Category Archives: Business

Want to Make a Fortune on Your Shipping & Handling Charges? Work With Uncle Sam

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A couple of days ago I wrote about the increasingly popular online practice of selling things dirt cheap and then making money on the shipping and handling charges.  Well the online folks are a bunch of pikers compared to the small defense contractor based in South Carolina that, among other things, charged almost a $1 million to ship two $.19 washers to Texas.  The sister team running this company manages to make Cheney’s boys at Halliburton look like Boy Scouts.

Oh, and because these jokers got away with several of these S&H scams for years thanks to the Pentagon’s expedited payment system for items that were shipped under "priority" status, the Defense Logistics Agency and the Defense Finance and Accounting Service "have made major changes, including thorough evaluations of the highest shipping charges."  Good to know, huh?

It’s the Shipping and Handling Stupid

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Seth Godin has a post on his blog about shipping and handling.  He points to an item on Amazon.com that costs $2.25 but has an S&H charge of $8.57 and then explains why this is a bad idea for the merchant (it kills repeat business).  Seth is right of course, but the reason I’m posting about it is that by sheer coincidence I received an email from Amazon yesterday with this subject line: "We Pay YOU for Overnight Shipping on Shoes & Handbags".  Here’s a pic of the email:
Amazonemail

As Seth points out in his post it’s been common practice in the direct mail industry to split out shipping and handling charges as a way to allow buyers to compare the base cost of an item with the cost of the same item in a bricks and mortar store.  When you think about it, however, it’s really irrelevant because what the consumer cares about is what they’re paying total.  If you add shipping and handling and the item costs more online or from a catalog than in a store then the consumer is likely to go to the store.   An online or catalog merchant would probably be better served promoting the convenience of buying from them versus dealing with a store (no parking, standing in line or surly clerks!).

What caught my attention about this email is that it says they are going to give me $5 on top of free shipping.  They didn’t say they were giving me a $5 discount on any item (i.e. a coupon) but they said my shipping would be negative $5.  I don’t recall ever getting a similar pitch and it’s an interesting way to take a negative (S&H) and turning it into a positive. 

I could be wrong but my take has been that online merchants are using insanely low prices on items so that the items do better on product search comparisons and then make up the difference in shipping.  This has led to the increasingly common practice of applying S&H charges that are multiples higher than the actual price of the product, and as Seth points out that practice is likely to kill customer retention because it just feels slimy.  That’s why I’m assuming that Amazon.com’s marketing team was influenced by that trend and decided to use it to their advantage.

On a completely unrelated tangent I want to know what part of my customer profile at Amazon.com would prompt them to send me a marketing message related to shoes and handbags?  It’s kind of disturbing.

Check out amAze

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I received an email this morning from Ofer Tziperman of Israeli company.  He’d read my post about Google’s new SMS service and sent me a note about his company’s amAze GPS service.  (He was amused that I used "amaze" in the title of my post).  I’ve not used amAze and my phone is not compatible with the service, but it looks like a very interesting application of the mobile GPS-based service I was writing about in the Google post.  If you’re interested in the service and want to know if it will work with your phone just take a look at the "Handset" page on their site, or you can also browse their message boards to see how others find the service.

Also, check out this PDF of a Financial Times article describing how LocatioNet is planning to build it’s business.  These three paragraphs from the article describe what I was envisioning re. the future of mobile advertising:

It (LocatioNet, ed.) has decided to distribute its local search and navigation application free and generate revenues via targeted advertisements and sponsorship integrated into the application.   Typically mobile navigation services are based on subscriptions.

For instance a chain of petrol stations is interested in giving its customers a branded version of the application. Similarly, mobile phone distributors see it as a way to maintain a customer relationship that lasts beyond the initial sale.

Locationet is also utilising the Yellow Pages model, based on revenue sharing for local search.

A key point here: amAze is free which means it stands a real chance of exploding the universe of mobile phone GPS users.  Think of it this way: would you use MapQuest or Google Maps if you had to pay for it?  Probably not.  Would Google be the monster it is if you had to subscribe to use it?  No way.  I’m not saying that LocatioNet will be the Google of the mobile phone GPS market, but I think their business model is basically what the winner in this market will use.  Heck, I wouldn’t be surprised if Google becomes the Google of the GPS market, but until then it’s nice to see a service like amAze making a go of it.

For more info on Ofer and LocatioNet check out this interview at inbabble.com and this Q&A at Services Mobiles.

