Residents of Saratoga Springs, NY have been noticeably more clueless over the last two months because of delivery problems with the Wall Street Journal.  Apparently there is some kind of turf war among carriers. So every morning I go online to https://services.wsj.com, sign in with my account number and login, and report the missed delivery.

A few minutes later I get an email that confirms my delivery problem and tells me I will be credited for the missed issue and the local office is working on the problem. It then goes on to advise me: “In the future, please go to services.wsj.com to report any problems with your delivery.  It’s easy and quick to use, and our delivery staff is notified directly from the site 24 hours a day, 7 days a week.”

See the problem? Since that’s exactly what I did, WSJ assuming I did not do it puts into question the rest of the message. And the takeaway is that I assume they are in fact doing nothing about my delivery problem, which in fact they are not.

Then, every few days they vary the mix and send an email that says “To make sure we provide the field office with everything they need to resolve this issue, please answer any of the questions below that apply to your situation.

Location questions:
– When did the problem begin?
– Where is the paper usually delivered?” Etc.

Once I rose to the bait and responded that nothing had changed about my delivery situation (the house has been here for 130 years) but it didn’t actually make any difference. Nor should it, since this is boilerplate that some helpful scribe inserted in the rotation (“if missed deliver complaints = >5, then print ‘n’ ”) so I wouldn’t see the same thing constantly. Instead of fixing the problem, they’ve focused on creating an extended library of customer service correspondence for people who get the same message over and over again.

The lesson here: If you have a contact strategy as elaborate as this one, then there’s something wrong at the core that needs to be addressed. Handle it, instead of asking some copywriter to paper over it. Oh, and don’t insert a marketing message when a customer is already pissed off, such as “Here’s an opportunity to give a great gift at a great price: The Wall Street Journal Print and Online for just $119!” Hey, I could give it to my dad… then he and I could both not receive the paper.

Did you ever get punished as a child for doing something naughty, because a parent or teacher didn’t believe you even though you were telling the truth? The problem here is a lack of authenticity—or, to borrow a favorite word from ace copywriter and gore movie maven Herschell Gordon Lewis— verisimilitude.

Consumers in general tend to be skeptical of marketers, which is why verisimilitude is very important. In addition to actually being true, a claim must APPEAR to be true or you break the spell and lose the sale. Today’s badvertising classic is a case in point.

Original State Seal Label (from a plaque at the springs)

I live near the bubbling natural springs of Saratoga, NY. Folks have been coming here to “take the waters” for centuries and the greatest number of springs, as well as the classic bath houses, are located in a park which is owned by the state.

Early in the 1900s an entrepreneur had the idea to bottle the water and sell it nationally. To emphasize the official connection, it was called “State Seal” water and the antique-y state seal of New York was actually shown on the label. Millions were sold and FDR became a big promoter of the springs and the water.

State Seal Spring Water label, c. 1980

Fast forward to the 1980s, and another entrepreneur had the idea to revive the brand. But he/she picked the wrong thing to revive. The new water is again called “State Seal” but the label design is bland and modern. Within a few years the revived brand was defunct.

The original State Seal water had verisimilitude. It looked like the kind of packaging a civic department might come up with if it had no clue about marketing but was simply trying to promote healthy water to its citizens. The revived water had none of this charm and authenticity. The revivalist probably thought the old design was out of date when in fact it was the essence of the brand.

Fetch me that paddle, ma. I think some marketer needs a whuppin’ here….

A few months ago, I wrote about the hybrid battery that failed in my 2001 Prius at 71,000 miles, generating a $3700 repair bill because the battery was recently out of warranty. It’s time I explained the reason for my lack of follow-up posts.

Back in mid-February I got a call from the general manager at the dealership which had done the repair. He was calling not because of the rather robust online discussion of my experience, but because I had given the experience an unfavorable rating in a mail survey. (Yes, good to know at least someone at Toyota is paying attention to what their customers think.) After we discussed my issues he agreed that the matter had been handled inappropriately at his dealership and said he’d go to bat and try to get at least a partial reimbursement from Toyota. He also asked me to forward to him the letter I’d sent to American Toyota President James Lentz, summarizing my issue.

