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Why so many businesses fail
Is crappy CS the main reason?
Wlauzon




msg:3828163
 11:09 pm on Jan 16, 2009 (gmt 0)

I plucked this snippet from another thread here about handling bad customers, but I think it goes far beyond that.
.. just saying that inaction (99.99% of the time) is absolutely the wrong solution...

We are a small company, only a dozen people or so. But we buy over $8,000,000 a year from various vendors, distributors, etc. Many of those are competing with each other selling the same or similar products.

The #1 reason why we buy from one vendor vs another one is ... INACTION...

Failure to respond to emails, or to return calls, or far too often - failure to do anything at all to even let us know that they got our message or call or whatever.

And recalling my own buying habits - whether online or in a "real" store, I do the same thing.

We have found that quite often responding to an email - even if the original sender is asking about something you don't have a clue about - will generate sales. In short, telling them you don't carry that item is better than no response at all.

 

HRoth




msg:3828396
 12:59 pm on Jan 17, 2009 (gmt 0)

I'm more willing to put up with inaction than I am with a bad product. I buy from vendors that are unresponsive, but I don't buy from vendors who sell me crap.

Re this question, though, why do so many (small) businesses fail, I just read a book that put forward the argument that they fail because the owner tries to do everything and doesn't view the business as a business but instead as an extension of him/herself. This prevents a business from growing; the owner even will shrink it deliberately in order not to be faced with having to change his/her relationship to it (for instance, not being in charge of making and packing everything but instead being in charge in general). Or because of being too much the worker-bee, the owner gets burned out and gets a regular job. I have seen this so much and have often felt that way myself. I have allowed myself to get so bogged down in the detritus of work (like packing widgets or making labels) that I didn't even want to answer the phone, for that matter. So this connects up to what you are saying about inaction.

This author's solution was to encourage owners not to allow that worker-bee mentality to take over; we should force ourselves to also be a manager and a creative thinker. He also suggests "automating" the biz--working out exactly what is done to the point that it could be handed over to a new owner, no problemo. I am working on doing that and it has been a very helpful thing.

IME, what you say about responding to an email that "I don't have that in stock or don't carry it" is indeed more likely to generate a sale than not replying. People like to know someone is there.

gpilling




msg:3828895
 2:45 pm on Jan 18, 2009 (gmt 0)

I have found that when customers call to complain about a minor problem with the product they ordered, often they just want a sympathetic ear to listen.

Essex_boy




msg:3828999
 7:14 pm on Jan 18, 2009 (gmt 0)

Funny you should all this, Ive ditched a supplier despite having unque products that I cant get else where, for constantly arguing and telling me lies.

Ive approached 8 other firms for products, 3 of which have come back.

Says something.

[edited by: lorax at 12:59 pm (utc) on Jan. 19, 2009]
[edit reason] fixed typo [/edit]

Wlauzon




msg:3829131
 11:40 pm on Jan 18, 2009 (gmt 0)

..Ive approached 8 other firms for products, 3 of which have come back...

That sounds very similar to our typical experience. A while back we were looking for a line of low voltage lights to add to our line.

I emailed about 10 different places, 2 of them got back to me. So it is a good bet that 8 of them totally lost out on a chance to sell around $100K a year.

And it is not just emails - similar with phone calls, letters, anything else.

dpd1




msg:3829204
 2:25 am on Jan 19, 2009 (gmt 0)

I've found that maybe 85% of venders I try to contact, don't respond at all. That's businesses of all sizes, but mainly large ones of course. Every time it happens I always hope that maybe someday I'll be so successful that I can just blow off customers left and right too, but something tells me that will never happen.

The pattern I've seen with a lot of people that I've personally known trying to start businesses, is that they always have the; 'If I build it, they will come' mentality. They go out and spend a ton of money getting a space, hiring people to do everything, purchasing all kinds of equipment... When in reality they should be making the stuff themselves in their garage. So they blow all their money on all this start-up stuff and have no customers. Then they just want to sit around all day and play boss and never get their hands dirty. Then they're all surprised when it goes down a year or less later. Throwing money at something is fine if you have the money to throw. But for everybody else, you have to bring more to the party than that. I don't know how many times I've had friends tell me they want to be partners with me in some business... But they bring zero to the table... No craft, no skills, no sales leads, no money... They just want to be the boss. If I have to do everything, what do I need a partner for?

