "I don't like your tone. You're threatening me. I hope this conversation is recorded." And she hung up.
Studying the bills, she found the $35 was a membership fee, which had not been added into the total somehow. She paid it immediately and canceled her card. The normally even-tempered Peggy promptly hotfooted it over to the PennSports gym to work off her fury.
After 41 years with American Express, I have to decide whether or not to continue being a card member. People who treat me or my wife badly do not deserve our business--especially when a platinum card costs $395 a year.
The conclusion: Little Swan Hellenic and Williams-Sonoma are wonderful. Great big American Express ain't.
My wish for Ken Swan is that he have as splendid a time on his final journey as he gave to Peggy and me on our sojourn to Egypt.
To Chuck Williams, happy birthday, and may there be many more!
Takeaway Points to Consider
- Ken Swan--as president and owner of the company--had the authority to make executive decisions on the spot in order to make things right for his customers.
- The same was true of the Williams-Sonoma telephone rep. Imagine how Don Jackson would have felt if the guy listened to his story and said, "Uh, gee, okay, uh, let me talk to my supervisor, and I'll call you back." Are your customer service reps empowered to make decisions on the spot?
- Williams-Sonoma had obviously planned for an occasional screw-up and was able to short-circuit the regular fulfillment process in order to satisfy the customer's needs. Do you have such a plan in place?
- I once ordered flowers online and saw that corporate policy was to "guarantee that all customer disputes will be solved within two business days." Under this policy, if flowers do not arrive on time--or do not arrive at all--the aggrieved customer is expected to sit around with mounting anger for up to two days. This is preposterous! It's only flowers! Overnight the person a new order on the spot--and at no charge!
- American Express is so big that it obviously cannot control its customer service, nor is it interested in paying for competent, caring help. From the July 19, 2005 issue of Business Common Sense (Vol. 1, No. 19):
Yet for headsets.com, a San Francisco supplier to businesses and telemarketing companies, its telephone operation is the soul of the business.
At the Merit Direct Business Mailer's Co-op and Interactive Marketing Conference last week, CEO Mike Faith, a Brit who just became an American citizen, described the infinite pains that headsets.com takes to hire its telemarketing staff.
A prospective telephone rep must undergo nine separate interviews-in person and on the phone with a business psychologist, a voice coach in Sydney, Australia, and with Mike Faith himself. In addition, a Wonderlic cognitive ability test is administered and the prospect must fall within a certain range--bright but not too bright. An emotional profile is created and handwriting is tested and analyzed. The hiring process takes four weeks from the posting of the ad to the final hire, and each rep undergoes extensive training in order to become an expert in the many products the company sells.
Each rep's performance is continually monitored; a rep is expected to love every customer; any rep who disrespects a customer--on the phone or off--is summarily fired.
The average telephone rep will make $42K to $44K the first year. In addition, high achievers can find random surprise bonuses in their paychecks-a little extra thank-you from Mike Faith.
In 1998, headsets.com had revenue of $40,000. In 2005, headsets.com revenue will jump to $30 million from $17 million in 2004. Revenue per-employee is $750K per year.
For Mike Faith of headsets.com, telemarketing is the heart, soul and core of his business.
Letters to the Editor
These letters were written in response to "What Will the Scammers Think of Next?," which was published on Sept. 29:
I absolutely love the format of your e-mail newsletters. Short, concise and always with a takeway. I look forward to reading your newsletters every day.
--Elisa Lena Hung, with Office Depot Inc.
Just to build on what you're saying in today's piece, this particular scam is not new, but has been going on since at least 2003, according to the Urban Legends site: http://www.snopes.com/crime/warnings/creditcard.asp
Keep up the good work, Denny.
New System for Secure Electronic Commerce
Predictions about the explosive volume growth of online commerce are not new. Neither are horrific stories about identity theft and the consequences to victims. These reports are at odds with each other, and impede growth of online transactions, especially to smaller merchants.
I do not type my credit card or banking information into any Web site whose address does not start with https. Even then, I often pass up on a purchasing opportunity.
