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Losing customers isn't the only thing to worry about when there's a service failure.

You've probably seen the typical angry customer studies. The numbers change, but the gist is X percent of customers will stop doing business with a company after a service failure. While not exactly an earth shattering discovery, these studies prove that good service is good for business.

But what happens to the angry customers who continue doing business with your company? There doesn't seem to be a lot of discussion or concern about this group.

That could be a mistake.

I recently discovered this study from Dr. Venessa Funches that reveals angry customers may continue doing business with your company, but they can still find other ways to hurt you.

Here's what you need to watch out for.

How Angry Customers Punish Companies

Funches gathered data from 732 people who were asked to recall a specific customer service situation that made them angry. The respondents were then asked what they did next.

As expected, a large portion stopped doing business with the company. In this study, it was 42 percent. The remaining 58 percent still did business with the company, but many changed their buying behavior (respondents could choose multiple options):

  • 35 percent reduced the amount of business they did
  • 25 percent stopped buy certain products or services
  • 17 percent stopped doing business with a particular location

Then there's the 25 percent of customers who said they continued doing business with a company in the same way because they felt they had to. You will see no change in buying behavior from these customers, though they may still find other ways to hurt you:

Here's what else angry customers do:

  • 70 percent spread negative word-of-mouth about the company
  • 60 percent complain to the company

Negative word of mouth includes a lot of things business leaders don't like to see:

  • Negative online reviews (Yelp, Google My Business, Trip Advisor, etc.)
  • Negative social media posts (hello viral tweet!)
  • Negative stories shared with friends

Notice that not all customers complain to the business. There are many reasons that angry customers don't complain, so it's never safe to assume that no complaints means all is well.


What You Can Do About It

Funches's study discovered that broken promises were the number one source of customer anger. If I'm a customer service leader, I start there and look for trends in service failures.

Many customer service departments react to one complaint at a time. For example, I recently bought a handleset for my front door. There was a part missing and, even worse, there was no instructional manual in the box to help identify exactly which part I needed. The company's website did not have an instruction manual for this particular door handle, either.

It took a lot of back-and-forth to finally identify the missing part.

The major failure is it's been two months and those support documents still aren't on the company's website. That means countless other customers have likely struggled through the installation process.

These types of issues are preventable. Smart customer service leaders do two things on a regular basis:

  • They look for icebergs that are subtle signs of bigger problems, such as the missing handleset instructions. 
  • They collect aggregate data on the top causes of service failures so those issues can be quickly addressed.

Another action step is to re-engage customers after a critical incident.

Years ago, I worked as a national account manager for a company that sold business uniforms. A customer called who was pretty upset about a mistake in an order she received. I apologized for the mistake and agreed to send out the corrected uniforms at no charge.

Many customer service professionals stop there. An even better move is to follow up again once the customer has had a chance to cool off. In my case, I called the customer right after her replacement order was scheduled to arrive. My last conversation was during a moment of misery, but this time I was talking to my customer during a moment of delight.

The replacement order had arrived safely and the customer was very happy with the outcome.


Take Action!

Customer-focused companies are constantly learning from angry customers. Try to find the source of what's causing their anger and fix it.

Another tactic is to try to prevent customer anger in the first place. This short video shares a technique called the Pre-Emptive Acknowledgement to help you do that.

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I recently had a chance to speak with brand leadership expert, Denise Lee Yohn about her new book, Fusion: How Integrating Brand and Culture Powers the World’s Greatest Companies.

Fusion is a wonderfully practical guide to aligning your company's brand with your organizational culture. The book makes three primary arguments why this is essential:

1. Employees work more efficiently when they share a common goal. 

2. Fusing brand and culture makes a brand more authentic.

3. Aligning brand and culture leads to better brand execution.

You'll find plenty of real-life examples to illustrate each concept and many helpful exercises that result in concrete action steps.

The book is now on sale through leading retailers such as Amazon and Barnes & Noble. I took a few pages of notes when I read Fusion and I highly recommend it.

It's always fun to talk about culture, especially with an expert like Denise. Here's her perspective on brand-culture fusion.

Q: A lot of leaders point to the importance of culture, but I don't know if we're always talking about the same thing. How do you define it?

"In the most informal way, culture is the way we do things around here.

"A more formal definition is the way people in your organization act and the attitudes and beliefs that inform those actions.

