Category Archives: Customer Service

How the Gilt Groupe Got Its Shine

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BY INVITATION ONLY

There is an old maxim that friends should not do business together since it invariably ruins the friendship. The Information Age has disproven this notion as best friends and college roommates have launched enterprises that eventually become billion-dollar companies (Microsoft and Google are two notorious examples). Perhaps one of the most engaging stories of friendship turned into entrepreneurial success is told in By Invitation Only by Alexis Maybank and Alexandra Wilkis Wilson. The relationship between Harvard Business School graduates Maybank and Wilson is so tight that the pair is known as A&A. However, By Invitation Only is more than a story of friendship, it is a story of how two smart young women leveraged their experience, intelligence, contacts, complementary personalities, careers, skills, and a passion for fashion into an innovative online enterprise called Gilt Groupe.

The Core Idea

The Gilt Groupe — co-founded by Maybank, Wilson, engineers Mike Bryzek and Phong Nguyen, and chairman and veteran online entrepreneur Kevin Ryan — is based on the idea of the “sample sale,” in which a very select group of customers is invited to buy (during a very small window of time) luxury brands at discount prices. “To savvy, fashion-conscious New Yorkers, a Louis Vuitton or Hermès sample sale was a drop-everything-and-run proposition,” the authors write. “Once there, you basked not only in the bargains, but in being part of (and often trampled by) an elite, stylish, in-the-know crowd.”

Gilt essentially brought sample sales to the Internet. The idea began with Ryan, whose French wife discovered a French “luxury private sale” Web site. Through a recruiter, Ryan was put in contact with Wilson, who had followed Harvard Business School with stints at Louis Vuitton and Bulgari. Uneasy with the idea of an Internet business, Wilson suggested her best friend Maybank instead.

Maybank joined Ryan but eventually realized that Gilt needed a high fashion insider with the right contacts and personality to lure the right high-end brands to the site — a job description perfect for her best friend, Wilson.

How to Network and Other Lessons

By Invitation Only describes the successful entrepreneurial journey of Gilt, revealing to readers the exhilaration and terror that launching, growing and managing a start-up inevitably brings. More than just telling a story, however, Maybank and Wilson want to help readers succeed in the way that they have succeeded, and therefore offer specific advice, often in the form of boxed checklists, on moving from an idea to a profitable enterprise. Extensive networking, for example, was a key factor in the successful launch of the site. In a chapter entitled “Networking to a Launch,” the authors offer a checklist that explains the rules for growing and maintaining your network. Another chapter describes how the co-founders laid the foundation for their viral business model. This chapter includes a checklist that enables readers, through a series of questions, to evaluate whether their business has the potential to be viral.

At the heart of the book, however, is the continuing friendship and collaboration (in that order) of Maybank and Wilson. The ultra-organized and cautious Wilson and the spontaneous, risk-taking Maybank complement each other perfectly. In an era in which company founders can end up on opposite sides of a courtroom, the story of the partnership described in By Invitation Only should be a primer for any friends considering going into business together.

How Excellent Companies Avoid Dumb Things

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DO CUSTOMERS CALL YOUR COMPANY ‘DUMB?’

About a month before your credit card expires, you lose it. You notify your credit card company, which sends you a replacement card with a new number that is valid for one month. Two weeks later, you receive your renewal card, also with a new number, to replace the one you just received. You think to yourself, “Why didn’t the company just renew my card four weeks early?” In other words, you are asking yourself, “Why did this company do this dumb thing?”

Although the title of his book has a positive spin, consultant Neil Smith’s book How Excellent Companies Avoid Dumb Things is, in truth, an explanation of why companies with supposedly smart managers and executives do the inexplicable things that make their customers shake their heads. According to Smith, the fault does not lie with the people who run the companies, but, instead, with psychological and organizational barriers that prevent those people and the companies they work for from doing the right thing — or at least the logical, intelligent thing.

In the case of the lost credit card, for example, Smith explains that the process of replacing a credit card and the process of renewing a card are completely separate. There is no process that allows card renewal to circumvent card replacement. At the two-year mark, a person’s card is renewed. Before that two years, even if it is only weeks before the renewal deadline, the card is replaced. Smith calls this the “Existing Processes” barrier. There are processes in place. However, there is no process that can change the existing processes.

A Promise: The Eight Barriers

According to Smith, there are eight such barriers that explain why companies do dumb things. Through clever wording, the first letter of Smith’s barriers make up the words “a promise,” which, he says, make the barriers easier to remember:

  1. Avoiding Controversy
  2. Poor Use of Time
  3. Reluctance to Change
  4. Organizational Silos
  5. Management Blockers
  6. Incorrect Information and Bad Assumptions
  7. Size Matters
  8. Existing Processes

Most or all of the barriers will be familiar to those in business. Most have seen a manager block a good idea from an employee because it threatened him or her in some way. The fear of controversy or the reluctance to change is a recurring problem either at an organizational level or an individual level.

Changing the Company

In eight dedicated chapters, Smith and his co-author, writer Patricia O’Connell, clearly explain and exemplify each of the barriers. Smith and O’Connell then lay out Smith’s 12 principles that serve as guidelines for the process of breaking the barriers. These principles range from having the process led by the CEO and ensuring that the people implementing the ideas own them to the importance of making the change process about culture change and not just a project.

Finally, the authors present a three-step, 100-day change process for breaking barriers that includes: surfacing ideas; rating the risks and debating the ideas; and reaching consensus on which ideas to implement. The process is led by a steering committee made up of the senior management of the company, driven by a full-time (during the 100 days) catalyst team that guides and monitors the part-time group leaders who lead the individual company units in the change process.

