reputation and rewards

Brand messaging and customer loyalty: why @Staples should fire Its Marketing department

I'm a long-time customer of the office supply store, Staples...or I was. Because I'm not any longer - and it's their Marketing Department's fault. There are two very specific reasons why - each of which is a laudatory tale for anyone looking at 'growing' their business at their customers' expense and without taking their customers into consideration.

The Bait and Switch Rewards Program

When Staples first established its customer loyalty program (because that's what rewards programs are supposed to be), they gave customers a 5% discount on each purchase. Immediately. At the cash register or online.

The money stayed in your pocket.

Somewhere along the line, someone (undoubtedly in the Marketing Department) got the bright and (short-term) money-saving idea that they could switch their Staples Rewards program so that instead of money, customers could get points.

Points! What an excellent idea! Customers would, I'm sure they thought, be just as excited about earning points as they were about seeing an immediate discount. And they'd just love to go through a remittance process - printing out coupons or showing their smartphones - once they got 'enough' points to warrant a reward.

Especially if the rewards were time-sensitive and the points disappeared if there weren't enough during any given rewards period.

Now that's putting the customer first, right? Yeah, right.

Which takes us to today's coup de grace:

Scaring the S**t Out of Customers That Their Credit Card Data Has Been Stolen

This one was a new one on me - and one for which they should be particularly ashamed in these days of stolen credit card information and identity theft.

Last week I made a purchase for which I undoubtedly got some points (see above) and, as part of my Rewards program 'membership,' received an email receipt. (I got a printed copy at the time, too, but we won't talk about that now.) Usually, that email marks the end of the transaction.

Not this time.

This morning, after having not made another purchase, I got an email from them with the subject line:

Thank you for your purchase! Open for More Great Products.

Their marketers may have thought they were being wise and witty, thanking me again, but they were wrong. Because when I saw that subject line, my immediate thought was, 
"Oh, s**t! Someone hacked Staples and got my credit card information. S**t! S**t!! S**t!!! Don't those f****rs know what they're doing?!?"
And I promise you, I'm not the only one who reacted that way. After all, any one of us can go through the litany of companies - from Target to Home Depot to JPMorgan - that didn't protect their customers' information adequately.

Based on that subject line, all it looked like was they joined the group.

Clearly their marketers weren't thinking about timing and what their message actually said. Otherwise, they wouldn't have sent it.

For my part, it put quite a pall on my morning - and no vendor is worth that.

For your part, it's worth taking the time to look at how you're creating and, hopefully, supporting your customers' loyalty - reward programs or not - as well as how you're communicating with them. As you can clearly see from my example, you may get one pass, but you won't get two.

And with that, I'm saying bye-bye to Staples and taking my business elsewhere. The saddest part for Staples is that I'm not at all sorry.

What Warren Buffett sees...and why Berkshire Hathaway is going local

I've been fascinated for years with Warren Buffett - but it's not his investing acumen that holds me. It's his thinking process.

Long ago, I heard Buffett say in an interview that even though he was and is great friends with Bill Gates, he didn't invest in Microsoft because he (Buffett) didn't understand what the company did. He invests in what he understands.

That's why the core of Berkshire Hathaway's companies is insurance, furniture, jewelry stores, executive jet services, manufactured (mobile) homes... All part and parcel of living your life.

Even his stock acquisitions follow suit. Coca Cola. Wells Fargo Bank. American Express. His logic remains the same.

He's also a great believer in the United States. It's only been relatively recently that he's begun looking at investments out of the country.

Back at home, a few years ago he bought a railroad. When everyone was saying that rail is as good as dead, he bought BNSF - the second largest freight railroad network in North America. It gets real things from one place to another.

In 2012, he started buying real estate agencies and put them all under the brand Berkshire Hathaway Home Services. State by state, he's buying up more agencies and putting them under the same brand.

This month, he announced that he has purchased the Van Tuyl Group of automobile dealerships. It comes complete with 79 dealerships and 100 franchises in ten states with something in the vicinity of $8bn in annual revenues. (Buffett will know, to the penny, exactly how much.) The plan is to start buying more. Then more...all branded as Berkshire Hathaway Automotive.

There are two things to learn here. The first is easy: Use your brand. Build your name and then use it to brand everything you possibly can. The more trust you've created, the more likely that people will find their way to your door - no matter what the product or service might be.