"One client I'm currently working with is a large technology company. They have a very process oriented and hierarchical culture, so the interactions between employees are more formal, structured, and preplanned. Another client, a senior living center company, has a nurturing and empathetic culture, so their employees are very concerned about how others are feeling and if they are growing and being cared for."


Q: What is a brand-culture fusion?

"Fusion introduces the concept of fusing brand and culture together so they are well-integrated and tightly aligned within an organization.

"Many companies focus on brand and culture separately, which can create silos where a brand doesn't really reflect the culture.

"The greatest companies fuse both of these together so they are working together.

"The culture and brand at Airbnb, the hospitality company, are one and the same—they're both about belonging. Airbnb wants customers to feel like they belong anywhere, wherever their travels might take them. It also wants employees to feel like they belong at the company, so its employee experience is all about community and comfort."


Q: This seems like a straightforward idea. Why don't more organizations do this?

"A couple of reasons come to mind.

"One is I think there's a misperception about what makes a good culture. Business leaders often cling to this idea that there's a right culture that focuses on things like being nice and supportive.

"That's just wrong. There isn't one right type of culture for every organization. For example, Amazon is known for being an incredibly customer-focused brand. They also have a challenging culture that's difficult for many people to work in because expectations for being customer-focused are so high. Amazon succeeds because it has a distinctive culture, but that culture is clearly not the right culture for everyone.

"I also think most leaders at the top would consider culture to be a human resources function and branding to be a marketing function. So it becomes dysfunctional where each department is doing its own thing and there's a lack of leadership to bring these functions together.

"A lot of executives tend to misunderstand both culture and brand. Many think of branding as just advertising or a logo. Culture can be the same way where executives liken it to ping pong tables or free beer Fridays. It becomes something that's tactical where you can just check it off the list rather than something that's fundamentally ingrained in your organization's core values."


Q: What's the connection between a brand-culture fusion and customer service?

"In Fusion, I outline nine general brand types. 

"One type of brand is Service, which are companies like The Ritz-Carlton that use service to differentiate their brand from competitors. So a service-focused culture becomes critically important for these organizations. 

"But all companies need to provide good customer service, even if it uses luxury, value, or another brand type besides service to differentiate itself. It's essential for all companies to have a brand guide or toolkit that helps all employees bring your brand values to life in all facets of the company.

"This helps people align their decisions with the brand and culture, such as how to interact with a customer."

(Note: You can learn more by taking this Fusion Assessment.)


Q: What is the one thing you really want people to know about the brand-culture fusion?

"Just one?! A few come to mind!

"The top one might be that your culture needs to be as unique as your brand. It's not enough to just be generic like friendly, supportive, etc. You need a distinctive culture to really produce specific results that are on brand and motivate employees to do what we need them to do.

"It's also important for people to understand there's a difference between simple and easy when it comes to culture-building. I think the concepts behind  brand-culture fusion are simple, but culture is not easy!"

Fusion is a must-read for anyone interested in marketing, branding, or service culture. It's available in e-book and hardcover formats.

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The association president decided to make an informal speech to the crowd gathered at the happy hour. He realized the people towards the back couldn't see him, so he grabbed one of the hotel's banquet chairs and stood on it.

Standing on chairs is dangerous. Every year, numerous employees suffer broken arms, legs, ankles, and other serious injuries sustained when they fell off a chair they were standing on at work. 

The president set a poor example with his behavior. When he asked a conference organizer to say a few words after his speech, she hesitated a moment and then reluctantly followed the president's lead and stood on the chair as well.

Leaders should understand employees are paying attention to the way a leader behaves. Here are five examples of leadership behaviors can than undermine your message to the team.


Employees look to see how the boss treats customers and even other employees. If the boss treats people poorly, employees will, too.

One customer service leader regularly belittled his employees. He disparaged them for poor service, gossiped about employees to coworkers, and generally acted like a bully if he didn't get his way. Even worse, he shied away from customer interaction, even going so far as to feign important meetings to avoid talking to a customer. Needless to say, employees were scared of the boss and did just enough not to get noticed.

Employees look to their leaders to model outstanding service. As a leader, it's up to you to demonstrate the appropriate behaviors when working with customers or even fellow employees.



Employees tend to understand how important something is by how and when you talk about it.

One restaurant manager rarely talked about service with his employees. He spent most of his time discussing compliance issues such as attendance, following procedures, and adhering to policies. His tone was consistently negative. 

One day, the manager sent a nasty memo to his employees addressing a string of poor Yelp reviews. He criticized employees for their performance and threatened to fire people for continued bad service. The memo was the first time he had communicated anything about service in a long time, and it only served to demotivate employees.