Jack_Hughes




msg:3829413
 10:02 am on Jan 19, 2009 (gmt 0)

The companies who think that it is some kind of honour for you to do business with them make me laugh the most. University spin offs seem particularly prone to this...

Morgenhund




msg:3829491
 1:49 pm on Jan 19, 2009 (gmt 0)

HRoth, would you be so kind to post title/ISBN here?

HRoth




msg:3829701
 6:22 pm on Jan 19, 2009 (gmt 0)

The book is called "The E-Myth Revisited: Why Most Small Businesses Don't Work and What to Do About It" by Michael Gerber. I thought the writing was terrible (most business writing seems to be terrible) but the ideas were good. I didn't go for his idea that the ultimate model for a business is a franchise, but the techniques used by a franchise that he outlines I think will help me. Mostly it seems to be about complete clarity as to what you are doing at all times and being very organized. A helpful book, IMO. I found that I myself had shrunk my business in order not to have to change my role, as he described, so it really hit home for me. Recently I got a request for a large wholesale order of stuff I make. Previously I didn't feel okay about filling such an order and didn't really know how to ask for a price that would make it worth my while. It felt too "big." Having read that book I could not only accept the order but ask the right price for it. I will make a lot off this order alone, so I feel like I got my money's worth out of it already.

bwnbwn




msg:3829743
 7:08 pm on Jan 19, 2009 (gmt 0)

I get 1-3 emails a day wanting to buy large quanities of products and just delete them, why I do it if someone wants to buy large orders I feel they would call me not just an email that may go into a spam folder.

If I am searching for a supplier I always call if they don't have a number posted I don't deal with them.

Sending out emails is not the best method for developing a business partner or developing a relationship with a seller.

I agree on customer service being one of the top of the list of to do's in any business but just feel sending out emails searching for a supplier is not a good option as many have posted here and should not be connected to customer service.

We answer all serious questions on products for intrested parties that is looking for a product as any good business is suppose to do.

There seems to be 2 discussions going on here one is about large orders from suppliers and one is on customer questions both are different and totally seperate.

Edited afer seeing Wlauzon and then Receptional Andy.

[edited by: bwnbwn at 7:35 pm (utc) on Jan. 19, 2009]

Receptional Andy




msg:3829746
 7:16 pm on Jan 19, 2009 (gmt 0)

This tallies with my own experience. If I want to buy something online but don't know a good supplier (and can't get a recommendation) I'll send an email expressing a clear intention to buy, but asking a question which is not answered by the site. No response means no sale.

Essentially, if I get no response to a "please let me buy something" email, I feel like I'd get the same treatment if a problem occurred with my purchase. In some ways, this is much more important than the site itself. I've persevered with some lousy sites just because they were responsive.

HugeNerd




msg:3829766
 7:48 pm on Jan 19, 2009 (gmt 0)

In some ways, this is much more important than the site itself. I've persevered with some lousy sites just because they were responsive.

I agree wholeheartedly. Unless your brand is so well developed that you get more orders than you can handle and therefore automation is crucial (i.e. Amazon; everyone knows their problems will be solved even if you never hear a voice and only receive form responses) to running the organization, not responding isn't the best option.

I posted these words on another thread just earlier today. Still, I find some of the most powerful words I write are:
"Dear Potential Customer:

Thank you very much for your enquiry. Unfortunately, ..."

If I can't help them, I explain why and attempt to direct them to someone who can. If there is anything I am able to do, I state the options and allow them to choose how our relationship works. This method gets excellent responses -- I do receive a lot of emails saying they were thrilled to receive my response and are very sorry that they can't do business with me this time, but that they have bookmarked my site for future reference. You'd be surprised just how many people return a few months later and really do make good on their promise to buy something from me.

You can also use this method to send your craziest customers to other merchants...

Wlauzon




msg:3829862
 9:47 pm on Jan 19, 2009 (gmt 0)

..There seems to be 2 discussions going on here one is about large orders from suppliers and one is on customer questions both are different and totally seperate...

Actually I don't think they are seperate issues. Both involve customer service - whether you are talking at the retail, wholesale, or manufacturers level.

