Picky Customer or Circling Vulture

Jen and I went to a mall on Saturday. It’s been a long time since I’ve been to a mall on a Saturday afternoon. I left buying nothing and feeling extremely uninspired to shop.

I now know why Target sold Marshall Field’s last year to May Department Stores and why May Department Stores is praying to be bought by Federated.

Like advertising, commercial radio, and the airline industry, the entire department store model is broken. It’s no longer useful to customers like you and me. Every store looks exactly the same. Each store offers the same products under the same brands, in the same colors, at the same price, with the same reason offered to buy from them – none.

Perhaps, like in commercial radio, this homogeneity is a result of consolidation. That may be. I submit consolidation itself is a result of:

  1. a business unable to be successful on its own,
  2. the belief sustainable margins could be reached with enough volume.

Even if stores aren’t sharing inventory, they’re striving for blandness by stocking the few items that move at competitors and dumping the unique items – the ones that don’t sell. Leaving me, and I suspect, you, with a strong sense of blah.

As we walked through Marshall Fields (or was it Herbergers or was it J.C. Pennys?) the majority of the customer activity was in the inter-aisle sale racks. 50% off jewelry, 60% off menswear, racks and racks of stale inventory clogging up the aisles. That’s where the customers were. The full-price stuff getting no attention. The scene reminded me of my mom – doing the bulk of her furniture shopping at Going Out of Business sales.

Retail stores traditionally mark up their products 100%. That covers things like: the staff, the building, and the products that aren’t selling. Things that keep the business running, that keep the jobs in your neighborhood. If stores get the bulk of their business when they run sales (going out of business or otherwise),

    what incentive to the have to:

  • stock things worth buying not on sale?
  • differentiate themselves from their competitors?
  • stay in business?

This relationship is like that mean, yet popular high school girl telling the infatuated A/V club president, “We can be best friends as long as we never see each other.” Yes, we’re the popular high school girl and the stores are the geeky boys.

A handful of questions come to mind:

  • Is this Wal-Mart’s fault for teaching us that stores should strive to squeeze the livable-wages out of margins?
  • Is this the fault of stores like TJ Maxx where the department store’s unsold inventory lands a season later? Thereby reinforcing the ‘if you wait, the price will be lower’ lesson taught to us by the frequent sales.
  • Is this the result of a society so plush with potential options we need the threat of something being gone tomorrow to make a purchase decision?
  • One last question: If turning customers into circling vultures is the only way to make them buy, are the products worth selling?

If a Sign is Needed, Something is Wrong.

In his Roads Gone Wild article for Wired, Tom McNicol describes a new mentality in traffic control: fewer signs = fewer accidents.

From this perspective, traffic control signs are actually a poor band-aid for an unsafe environment. At best, they keep accident rates constant, at worst they actually cause more.

This phenomenon is not unique to traffic. It’s rampant in the retail and hospitality industries also.

    Examples:

  • Video games have the potential for high shrinkage. Target puts them behind lock and key. Target doesn’t fully staff their electronics/video game department. Far fewer games are shoplifted, and far fewer games are sold. How do they sell more games? Maybe the real question is: Which is more expensive, shrinkage or staff?
  • Like all good hotels, The Grand Hotel in Minneapolis offers robes, towels, and refreshments to its guest. They also charge quite a bit for the convenience as illustrated by this camera phone photo:
    Are You Kidding? $9...The hanging tag on a bottle of Evian at the Grand Hotel in Minneapolis.
    Similarily, the tag on the robe says if you take it, you’ll be charged $99. Now. aside from the fact both these items should come out of the marketing budget, the signage is displayed in a very “We don’t really want to sell this.” manner. For a $100+/night hotel room, I would expect complementary $1/liter bottled water. Perhaps the Grand hasn’t reviewed Yours is a Very Bad Hotel in a while.

How to Stifle Teamwork – Part 3

The news reports that US Defense Secretary Donald Rumsfled had an opportunity to inspire, motivate the US troops during a recent question and answer session in Kuwait.

Based on this exchange, I can’t say he succeeded in addressing the troops concerns let alone inspire them to go back into battle. That is unfortunate.

“Why do we soldiers have to dig through local landfills for pieces of scrap metal and compromised ballistic glass to uparmor our vehicles?” – Army Spc. Thomas Wilson

Rumsfeld replies, “You go to war with the Army you have.”

More at: [MSN] Troops put tough questions to Rumsfeld

The White Collar Revolt, Part 1

Related to my earlier post about saying ‘No’ (Some of the Passengers, Some of the Time) fed up computer programmers at Electronic Arts are suing their employer over “extreme job stress and health problems”.

NPR had the story this past weekend on Weekend Edition.

Employees are gaining more control over their work conditions with each passing day. And if a specific employer doesn’t allow employees to have control over their schedule, environment, and work – they should prepare to see a similar suit against themselves shortly.

Ricardo Semler outlines how to structure a supportive and profitable organization in, Maverick. I can’t say enough good things about his book.

Get more details at the Social Customer Manifesto.

Some of the Passengers, Some of the Time

“Go back in history. One of the first decisions an airline had to make was, Should we carry passengers or cargo? Whenever an airline came to that fork in the sky, they took both forks…” – Doc Searles

Doc makes an excellent point. Very few companies can successfully be all things to all customers. The big airlines are proving right now that this strategy is road paved with good intentions.