Measure Your Personal Brand

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Want to know what your personal brand ranking is online?  Check out this calculator at Career Distinction
and see how you do.  Like most online calculators this one really takes
something complex and simplifies it, but it’s still a nice way to get a
general idea of how extensive your personal brand is online.

If you have a low ranking and want to raise it I have a couple of suggestions that might help:

  • Start a blog and stick to it.  Success will not happen overnight,
    but over time you’ll find yourself being referenced more and more
    often.  I know, most people don’t like to write and don’t feel they
    have time to do it.  Here’s the dirty little secret about blogs: you
    don’t have to write much if you don’t want to.  Simply share links to
    resources, stories, columns, data, etc. that you find interesting.
    You’re sharing your knowledge and people respect that.  And don’t be
    intimidated by the technology because services like Typepad are as easy to use as Microsoft Word and cost next to nothing to use.
     
  • Comment on blogs that are relevant to your industry/career.
    Comments are indexed by search engines so you will be riding the
    coattails of others within your industry.  Obviously you’ll also get
    the attention of anyone reading that blog and so your expertise will be
    on display to your core audience.

Cross posted on LowderEnterprises.com

Nice Bit of Customer Communication from The Old Fourth Street Filling Station

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I wrote a few days ago about a pretty bad dining experience that Celeste and I had at The Fourth Street Filling Station.  Unfortunately it was also the first time we’d eaten there so it was not a good first impression by the restaurant.  Initially I blogged about it (harshly) and I had a bad feeling about it.  I didn’t feel bad about my opinion or even the harshness of my words when I blogged about it, but I did feel bad that I never said anything to the restaurant management.  In simple terms I violated the Golden Rule (do unto others and all that) and I figured the least I could do is share my opinion directly with the restaurant’s management.  So I went to their website, found their "contact us" form and shared my experience.  A day or two later I received an email from them and with their permission I’m sharing it here:

Dear Mr. Lowder,
 
Thank you for sending us your feed back.  I was so sorry to hear that your
first experience at The Old Fourth Street Filling Station was a bad
one. Our goal is to serve quality food, with excellent service, in a comfortable
atmosphere.  It seems that we failed in your case.  We take criticism very
seriously and would like to make things right. 
 
The ‘Seafood Pasta’ and the ‘Brie Chicken" are two of our most popular
dishes. I hate that the seafood was over-cooked and the flavor not to your
liking.  This certainly can happen and I apologize. You had mentioned you liked
spicy foods,  our ‘Shrimp and Grits’ are the best in town and can be spiced up
as much as you like. This is our signature dish featured in Southern Living
Magazine and is truly our most requested dinner item. 
 
I would love for you to give our restaurant another try. If you and your
wife would like to come back, it would be my pleasure to pay for your
meal. Please make a reservation through one of the managers; Matt, Mike or
myself.  Once again I apologize for the unsatisfactory experience and look
forward to meeting you soon.

Best regards,

Adam T.
Andrews

Chef & General Manager

That’s really a nice piece of customer service and I’m now certain that we’ll be going back to give the place another try.  BTW, they just won "Best Outdoor Patio" in Smitty’s Best of Winston-Salem survey, which I definitely agree with.

Cross posted on Lowder Enterprises LLC.

Let Customers Promote You by Marketing Themselves

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Last month I traveled to France with my family and we stayed with some
other family members and some family friends.  One of those friends was
Helene Blowers the Public
Services Technology Director for the Public Library of Charlotte &
Mecklenburg County.  Helene maintains the blog LibraryBytes.com which
is a great resource for anyone who’s interested in the applications of
evolving online technologies and services.

Recently Helene gave a presentation at the ALA 2007 conference and she focused it on one slide in her presentation that said the following:

The best way to get customers to market your brand is to allow them to promote you (the Library) by marketing themselves.

All you have to do is substitute "your company" for "the Library" and
this statement is applicable to just about any business.  Many elite
brands figured out long ago how to help their customers promote
themselves and by extension the brands simply by putting their logo on
items.  People who buy high-end items want the world to know that they
can afford said items so they want the brand symbol to be prominent.
Back in the 70s that meant wearing shirts with the Lacoste crocodile
and in the 80s it was the Polo pony player.  What Helene is talking
about, however, is deeper and is specific to the world of Web 2.0:

For me, this is really what web 2.0 is all about. Tools
that allow
users to express themselves, participate in the conversation, and
celebrate and showcase their individual talents. So in looking at web
2.0 and the potential that they hold as marketing tools, it’s important
to realize that "the library" is really not about us (aka the library,
it’s staff, and services); it’s about our community. And what better
way to market to your community and create a sense of ownership then by
letting your community members use your brand to celebrate and market themselves.