And as I noted, While email is often our first line of communications, we have the same problems with telephone calls. Playing phone roulette with automated systems for 10 minutes or more is not exactly conducive to customer happyness either. If their phone system sucks, then they had better have a working email system.

sun818




msg:3830120
 6:09 am on Jan 20, 2009 (gmt 0)

I think customer service is important if your business is a niche (small community of buyers) or you likely have repeat business (wholesale). Since commodity products (pc parts, electronics, video games, anything with a upc or ISBN), by definition, is driven by price -- customer service is less important I think. You still need to handle shipping, returns, etc but answering product questions is not important. Some businesses go for the volume game, will ignore pre-sales questions and just go for the volume. Amazon essentially operates this way. They just happen to have a massive knowledge base which replaces customer service.

Wlauzon




msg:3830172
 9:42 am on Jan 20, 2009 (gmt 0)

That is pretty much the way Fry's Electronics operates. They have probably the worst customer service in the world, but they sell things cheap. (though not as cheap many people think).

Personally I refuse to shop for myself in places like that, and I refuse to buy items for the company from places like that. But some people are driven far more by price than other factors, and they attract that segment of the market.

I have even considered setting up a 900 line for tech support on the products that were not bought from us :)

[edited by: Wlauzon at 9:44 am (utc) on Jan. 20, 2009]

Morgenhund




msg:3830205
 10:51 am on Jan 20, 2009 (gmt 0)

There is an opinion, that no company is able to stretch enough to provide good prices and good service at the same time.

Either buy cheap and do not expect a personal approach, or be prepared to pay more for a good service.

Just a matter or choice.

HRoth: thank you for the book reference. I cannot stand a good reading (even if this is a bad reading, but contains a good advise).

[edited by: Morgenhund at 10:53 am (utc) on Jan. 20, 2009]

bwnbwn




msg:3830428
 4:11 pm on Jan 20, 2009 (gmt 0)

Wlauzon my apologies they can be considered the same I just treat them differently so that is me, but per conversation I agree they are the same sorry.
Since we are on the conversation of customer service I pay for a 3rd party reporting service "Ratepoint" and find this a very useful service in getting customer feedback both good and bad.

My question here is how many use a service to help provide a service that isn't controlled by the company and can't be altered to insure an honest reporting.

I also paid for Truste Privacy Policy certified with the Truste logo and feel this is as well a good investment is customer "trust"

HugeNerd




msg:3830461
 4:43 pm on Jan 20, 2009 (gmt 0)

I use BizRate -- I find the reporting to be flawed as we get negative feedback for the "Customer Service" section from orders which where ordered via the website, with no phone call, and were shipped immediately and received on time, without damage (How do I know this, you might ask? Well, the customers write it out themselves. However, you must go into the rating details/comments to see this and cannot get this insight from our "Store Rating" front page! I doubt many consumers take the time or effort to drill down to this point.). While it's useful to get feedback I may not have otherwise received, I feel that it can present a poor image of our store...even though the customers claim to have no problems. So maybe part of the issue is perceived poor CS regardless of reality.

reprint




msg:3830587
 7:32 pm on Jan 20, 2009 (gmt 0)

I too read that book HRoth. I dont think it is well written or even contains novel ideas but it makes you look at what you are doing and re-evaluate what you are putting your effort into.
It is a simple message about transitioning to having employees and managing them and the business appropriately at different stages of growth. Like you i dont see the franchise message in the book as a blanket solution.

nealrodriguez




msg:3830648
 8:35 pm on Jan 20, 2009 (gmt 0)

i also read E-Myth a few years back; i don't think his idea is for you to create a franchise or to buy one, if that's what you mean; but to simplify all the processes involved in the business to the point that you could sell it if you wanted. running a business in this fashion, you establish best practices that can be executed by people with the lowest skill set available, so you could keep your costs down delegating responsibilities, and you don't have to be a one-man operation.

it's your choice if you then would like to franchise or sell your operation.

trinorthlighting




msg:3830694
 9:32 pm on Jan 20, 2009 (gmt 0)

Why do so many businesses fail? That answer is simple: Bad Decisions! That decision can be customer service, choice of products to sell, poor marketing choices, hiring the wrong people and I could go on for days here.

As for not always answering emails and returning phone calls. I am actually mixed on this a bit. From my own personal experience of running a hundreds of million dollar corporations. Sometimes you are lean and mean staff wise. If all the sudden you get a spike in phone calls or emails. You just have to pick and choose who to email and return calls to until you properly adjust staffing. That does not mean that is what our companies want to do, but we do live in a world where reality does rule and cost have to be kept in check to remain profitable.

