Category Archives: Business – Opinion

Circuit City and Verizon

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When I was in Circuit City buying a new router today I walked past the Verizon Wireless kiosk which happens to be next to the cashiers at the front of the store.  I wanted a new case for my PDA so I grabbed it off a display tree and went to the register.  The clerk looked at my two items and said that he could handle the router purchase for me, but only the Verizon folks could sell me the PDA case. 

I looked over at the Verizon folks and saw one of them talking on the phone while he tried to assist a lady with her phone and the other talking on the phone while he processed the phone order he was working on.  Standing in something that could be loosely defined as a line, since there wasn’t really a "line starts here" place by the kiosk, were three people looking pretty pissed off as they waited for service.  Of course I bought my router and put the case back on the display tree.

The whole thing made no sense to me.  Why wouldn’t Verizon work out a deal with Circuit City to allow the Circuit City employees to process the purchase of peripherals?  I understand not letting them process the phones (i.e. contracts) but why not everything else (ear pieces, cases, pre-paid phones, etc.)?  They have to know that there will be times when their employees are busy helping customers get new phones, which is a long sales and paperwork process, and consequently there will be a long wait for someone who wants to make a simple peripheral purchase.  Verizon might get a lower margin on the peripheral sale if Circuit City processes it, but they could build that assumption into their contract negotiation with the store.  20% of something is still better than 100% of nothing.

And why would Circuit City create a situation that is potentially irksome to customers?   Believe me, when the clerk told me I could only buy the case from the Verizon guys my first inclination was to look at the clerk and say "Are you serious", and that’s what I did.  That gave him the opportunity to show me his surly "the holidays suck" side, and that’s what he did.  Consequently I’m ticked off at Circuit City, not Verizon.

The irony is that it’s probably the Verizon employees who really made the situation worse.  I took one look at them chatting on the phone with their girlfriends while working with customers and knew it was a minimum 45 minute wait to get service. I’m not waiting that long for a $20 case.  Unfortunately that is exactly the kind of service I’ve come to expect from Verizon so I wasn’t surprised, while on the other hand I expect Circuit City to be able to take my money for a simple purchase (I long ago gave up on looking to them for expert advice on anything they sell) so when they couldn’t meet my already minimal expectations I was really put out of sorts.

By the way, I was there at mid-day on a weekday.  Yes it’s the holiday season, but it really wasn’t very crowded at all.  Imagine what it will be like at 5:30 today and how much business Verizon could potentially lose and how many customers might show up at the cashier to be told they can’t be helped?

Bankers are Giving Lawyers a Run for Their Money

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I’m beginning to believe that bankers have supplanted ambulance-chasing lawyers as the slimiest sharkskin-suit-wearing industry in the country.  Actually, they may be in a tie with health insurers (see my post about that), but right now I’m thinking the bankers are in the lead.

Here’s what has my dander up today: When we got back from San Francisco we had a message from Chase saying we’re late on our last car payment.  This confused Celeste because we’ve been paying with autodrafts from our bank account for four years, or the entire lifespan of the car loan.  When she called Chase back they said that if we’d read the fine print of our loan we would have known that they don’t accept autodrafts for the last payment.  Okay, fine.  So Celeste asks the very unfriendly bank rep why we’re hearing about this only now that the payment is 90 days late and we’ve been put in collections?  The rep’s reply is that she can only handle payment, not answer customer service questions.

It gets better.  Celeste asks how much we owe.  The rep says she needs our bank information before she can answer any questions.  Huh?  After Celeste asks again the woman gives her the amount and they take care of the payment information, which by the way requires a $15 processing fee.  Huh?  (Celeste truly has a knack for getting the asshole reps).

Before she gets off the phone with the bank’s collection-dolt Celeste gets a customer service number, calls it and enters into banker-logic zone. The customer service rep asks her for our address to verify that he’s talking to the right person.  When she gives him the address he says that it is the wrong address.  Bingo, they never got our change of address when we moved two years ago, which probably explains why we didn’t get a late notice on the final payment.  Yet they were able to track us down for collection purposes.  Nice.  Eventually he’s able to confirm Celeste’s identity using other information and Celeste, who is absolutely fanatical about protecting our credit score, asks how we can get this cleared off our records.  After all we’ve never been late on a payment for the entire lifetime of the loan, and obviously there was a mix up with our change of address.  His answer was to give her a fax number to send a letter to and then wait seven days for their verdict.  Huh?

Here’s my problem.  The bank is probably within their rights, technically, to treat us like this but in the real world they are behaving reprehensibly.  We’d obviously been good customers for four years, but they’re treating us like criminals because of an honest mix up?  And who’s to say it’s our fault?  If they could track us down for collection couldn’t they have done the same for a courtesy call reminding us that an autodraft wouldn’t be accepted for our final payment?  Assholes. 