Take a moment to review your own communication. Think of the emails, verbal discussions, and team meetings you had in the past week. What were the most frequent topics? Do you tend to use a tone of encouragement or compliance?



Employees will look to their leader to see what is tolerated and what is not.

An employee in one organization routinely generated complaints for poor customer service. Her boss wanted to hold her accountable, but the business unit's vice president overrode the decision. The vice president felt the employees' sales numbers were too valuable to the unit's scorecard, and she didn't want to undermine her unit's successful image by correcting a top producer. This send the clear message that poor service was fine as long as you made your sales numbers look good.

Think about what negative behaviors you allow. Leaders often make excuses to themselves, brushing away minor transgressions and being too minor to worry about. Beware that tolerating something small often sets the stage for even worse performance in the future.



Employees look to their leader for enthusiasm.

I'll never forget the first boss I ever had, Christi. I was working in a retail clothing store while I was in high school and just starting to learn about customer service. At the end of every day, I noticed how Christi would walk around the store and thank every employee for doing a good job. She always displayed such enthusiasm for working at the store that her employees felt a strong urge to do a great job for her.

Other managers have the opposite effect. They are consistently negative or overly serious, which are usually not ideal attitudes for employees to convey to customers. One executive flat out refused to say "Good morning" to employees as they arrived for work and passed her in the halls. Those managers unconsciously influence employees to act the same way.

Consider what attitudes you display to your employees. Are you enthusiastic? Negative? Serious? Authentic?



Employees place a lot of weight on the hidden message behind a leader's decisions.

A software company's support team leader told his team that service was a top priority. Yet the leader consistently made decisions designed to save money. The support team was understaffed, undertrained, and lacked some of the tools needed to serve customers at a high level. Employees soon realized that service wasn't a top priority at all. The real priority was short-term cost savings.

A leader at another software company made a completely different set of decisions. He worked with his support team to create a customer service vision, which is a shared definition of outstanding service. He then used that vision to guide other key decisions such as goal setting, hiring, training, procedures, and even his communication as a leader. Support employees in that company quickly realized that service was truly the top priority.

Pay careful attention to your own decisions and how you make them. Your employees are watching and will understand your true priorities by the direction you take.


Take Action!

Take a moment to complete a personal inventory of the behaviors you've modeled in the past week. These questions can be a powerful assessment of your performance as a leader.

  • Service: Do you consistently model a strong service culture?
  • Communication: Do you consistently have positive communication about service?
  • Tolerance: Do you tolerate negative or inappropriate behavior?
  • Enthusiasm: Do you regularly display genuine enthusiasm for serving customers?
  • Decisions: Do you use service as a top priority when making decisions?

The results can be eye opening.

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"The customer is always right" has a longstanding tradition in customer service.

Pushy customers quote it when they try to get their way. Customer service professionals bristle at the saying because they know it isn't true. Customers are often wrong.

When I was doing research a few years ago for my book, Service Failure, I tried to find the origin of that lousy quote. My goal was to find the person who first said it and maybe send them a box of glitter or something equally horrible.

What I learned was a surprise. It's likely the original quote has been mangled over time. Here's what I learned.

The Origin Story

There's no conclusive evidence as to who first said "The customer is always right." However, the Quote Investigator website does reveal some interesting possibilities.

One contender is the famous hotelier, Cesar Ritz. He is credited with saying "The customer is never wrong," in 1908.

Another contender is the Chicago retailer, Marshall Field. He was quoted in The Boston Herald on September 3, 1905 as saying "The customer is always right." 

There are two issues that call this quote into question. 

One is a longer version of the quote adds important context (although I can't locate the origin). The longer quote is, "Right or wrong, the customer is always right." 

The second issue is a similar quote attributed to another Chicago retailer, Sears, Roebuck, & Co, was published several months earlier in April, 1905: "Every one of their thousands of employes are instructed to satisfy the customer regardless of whether the customer is right or wrong."

The most likely explanation is "The customer is always right" concept predated these quotes published in 1905. I tend to believe the longer version of Field's quote because it adds additional meaning and other stories place its origin much earlier in time. Alas, I can't find any proof of those stories.

Does it matter?

Customers are absolutely wrong at times. To me, the real meaning of "The customer is always right" is our goal in service is to help the customer be right, even when they are technically wrong.