Also you really have to ask yourself, do you really want to spend you or your employees time (Which is money) on answering people that you do not carry certain products? Depends, if you have a website full of ice cream products for example and someone asks for auto parts do you really want to waste your money replying to people who do not read your own website? I say no. If it was a similar product (Like milk), yes you should respond because may be their milk product is actually used to make ice cream and you can further your sales.

Now, if you are a serious buyer should you email? Honestly in my opinion, you should call and start a business relationship. Email is a bad form of communication subject to email spam filters. If someone hacks your website and starts sending out spam for casinos and male enhancement drugs it is possible that your email address could already be blocked by someone else's email filtering systems and you might not even know it. Who's fault is that, your own company. Does that mean that you could miss better pricing and better service because your email is hitting a spam filter, potentially yes that does. Add to that, I personally get 20-50 emails a day for "large sales" and 99.999% of the time they are scams (From overseas and Nigeria). Do I want to waste time finding that .0001%, not really. Why, because our phone system is good and if you do not get a human after the first 10 rings, you can leave a voicemail. No automated push 100 buttons to leave a voice mail system. Simple phone system, check your voicemails and choose your business and make money. Honestly, that is where I spend my time on my voicemails.

aspdaddy




msg:3830708
 9:49 pm on Jan 20, 2009 (gmt 0)

The #1 reason why we buy from one vendor vs another one is ... INACTION...

This is one of the main reasons for the emergence of CRM. Im fairly good at making impartial purchasing decisions but looking back theres been a couple of big contracts where it just happended to be the one who called back at the right time.

Keeping customers warm is key, the more interactions you have with them the more they buy.

Wlauzon




msg:3830747
 10:11 pm on Jan 20, 2009 (gmt 0)

...if you do not get a human after the first 10 rings, you can leave a voicemail....

Of which has about a 35% chance of ever being returned, in my experience.

On emails, I was not referring to "blind" emails sent to something like "sales@mywebsite.com". In many cases I had actually called and gotten a contact email of what was supposed to be a live person. In one case just last week I talked to a person and he was supposed to email me updated availability in a few minutes - I am still waiting.

And you don't have to personally respond to each and every email you get for products you don't carry - as someone else noted above, all you have to do is make up a canned response about sorry, etc. We find that 2-3% of those turn into sales (have you ever searched the web for something and accidently found something else you can't live without?).

As a side note, I am always amazed at how many companies send out emails and don't have some kind of signature about both their email address and website.

[edited by: Wlauzon at 10:13 pm (utc) on Jan. 20, 2009]

trinorthlighting




msg:3830784
 10:39 pm on Jan 20, 2009 (gmt 0)

That is the key to good business, returning relevant telephone calls. I guess we are one of the 35% and that is why we are successful because we return almost 100% of our calls. As far as email contacts, they are only as good so far. If a person is out sick, goes out on vacation, etc.. a company has to stay on top of that and send "out of the office" replies and a back up contact information. Many businesses overlook that. If you have a contact who is working and not responding, that can fall under the bad decision making process of hiring people. When I come across that from my own vendors (Established), I typically call their boss and let them know and at least give the company a chance to fix itself. If it is a new vendor and I am shopping around, I will keep shopping. If it is one of my own employees, they get one fair warning, after that it is a trip to the unemployment line and I hire someone else who is more than willing to return calls. A first impression is a lasting impression for any business.

By the way, this is a great thread!

sun818




msg:3830785
 10:40 pm on Jan 20, 2009 (gmt 0)

> Depends, if you have a website full of ice cream
> products for example and someone asks for auto parts
> do you really want to waste your money replying to
> people who do not read your own website?

Zappos is the only company I know that will actually do this. As part of the presentation Tony H. gave at Online Market World, he tells a story about how one night while out with his partner vendors, one of the women wanted pizza late at night. Hotel kitchen was closed. Someone in the group joked they should call Zappos for a list. The woman called the bluff and phoned Zappos to get a list of delivery pizza near the hotel. CS clarified they sold shoes. The woman was put on hold and CS came back a few minutes later with a list of delivery pizza places.

(Please don't actually try this yourself though...)

HugeNerd




msg:3830840
 11:38 pm on Jan 20, 2009 (gmt 0)

Also you really have to ask yourself, do you really want to spend you or your employees time (Which is money) on answering people that you do not carry certain products?