We’re not the only ones feeling this way about the banks.  Greensboro blogger David Hoggard has some thoughts about banks (he compares them unfavorably with payday lenders) and there’s a very good Frontline piece on the credit card industry that is enlightening to say the least.   It’s not just the credit card side of the industry that’s sullying its reputation; let’s not forget the banks’ investment branches involvement in the dotcom debacle.  With the loosening regulation of financial institutions I think things might get worse before they get better and ironically I think our best hope is, gag, the lawyers.  Hopefully we’ll get some class-action cases going that will have the bankers begging for re-regulation from that den of thieves otherwise known as Congress.

Oh, good Lord.

BB&T to Offer HSAs

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BB&T, a rather large bank based here in Winston-Salem, announced
today that they will begin offering Healthcare Savings Accounts to
commercial clients through their employee benefit subsidiary.  From the
article:

BB&T Corp.
will begin offering health savings accounts, or HSAs, to qualified
clients interested in an alternative to traditional insurance plans,
the company has announced.

HSAs allow account holders to make tax-deductible contributions
that can be withdrawn tax-free when used for qualified medical
expenses. Unlike flexible spending accounts, money left unspent at the
end of a year remains in the account.  

Winston-Salem-based BB&T (NYSE: BBT) will offer HSAs to
institutional and commercial clients through its employee benefit
subsidiary Stanley, Hunt, Dupree & Rhine. The company will also offer the accounts to retail clients who are covered by high-deductible health plans.

Having been self-employed or owner of a small business for much of
the past 10 years I’ve been keeping an eye on these things.  The
biggest thing they have to overcome is the fear factor for people used
to traditional health plans and HMOs and the sticker shock many will
experience when they look at the out-of-pocket expenses before they
reach their deductible limit.  They’re also often confused with "use it
or lose it" plans so people are worried they won’t get to keep the
money they don’t spend.

Some view the HSAs as just another way for businesses to shift the
financial burden of healthcare to their employees, but especially in
the case of very small companies HSAs may offer the only way to provide
any health benefits.  And for the self-employed it’s definitely
something they consider.  Here’s some back of the envelope calculating:

Say you have a family of five, you’re with a traditional health
insurance company like BSBCNC and you pay $700 in premiums per month
which gets you 80/20 coverage for all medical procedures (you have to
cover 20%) and a deductible of $2,500 per year.  On top of that you pay
$30 per office visit and $15 per prescription.  Let’s assume that each
person in the family goes to the doctor once a year (very optimistic)
and gets one prescription per year and no one needs a medical
procedure.  That means your total expenditure for the year is $8,625
and if anyone in the family has to have an operation or stay in the
hospital you’re talking $10,000+ per year.

With an HSA, which is tied to a high-deductible health insurance
plan, you’re probably looking at premiums in the range of $300 per
month and a deductible of $5,000 per year minimum.  Assuming that
co-pays and drug benefits are about the same your looking at saving
$400 month in premiums or $4,800 year.  If you contribute the same
amount per month to your HSA account that you were paying in premiums
you’ll end up spending the same amount of money IF someone in your
family is sick and you exhaust your entire deductible. But if no one
gets sick you get to keep the money you don’t spend in the HSA account
and roll it into the next year, kind of like an IRA.  After a couple of
years you can actually reduce the amount you contribute each month
because you will have built up a cushion that more than covers your
deductible and incidental medical expenses.  With a traditional
healthcare plan your premiums are gone whether or not you’ve been
sick.  In other words the insurance company is keeping your money even
if you and your family have been as healthy as a horse.  The icing on
the cake is that your contributions to the HSA are tax deductible and
my understanding is that you can pay for things like over-the-counter
meds with the account as well.

One problem that HSAs have had in the past is that they’re typically
offered by
companies that no one has heard of so it makes people nervous turning
over such an important safety net to an unknown entity.  With name
brand companies like BB&T getting involved I think you’ll see these
things take off, so if you’re self employed or are a small business
owner you might want to check them out.

Also posted at Lowder Enterprises blog and Winston Salem Business.

Airline Bills Passenger $1,350 for Causing a 27 Minute Delay. Hmmm

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According to this story Air Canada is charging a beligerent passenger $1,350 for causing a 27 minute delay. They say the charges are for "the cost of overtime for flight crew, extra baggage handling and various other unspecified expenses".  While it sounds like the passenger was a real jerk this story has me wondering what would happen if the airlines received bills from every passenger they caused to be late to a meeting, miss a ride, miss a connecting flight, etc.