While you might think this only applies to companies that provide web
2.0 services, companies like YouTube, Flickr and Yahoo, it really
doesn’t.  Helene’s library doesn’t create Web 2.0 applications but it
does use them to help their end customer.  Your company can probably do
the same, and here are a couple of "off the top of my head" ideas to
demonstrate how:

  • A restaurant could use a service like Flickr to have a t-shirt design contest and have customers create design ideas, enable them to show off their designs to friends and family, and prompt them to have their friends and family vote on the design.  It would make for some great word of mouth marketing and announcing the winner would be a natural PR opportunity. 
  • A small company can create its own channel on YouTube
    and have customers submit advertising ideas for your company.  This is
    basically stealing a concept from a few Fortune 500 companies that hosted their own ad contests, and now the evolution of YouTube and like services allows any company, no matter how small, to do the same.  Of course the company should do the same things as they did with the first idea (invite family and friends to view and vote) and it also has built in PR opportunities.

Your first step should be subscribing to LibraryBytes.  Helene knows what she’s talking about.

Cross posted on LowderEnterprises.com

Sears, Your Subcontractors Are You

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Newstove_070402That spiffy new oven/stove you see to the left was just installed in our kitchen.  Our old stove (and I mean old) was a Jenn-Air style that had inserts you could put in to do things like grill indoors.  A neat innovation for 1942 but it meant we had a small oven compartment because a grease trap took up the left quarter of the oven space.  You’ll notice that our air vent in the new stove is in the middle of the cooktop, or in other words is a down draft.  Our old stove had a similar set up, which means the ventilation runs beneath the oven, between the floor joists and through the wall to the right of the stove.  When we decided to replace the stove (the stove top started spontaneously heating) Celeste did some research and found out that unless we wanted to completely re-do our ventilation system we had exactly two stoves to choose from, both of which were Jenn-Airs.  For those not familiar with stoves, as I was, let me tell you that "Jenn-Air" = "four times the cost of your average stove."

So early in March we went to Sears to buy our new stove and a new dishwasher (our old dishwasher couldn’t clean a nun’s conscience). Celeste knew that if we waited long enough one of the stores that carries Jenn-Air would run a special and if we were patient we could take advantage of it.  It just so happened that Sears had a special "12 months with no interest" financing deal on newly opened Sears credit cards in early March, and since she knew they carried one of the second mortgages, er, stoves that we needed for our kitchen we needed to steer our mini-van to Hanes Mall.

At Sears we were told by our salesman that we would get the dishwasher within a week but the stove, of course, had to be special ordered and wouldn’t be in the store until March 12.  We said "fine" and went our merry way. Some time around March 15 we began to wonder where our stove was and Celeste called the store and talked to our salesman.  He looked it up and said, "Huh, the stove’s here so I’m not sure why the installer hasn’t contacted you.  I’ll get hold of him and have him call you."  A couple of days passed and we heard nothing.  Celeste called again and the same thing happened, so when she called the third time she talked to a different salesman and he gave her the installers name and number so she could talk to him directly.  She called on March 23 and 25 and both times he promised to call back and never did.  I finally called on the 27th and he said he’d install it today (April 2).  He also said he’d call yesterday to get directions to our house, which he did. 

Unbenknownst to me Celeste had called Sears on Friday and asked to speak to a manager.  She filled him in on the situation and he promised to talk to the installer himself.  I’m not sure if the installer reacted because he was talking to a man, which would be ironic since anyone who knows our family would tell him he that when he talked to me he was NOT talking to the person who wears the pants in the family, or because he got a call from the manager.  Either way we finally got our new stove.

My message for Sears is this:  Your salesman’s customer service left something to be desired and your subcontractor, who is you as far as I’m concerned, left a lot to be desired.  Thankfully the installation went well but that cannot undo the ill will bred by the lack of responsiveness from your representatives.  Five calls to get something like this scheduled is plainly bad and honestly we’ll not be shopping at Sears again any time soon.