This suggests some specific types of actions:

  • Don't argue with customers
  • Partner with customers to help them succeed
  • Help customers avoid making mistakes
  • Be generous in your policies
  • Give customers the benefit of the doubt

"The customer is always right" is really just the tip of the iceberg. There are a lot of inaccurate customer service quotes and statistics floating around.

The key is to take each one with a grain of salt and understand the true meaning and intent behind them.

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Walk into a grocery store early on a Friday evening and you'll encounter chaos.

There are lines several people deep for each checkout lane. People waiting in line spill into the aisles, making it difficult to navigate around the store. The trip seems to take forever just to pick up a few items for dinner that night.

Checking out or checking in is often the worse part of the customer experience.

We wait to pay for our groceries, purchases at a retail store, or our bill at a restaurant. There's a line to check in for a flight, check in to a hotel, or buy a subway ticket.

All those lines and waiting feel miserable. The good news is companies are making huge strides to fix this terrible experience.

The bad news? Customer service professionals need to adapt.

Solving The Worst Part of Customer Experience

I'm anxious to try Amazon's new grocery store.

If you've not yet heard of it, the store is called Amazon Go. There's just one right now, located in Seattle, though more are expected soon. What makes it special is you walk in, select your items, and walk right out without ever standing in line for a cashier.

This short video provides a tantalizing preview.

Introducing Amazon Go and the world’s most advanced shopping technology - YouTube

Grocery shopping isn't the only place where the checkout is being eliminated or greatly improved. OpenTable is slowly rolling out its payments feature which allows you to make a restaurant reservation and then view and pay your check right from your smart phone. Imagine enjoying a great meal with friendly service and then leaving without having to wait for the check!

One of the major benefits of rideshare services like Lyft and Uber is the app-based checkout. As a frequent business traveler, one of the worst parts of a taxi ride is the time it takes to pay for the ride once you reach your destination. I used Lyft on a recent business trip and enjoyed the convenience of hopping out of the car as soon as we arrived. I could open the app on my phone and leave my driver a tip as I walked into the building I was visiting.

The opposite side of the coin, checking in, is also improving.

Airlines have allowed app-based check-ins for years. Now some airlines like Delta are eliminating the check-in process entirely and automatically generating boarding passes for confirmed passengers using the app. 

Hotels are slowly rolling out this feature as well. This is especially handy when you check in to a busy hotel for a conference and you can skip a check-in line that can take 20 minutes or longer.

Movie theaters get this right too. Most theaters in my area have automated kiosks that allow you to buy tickets or you can buy your tickets ahead of time via an app so you can skip the long box office line.

Even mass transit systems are getting in on the game and starting to allow passengers to buy tickets via an app rather than wait in line at a kiosk or a ticket counter.


Humans Need to Step Up Their Game

All this automation creates both a challenge and an opportunity for humans in customer service.

The challenge is the check in or check out is the primary point of human interaction in many customer experiences. Eliminate that and you remove a big opportunity for people to shine.

The Starbucks app is a good example. You can order your drink and pay for it via the app which allows you to skip the line. I frequently see people pick up their drinks without so much as a nod or smile towards the human making them.

This experience seems to run counter to the Starbucks mission: "To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time."

This is also the opportunity.

Freed from the transactional nature of checking customers in or out, people have a chance to add more human value to experiences.

Lupe at my local Starbucks store greets customers by name, even if they are picking up a drink they ordered via the app. He can actually greet more people since he says hello to both people waiting in line and people coming in to pick up a drink they ordered via the app.

I've really enjoyed using Lyft because the app handles the transaction, freeing me up to have a pleasant conversation with my driver. My experiences have been incredibly positive and the ride always seems to go faster.


Tips to Help You Stay Connected

Building rapport is a foundational customer service skill. Automation is making rapport more important than ever before. 

Here are just a few tips:

  • Greet everyone enthusiastically. Yes, we all know this. No, we don't always do it.
  • Try to personalize your interactions with customers.
  • Use the five question technique to create thoughtful conversation starters.

You get find even more suggestions when you subscribe to the Customer Service Tip of the Week email. It's one email with one tip, once per week. 

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Advertising disclosure: We are a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for us to earn fees by linking to Amazon.com and affiliated sites.

You've probably heard the adage, "Hire for attitude, train for skills."

It sounds good, but how exactly do you hire for attitude? Customer service leaders struggle with this one. Many rely on off-beat interview tactics they hear about in blogs and books, such as asking questions like "What kind of fruit best describes your personality?" Some just like to have a friendly conversation to see what sort of vibe they get from each person.