The second is more a trajectory thing. A thinking process. It's about local.

Buffett, possibly more than any other investor, knows about global. While his companies may be US-headquartered, they operate globally.

Yet, when he looks at what is coming next, what he seems to be seeing - at least based on his investments - is a hunkering down and in. A focus on an immediacy of life and its needs. On building a quality of life on a day-to-day basis.

It may be that, simply by virtue of his age (he's 84, after all), he's thinking more of home and hearth than ever before.

Possibly, but I doubt it. His filter for thinking is investments. He wouldn't be putting his or his shareholders' money toward some vanity project because he's in his 'declining' years.

Buffett sees Main Street and he sees it growing. He recognizes that there's a virtual world out there, but he, his companies and his investments aren't part of it. He sees something else. Something much closer to home.

He sees that humans have needs they want provided in a human and basic way - locally, in person, with a high quality of service, focus and attention.

At least that's what his most recent major purchases seem to be saying.

I think you should pay attention, if for no other reason than Buffett's track record. Because, realistically, if Buffett says it's worth doing, you can put your money on it...right along-side his.

Uber's tax problems: advocacy, adversity and society

Uber is having problems with its drivers and the US tax code.

Without going into too much detail, what it comes down to is that Uber wants to consider all its drivers contractors and the drivers (and IRS) want to consider them employees.

The benefit to Uber of 'their' way of looking at their business model is that they don't have direct responsibility for anybody. That keeps their costs low, their liability lower and their shareholders happy.

The benefit to the drivers and IRS to 'their' way of looking at the work that's being done is that Uber has to pay toward their taxes, provide benefits and generally give back more than simply an opportunity to make money for themselves (and even more for Uber and its shareholders).

Uber is part of what's being very prettily called the "sharing economy" - a $30+bn market that's only going to get bigger.

To be fair, this model began long before it was called the "sharing economy." In fact, it started in the late 1980s when companies started laying off their people in large, large numbers...only to hire them or others like them back as contractors.

Back then, it was the early days of "outsourcing." Standardized functions that weren't considered to need a proprietary approach (or company loyalty) all got handed off - from travel to accounting to HR.

The logic was exactly the same: The company's expenses and liabilities lower when they use contractors rather than hire employees.

And throughout that time, the same battle that Uber is fighting has been waged.

You'd think that by now - and with this level of 'sharing' being done between employers and contractors and the IRS - that someone would have realized that there's an easy fix: Modify the tax code.

All that's really needed is a means for companies to maintain their independence and manage their costs while contractor/employees get some of the benefits of being an employee with the full understanding that, as contractors, some things need to remain their responsibility.

In fact, if Uber and its sharing brethren would take some of those billions and point them toward their corporate and tax attorneys and accountants specifically to advocate for change rather than fight exclusively for the status quo, the problem would be solved quickly and easily.

This is a societal problem. We've changed the way we do business. Now it's time for businesses, their advocates and government officials to catch up with each other so that everyone - and I mean everyone - in society wins.

What do you do when the answer is no? 5 steps to a global win.

So Scotland voted. Or at least the registered Scottish voters got their chance to weigh in on their future. Happily, well over 80% of them did. Unhappily for 45% of those who voted, they lost.

The country they wanted to establish as an independent, self-determining entity will stay part of the United Kingdom.

Now what? What are the leaders across the UK doing to make this into a win for everyone? Even the ones who lost?

Nothing. Frankly, as was to be expected, they're doing a different version of making the same mistakes they made that led up to what was, to all intents and purposes, a Scottish Revolution.

As a result, even though for the moment they're going through various motions, the long term effect will be an even greater distrust, disconnect and undermining of Government than before. All thanks to the country's 'leaders.'

It's sad but true that in most cases leaders lose the opportunities they've just gained through mismanagement of what comes after a win. They underestimate the damage they're doing by taking their 'win' and leaving the losers behind...because they can.

That's a very big, very costly, always-to-be-remembered mistake...which makes the supposedly winning leaders the real losers.