Two days later, on 2/18, this manager emailed me that:

Just got done speaking with my Toyota Factory Representative, she agreed with my assessment of the issue as well she agrees with your points you made to Mr. Lentz.

Based on that conversation it’s my guess you will probably receive a 100% reimbursement check in about 8 weeks at your Saratoga Springs address. Please understand I’m making no promises, but I feel it looks real good.

Based on that 8 weeks, I would have received the check in mid-April. When it didn’t arrive, I checked in with him and heard that:

Money is coming soon, should be no problem…..

Well, the money finally did arrive, on 5/25/10, and it was indeed a full reimbursement. I’m happy not to be out of pocket $3700, but I’m also happy that Toyota was willing to pay it which I don’t think they would have done if a huge number of Prius batteries was failing just out of warranty like mine did. (The cover letter made no reference to my history, by the way, just referring to it as a “goodwill check”.) So good news for me and good news for other Prius owners.

In spite of my own recent issues, I had thought Toyota was doing the best it could with its massive recall. James Lentz, president of Toyota USA sales, was all over the press shows last weekend with the two key statements considered essential in the post-Tylenol era: “we screwed up and are sorry” and, “we care about our customers and are very concerned.” (Tylenol took a similar open, earnest tack when someone poisoned some of its bottles in the late 1980s and, coupled with an intensive “get to the bottom of this” campaign [they never did, but they were obviously trying]  it saved a brand everyone was writing off. For how NOT to handle a PR disaster see “Woods, Tiger”.)

But today I read this Reuters article that points out Akio Toyoda, the REAL president of Toyota, has said not one single word on the recall problem. And that another Toyota executive blamed the problem on (presumably inferior) U.S. made parts, chosen out of a charitable desire to help struggling American economy! Meanwhile the recall expands to the Prius (different problem, but nobody’s tracking the details any more) and Twitter #Prius traffic, which I’d been following because of my own recent posts, goes from sleepy to through the roof.

Concidentally, my original post about my dead Prius battery has become one of the most-read articles ever on this blog. Lots of new readers are discovering it linked to articles on the Toyota recall as they lick their chops for other Toyota schadenfreude. Speaking of which, my request for some financial relief led to timely response and some nice talks with friendly people in the Toyota Customer Experience Center, but a firm turn-down. I was frankly surprised at that.

[UPDATE for new readers: Toyota has now paid for the replacement battery. Details here.]

My casual research suggested a hybrid battery failure at 70K miles was extremely unusual if not unprecedented. It would seem like a good investment to fix an anomalous problem and placate a good customer who’s been evangelizing your product. Instead, here I am writing another post about problems at Toyota. How is that good for their brand?

I wasn’t too incensed about the dead battery on my Prius, just surprised, but after a bit of research I’m getting my dander up. Turns out, according to this article in the Toyota Pressroom blog, that the Prius battery has a 10 year warranty… EXCEPT for the first three model years that have only an 8 year warranty. (Mine died at 8 years and 8 months.) In other words, the earlier adopters who put their faith in Toyota and spread the word and built the Prius brand potentially get a $3700 repair invoice while later adopters would get a free replacement for the same problem.

I predict there is a bit of trouble ahead for Toyota if more owners see their batteries go south* and discover the company isn’t going to replace them. This is a classic example (getting back to marketing which is what this blog is supposed to be about) of taking your best customers for granted and treating them worse than your marginal customers.

Speaking of marketing, there are some other not-to-do’s worth learning from the Toyota Pressroom post. They acknowledge that “battery replacement in a Prius is neither as simple nor as inexpensive as replacing the battery in a conventional car.” That’s disingenuous because the massive and complex hybrid battery has no basis for comparison to the battery in a conventional car; in fact the Prius ALSO has a “conventional” battery. And they quote a bargain $2,299 for that replacement battery without mentioning that installation and tax at your Toyota dealer are going to add another, oh, $1400.

In a day when anyone can and does have access to your press releases, glossing over the pesky details is not a good idea. What exactly is this article trying to accomplish?  How could anybody who actually has a battery problem not feel pissed? And how could any news source that picks it up, then later discovers the truth, avoid feeling duped?

