Reputation Management: Teaching Your Customers Why They Can't Trust You (or why the New York Times are liars)

Customers are an interesting bunch. You just never know what's going to make them think a certain way about your product or service.

Take the New York Times, for example.

Like every other media outlet, they've had their problems with content in the past, but it's pretty safe to say that they're one of the most trusted newspaper/media outlets. Possibly in the world.

But if their business practices are not as robust as their reporting, why should we trust them?

The short answer is: We shouldn't.


Because they, themselves, have given us reason not to.

Here's the little story that's the basis of this big lesson in reputation management.

At the beginning of this month, I decided to cancel my online subscription to

They had taken my payment on a Saturday. I called two days later - first thing Monday morning - explained that I hadn't known that their offices were open on weekends until hearing their greeting message on that particular call, but hoped that they would give me the refund anyway.

I was assured by their Customer Service Representative that a refund would be paid to me. I was also told that it takes 10 to 15 business days for the payment to arrive.

Frankly, while I thought that was a horrible refund policy for customer service purposes, I didn't give it any further thought.

Very quickly I received an email confirming that my subscription was cancelled but never received any confirmation of a refund. Okay, I thought. That will come separately.

But it didn't. So I called again later that same week, spoke with a different Customer Service Representative, had them look at my account file, confirm that the subscription was cancelled and that a refund was on its way.

The very polite Representative told me that, yes, everything was in progress, the payment would be made and that I shouldn't expect an email regarding the refund as they wouldn't be generating one. The payment would simply land.

But it didn't. So, today, I called again (because it had become a hobby) - but this time was told that I wouldn't be given a refund and that, in fact, it was never requested nor processed.

Which makes the New York Times liars.

The thing that executives and managers rarely put together - even though any sentient, thinking beings would - is that what happens in one part of an organization directly impacts the way the rest of the organization is viewed.

We're talking about $15. That's it. Fifteen dollars.

What's important about that number is that, clearly, it's not the amount of money that makes the difference. It's that TWO of their representatives told me the same lie - and that makes lying their policy.

Which makes the New York Times liars.

I've been assured that I'll be contacted by a Supervisor to further discuss my "issue" (their word).

We'll see. They're probably lying about that, too.

Business and Politics: Avoiding Your Organization's Fiscal Cliffs

One of my areas of expertise is tracking how business and politics intersect in the ways they operate - and, most importantly, what we can learn from both. Over the years, I've written strategy papers on the subject as well as having advised senior members of United Kingdom political parties on how business strategy can be applied to create political party success.

With all that's been going on in US politics recently, I've decided to begin posting on the subject - only in this case, focusing on what business can learn from how politics operates, at its best and at its worst.

There are important strategic, operational and profit-related lessons to be learned and applied to your business, so, no matter where you live or what your political affiliation might be, put it aside and just look at the process.

I'll look forward to your thoughts and comments.
On January 1st, 2013, a few minutes after 11 pm, the United States House of Representatives voted to accept the Senate's bill (approved some 21 hours earlier) averting the so-called "Fiscal Cliff."

As markets around the world opened for their first trading day of the new year, they upheld the conventional wisdom that a global economic catastrophe was averted. Markets and futures were immediately up and could well stay that way. At least until the already known next 'cliff' occurs in two to three months.

So, good for Congress. They did their job. They saved the world. For the moment.

They should also be ashamed of themselves.

The reason why they deserve real scorn is because it was this exact same Congress that agreed to the "cliff" in the first place. That was in December, 2010.

Twenty-five months ago.

Why did they create the cliff? The logic was that it would motivate the elected officials to work together to solve the debt and deficit problems the US is facing.

From then until now - while those twenty-five months passed with the cliff always looming - they weren't willing to do what needed to be done for their own country as well as those world markets and economies. Right up until the last minute - and only then because it was the last minute.

Okay, so that's the politics of it. What does this have to do with you?

Like it or not...admit it or not...but you have your version of a cliff playing out in your organization on a regular basis.

It's those things that you and your employees at every level see and know and recognize out on the horizon that you'll take care of later. Some day. Soon. You're sure of it.

Only those 'things' - both little and big - grow to outrageous proportions the closer they get to whatever time limit within which you're working.

Maybe it's when your customer needs an order filled. Or you've got a new product or service launch that needs that one more thing to make sure everything goes smoothly. Or there's an expert you know you're going to need to hire to make sure that the strategy you're currently working has a chance in hell of actually succeeding.

It's anything that escalates from knowledge to emergency - simply because you or someone in your organization let it get that far.

And it gets worse.

You may well have someone you trust who has made a success of their career swooping in at the last moment to save the day.

That's all well and good when the emergency is a true emergency - not a manufactured one. If it's the latter, then whoever is playing 'hero' is anything but. In fact that person - man or woman - is the equivalent of an organizational sociopath...allowing that particular cliff to loom and get ever closer for their own purposes, frankly, not caring how it might impact others.

Including you and your business.

Because if the 'thing' escalates far enough for long enough - at least to suit your local sociopath - even with a save, you'll lose your reputation as a trusted provider. There go the orders, customers and jobs. And there goes your business.