I waste my time, not my employees time on these...but for good reason (beyond that I may be some sort of moronic, bleeding heart liberal): Sales. I don't keep statistics on it, though the economist in me feels compelled to do so now, but I find this to be an easy way to drive sales.

Let's take your ice-cream and automotive example and I'll filter in my own experience. I'd call or email the auto-part seeking individual and do exactly as the Zappos CS did, "Thank you very much for your enquiry. Unfortunately, we, company XYZ, are distributors of fine ice-cream products and, therefore, cannot provide you with adequate assistance in your search for auto parts. Maybe you have us confused with ZYX; our names are similar and we are often confused with each other. I believe they sell auto-parts. Here is their URL/phone number. Please let me know if there is anything else I may do to be of service to you."

Sure, you waste some time. But, I've developed a few useful sentences for myself which work well as a response to the majority of such situations and take maybe 5 minutes to write out. Typically, I find that these people have made an honest mistake. They bothered to write to you thinking you had an answer, so why not be civil and respond?

<snip>

His timing couldn't have been more perfect, and I will probably have to tell him so!

Anyway, my point is that responding begins a dialogue. Just because he doesn't need what I have now, doesn't mean he won't have a use for my products at some point in the future. The site I work on has been up since 1998; I know these people return and purchase. They might have bought from me regardless, but I choose to believe that my service directly influenced their behavior.

Can you respond to every. single. message? No. But you can respond to more than you think. Do I respond to requests for whole containers of high-end widgets being shipped to Nigeria for Rev. Brown? No. I'm not advocating idiocy. Define your target audience/customer base and respond accordingly.

As for poor decisions being the reasons businesses fail, I agree. I think more fail than need to because of poor decisions regarding CS, though.

[edited by: lorax at 1:31 pm (utc) on Jan. 21, 2009]
[edit reason] no emails please [/edit]

incrediBILL




msg:3830870
 12:15 am on Jan 21, 2009 (gmt 0)

I've approached 8 other firms for products, 3 of which have come back.

I wouldn't be so quick to judge companies based on lack of email responses because many people send email that trigger spam traps so your email is never seen in the first place.

Additionally, it's possible they DID reply to you and YOUR spam traps dumped their email or your ISP blocked it before you ever saw it in the first place.

1. Make sure your email server has SPF installed in your DNS:
[microsoft.com...]

2. Make sure your server/domain/IP has reverse DNS properly installed.

3. Verify you don't have any open relay email sources on your server.

4. Don't send email from spammy sounding from addresses like "sales", "support", "info", etc., send it from your own personal email address.

5. Check your domain and IP address against MAPS, RBLs, etc. using a service like the DNSBL Resource [dnsbl.com...] and also check to see if you're listing on TrendMicro or Karmasphere.

6. Don't send email to these companies from free services like qmail, yahoo, hotmail or other email addresses typically associated with spamming or heavy handed anti-spamming policies as sending email to a hotmail, earthlink or AOL address can be next to impossible.

7. Try sending a 2nd email from a different email account if you don't get a reply in a few days.

How I know people aren't getting emails is because I run a squeaky clean email operation and a significant amount of people don't get confirmation emails and they have to dig them out or complain to their ISP to fix the problem.

Thank the spammers for this situation.

[edited by: incrediBILL at 12:19 am (utc) on Jan. 21, 2009]

farmboy




msg:3830975
 3:32 am on Jan 21, 2009 (gmt 0)

Reading this thread reminded me of the Inc. article about markus007 earning $10 million/year working one hour a day:

Frind has resisted adding other commonly requested features, such as chatrooms and video profiles, on the same grounds. "I don't listen to the users," he says. "The people who suggest things are the vocal minority who have stupid ideas that only apply to their little niches."

peterdaly




msg:3830981
 3:44 am on Jan 21, 2009 (gmt 0)

I think many businesses that fail either:
1. Mis-judge the market (size, desires, competition, saturation, etc.)
or
2. Mis-judge the marketing effort needed for success

Broad brush, but that may sum a lot of things up.

FWIW - The e-Myth books are worth reading, although I agree with the comments above.

2clean




msg:3831106
 8:51 am on Jan 21, 2009 (gmt 0)

If someone is making me an amazing business offer by email, I'm thinking that if it was that good, why don't you call me and be even more convincing. Luckily my antispam has already moved it the trash allowing me to focus on the days real issues.

This 39 message thread spans 2 pages: 39 ( [1] 2 > >
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