August 17, 2009

Gliebers Dresses: Free Shipping

Welcome to the Gliebers Dresses Executive Meeting!

Glenn Glieber (Owner): " ... so my nutritionist tells me that I have to eat heart-healthy food. Well cripes. She gives me this recipe for what she calls 'heart healthy muffins'. And they really aren't that bad, even with two tablespoons of FiberSure in the recipe and a whole boatload of turbinado instead of brown sugar. I baked eight of these things for the county fair, I entered them in the 'healthy muffin' category. Dorothy and I went to the fair around noon yesterday to check on my exhibit, and guess what? I'm the only person who entered anything in the 'healthy' category. But get this ... they give me a second place ribbon. How in the name of Earl Tupper do you get a second place ribbon if you are the only entry in a category?"

Meredith Thompson (Chief Merchandising Officer): "Kevin, is that you?"

Kevin: "Yup, it's me."

Candi Layton (HR and Chief Customer Officer): "Lois, can you continue your discussion about our free shipping problem?"

Lois Gladstone (Chief Financial Officer): "Candi was out on Twitter yesterday, and she noticed that there's a ton of Twitterers who tweet about free shipping."

Candi Layton: "So I searched for Gliebers Dresses and free shipping, and sure enough, there's a bunch of our offer codes out there, and it looks like customers go to Twitter to use them. They're the same codes I authorized Roger to use when customers have a problem ... you know, the customer has a bad experience, so we give them free shipping to make everything better. Now I've heard you can find these things on Google, too, but I'm a social media person, and Google is so old-school, you know, I mean, they just aren't even a factor in the real-time web."

Lois Gladstone: "I noticed when preparing the preliminary August profit and loss statement that free shipping, outside of the 3,000 customers who are now in the loyalty program, was eight percent of sales, eight percent --- and we didn't have a single free shipping promotion all month."

Roger Morgan: "I queried the customer database, and yes, these are valid codes, straight from the call center, the very codes we created to act upon instances where the customer needs to be offered free shipping to make up for a bad experience."

Candi Layton: "I really think my customers are telling these websites the free shipping codes on purpose. I think they are taking advantage of our kindness."

Lois Gladstone: "Or maybe somebody in the call center is in on it --- they get a cut if they tell these websites what the codes are."

Roger Morgan: "My employees would never do that. They're the best in all of New England."

Lois Gladstone: "Pepper, can't you do something about this?"

Pepper Morgan (Interim Chief Marketing Officer): "Like what?"

Lois Gladstone: "Shut these websites down, enter into litigation, something, do something!"

Pepper Morgan: "Why don't we just change the codes, each customer service free shipping code expires daily, so then the coupon sites can't keep up with us?"

Roger Morgan: "Oh, we cannot do that. Our order entry system requires that offer codes be tied to either calendar months, fiscal weeks, or catalog source codes. So the best we can do is offer new codes on a monthly or weekly basis."

Candi Layton: "Do you understand what a terrible customer experience this creates? You work hard to be part of our loyalty program, you spend a fortune so that you can earn free shipping for the rest of the year, and then some customer searches Twitter and finds codes to use to buy from us, codes that give the customer free shipping."

Pepper Morgan: "But Candi, we created the bad customer experience by trying to improve the customer experience without attempting to understand how the customer experience might go sideways when a customer is given a free shipping offer code."

Lois Gladstone: "Eight percent of net sales will be tied to free shipping this month. It was the difference between being profitable and being unprofitable."

Roger Morgan: "I've been saying for a year that we need to upgrade the order-entry system. If we invested the money in our infrastructure, we wouldn't have this problem."

Candi Layton: "Folks, I didn't mean to do this. I was just trying to improve the customer experience. I never meant to give away $30,000 of shipping revenue."

Roger Morgan: "What would Chip Cayman do at a time like this? Maybe we can get him on the phone?"

Meredith Thompson: "Kevin, how would you handle this?

