Monthly Archives: July 2008

Waiter, there’s a fly in my soup

Service with a smile

British people, in general, don’t like to make complaints in restaurants. There are two reasons why. The first is that most Brits were brought up to believe that it is best to disappear in to the background rather than make a fuss. The second is that when taking out their revenge on another they would do it in a way that meant the other may not ever know about it. Therefore, complaining in a restaurant must mean that the chef is exacting some sort of gruesome revenge out of sight in the kitchen and this is a good reason not to complain. It is with this in mind that I came across the launch of a new website last week called “iWantGreatCare.org“. This new website gives patients the opportunity to provide feedback about the care they have received and in particular about the Doctor that cared for them.

Working in the area of customer experience myself I am a firm believer in the need for and value of feedback. Organisations crave it and when properly gathered and analysed is can provide a level of insight that is often otherwise impossible to get. My wife just received an order from Tesco Direct that had no packing material in the box at all so everything had been thrown around and one item was very badly damaged. Not ideal as it was a birthday present. A quick phone call and an email and the complaint was dealt with and although there was no anonymity the complaint was about an organisation and the person responsible will probably never know who it was that complained.

It seems to me that there are so many ways this new service can be abused that it is hard to know where to start. You have to leave your email address to register and although it is claimed you can leave feedback anonymously it was hard to work out how from my review. Also the site is most effective when it reaches critical mass and I am not sure it will ever reach its tipping point when most Doctors have absolutely no feedback. Who will ever be the first? Is the correlation between treatment and complaint going to be obvious and if so what is the outcome?

Surely Patients will never trust that their identity and their complaint will remain separate, unconnected entries. Won’t they be worried about the likelihood of their next Doctor or carer being forewarned that they are a trouble maker and won’t this impact the level of care? Isn’t that just human nature?

Score draw
Score draw

To score your victim Doctor, you are given three sliding bars that represent ‘trust’, ‘listening’ and whether you would ‘recommend them’. However, by far the biggest challenge is identifying the correct Doctor in the first place.

What I particularly like is the tick box at the bottom where you can opt in to receive “occasional news and updates”. Will this be like Twitter for Doctors? It really feels like the convergence of old and new with the application of these very ‘web’ practices in the old fashioned health service. I wonder if one day ‘Amazon-like’ capability will be added and behavioural data used so that you can expect a message that says “Patients who had surgery for a duodenal ulcer also had surgery for psoriasis of the liver”? That’s great to know!

How can we save Jessops?

1888 Kodak camera
It will never last...

I was speaking with David Pickering, CEO of Charteris at a breakfast briefing recently when the subject of Jessops came up. We both agreed that we didn’t want Jessops to go out of business as we found their stores a really useful source of advice and information but were equally worried about how they would survive given the financial performance they had been experiencing [when we spoke]. So yesterday when I read that Bloomberg reported Jessops losses had widened my concern increased and I decided to carry out some desk research of my own.

Sales in store have fallen 11% in the past three weeks. That is not that surprising when you consider the prevailing market conditions and gross profit percentage is up. A year ago the company announced that it would close 81 stores, 31 of which were loss making and with these changes in place the company still expects to report improved EBITDA figures on last year. A big problem however is the level of debt they need to service. Borrowings are at £52.26m and although they managed to restructure the debt with HSBC they will have to make a payment against the £49m of senior by spring next year according to FT.com. Even a year ago Jessops was being referred to as a ‘Private Equity Disaster‘ although despite the results Chief Executive David Adams is optimistic about the future.

So they have a lot of big problems and have taken extreme measures to cut costs and do the normal things companies do when they are going slowly down the toilet. But in my view, they are still worth saving. Why? Because they are one of the few high street retailers that are truly specialist. If you visit Jessops and you are interested in photography you will be met by employees who on the whole are passionate about photography and happy to spend time with you helping you. The problem is this doesn’t make you any money when the product has become commoditised and online competition is fierce. And it is this, the multi-channel elements of their retail strategy that in my view they get most wrong.

On Saturday I tried to do my bit to save Jessops. I had 3 digital photos to print: two 10″ x 12″ and one 7″ x 5″. Online, including delivery in 24 hours (which is real as I have used photobox before) the price £4.09. At Jessops each of the large photos was over £4 (the 3 day services £3.49 and 1 hour £6.99). These prices are available on the website as the link in the last sentence indicates.

On the same website I can link to Snapfish, Jessops online photo business and be offerd an 8″ x 10″ print for £1.25. Snapfish is in fact an HP business and the arrangement with Jessops has existed since 2006. Jessops have actually done something quite innovative by connecting the web with stores and providing a ‘reserve and collect’ services. The problem is the pricing and also the lack of specialism. Why would you pay a premium to order one day and pick up in store when it is cheaper to order and have a home delivery where they have no differentiation?

The website is completely “off” brand experience. There is no content beyond products for sale. If you type ‘advice’ in the site search you get a message that “nothing was found matching your search criteria”. The only link with the store are the prices of products or so it would seem. In fact when I navigated to the photos tab and then once in selected ‘photos home’ I was presented with a range of specialist in-store services. The usability of the website surrounding this content is so poor however that I can’t believe many find it. Interestingly there is listed here a further service that I have experience of.

I wanted my wedding video transferred from VHS to DVD. I went to Jessops (another opportunity to save them) and was told by the incredibly helpful and knowledgeable assistant that a store round the corner did it and Jessops didn’t. Thanks I said and took my £40 round the corner. According to the website this is a specialist service provided in store and a further demonstration of multi-channel strategy being poorly implemented.

Nor is the website well marketed and I wonder if this is an indication that where online is concerned, Jessops are not expansive in their thinking about what business they are in. If you search for “photography” in Google.co.uk, Jessops don’t appear on the first page at all. Changing the search phrase to “camera” and they come second in natural search, but have no paid for advertising. It is no coincidence that there is no photography content on the site.