Rollin’, Rollin’, Rollin’

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It looks like I’ve hit one of those travel "humps" I get every once in a while.  It started last Sunday when I rented a car and drove up to DC for meetings there on Monday and Tuesday.  From DC I flew to Charleston, SC Tuesday night for my wife’s family reunion, and from Charleston we drove home to Winston-Salem Saturday.  I fly to New York from Charlotte tonight (Sunday and the busiest travel day of the year) and I’m in New York until Tuesday, when I fly to Chicago for a meeting and then Tuesday night I fly home.  I’m home until the following Tuesday when I fly to San Francisco to run a seminar for a couple of days and then Celeste is going to meet me there for a long weekend before we fly home on the red-eye that Saturday night.  After a couple of weeks at home we’ll be on the road again for Christmas.

If I don’t gain 20 pounds by New Years it’s going to be a miracle.

Blue Cross Could Have Sent Some Vaseline Too

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Remember the truism that nothing is certain but death and taxes?  I think that needs to be revised to state "nothing is certain but death, taxes and massive annual rate hikes from your health insurer".  Actually that last could probably be better stated as an "annual screwing from your health insurer".

We recieved a letter from our health insurer, BlueCross BlueShield of North Carolina (BCBSNC), that begins as follows:

Dear Valued Blue Cross and Blue Shield of North Carolina Member:

Thank you for choosing Blue Cross and Blue Shield of North Carolina (BCBSNC) for your health insurance needs. We value your continued membership and want to let you know about some upcoming changes to your Blue Advantage premiums and benefits.

Most Blue Advantage subscribers will have a premium adjustment in 2007.   This will be your guaranteed premium until January 1, 2008, unless you switch plans, add dependents or purchase additional coverage.

Blue Advantage is the most popular individual insurance plan in North Carolina and currently serves more than 315,000 members. Your Blue Advantage premium adjustment is based on the health care costs of all Blue Advantage members and is impacted by factors such as where you live, your benefit design, your gender and your age. For example, if you had a birthday in the past year that put you in a new age-bracket category, it may have had an effect on your January 1, 2007 premium adjustment.  Your individual claims do not have an impact on your annual premium changes.

Here’s the thing: our premiums were about $595 a month this year, which was up about 10% over the year before.  This is a 35% increase from ’06 to ’07!  Celeste and I both turned 40 this year and so I went to the BCBSNC rate quote website and found that if I compared rates for us at the age of 38 and 40, the quote for age 40 was about 8% higher.  So where in the heck did the rest of the increase come from?

What kills me is that there are NO factors that say anything about our personal health choices.  Why can’t we get credit for exercise?  Why can’t we get credit for a healthy diet?  Why can’t we get credit for our general health?  They can lump us in with the rest of the people who are individually insured, essentially treating us as a group health plan, but they give us no control over how we might control costs.  This is BS!

Here’s something else that just pisses me off about this: BCBSNC is a non-profit that has been accused in the past of making too much profit and in fact they made a concerted PR push last year to point out that they were reducing their profits.  They were sensitive enough about it that they sued an advocacy group called ProCare over the group’s disclosure of what BCBSNC said were confidential business sources.  Of course that doesn’t mean that ProCare was wrong and one of the documents in dispute detailed how BCBSNC spent $478,000 to sponsor the US Open.  And my old employer, Atlantic Information Services, had a piece in ’05 about how states, including North Carolina, are going after the "Blues" for reserves that are too high.  The point is that non-profits have reasons for existing that go beyond profits which is why they get their special status and treatment from our friends in government, and I can tell you that if the non-profits I worked with spent money the way BCBSNC seems to they’d be in a heap of trouble.

We can change our coverage options (higher premium, higher co-pays, etc.) to bring down our monthly premiums, and we might end up doing that, but we’re also going to seriously consider a Medical Savings Account.  We’ve been looking at MSAs for a while, but we were kind of scared off by the "newness" of them.  I also remember reading about UnitedHealthcare getting ready to offer individual health coverage in NC (right now BCBSNC has a monopoly in the state) and we’re going to check them out as well. BCBSNC has given us a lot of motivation to look at ALL of our alternatives. 

Here’s my final observation about these jokers and another truism in the realm of business communications: any letter that begins with "we value your continued membership" is the setup for a royal screwing and out of kindness should be accompanied by a small package of personal lubricant.

By the way, this experience just gives me further evidence that Dr. Feld is right about the need for true competition and free market reforms in the healthcare marketplace.