Archive for business issues
How NOT to Respond To a Slowing Economy
Posted by: | CommentsMy wife and I went out for Chinese food today for lunch. We went to our favorite place, just around the corner. Usually we order the lunch special, and sometimes we order drinks along with the standard tap water.
But today was different. When I had finished my drink, I was offered a refill as always. I accepted, and then was told that there would be an extra charge.
This is new, and the new policy is because of “rising prices.”
And I understand. When prices rise, the costs get passed on to the end consumer. But there’s a right way and a wrong way to do it.
The right way would be to increase the price of the lunch special, or even the drink itself. This is a completely understandable response to rising food prices.
The wrong way is to change a long-standing policy of “free refills with your soft drinks” and start charging for something that used to be included in the price. (What next – an extra charge for the fortune cookie? A separate bill for the rice?) As a customer I don’t mind paying for the meal or for the drink, but I left today feeling “nickeled-and-dimed” instead of satisfied — and it really has little to do with the final price and everything to do with how we got there.
The refill would have cost them about 10 cents. The result of their new policy is I will not be ordering drinks when I eat there, and I will probably eat there less often. $1.95 for a soft drink is pretty steep – but tolerable if you can at least have a refill, and don’t have to interrupt your meal with a decision of whether to spend another $1.95. I doubt I’m the only customer that sees it that way. Luckily for them, I like the food enough to keep going there; but I wonder how many customers they will lose with this policy (never mind how many drink sales will be lost). All to save 10 cents.
If business is slow because the economy is slow, then perhaps raising prices is required. But don’t start charging for things that your customers have come to expect as part of the normal transaction. Your customers don’t mind paying a fair price, but they will rankle if you seem desperate to get every possible cent from them.
And one final point – if the economy is truly affecting business, that means customers are looking for deals more than ever. This means providing value (not necessarily offering the lowest price). It’s better to increase the value of the offering (even if this means increasing the price) instead of trying to offer less for the same price. Provide more value than your competitors and you will win, even in a slowing economy.
No Phone Number For You! Part I
Posted by: | CommentsI’m going to go out on a limb and take an unconventional stance on the subject of telephone numbers on websites.
Simply put:
No, you can’t have my phone number.
In my early days in ecommerce, I posted (and paid for) an 800 number which I prominently displayed in the header of my website. “Call us anytime!” And let me tell you, plenty of people took me up on this offer.
In the ensuing years, I went from the toll-free number to a local number, which did reduce call volume somewhat (but not as much as you might think).
Finally, over a year ago I took the phone number off my sites altogether.
There are a few circumstances in which I’ve given access to my phone number:
1) If you dig deep enough into some of my sites, you might find my (local) phone number that goes to my “Virtual Attendant” voicemail box. (Hint: scour the privacy policy – it’s in 4pt type somewhere in the lower third). However, this is always in proximity to a company email address, along with an admonishment that emails are answered much faster than phone calls.
2) If you buy something from me, I provide the afore-mentioned “Virtually Attended” mailbox phone number – again, with an admonishment that email is a more efficient method of getting assistance. This advice is reiterated by my Virtual Voicemail Attendant.
3) If you are a current client of mine (I’m not taking any more currently), you already have my cell phone number. You may call it, but you’ll pay me for my time. And even then, I may not answer when you call, or return your call as quickly as I’ll return your email. (If/when I take on more clients, they will most likely not be given this number).
Am I drinking the “4 Hour Work Week” koolaid? Maybe a bit, but I had already reached this conclusion through my own experiences well before I was introduced to the 4HWW concepts. Here are a few of my observations from my ecommerce ventures:
- Having the 800# did not increase sales over having a local phone number.
- Having a posted phone number (whether 800 or local) did not significantly increase sales. It did, however, significantly increase customer service costs.
- The majority of people calling were not calling to place an order. They were calling for free advice, to complain about something we had no control over, or to ask questions that are clearly answered on the site.
- Customers who placed orders over the phone were more likely to return items, initiate chargebacks, or otherwise demand further time and attention — and least likely to be repeat customers. In short: they were much harder to please, and generated less revenue.
Many ecommerce consultants will tell you to put a toll-free number on every page of your site. Now, I’ll concede that it depends on the market you are in, and that for some folks that’s the correct advice. If you are selling high priced items or programs that require that kind of interaction in order to close the sale, then by all means, you should have a prominent phone number (and make sure that it gets answered).
However, for sites selling lower priced items – and I’m talking $500 or less, maybe even $1000 or less – I don’t think you need one. In fact, I think it can be detrimental to your online business, both in terms of the actual costs of manning the phone line, and in the opportunity cost of devoting resources to a negative ROI activity.
Here’s a little experiment for you to try:
1) Go to Amazon.com and locate their 800 number.
2) Can’t find it? Ok, try their “Contact Us” page.
3) Can’t find a “Contact Us” page? Hmmm. Try their “Help Department” pages link near the bottom of the page.
4) Ahh… there we go. A “Contact Us” page. Oops, we have to sign in to get the phone number…
5) Where now…? Oh, there it is… a little “phone” button. Click that…
6) And if you can squint hard enough, you can see their phone number – and that will connect you to their “automated customer service system.”
That is a far cry from the “conventional wisdom”, wouldn’t you say? Amazon is arguably the largest ecommerce site in the world, and they certainly don’t have their phone number plastered everywhere for anyone to call whenever the mood strikes them. Not only do you have to hunt for the number, but you have to be a registered customer of theirs before they’ll even give you access to their automated system.
If you are running an ecommerce site, I think it’s important to realize the business that you are in and the type of customer that you want to attract. My ecommerce sites are online stores, not extensions of an offline catalog, and I run them like online stores. That is, the transaction is done online. I market online, my customers are online, they order online, and they can contact us online.
I’ve got more I want to say on the subject, but I’ll save it for next time. In the meantime, if you have a comment about this post, give me a call and we’ll chat.
Or, if you prefer, leave your comment right here on the website. Technology is awesome. :)
Yahoo Stores down on “Cyber Monday”, but not mine!
Posted by: | CommentsFor a good part of one of the busiest online shopping days of the year, the Yahoo Stores system was reportedly down, causing shoppers and merchants alike a great deal of frustration. Check out this snapshot from the Yahoo Merchant Services system log:
(Source: http://updates.smallbusiness.yahoo.com/)
Looking at their timeline, it took over 24 hours for them to finally say that the issue had been resolved – ouch!!
CNBC has a full story here on this issue that has generated quite a bit of angst among a certain segment online businesses (and another article here). Sounds like there are a *lot* of unhappy merchants this morning. Here’s a quote from a merchant that had SIX online stores that were down yesterday: “All of a sudden, the bedrock of our company has been replaced with quicksand. I guess its time to diversify our merchant platform.” (Tom DePrato, quoted in the CNBC story).
I’m not one of those unhappy merchants this morning, though…
My ecommerce software and hosting combination is rock-solid, and all of my online stores worked flawlessly as they processed more orders yesterday than any other day of the year. It’s been rock-solid each and every year, and I must admit I never gave it much thought — until I heard about the pain many of my fellow online merchants have been experiencing with other solutions.
So, I’d just like to take this opportunity to say…