Kevin: "First, stop creating offer codes for free shipping unless you're going to run an actual free shipping promotion. And if you're going to run an actual free shipping promotion, give free shipping to everybody, regardless whether they have a code or not. Make the darn code ubiquitous --- print the thing in catalogs and e-mail campaigns and put it on the homepage of the website and put it up on Twitter, make sure folks share it via Facebook, allow them to text it to their friends --- allow every single customer on the planet to share the code with their friends and family, and make sure the code expires in a week so that it creates a sense of urgency. Instead of making free shipping a scarcity, make it something that is available for everybody. That would make for a great customer experience. Given the size of your business, you'd load up on new customers, too. If you did that, it would almost be like free marketing, given the PR you'd get."

Glenn Glieber: "I love free marketing!"

Kevin: "Second, go in the database, and correlate people who were using the code with employees who were authorized to give out the code to help improve the customer experience. This way, you may find if you have employees who link the codes to websites and Twitter accounts. Roger can deal with any employees on a one-on-one basis, if employees were causing the problem. I can run this analysis for you."

Roger Morgan: "Maybe our loyalty program should be linked to some sort of card, a card with a number on it that can be accepted by the order-entry system. I'm clearly not an expert at this, but the card could link to a credit card number in the database, and if anybody uses the loyalty card number and does not use a valid credit card, then the transaction is stopped right there. I believe the order entry system can handle this, because there are enough fields available to support a loyalty card number."

Pepper Morgan: "Maybe when we give away free shipping as part of fixing a customer service issue, we tie free shipping to each employee's employee number --- enter the employee number into the order entry system, and then track what happens. I realize this is a gross oversimplification of our order entry system, but it would be wise to spend a bit of money modifying the system to handle the things you can control. We may not be able to stop a Twitterer who tells her followers about your free shipping offer code. We can control the elements of our order entry system, and how they interface with the customer."

Kevin: "And third, we keep reading about all of those KPI (key performance indicator) dashboards. Well, add expense by free shipping by code to the dashboard. Theoretically, you want to give away free shipping from your loyalty program, so that should be something you post to the dashboard every week, and should be something you try to get people excited about. Conversely, post free shipping expense in all of these other codes to the dashboard, and create an incentive to keep that expense down --- encourage people to reduce fraud."

Glenn Glieber: "As long as it doesn't cost more than a few thousand dollars to update the order entry system, then let's go ahead and fix this thing. Roger, figure out some workaround and get this resolved by the end of day today. Ok, let's move on to the next issue that roasted my pork, folks. As you know, our annual picnic is on September 12. And somehow, yesterday, at the 4-H auction at the fair, I was the top bidder for a 219 pound pig named Gertie. I was just trying to drive up the price so that Sarah Wheldon would pay through the nose. I kept thrusting my paddle up in the air, and she kept thrusting her paddle in the air, and the auctioneer keeps yelling "how about $3.40?" and the guy next to the auctioneer screams "YEP" and then the auctioneer looks at me and says "how about $3.50?" and I raise my paddle and the guy belts out another "YEP" and this exchange just keeps going back and forth. And then, out of nowhere, Sarah just stops. Well, the audience bursts into a wild applause, I mean it was like I just won the state basketball tournament or something! They tell me that I just paid $8.60, a record for the fair. I have no idea who these people are who keep patting me on the back. Some guy can't stop laughing, he calls me a 'freakin rube', well, I didn't appreciate that one. It's wild excitement, I'm telling you. And then Pamela, this fourteen year old freckled girl with dusty brown hair in a pony tail, the very girl selling the pig in this straw-covered, foul smelling arena, comes up to me and with tears in her eyes says that I just paid for her first year of college. Well, I say, 'private, public, or community?', thinking community college because I thought I paid $8.60, but in reality, I paid $8.60 per POUND for a 219 pound pig. Do the math, folks, because that's a lot of bacon to shell out for a pig. Dorothy is just livid, she's telling me she wanted to go to Mirival for some sort of organic dining week that she read about in O magazine, and now she's stuck sharing barley, oats, and wheat with a 219 pound pig named Gertie. Anyway, I'm thinking that we're going to solve this problem by having a pig roast for our annual picnic on September 12, and I'm thinking that Roger is going to prepare the best pig roast in history, so thanks Roger for picking up the ball on this important issue! Gertie is staying at Dairyview Farms, just call 555-555-3984 and give them slaughtering instructions."

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