Researchers have confirmed you'd make better hiring decisions if you skipped these sort of interviews entirely.

You need a systematic process if you want to hire for culture fit. 

There aren't a lot of great examples to follow. In fact, the biggest challenge when I wrote The Service Culture Handbook was finding good examples for the chapter on hiring. (One of the best examples I know is Publix.)

This post is an update from a post I wrote back in 2014.

Start by Defining Your Culture

The very first thing you need is a clear definition of your culture. It's pretty tough to hire people who fit your service culture if you can't describe that that is!

A service culture is defined by what's called a customer service vision. This is a shared definition of outstanding customer service that gets everyone on the same page. 

Let's imagine we started an online wine store that focuses on helping customers learn about wine and explore new wineries, varietals, and wines from different regions. Our customer service vision might be: We make it fun to discover great wine.

So people who work in our company should not only love wine, but definitely not be wine snobs. They should enjoy learning about wine and helping others experience the fun and joy of learning about wine, too. (I really want to start this business now!)

We can now use this vision as a basis for hiring people who will embrace our service culture.


Create an Ideal Candidate Profile

The next step is to identify the characteristics of an employee who fits your company's service culture. I use this worksheet to create what's called an ideal candidate profile.

This profile separates the characteristics we want in an employee into two categories:

  1. Must Have Characteristics
  2. Like to Have Characteristics

The must have characteristics are attributes a candidate must have or we would not consider hiring them. For instance, everyone we hire for our online wine store must have an enthusiasm for wine. They don't necessarily need to be an expert, they just need to really like learning about it.

A like to have characteristic is an attribute that would help us make a hiring decision but isn't essential. So we might not require our wine store employees to have extensive knowledge of different wine varietals, but a candidate who did have this knowledge might have an advantage over other candidates with similar qualifications.

One key test for your ideal candidate profile is to compare it to your existing employees. You'll need to revise your profile if you have any successful employee who did not possess one of the must haves when they were hired.


Devise Screening Tests

The final step in creating your hiring process is to devise tests to screen candidates for each item on your ideal candidate profile.

The most common way to do this is through interview questions. Each question should be designed to uncover something specific. You should also have a clear answer key before conducting the interview.

For instance, we could test our online wine shop candidates for the "enthusiasm for wine" characteristic by asking them to tell us about a recent wine tasting experience.

A answer that indicated a culture fit would be an enthusiastic story about discovering new wine, such as going wine tasting at a local winery or wine bar. A poor culture fit answer would be someone who hadn't tried any new wine recently, admits they don't really like wine, or describes a story that sounds more like going out and partying.

I highly recommend Janis Whitaker's excellent book, Interviewing by Example, for clear guidance on how to write effective interview questions.

There are other ways to test an employee's qualifications besides interview questions. Here are a few examples:

  • Resume or LinkedIn profile
  • Skills assessments
  • Small project

We might screen potential wine shop employees for the "continuous learner" attribute by  looking for recent training classes, certifications, or education on their resume or LinkedIn profile. These don't necessarily need to be wine related since any recent learning indicates this person is likely a continuous learner.

Some companies have customer service employees respond to a realistic customer email to gauge both their writing style and resourcefulness. Assessing skills through a small project is another great way to learn a lot about a candidate.


Take Action

Assess your current hiring process by asking these three questions:

  1. Does your company (or team) have a customer service vision?
  2. Do you have an ideal candidate profile?
  3. Do you have screening tests for each characteristic on the profile?

The answers will help you decide where to start. You can learn more and see additional examples by viewing this on-demand webinar from ICMI.

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A new report from CRM software provider SuperOffice revealed some dismal trends for email customer service.

The company sent an email to 1,000 companies. The email asked two questions:

  • Do you have a phone number I can call you on? 
  • Where can I find pricing information on your website? 

The results were not good. Response times were too long, if companies responded at all. Replies felt canned and the substance of the answers often left these two simple questions unanswered.

This post highlights five email best practices and compares them to the results in the SuperOffice report. You can download the entire report here.

Best Practice #1: Respond

OK, stop laughing because this is a real challenge. The SuperOffice study found 62 percent of companies did not respond to an email.