I think we might have a budding movement here.  Let’s see if we can introduce legislation that would allow us to bill the airlines for all the money they cost us when they’re late.  Of course there are situations when they can’t help it (weather and such), but there are plenty of times when it’s their own fault that the flights are delayed or cancelled.  I’ll tell you right now that a 27 minute delay would fall in the realm of "slight" delay from the airline’s perspective and if they’re going to bill passengers for causing a slight delay then they should be prepared to pay the piper for all the 27 minute delays they cause.

Sign me up.

Accountants, Lawyers & Congress

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Venture capitalist Brad Feld has a blog post called The Accountants Strike Back in which he has a series of observations that begin with "Accounting is the only profession where…" Let’s just say he’s not high on the accounting profession.

I’ll give you some samples below and you tell me if you agree that for most of them you could substitute "law" or "being a member of congress" for "accounting" and still be completely accurate.  To me these "industries" might be the true Axis of Evil:

Accounting is the only profession where you can completely screw
everything up (see Enron, WorldCom, Kmart, etc..) and your “punishment”
(so long as you aren’t Arthur Andersen) is that the “powers that be”
enact all sorts of legislation (SOX, Option Expensing, 409A, FASB 123,
etc.), that create a full employment act for your profession, radically
increase your fee structures, and make everyone in your profession
better off than when everyone thought you were doing a good job and
maintaining the public trust.

Accounting is the only profession that actively tries to get rid of
most of its clients, but at the same time tries to bleed every last
cent out of them on their way to being fired.

Accounting is the only profession that doesn’t care if their processes
negatively impact your business, what your opinion of them is, or
whether or not you are a happy customer.

Accounting in the only profession whereby a new regulation comes down,
a client alert is sent out and not a single client can understand
anything that is on the printed page.

Dell’s Blog is Pretty Darn Good

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Okay, I’ll admit that I jumped on the "Jeff Jarvis Dell Hell" bandwagon and I was fairly critical of the incentives package that Forsyth County (not to mention North Carolina) forked over to Dell to get them to build their plant here.  So I’ve watched their nascent efforts at blogging with interest and I have to say that I’m impressed.

They have multiple contributors to the blog and they are using it to deal with hot button issues  like exploding batteries and fairly mundane customer service issues like the accents of their customer service reps.  They’re also using video posts to good effect and from what I can tell they’re avoiding the trap of making it one big PR/marketing excercise.  To me the best sign that they have the right idea is that they accept both positive and negative comments, and in fact monitor them.  For instance the video post I pointed to has a comment from one user having problems loading the video and then another comment from a Dell person with a tip on how to download the video and a mention that they are trying to make the viewing process a little easier.  They even responded to comments that their original blog name, one2one, was also the name of a porn site and changed the name to Direct2Dell.

I’m liking what I’m seeing.

Here’s a Good Example of How Blogs Change Business Practices

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Dell caught some severe hell over the past year or so and I have to agree with many of their detractors that they were slow to react.  They seemed to be stuck in an old-world customer service/PR paradigm that was a little incongruous for a company that built its business on a "revolutionary" business model.

Well they might have been slow but Dell is beginning to hit its stride.  They’ve launched a customer service blog called Dell one2one that is a great example of how a corporate blog can change the way business is done.  When the blog launched it was criticized by some blog purists and PR/customer service gurus, but just like every other person/entity that ever launched a blog I think the Dell-ers just needed some time to develop their sea legs.  After reading it for a few weeks I think they’ve developed a nice mix of PR (using the space to refute some negative statistics about them) and product updates (here’s what we’re doing about fill-in-the-blank issues).  Basically they’re beginning to open up a window to their operations and if they’re careful and don’t become too defensive I think they’ll find that they will engender more customer goodwill in the process.  Simply by admitting that they’ve made mistakes and do indeed need to improve their customer service (see here) is a huge step in the right direction.

On an anecdotal note I’ve noticed that more people are stepping up to defend them when stories about exploding laptops appear, or at least point out that it’s really more of a battery issue and less of a computer issue, so any company that is supplying customers with computers, PDAs, phones, etc. will have these instances occur. Until recently everyone seemed satisfied with only blaming Dell as if it’s the only manufacturer that has these problems.  I think Dell’s willingness to be more open with its practices is allowing people to see the positive along with the negative, and by admitting that they make mistakes and explaining how they’re working on fixing them they are stopping the negative momentum. Remember it’s human nature to complain about bad service to multiple people but never mention satisfactory service at all so by using its blog effectively Dell is able to answer the negative feedback and then point out positive developments as well. 