When combined, the 12 principles and the 100-day change process create an effective template for managers responding to the barriers that are hurting their companies. The greatest value of the book, however, is in the barriers themselves. Some business leaders may be horrified to realize how a particular barrier is costing the company significant cash and other resources — while some enlightened customers will say, “So that’s why that company does that dumb thing!”

Employee Loyalty Equals Customer Loyalty

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In a previous job, I worked for a woman who cared deeply about her employees. We enjoyed having every day off that both the post office and bank had, plus we always had the week between Christmas and New Years along with a Christmas bonus, on top of our regular vacation days. If your child had an event going on at school during work hours, she would encourage you to attend, and she was always interested in how our families were doing.

Her supportiveness resulted in a very loyal group of employees, ready to do whatever was needed to make the company successful. And this was especially evident in our treatment of our customers. We would go out of our way for them, because this was part of the overall atmosphere of the company.

Although this is certainly not a novel idea, loyalty seems to have taken a back seat to survival in the past decade here in the U.S.. While there has been a strong push for customer service, the employees have not always been taken into account.

In The Loyalty Factor, Dianne Durkin connects these two groups back together. Her Loyalty Factor is “Employee loyalty drives customer loyalty, which drives brand loyalty.” Some of her suggestions as to how to encourage employee loyalty include:

  • Communicate uniquely with each generation
  • Accommodate employee differences
  • Create workplace choices
  • Be flexible in your leadership style
  • Respect competence and initiative
  • Recognize achievements
  • Reward results

If you would like to hear more about Durkin’s thoughts on loyalty, you’re in luck. We’ve invited her to join us for our next Soundview Live webinar, Building Employee, Customer and Brand Loyalty, on May 15th. Register today and bring your loyalty questions to ask during the session.

How to Amaze Your Customers

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A quick review of books on customer service shows that the prevailing view is to WOW customers, to knock their socks off with service far beyond what they expect. But Shep Hyken takes a different approach. He says that what will really amaze customers is if you provide consistently above average service – with the emphasis on “consistent.”

“Amazement is not necessarily about “Wow!” levels of service, although sometimes it may be. It is about an all-of-the-time, I-know-I-can-count-on-it, better-than-average experience.”

In Amazement Revolution, Hyken provides seven amazement strategies that companies can implement in order to provide that consistency, which I will list below. But he begins with one very important principle. You have to take care of your employees first!

“To keep external customers happy, you must make sure your employees know that you care about doing what’s right by them, day after day after day. Your employees will in turn care about doing what’s right by the customer.” “Amaze your employees, and they’ll spread the amazement!”

The 7 Amazement Strategies:

  1. Provide Membership – Shift your mindset to treat the people you serve more like members rather than customers.
  2. Have Serious Fun – Real FUN in the workplace is determined, not by how many belly laughs your enterprise generates, but by the level of fulfillment it generates in the workforce, the uniqueness it respects in each employee, and the sense of anticipation it creates for the next challenge on the horizon.
  3. Cultivate Partnerships – Deliver a premium level of service that incorporates active problem-solving and inspires customers to count on and return to your organization.
  4. Hire Right – Create and implement innovative hiring and retention processes that support your service mission.
  5. Create a Memorable After-Experience – A positive initial customer experience is only the beginning! Make sure your organization gives people the flexibility to deliver a range of powerful, personalized after-experiences.
  6. Build Community – Support and inspire both the internal and the external community of evangelists.
  7. Walk the Walk – Acknowledge, model, and reward adherence to customer-focused values at all levels of the organization.

Does your customer service experience need tweaking, or a complete overhaul? Then you’ll want to hear directly from Shep Hyken as he explains his strategies in detail, and provides case studies from best-in-class companies. Join us on March 8th for our Soundview Live webinar Learn the 7 Customer Amazement Strategies, and bring your questions for Shep.

You can fill your conference room with people to listen in, Free for subscribers and just $59 for all other registrants. You might consider using this as a customer service training session.

Have You Experienced Zappos?

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As most business people and consumers are aware, Zappos is a shoe and apparel website with a reputation for superior customer service. It was started in 1999 as shoesite.com and after a hefty investment by Tony Hsieh became zappos.com. In 2009 the company was sold to Amazon for $1.2 billion, just 10 year after it began.

But what some people may not know is that Zappos’ commitment to customer service goes beyond its own doors. They have developed a program called Zappos Insightsto help other companies also excel at customer service. Although the company may seem like a wacky one-time success, this success is built on a set of principles that can be applied to any company.

Joseph Michelli, in his book The Zappos Experience, provides us with these principles from his research of the Zappos business, with ample cooperation from its employees and CEO Tony Hsieh. Here are the five Zappos principles:

  1. Serve a perfect fit – Zappos has a rigorous application process to make sure new employees fit with their culture, and let’s all unsuccessful applicants know why they weren’t accepted.
  2. Make it effortlessly swift – Customers are less concerned about WOW service then they are about getting satisfaction without a lot of effort.
  3. Step into the personal – Zappos finds ways to create individualized experiences that extend beyond their solid service platform.
  4. Stretch – Zappos understands that a key to retaining great people is to keep them challenged and learning.
  5. Play to win – High levels of workplace fun are consistently associated with increased creativity and productivity.

If you would like to hear more about these five principles and how they can be applied to your company, join us on February 16th for our Soundview Live webinar The Zappos Experiencewith Joseph Michelli. You’re sure to learn something that can help your business succeed, and perhaps have some fun in the process.