In 2007, when commenting about the cuts Jessops were making David Adams, said: “The strategy allows us to re-position Jessops as a true multi-channel retailer, building on our core strengths in the digital imaging market place.”

It appears to me they have precious little strength in the digital imaging space and are not a multi-channel retailer. For sure they have multiple channels but they may as well be two separate businesses. I want to save Jessops but as a consumer I am struggling to work out what I can do to keep them alive.

Will online sales benefit from high oil prices?

The Economist this week (The Economist July 12th 2008 ) reported that driving behaviour had changed as a result of higher fuel prices. Garages report that there has been a 5-10% drop in in fuel sales and this is as a result of fuel prices rising at their highest rate ever in June. The Economist also reports on data from Footfall, a research firm that tracks customer numbers, that indicates visits to out of town shops have fallen and at a higher rate than the drop in visits to town centres.The suggestion is that consumer behaviour is altering as a result of fuel price inflation.

At the same time Internet Retailing, an online retail website, reported increased sales to online grocery websites. Value retailers have experienced growth of between 30 to 40% in the four weeks to June 7th and visitor numbers for both Morrisons and Asda were up by more than 48% for the 3 months March to May 2008.

Meanwhile on June 30th 2008, ASOS, the UK’s largest online retail store attracting over 1 million visitors per week, were reported by Retail Exec, an online publication aimed at Retail Executives, to have achieved a 90% increase in revenues to £81 million and post pre-tax profits of £7.3 million up £3.4 million on last year.

I was asked to contribute to a book recently called “winners and losers in a troubled economy” and to offer my views on whether ‘online’ would be effected by an economic downturn. The answer to me is clear: Not if executives take on board the data available to them about changing consumer behaviour and the benefits the online channel offers. Having done so, they need to determine to make their online property best of breed.

Not everyone will do this of course and it is easy to predict that in 18 months time when the down turn is becoming a recovery there will be a number of high profile casualties that did not make the right investment decisions and were not able to maximise the opportunity that a down turn presented to their business.

We have all learned over the past decade or so, sometimes painfully, that the Internet is not the answer to all of our problems. However, where the case is dropping high street sales due to altering consumer behaviour as a direct result of high fuel prices there does seem to be a strong positive correlation and maybe this time, it is.

Starbuck’s to close 600 stores in the US

An article this week in HBS revealed that Starbuck’s is to close some 600 US stores. HBS put it down to 3 reasons: disenfranchise early adopters,  too many products and superficial growth from too many stores and products, which in many ways boils down to this: “they delivered a lousy customer experience”. More importantly they made the mistake that Facebook are making – they forgot who really owned the brand.

Starbuck’s thought they owned the brand and in pursuit of earnings to satisfy the markets they grew like crazy and changed the brand and therefore user experience. Soon getting a coffee in Starbuck’s was no longer about the laugh and joke with the Barista, the remembered regular order and the great coffee sipped at a well positioned table from a comfy chair. Rapid service and more choice than you can remember took precedence in the pursuit of growth.

When will brands realise that sometimes you have to sacrifice growth for sustainability? For sure the market puts enormous pressure on businesses but this is a chicken and egg scenario and greed wins out. It is certainly difficult (I imagine) to become a gozillionnaire by pitching up to a VC and saying “we won’t grow that fast but we will be profitable and our customers will love us”. But it would be nice to think that somewhere out there another Amazon exists.

Don’t mix friends, family, and business contacts.

The Daily Telegraph (a UK broad sheet newspaper) recorded a story on 16th June 2008 about a High Court ruling that requires an ex-employee of Hays to hand over his business contacts built up on the social networking website LinkedIn. The story has been picked up in various places including Brand Republic and Computer Weekly but none raise the obvious more expansive question of what does this mean to the rest of us? Computer Weekly does make reference to a legal specialist that advises employers to add clauses to employment contracts and to ask employees to set up business only networks but I think this misses the point.

Social networks are just that – social. The dictionary definition of ‘social’ is “living or preferring to live in a community rather than alone.” The networks don’t have boundaries and certainly don’t separate colleagues from friends. In many ways, if they did it would defeat the object. But for many, the level of transparency is unnerving.

I had lunch with a customer recently who talked about her younger sister connecting with her on Facebook. I have a similar scenario where I am connected to my niece and nephew. They have very different interests and circles of friends to me being as they are about 25 years younger but what is my alternative – deny their existence or compartmentalise them?

Only five days earlier (11th June) the Times Online ran a feature that advised people to keep their social and business networks separate. This is an interesting idea and there were various suggestions made by different people – all in recruitment (or Talent Management if there is a difference). One suggested he uses a nickname on Facebook that only his friends know, and uses LinkedIn for business contacts only. I don’t see how this can work. There has to be crossovers and what happens when a family member or close friend is also in business or vice versa? The article finally ends up with a suggestion that soon software will simply track you down by making connections between you, friends and colleagues and bingo – your profiles are connected for all to see.

What this really means is we have to get ready for a time when virtually everything we put up online will be attributable to us. Potential employers will be able to see our connections with dodgy friends and family members and start judging us across a wider set of values. Is this good or bad? I am certain, their will be losers as there always are but I think this is akin to businesses getting used to corporate blogs – which many have yet to do.

There are countless examples of businesses gaining stronger brands as a result of honest information about them going up on blogs. They are measured by how they respond to negative comments about poor performance and people realise that no business is perfect and actually, if you can see them warts and all you tend to trust them more. The same will surely happen to individuals and I think it will be refreshing.

I predict that the transition will be ugly, but when we get there we may see a levelling of the playing field on a scale never seen before.