This is almost always a systematic issue. Common causes include:

  • Unmonitored email boxes
  • Emails that go to an individual (who may no longer work there)
  • Insufficient standards or processes for handling email


Best Practice #2: Acknowledge Emails

An automated message should be triggered by every customer email. That message should do three things:

  • Acknowledge the email was received
  • Set expectations for a response time
  • Provide alternative ways to solve the issue (i.e. phone, FAQs, etc.)

Only 10 percent of the companies SuperOffice tested acknowledged an email.


Best Practice #3: Respond Within One Hour

My own research from 2015 revealed that companies should set an email response time standard of one hour or less.

The average response time in the SuperOffice study was 12 hours. That's too long, and may cause customers to contact your company multiple times which increases their frustration and wastes your resources.


Best Practice #4: Answer the Question

This one shocked me. SuperOffice reported that only 20 percent of companies answered both questions (phone number and pricing) in the first email. 

I double-checked the math and realized the report was counting the companies that did not respond at all in the group of companies that did not answer both questions in the first email. When you adjust for companies that did respond, that number rises to 56 percent. Still not good.

Support agents typically fail to answer customers' questions for two reasons:

  1. They are working too fast in an effort to handle a large queue
  2. They rely too much on pre-written templates to respond quickly

The fix here is simple:

  1. Train your agents to slow down, fully understand the customer's request, and answer it
  2. Monitor emails for quality, just as you would phone calls

When I started monitor email as a customer service manager, I was surprised to find an issue with more than 50 percent of the emails my team sent! Some training and improved coaching helped the team quickly improve, but it was a lesson that stuck with me.


Best Practice #5: Convey Some Personality

The SuperOffice report discovered that just 39 percent of companies responded with an email signed by a person. The rest used generic identifiers such as "Customer Service" or even "Secretary."

Yes, templates are an essential part of email support. That doesn't mean your support agents need to sound like anonymous robots. 

Let your people add just a little flair to each email so they can make a more positive connection with the customers they serve. Some companies even encourage agents to put a micro-bio in the signature line of their emails, which creates an even stronger connection. 


Take Action

These basic best practices are table stakes for an effective email support operation. Your company will struggle to serve customers if you can't do these things well.

I recommend auditing your own company. Navigate to your website just as a prospective customer would and send off a simple email inquiry. Start a timer and evaluate how quickly you receive a response, whether that response answers your question, and whether that response conveys warmth and personality.

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Note: Lessons from The Overlook is a monthly update on lessons learned from owning a vacation rental property in the Southern California mountain town of Idyllwild. It's a hands-on opportunity to apply some of the techniques I advise my clients to use. You can find past updates here.

People often ask us how we advertise The Overlook. They want to know if they can find the cabin on Airbnb, VRBO, TripAdvisor, or other popular vacation rental websites. 

You won't find The Overlook advertised in any of those places. Our rentals are booked exclusively through our property manager, Idyllwild Vacation Cabins.

It's not uncommon to use a third party to generate sales for a business. Here are just a few examples:

  • Hotels, airlines, and rental car companies all list with various travel websites. 
  • Many companies use outsourced contact centers to handle sales and service. 
  • Restaurants use OpenTable and Yelp to handle reservations. 

Deciding which third party to use can be tricky. Each one comes with it's own pros and cons. Here's why we decided not to list on any of the major vacation home rental websites.

Drawback #1: Owner Fees

The major third-party websites charge a guest booking fee in exchange for advertising your property. Here are the fees for three of the biggest players:

Keep in mind this fee is on top of 35 percent fee we're already paying our property management company. So we'd have to pay an additional 3-8 percent to one of those websites for each booking.

Some people don't realize that vacation rental property management is much more expensive than the typical 10 percent fee a property management might take to manage a condo or house. A normal fee for a vacation rental is 30-35 percent because a vacation rental manager handles multiple guests per month and provides more services. In our case, the fee includes a lot:

  • Advertising and marketing
  • Credit card fees
  • Guest screening
  • Cleaning
  • Pre-arrival inspection
  • Post-checkout inspection
  • Laundering towels and sheets
  • Stocking the home with toilet paper, soap, paper towels, etc.
  • 24/7 guest service
  • Coordination of maintenance and repair projects

Sites like Airbnb and VRBO only handle advertising and marketing plus credit card fees, so we'd still need our property manager. That means the only way to justify the extra booking fees would be to get an significant lift in occupancy. 

Keep in mind The Overlook is located in Idyllwild, where the market is typically for two and three-night weekend rentals. So the maximum expected occupancy is roughly 40 percent if The Overlook rents each weekend for three nights. The quirk is a guest who rents just Friday and Saturday nights pretty much ensures there won't be any additional rentals that week.