Contrast the airlines’ “both forks” strategy with this recent Business Week interview with Steve Jobs:

“…it comes from saying no to 1,000 things to make sure we don’t get on the wrong track or try to do too much. We’re always thinking about new markets we could enter, but it’s only by saying no that you can concentrate on the things that are really important.”

Tomorrow, say ‘No’ to keep focus on an ever expanding project, say ‘No’ to keep your company’s niche, and most importantly – say ‘No’ so you can spend dinner with your family this holiday.

How to Stifle Teamwork – Part 2

“Rating and ranking engender competition, not collaboration” – Esther Derby, An Alternative to the Yearly Performance Review

I always felt annual performance reviews existed for disconnected management to reinforce hierarchy. To know that their prime purpose (in employees’ minds) of securing an individual salary increase actually incents people to not collaborate is doubly disheartening.

Compare this individual-focused structure against a work environment where: everyday at 10am the entire team, manager and all, meets for 15 minutes to review the previous day and prepare for the current day.

That simple, regular, act promotes collaboration among the team members and an engaged, connected manager.

In this new world, how do you determine an individual’s salary? The same way you did originally, compare what they’re doing against the market.

When Brand is the Bottleneck

Recently, a collegue and I went to lunch at Pancheros, a 14-year old burrito chain started in Iowa City, IA. I’ve spoken about the power of lunch before as well as the lunch experience. Always enlightening. This time was no exception.

I’m a big fan of Chipotle, they’ve taken the Subway model and transferred it to Burritos. In the process, created the fastest growing resturant segment and an engaging write-up in Trading Up: The New American Luxury.

Rather, I thought it was Subway, until I stepped into Pancheros.

The process at both Pancheros and Chipotle are identical; start with the burrito, then rice, beans, meat selection, salsa, sour cream, guacamole, and greens.

The difference is at the start; Chipotle has pre-pressed burritos that are steamed for each order, Panchero’s creates each burrito fresh from a ball of dough for each order.

According to Pancheros website, freshly-pressed burritos were introduced in 1998 – as Pancheros’ differentiator I suspect, for that was about the time I discovered Chipotle.

Bad idea.

This was the Panchero’s order-taker’s process I observed:

  1. Take burrito order.
  2. Turn around, press ball of dough into burrito.
  3. Throw freshly-pressed burrito on grill.
  4. Turn around, take next order.
  5. Repeat step 2.
  6. Flip over first burrito.
  7. Grab first burrito and re-ask first customer what they ordered.

Compare this against Chipotle’s order process:

  1. Take burrito order.
  2. Grab pre-pressed burrito and steam.

As I discussed in my 5 Organizational Tips from Academia entry, the infrastructure is often the bottleneck to greater capacity. Panchero’s capacity is being limited by their fresh-pressing.

If you have both in your neighborhood, pick a nice day and stop by both. I predict the Chipotle will have a line out the door and the Panchero’s might have 10 people in queue.

What should Panchero’s do? I recommend taking a cue from Baja Sol Tortilla Grill and differentiate on offering and freshness.

How Not To Do Customer Research

We do quite a bit of customer and employee research here at Working Pathways. From in-depth 1-on-1, deep dive, interviews to quick email surveys to observational studies – our expertise runs the gamut. Whatever the study, each participant involved is 1. screened and qualified and 2. receives some level of compensation for their time and insight.

With that in mind, here’s how not to conduct a customer research telephone study:

  1. Don’t tell recruits who’s sponsoring the study. That’ll just skew the data and hey, why do participants need to know anyway?
  2. Don’t tell recruits why you’ve called them. That’ll skew the data also, say ‘satisfaction with products you may or may not have used’.
  3. Don’t tell recruits how long the interview will last. Participant’s time isn’t valuable, we can use as much of it as we’d like.
  4. Don’t compensate them. They should be happy just talking to us.
  5. Be surprised when nobody wants to talk with you.

In our experience, the most insightful research comes from passionate customer, they want to share their experiences with your products. You won’t get the valuable stories through a dispassionate qualitative satisfaction survey on products they haven’t used. They only come out when you respect your customers and consider your time with them a business appointment – pre-scheduled on both parties calendars. Like a business appointment, in this mode – one party compensates the other for the interaction.

How to Stifle Teamwork

As an appetizer for an upcoming Work Better article on collaboration techniques, I’m pleased to present these team work worst practices from Ester Derby’s Software Managemet Process Improvement weblog:

A clear strategy to stifle teamwork

Establish two classes of membership on the team [WP NOTE: i.e. developers and testers, employees and contractors, or people with technical focus and people with business focus] , then follow these steps to ensure that all are aware of the distinction

3) Hold meetings to discuss project business, and exclude the 2nd class team members. If they ask to attend, tell them the meetings are to discuss topics they don’t need to know about… or say “This is meeting is only for 1st class team members.”?

4) Swap in new 2nd class staff frequently (2nd class team member are fungible, afterall, unlike more important 1st class team members). This is a double-header strategy – it slows down progress, too!

8) Blame the 2nd class when the so-called team fails to work together effectively…“They just don’t understand how to work as part of a team.”?

For all 8 helpful hints, visit A clear strategy to stifle teamwork.

As illustrated by this article, teams are about quality interpersonal relationships. If the office culture doesn’t support building collaborative relationships – failure is imminent. For the project, the team, and the organization.