A lot of businesses can learn something by watching how Dell goes about this, because if they fail there will be a lot of "this is how you don’t do it" stories and if they succeed they’ll blaze a trail that others can follow.  My money’s on the latter.

Great Warren Buffett Quote

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I’ve always been a big fan of Warren Buffett and his recent donation of $31 billion to the Bill and Melinda Gates Foundation only deepens that admiration.  There’s an article about Buffett and Gates in the NY Times and it contains a great quote:

"I don’t believe in dynastic wealth," he said, calling those who grow
up in wealthy circumstances "members of the lucky sperm club."

Classic.

Travel truly sucks; So does Delta’s Customer Service

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I tried to post this while on the road yesterday and for whatever reason it didn’t post, so I’m re-posting today:

Yesterday I had a planning trip for SCIP’s 2007
conference at the Marriott Marquis in Times Square. I had a flight up
Monday night that was cancelled so I was re-booked for yesterday
morning and the flight up was fine.  Unfortunately the return flight
last night was cancelled due to weather (along with at least a dozen
other flights) and in the typical fashion of modern airlines Delta
assigned exactly one person to their registration desk so re-booking
took forever.  They also offered no help in finding a room, but I was
lucky to find a hotel with the help of a fellow traveler who does a lot
of travel to NY.  Since this is peak tourist season almost everything
was booked solid.

So after four hours sleep and wearing the same clothes as yesterday I
sit in Atlanta waiting for my connecting flight (let’s forget that I
paid for a direct flight) and am feeling tired and smelly. The only
positive note is that they originally had me going through Cincinnati,
but when I showed up they  were oversold for that flight and they gave
me a $200 travel voucher to switch to the Atlanta flight.

I also feel fortunate compared to the woman who was in front of me in
the line to re-book; she was travelling with her 7-ish daughter and
wasn’t sure where she was going to stay.  She disappeared before I or
the guy who helped me find a room could offer help.  Hopefully she made
it home.

Conclusion: Delta’s customer service sucks. Not necessarily the people,
although the kid they had working the counter either wasn’t too bright
or very well trained, but the management structure that allowed them to
do such a poor job of staffing and a horrendou job of communicating
with the customers as flights were repeatedly delayed and eventually
cancelled.  There were a LOT of pissed-off Delta customers in NY last
night.

Bistro Sofia and an Evening in Greensboro

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On Tuesday night (June 6) Celeste and I drove over to Greensboro for an evening out.  We started with dinner at Bistro Sofia, a restaurant that I found thanks to writing this blog.  The restaurant had a run-in of sorts with someone who wrote about it and then I picked it up and wrote about it a couple of times.  Well, the general manager of the restaurant found my first post and emailed me directly to discuss some of the issues and in the process did exactly what I think any small business should do when confronted with a negative PR situation. That led to a follow up post that kind of laid out the restaurant’s side of the story, but really focused more on how I felt they had done a great job of dealing with a bad situation.

Celeste and I had somewhere to be at 6:30 so we got to the restaurant right when it opened at 5:00.  We were greeted by Kerrie, the GM, and seated in the dining room.  Since we were so early we had the room to ourselves until the end of the meal.  I’m no food critic but I can tell you without hesitation that:

  • Celeste and I agreed this was the best restaurant we’ve eaten in since we moved to North Carolina.
  • We’d put the food, service and ambience up there with any restaurant in D.C.
  • We’d have paid a LOT more in D.C. for a comparable eating experience.

To top it all off the owner of the restaurant and one of the bartenders (Beth and John respectively) stopped by our table to check on us and to talk about the whole "blogging" thing.  Very nice people and again they set a fine example of how to deal with negative PR.  Without going into details I’d say they have a firm grasp on what happened, the mistakes made on their end and also some strong feelings that the other side of the story was skewed.  Fair enough and totally understandable.  I hope that the two sides can get together and come to an understanding.

Suffice it to say that I give the Bistro Sofia a very strong "5" on a five star scale.

After dinner we headed over to the News & Record for a meeting with Lex Alexander and a bunch of bloggers from Greensboro.  It was nice meeting some people whose writings I’ve been reading for years, and there was some interesting conversation about how the newspaper can work with the community in the future.  You can read about it here.

We didn’t hang around after the meeting since we needed to get home to make sure the kids were in bed and ready for their third-to-last-day of school.  But we enjoyed the drive through downtown, which was a Greensboro first for the two of us.  Celeste very much liked the neighborhood around Greensboro College and mentioned how much fun it would be to own a house there and rent it to students.

That, my friends, is a sign of how much we enjoyed dinner and the meeting; it made my wife delusional.