Here is our average occupancy for the past year.

We're just about at capacity during the busy season, so listing on another third-party site wouldn't give us any significant lift. It might even cannibalize existing rentals and just increase our costs.

The entire town is slower during the off-season, so it's uncertain if listing on another website would yield a significant revenue gain.


Drawback #2: Guest Booking Fees

Idyllwild Vacation Cabins does not charge our guests a booking fee. The other sites charge a fee ranging from 8.5-12 percent, which increases our guests' costs.

Here's an example of what a guest would pay for a three night stay if we listed The Overlook on Airbnb compared to what they pay now.

Guests booking through Airbnb would pay an additional $92.50 without receiving any additional value. While we aren't trying to be the low-cost leader, our pricing strategy is designed to provide exceptional value to our guests.

Our list rental price also includes a few extras that most vacation rentals charge extra for:

  • House cleaning
  • Spa cleaning
  • Snow removal

Pro-tip: Many vacation rentals maintain their own websites. If you find a place on Airbnb, VRBO, or TripAdvisor that you'd like to book, it's worth trying to contact the property through the owner's website so you don't have to pay the booking fee. For example, you can find our cabin here.


Drawback #3: Consistency

Idyllwild Vacation Cabins manages more than 40 rental properties in the Idyllwild area. The company's strategy is focused on direct to consumer rentals rather than relying on Airbnb, VRBO, TripAdvisor, and other sites.

This allows the company to avoid paying costly subscription and booking fees. It also means avoiding the additional administrative burden of actively managing and reconciling listings for the same property on multiple sites.

Instead, the company attracts guests through a lot of repeat business, outstanding search engine marketing, and a storefront in the town of Idyllwild. They also provide responsive, helpful, human service and take time to get to know guests so they can help them choose the ideal property to rent.

We'd be creating an exception to normal procedure if we insisted on listing The Overlook on Airbnb or a similar site. Exceptions can often lead to inconsistent results when you are working with a service provider.


Our Plan for Now

Businesses generally try to increase profits by increasing revenue and cutting costs. The Overlook is no exception. 

Last year was our first year of ownership, which brought a lot of normal startup costs such as furnishings, repairs, and extra maintenance. We also built a game room. Those costs should go down this year.

Idyllwild had a very hot summer in 2017, which drove down our bookings during the slow season because people don't flock to the mountains when it's hot. The Overlook also doesn't have air conditioning, which makes our place uncomfortable in the summer for some guests. We should get a few more bookings since we found a way to keep the house cooler.

Finally, having a year under our belts opens up the opportunity for repeat guests. We'll keep an eye on that since we expect a slight uptick in occupancy due to last year's guests making plans with us again this year.

We'll see how it goes.

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My credit card recently expired, which meant updating accounts such as Netflix, cable, etc. where the card was used for automatic payment.

It was a strangely inconsistent process from company to company.

My cable company's website wasn't working, so I had to contact a live agent. I opted for chat, hoping this would be the most convenient. It was not a great experience.

I waited for two minutes to get connected with an agent. Once the agent came online, her responses were so clearly templated that I sincerely questioned whether she was a human or a bot. She replied "I am a robot :) beep beep," which tells me she was (probably) a human.

There was also a long lag between her responses. I later learned she was handling three chat sessions at the same time. The chat session took 10 minutes just to update my credit card expiration date.

This experience is similar to what many chat customers encounter every day. If your company offers live chat, it's time to do better.

Chat Satisfaction is Down

Customer satisfaction for chat was down in 2017. 

The LiveChat Customer Service Report 2018 shows an overall chat satisfaction decline from 86.35 percent in 2016 to 83.54 percent last year. Comm100's Live Chat Benchmark Report 2018 showed a similar decline from 84.06 percent down to 80.68.

Two major pain points are average wait times and average chat length, both of which I experienced in my chat with the cable company. Here are the averages for 2017 from the LiveChat report:

  • Wait time: 51 seconds 
  • Chat length: 11 minutes, 34 seconds

Companies should drive those numbers way down if they want to modernize their chat channel. Keep in mind that customer satisfaction with wait time is a function of the actual wait combined with how that wait was spent.


Best Practices to Speed Up Chat

I reached out to leading chat providers such as Comm100, LiveChat, and Zendesk to learn some best practices.


