Crastinate

There is a list somewhere of people who are banned from certain casinos. Usually this is because these players have found a way to beat the house by somehow breaking the rules. It’s not illegal, but casinos lose money with these people and have no interest in having them continually win more than they lose. The business equivalent of these people is my friend Jerome (names have been changed).

Jerome will complain to EVERY company that he thinks he can get something out of. He claims to have good reasons for this but all his friends know the truth. If he drinks a Snapple that tastes funny, he calls to complain and gets free Snapples. If he goes to a hotel and sees another person’s hair, he demands three free nights. Amazingly, many of the times he gets what he wants, or at least more than you would ever expect a company to give up. Jerome recently complained about Kenneth Cole shoes that he had for a few years and were starting to wear out in places that he felt shouldn’t have worn out. After much back and forth with customer service, he was able to get a $250 gift card for new shoes. His original shoes retailed for $200. I know, amazing.

Market research has shown that happy customers are repeat customers and it seems to have become standard practice for companies to give in to the Jeromes of the world because the additional cost will be made up by good word-of-mouth for quality customer service and repeat business.

Another friend of mine, Kyle, had his backpack replaced when he was in 7th grade by Jansport because a hole developed. To this day (he’s 28 now) he continues to buy products from Jansport, including his latest laptop case. This is an example of customer service that made an existing customer, a loyal one.

The world of social media has blown the communication channels wide open. No longer do you have to go out to find the right number to call or person to email. Brands are looking for you. If you own a product, that company wants to have an online connection with you. Complaining about a product to a customer service representative is as easy as writing a 140 character message. The Jeromes of the world love it but the Kyles get screwed. All the legitimate claim holders will be drowned out by all the Jeromes of the world.

In a perfect world, customer service would be transparent. Defective items would be replaced and false claims would be ignored. That isn’t how the world works. People are greedy and take advantage of big business (yes, big business is sometimes the victim). Utilizing social media is an amazing new approach to customer service. If a company isn’t careful, however, it could easily backfire into losing the quality customers amongst the crowd of irrelevant ones. To reinterpret a line from “The Incredibles”, “If everyone gets excellent customer service, then no one does”.

UPDATE: Regardless of my warnings, here is a good post by Tamar Weinberg as to why companies should be utilizing social media in their customer service initiatives.

All this media attention on Twitter reminds me of the buzz surrounding Digg in 2005. One of Digg’s biggest issues back then was how easily one could get a story to the front page. What people haven’t been talking about yet is how easily Twitter can be gamed.

It’s quite easy to become a top trend on Twitter. All you would have to do is hire a couple hundred people to keep on using your company/brand/product over and over in their tweets. Sounds like something a couple of hundred Russian kids would do for $1 apiece. Digg, to this day, acknowledges and fights ways of spamming Digg. I’m waiting for Twitter to step up to the plate because everyone knows that those top trends are being gamed daily.

I recently had an interesting conversation with some friends about the future of Facebook. One friend of mine who works at a hedge fund was comparing Facebook to AOL. His argument was that Facebook, for many, is the portal to the wide social web that is now emerging. Over the next few years, other services that do what Facebook does best (share photos, status messages, etc) will be replaced by services that specialize in these fields, Flickr, Twitter, etc. He believes that as the Facebook community realizes they don’t need Facebook to fulfill their need for an online social graph, they will flee, as did AOLers when they realized they don’t need AOL to access the internet or their email.

My rebuttal to this argument was that comparing AOL in the 90′s and Facebook now, I think, is ridiculous. AOL was a gateway to the web. It was, as time went on, an unnecessary barrier. The death of the modem sealed the deal for AOL. Facebook, on the other hand, is on the forefront of the social web. While other services do things better, none connect people like Facebook. And while people talk about the services that Facebook provides, the only real service I see is the network. I can’t think of one company that provides a service as valuable to a user as their Facebook network. The switching costs are astronomical. Facebook is over the mountain. There isn’t room for another Facebook-like company that provides similar services slightly better. Facebook, in my opinion, isn’t going anywhere….unless they still can’t figure out how to make money in 10 years, which is possible.