Facilities like PayPal offer some remedy for constantly disseminating credit card numbers, expiry dates, that three-number pin on the back, mother's maiden name, etc., even though it still has to be provided to PayPal to open an account. However, a lot of people do not like PayPal, for whatever reason. Also, there have been many tales of compromised databases that have reduced trust in the most secure sites.
A new way of doing e-commerce may be just around the corner. It borrows from the old-fashioned "layaway," and avoids giving out any information at all, even down to the purchaser's name (and address, if the purchase is digital merchandise such as a downloadable object). It will require setting up a new trading program, and banks, merchants and credit card issuers will need to develop appropriate capabilities.
When a customer shops on a Web site, and completes the activity, a shopping cart is created.
At checkout, a payment option would be "MoneyPark Account number," which would also identify the state, for tax purposes.
The customer would then type in an individual account number, noting the exact transaction price including tax and shipping, and disconnect from the site.
Nothing would happen until the customer pays the line item charge on the MoneyPark account.
When the customer is ready to release the purchase for delivery (normally immediately), he/she will log on to their MoneyPark account, and verify the line item/s and amount/s they wish to pay.
To complete the transaction, the purchaser will open the source account (bank, credit card, PayPal, etc.), and transfer the exact amount of the purchase/s. An automatic receipt and money transfer will be sent to the merchant along with the default shipping address. If the purchase is to be sent to a third party, the appropriate address is provided at the MoneyPark account page. Although this process appears cumbersome, it is very logical--buy, authenticate, pay. It is actually easier than entering all the information required with a credit card purchase, and so much more secure. The biggest advantage is the added security of disconnecting the merchant and unwanted eyes from access to the buyer's financial institution or information. An additional safety benefit is the opportunity to intervene in an electronic interaction with the MoneyPark approval step.
A patent has been applied for, and appropriate business partners are being sought by the developer, Leon Helfet of Helfet Inventions Inc.
--Leon Helfet, president, Helfet Inventions Inc.
Denny Hatch's response:
Fascinating stuff and I will certainly post it.
A couple of concerns from a business point of view. First, so much stuff of a personal nature is out there, you cannot get it back. Like H.R. (Bob) Haldeman (Nixon's henchman) said, "Once the toothpaste is out of the tube, it's very hard to get it back in.
Second, what you describe sounds complicated as hell--180 degrees from Jeff Bezos's (also pateneted) "One-Click Ordering."
Can Mrs. Pscuniak of Grand Forks figure out how to place an order with your system?
Unbreakable rule in marketing: Make it easy to order.
Leon Helfet's response to Denny Hatch:
Thanks for taking the time to write, and for your constructive pointers.
I have grown the concept and benefits.
I recently had my credit card cancelled and re-issued due to the database being compromised, and had to update every place I had given out my personal details. Something went wrong at the gas company, and they put me on "cash only" for 12 months.
Imagine if all your bills and utilities post all your monthly debits to MoneyPark, and you have a chance to check and approve them before the charge goes through? Click each line item, and you are done!
If your card gets compromised (and you are using it to pay MoneyPark), you change data in one place (if you are using PayPal to send the money), or not at all if you are able to post the money directly from your card homepage. With MoneyPark, you do it all in one place, and never have to give your mother's maiden name again!
This letter was written in response to "Is Your Business Model Obsolescent?," which was published on Sept. 27:
Call me a curmudgeon, but I have been a subscriber to the print WSJ for years, and while I'd like access to the online edition, I think it should be included in the price of the print subscription. I'm not paying extra for the privelege of reading essentially the same content in a form that's harder to browse than a broadsheet.
The weekend WSJ is, I think, doomed. Remember the National Observer? That was essentially a weekend WSJ, and all it proved is that people don't want any more weekend reading. One or two Sunday papers is enough for most of us. I predict that advertisers will defect in gaggles as it becomes clear that the thing just ain't getting read, no matter how many papers are distributed.
Now YOUR online column ... that I'd pay for.
--Robb Ruyle, Powderhorn Industries
Web Sites Related to Today's Edition
Ken Swan's Passing