Leverage Chatbots

Comm100 launched a chatbot in 2017. Its clients were able to use the chatbot to handle 20 percent of their chat volume, on average. Let's go back to my credit card example. The agent added no humanity (recall I initially couldn't tell if she was human) to what was really a simple transaction. A chatbot could have handled the same issue with no wait time and no lag. This also would have freed up the agent to assist another customer with a more complicated issue.


Integrate Customer Data

Szymon Klimczak, CMO at LiveChat suggests leveraging available information. "Building a positive experience is all about using the available data appropriately. Hence, knowing your customers really well seems to be the key to success." For instance, I was signed into my cable company account when I initiated my chat session, so the chat program could have been programmed to recognize that data and allowed that chat agent skip the four questions she used to verify my identity.


Route Intelligently

Tony Sandhu, Comm100's Customer Success Manager, suggests making sure chats get routed to the best available agent, rather than just assigning chats on a random or round robin basis. "Long wait times can be eliminated by using intelligent routing rules that automatically route requests based on departments, customer value, or competency of agents."


Share Content 

Caitlin Henehan, Zendesk’s Vice President and General Manager for Chat, describes how sharing helpful content in chat helped one client solve issues faster. “The ability to send video, screenshots, and links to help articles via chat has allowed our customer TeamSnap to reduce their work time per issue by 20% and increase customer satisfaction."


Limit Simultaneous Chats

The number of simultaneous chats an agent can handle at one time should be capped to improve customer satisfaction, reduce lag time, and prevent errors. The exact number varies from company to company and should be determined by working closely with your agents to observe what's most efficient. In my cable company example, running three chats at once created a negative experience because the agent took took long to respond and wasn't able to inject any personality into her initial responses.


Take Action!

Chat has the potential to be a really great channel if used correctly.

Evaluate your own chat function from the outside in by conducting a mystery shopping exercise to experience what your customers experience. Look for opportunities to apply best practices to reduce customer wait times, increase customer engagement, and solve problems faster.

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Your credit or debit card expires every few years. When it does, one of the required chores is updating all the accounts that card is linked to for automatic payments.

This recently happened to me. What's fascinating is how widely this experience varies from company to company. No company did it perfectly, though some (Netflix) handled it much, much better than others.

You'd think companies would make it easier for us to pay them. Instead, updating a credit card expiration date often generates unnecessary contacts and customer frustration. 

Here are a few examples:


Winner: Netflix

I logged into my Netflix account and discovered my credit card was already updated.

How did Netflix pull off this magic? They subscribe to a credit card updater service that handled it automatically. This saved me some effort and ensured Netflix would continue to get paid.

The only thing that would have made it better was a proactive notification. Netflix would have saved me the trouble of logging into the billing section of my account by emailing a message that told me my new credit card expiration date was already on file. 


Average Experience

Most companies were fairly straightforward. Login, find the billing section of my account, and enter the new credit card expiration date. 

It took less than one minute on average from start to finish for each company. That's not too bad though Netflix clearly does it better.

My worry for these companies is what happens when they have customers who aren't as proactive as I am? Chances are there are a lot of service interruptions that generate unnecessary customer friction. Those service interruptions also slow down the company's cash flow and add to the cost of servicing each account.


Worst Experience

The cable company won this one. Again. (I've had a challenge updating my credit card expiration date in the past.)

The company did one thing well. It mailed a proactive notice reminding me my card was about to expire. That was smart business.

The difficulty occurred when I tried to make this update online. I couldn't. I tried several times over a few hours and repeatedly got this message:

Poor grammar aside, a broken self-service process is bound to generate unnecessary contacts. It was time to check this chore off my list, so I opted for live chat.

The chat session took a full ten minutes to complete. (Yes, I'm the nerd who times these things.) Most of that was lag time because the agent was chatting with two other customers concurrently and I had to wait for her responses. 

Ironically, my cable company recently sent a promotion for its home security service. The unnecessary friction required to update an expiring credit card is enough to convince me the home security service would not be a good experience.


Take Action

Does your company keep customer credit or debit cards on file for automatic billing?

If so, audit your process. Follow your customer's journey to see how easy (or difficult the process is). Do some extra research when an account is suspended for nonpayment to find out whether the issue could have been prevented.

The way I see it, there are three best practices for companies to follow.

  1. Subscribe to an updater service so card information gets updated automatically.
  2. Send out proactive notifications to give customers the peace of mind that their account is up-to-date.
  3. Make it very easy for customers to update payment information on their own.

The result will be happier customers and fewer missed payments!

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