So, as this year begins, spend some time on your own and with your leadership team to:
  1. Take a look back over the past six to eighteen months
  2. Identify those situations that escalated into crises
  3. Determine how those crises occurred (real or manufactured)
  4. Define how long in advance the problems were known
  5. Determine in each case how long it took to get from knowledge to action
  6. Specify the outcomes in each case - including but not limited to impact on operating costs, revenues, profits, customer relations, market share, reputation, etc.
  7. Identify the specific functional areas and their respective managers/team members involved in each crisis
  8. Determine whether there is a trend of occurrences by any of the people or functions involved.
As well, if you have a Lean initiative going, take the time to review the teams' measures to identify any trends from the data that show highly risky levels of variation in your processes.

Once you have the information in hand - as uncomfortable as it might be - you'll know what to do. Do it. While you still have the time.

Because the biggest difference between business and politics is that the politicians who took the US to the edge of the fiscal cliff have at least two years before there is a remote possibility of being held responsible and accountable.

For business...for your don't have that luxury. 

Figure out your cliffs now - and then manage your organization so that you're designed never to get close to them again.

How to Lose Customers in One Easy Lesson

Today I was talking to my oldest friend in the world, Lori, bemoaning the state of customer service these days.

Why? Because both Customer Service Representatives and their Supervisors are liars.

Who were we talking about in particular? For me it was Kohl's and the Daily Journal. For Lori it was Chico's. For both of us, it decided us that we weren't going to bring our business back to those organizations.

Where did these problems take place? Ah. Now that's a very important part of this story. The problems all took place online and on the phone.

What happened? Without boring you with all the details, what it came down to in all cases was that we:

  1. Made a purchase - both in person and online - with which we subsequently had a problem
  2. Used the various organizations' online and telephone customer service solutions - from "Live Chat" to live people
  3. Eventually spoke with a Supervisor because the Customer Service Reps were unable - or unwilling - to solve the problem for us
  4. Got a promise from the Supervisor that the problem would be solved to our satisfaction
  5. Nothing happened - whether the Supervisor made note of the conversation or not.
What makes these experiences even more ridiculous is that each purchase that Lori and I were discussing was under $100. If the companies involved had a brain cell working, they'd simply empower their Customer Service Reps to be able to solve the problem on first contact for up to that amount.

Why don't they? Because their management is scared. They don't trust their employees - which means, in fact, they don't trust their hiring processes, their training or their managers to supervise.

It's not about the employees. It's about the management systems.

And from a competitive perspective, as a result of those policies and practices, they're actively reducing profitability, shareholder value and market position.

The truly fascinating part - and the one their management would never admit - is that they believe they exist in a vacuum. That they're the only place that a customer would want to go to find whatever it is they offer. That customers have no other choices.

Not only is that thinking wrong, it's short-sighted and, frankly, stupid.

But, based on the way they treat their customers, they don't seem to be worried that their policies leading to customer frustration and dissatisfaction have no impact on their bottom line.

So, when you see that you're losing customers, take a quick look at your customer service policies and practices - because it's a good bet that that's where you're losing them. In the customer experience.

And, as you can see from Lori's and my experience, no matter how long-standing a customer we may have been, it only takes once - and we're not coming back. 

Decision-Making and Managed Risk-Taking

If you read me, you know that I'm a serious fan of Josh Brown's blog, "The Reformed Broker." He may be talking about finance and the financial services industry, but if you read closely, you'll see that the foundation of what he's talking about is always decision-making and managing risk.

Yesterday he had a perfect example.  After the US Federal Reserve announced its forthcoming policy and decision he wrote (emphasis mine):
"Now everything is different. At first blush QE3 does indeed look like a game changer. 
This business is not about making calls and and sticking with them for the sake of being able to say you were right all along, it is about processing new information that will make a difference and dropping the opinions that have been invalidated. I come to work every day hoping I'll be able to do that. It's easier to write about than to actually do. Is your decision making process flexible? Are you hung up on what "should happen" rather than what is likely to happen?"
With that in mind, take a look at your decision-making process.
  • Are you flexible? 
  • Open to new information?
  • Using it to fuel your and your team's new thinking?
  • Do you drop old opinions and decisions as the new information gives a different direction or guidance for you to follow?
The answer to all those questions should be 'yes.' If it's not, start tracking how you make your decisions - as well as how others in your organization make them - and determine how to balance managing risk with courageous steps forward.

Game changers - big and small - are happening all the time. Use them correctly and you'll exceed your vision...not just achieve it.
Read The Reformed Broker Blog
Follow Josh on Twitter (he's loads of fun!)

LEAN: Jim Blasingame on Quality and Profitability

For over ten years, Jim Blasingame and I have been having conversations on his radio program, The Small Business Advocate about how to make small businesses succeed. Most of them have been about how to implement quality for the quickest and highest levels of profitability.

He very generously wrote the Foreword to the 20th Anniversary Edition of my book, Managing for Quality and, now, has created a video that gets to the heart of the matter.

Take the three minutes.  He's definitely worth watching.