Howard’s Inner Circle, No. 36: Pavlov’s Customers

Very few scientific experiments fascinate me. An exception was Milgram’s dealing with obedience to authority. Another is Pavlov’s regarding the creation of conditioned responses. They captivate me because of their detrimental implications in our lives.
Take the following ways merchants integrate Pavlov’s principles as a component in their customer relations management philosophies.
• Using so-called rewards-based loyalty programs to compel further sales to the same customer.
• Self checkouts that make the customer perform the duties of staff with no compensation.
• Lip service, form letters, and platitudes about providing superior customer satisfaction to complaints.
• Discouraging concrete and mortar store shopping by eliminating low-level supervisors and staffing store with inexperienced staff. Little attention to display and layout and standard response by staff if you can’t fine what you want, go online rather than accessing computer and offering to order it for you.
• Fast food restaurants where special orders aren’t listened to.
• Fish hooking with freebies that lock you into expensive long-term service contracts.
• New, must-have improved version of the same product unveiled every six months.
• Charging more for those who commit early or buy directly from provider, rather than via third-party Web site.
There are many other examples of customers being conditioned to buy on the merchant’s terms at the customer’s expense. But unlike the dogs in Pavlov’s experiments rather than salivating, customers are beginning to snarl, and bite those who ring the bell.
© 2011
*****************************************************************************
Above may be reproduced in full if that fact is stated and Howard Wolosky at http://howardwolosky.blogspot.com is credited as the author.

Howard’s Inner Circle, No. 33: A Two-Question Rx for Doctors

“Every child has to eat at least a pound of dirt before they grow up” is the wisdom many family doctors imparted to parents years ago. A holistic and humanistic approach that is lacking in many of today’s medical practitioners.
It is understandable as there is more specialization, need for greater efficiencies lower reimbursements, many procedures being performed by third parties, greater use of specialized outpatient centers and labs, increased reliance on test results, and higher malpractice insurance premiums. The skilled and trained professional still exists but something is missing that patients find discomforting.
We can’t go back but let me suggest a simply way of making the patients experience better. It is a simple technique used by an accounting firm in Ohio. Just as work is completed it gives clients a prepaid postcard with two questions regarding the engagement. There is a high-response rate and always any needed follow-up is done.
Doctors could give their patients a similar postcard at the close of each visit asking: ‘What did we do well?” and “What could we do better?” Expected responses might be the doctor didn’t talk about the side effects of a medicine or a particular technician made the patient very comfortable by detailing exactly what the testing machinery would do. Of course, there must be any necessary follow-up and additional patient communication.
Adopting this approach might help in a number of ways including awareness of patients’ areas of discomfort, a testing of implementation of “best practices,” and efficiency without sacrificing effective treatment. In the age of the Internet, online reviews, social networking, e-mail, and text messaging, patients will be sharing their good and bad experiences, so obtaining customer (patient) feedback is an imperative. Doctors are not good at this. The medical establishment, including the AMA, should take notice. Perhaps that two-question prepaid postcard is a good starting point.
© 2011
*****************************************************************************
The above may be reproduced in full if that fact is stated and Howard Wolosky at http://howardwolosky.blogspot.com is credited as the author.

Howard’s Inner Circle, No. 23: “Customer Crazy Glue”

I first saw it when I was with Practical Accountant. Tax research companies began purchasing tax prep software companies followed by the acquisition of those companies specializing in payroll software and CRM systems. The acquisitions allowed for suite offerings. The suite business model is based on the idea that it is more difficult for a somewhat unhappy customer to leave if they are getting more than one service or product from the company. The problems for suite customers are that quite often the new product isn’t best-of breed, the acquiring company has little prior in-depth understanding of the new product, and integration with existing products is slow and often poorly done.

This isn’t the only form of “customer crazy glue” that I detest. There are the customer loyalty programs in which you are urged to join, some of which have an annual fee. An example is those offered by airlines which rate passengers on miles flown to determine the different baseline of service they will give to a flyer. It reminds me a bit of the different passenger classes as portrayed on the Titanic in movies.

My least favorite “customer crazy glue” is the customer support offered by technology companies which are marketed so beautifully when you purchase the product. You soon find out this support is outsourced, that a charge is often incurred, and a good portion of the call, which takes numerous prompts and a long wait, is consumed with a pushy sales pitch for an additional product that you supposedly really need.

Perhaps I hate this “customer crazy glue” retention because I grew up working in my father’s store where a customer didn’t have any special ties encouraging them to come back. It was a time of “The customer is always right.” So when someone complained that a mop they purchased disintegrated on its first use we would replace it at no cost with a cotton mop and explain that disintegration probably occurred because they use used bleach and that wouldn’t happen with this, a cotton mop.

Customers aren’t always right but they also aren’t fools and they will become more aware of customer glue traps and how to avoid them. It will be interesting to watch the marketplace reaction to this.

© 2010
*************************************************************
The above may be reproduced in full if that fact is stated and Howard Wolosky is credited as the author.

Howard’s Inner Circle, No. 10: 2011 Accounting Cover Stories

For many years each month as editor-in-chief of Practical Accountant I decided on what would be the cover story. It wasn’t hard do but for one fact; we had to decide on the subject matter as much as a year and a half before the issue came out. The reason was the editorial calendar had to be in place in July of the preceding year and there was no guarantee that each month there would be a development affecting the accounting profession worthy of cover story coverage.

Because habits are hard to break I decided why not have some fun and pick out 12 possible 2011 cover story candidates now for a magazine for the accounting profession.

Tentative and Very Hypothetical 2011 Editorial Calendar
January--Plethora of Estate Tax Engagements
February--How CCH, RIA, Intuit, LexisNexis, and Others Are Utilizing CPA Firms as Business Partners
March--Reverse Mentoring: Overcoming a Firm Management’s Deep-Grained Aversion
April--Success Stories and Best Practices from Early Social Media Adopters
May--Increasing Revenue and Correctly Positioning a Firm During an Economic Downturn
June--CRM: What Firms and Clients Are Doing Wrong
July--Regionals Replacing Nationals as Auditors of Public Companies
August--Outsourcing Manufacturing and Distribution Functions
September--Walking the Cost-Cutting Walk: Fee Reductions on Modified Engagements Complement Advice
October--Tax Prep--Protecting Against Fee Erosion and Client Flight
November--The Practice Development Joint Ventures Art Form
December--Hidden Benefits of Firm Associations, State Societies, and Trade Groups
© 2010
*****************************************************************************
The above is from the tenth issue of the newsletter, Howard’s Inner Circle, which periodically appears on the blog, “Instigator” at http://howardwolosky.blogspot.com/. It may be reproduced in full if that fact is stated and Howard Wolosky is credited as the author.