Interestingly, while not on a world-map-changing level, this is a not uncommon occurrence in organizations every day. For example:
An employee brings forward an idea in a team meeting to solve a problem while their colleagues are nodding in agreement. You listen with, you hope, an interested expression on your face, while you think of all the reasons why not...
or
You have an open-door policy that one of your people takes advantage of to bring you new thinking. Even as you listen, you're thinking of the reports you have to finish or the emails you need to respond to from your colleagues or your customers or your spouse...
or
Your organization has adopted a lean/six sigma/quality improvement initiative that has teams forming and storming and norming all over the place, generating ideas, implementing pilot projects, presenting results to you in an approved format. As you give them the t-shirts, coffee cups and certificates in reward for work well done, you've decided to kill their suggested plans to expand upon their successes for time, cost or productivity reasons you're convinced will apply.
In every case, you had a win. You had ideas, innovation and participation. You had exactly what the business books - as well as business owners, executive teams, Boards and shareholders - want and expect you to create.

Yet, too many managers, executives and business owners mishandle what happens next after any number of forms of a win. As a result, they miss out on the opportunity to create success on a far greater scale than they otherwise imagined.

For you, that stops now.

Here are the 5 steps - in order - that you take when you're presented with the opportunity to create a global win:

1. Don't just listen. Hear.

One of the most valuable commodities you have - and compliments you can give - is the ability to really hear what your people are saying. To give them your full attention. Your focus. To let them know that you're fully present both with them and for them.

By doing so, you not only gain far more information than you previously had access to - now and in the future - but, without saying a word, you build a collegiality that takes the pretty-words concept of 'team' and turns it into an action.

2. Ask penetrating questions. Find out What and Why.

Your people have reasons for the information they're sharing. Whether it's a problem or a solution - or both - they have a logic to which they're operating that, most likely, is outside of or goes beyond your understanding of what they do. You want to know that reasoning. You want to ask questions about their logic. Instead of defaulting to "How?" you want to spend time and attention on the key, more penetrating questions: "What?" and "Why?"

By asking about the specifics that led to identification of the problem and/or solution, you're getting insight into exactly what they're dealing with on a regular basis. You go even further by asking them why those things are happening. Not with blame or finger-pointing - but, purely, as information gathering.

Think of it as a mystery that needs to be solved - with you and your people the ones who will solve it.

3. Make it a conversation. Create a shared outcome.

By truly hearing what your people have to say and getting at the more penetrating information, you've created a conversation. Now it's time to create a shared outcome.

That's where your position of power comes into play. You know things and have access to people and information that go far beyond what your team members have available. At the same time, they know things about how your organization really works - including the obstacles they confront and end-run every day - that you need.

Now's the time to take all the information and figure out - together - how to use it to its best advantage...for you and for them.

4. Determine how to generate as big a win for everyone as possible.

It's time to kick in your value chain thinking.

The biggest and best wins - no matter the size of the problem or solution or, for that matter, from how deep in the organization it comes - create a veritable tidal wave of success. But only when you consciously work your solutions as part of your value chain.

Internal and external to the organization, every action and decision has a ripple effect. From your choice of suppliers to your hiring/on-boarding/training processes to the IT systems you adopt, everyone who touches your organization from within or outside is impacted.

As you look at not only the problem and/or solution that's been brought forward - but, particularly, the what's and why's - begin to figure out what you can do to create a positive tsunami of impact for and with your senior-level counterparts within the enterprise. Don't forget to include your team members. They can positively work things cross-organizationally in ways that you can only dream.

5. Generate a plan with timelines, metrics and responsible parties - including you. Execute it.

You've got the right thinking. Now you take the right actions.

It's all well and good to talk pretty and make promises. The problem is, whether you know it or not, no one believes you when you do. That's because, whether from you or others, they've been taught that unless there's action - and your skin in the game, too - it's just a bunch of pretty words.

To make sure that that doesn't happen, figure out - together - how to create the win you've identified for everyone. Just as with any other project plan you put together, start asking questions like:
  • What are the steps? 
  • In what order? 
  • Who needs to be involved - within and outside our team? 
  • At what point?
  • How do we bring them in?
  • How will we know how we're doing at every stage?
  • What are the metrics we'll be using? 
  • Are they in place...or do we need new metrics and measurement systems?
  • Who will be responsible for ensuring that the data are up-to-date? 
  • What's the reporting structure?
  • When/How often do we meet to discuss how we're doing and next steps?
...and those are just the starter questions.

The key to this step is to make sure you're prominently involved - as first line of defense, creator of new relationships and possibilities, sounding board and more. The more they see you taking the right actions on your own and their behalf - so that they see you have skin in the game, too - the more and better they'll do for you. Now and in the future.