* Fortunately for other early Prius owners, mine may be a fairly rare occurrence. According to the Driving Sports blog only 306 Prius batteries had failed as of 6/09, out of 750,000 installed. “The life of the battery pack is generally about the same as the life of the vehicle,” said Toyota’s Jeremiah Shown. Well, that’s good to know.

Ok, now I’ll stop. No more about Toyota. I promise. Maybe.

[UPDATE for new readers: Toyota has now paid for the replacement battery. Details here.]

[UPDATE for new readers: Toyota has now paid for the replacement battery. Details here.]

Last week our 2001 Prius started acting strangely, and today SF Toyota gave me the bad news. The hybrid battery is shot and a replacement will cost just under $3700, tax included. We’re a year and half 8 months out of warranty, it turns out,  so the repair cost is 100% our responsibility.

Our 2001 Prius in happier times. Photo courtesy sfgate.com.

This is a vehicle that was on the front page of the SF Chronicle in 2001, as a poster child for early adopters of green technology. We’ve bought another Prius since then and I’ve been looking with interest at the lithium-powered next generation coming in 2012. But this changes the equation. If you can expect to pay for a $3700 repair at 70,000 miles, the car suddenly becomes much more expensive as well as less reliable… what happens if the failure occurs elsewhere than in a major city?

I remember the naysayers when we bought it: “the battery’s going to die and it will cost you a fortune.” The reviewers scoffed at this: batteries don’t last forever, but it is unlikely to fail in the driving life of the vehicle. Too bad that’s not true. The $3700 new battery is warranted for 12 months. I guess that tells you something.

News like this could have a chilling effect on hybrid sales, just when we need a nitty-gritty, ready-right-now antidote for energy waste and climate change. (I love seeing the MPG on our 2006 Prius creep over 50, combined with the fact that the car has actually been made less efficient in order to come close to zeroing out the emissions.)

Toyota needs to fix this. I’ll update if they do.

You know I’m a fan of Southwest Airlines and a complainer about AT&T Wireless. But how much are my opinions actually worth to those companies? An former client, Satmetrix, has devised a back-of-the-envelope exercise that shows how to calculate the value of word-of-mouth (WOM, pronounced “wom”.)

Start with the following assumptions:
1. The lifetime value of a customer before considering WOM is $1000.
2. Promoters buy more at higher margins and defect at half the average rate, so their value before WOM is 3 times that of an average customer.
3. Detractors’ lifetime value is half that of the average customer due to complaints, higher service costs, and short tenure.
4. On average, Promoters make 4 positive referrals, 0 negative referrals.
5. On average, Detractors make 0 positive referrals, 3 negative referrals.
6. It takes 6 positive referrals to generate a new customer.
7. Each negative referral neutralizes 4 positives.

Based on these assumptions, you can now calculate the following:
1. What is the full value of a promoter compared to an average customer?
2. What is the full value of a detractor?
3. What is it worth to convert a detractor into a promoter?

The results may be eye-opening, and will certainly show why it’s smart to be good to your customers instead of treating them like crap. If you like this exercise, it’s worth converting the formulas into numbers that are are more reflective of your experience with your own customers. Have fun!

At the SXSW Web Awards on March 15, the Adobe presenter gave a shout out to “all the social media gurus in the audience” and a titter ran through the crowd. The reason it’s funny is that, certain people’s business cards notwithstanding, this whole business is simply too new for anybody to be an expert. Everybody is figuring it out as they go.

Here are a couple of examples of companies that are figuring it out. They’ll do as best practices until something better comes along, and they’re also good illustrations of why companies are so fascinated by the potential of social media.

1. Everybody in the US knows about the Oscar Mayer WienerMobile: a funky vehicle shaped like a hot dog that tours America and shows up in the oddest places. In years past, someone who saw the WienerMobile might have told a few friends about it. Now, they’re likely to Twitter to a much larger audience… and Oscar Mayer’s PR folks are regularly searching the subject #wienermobile so they can respond to these posters, thank them for their interest and offer a coupon or just a continuing relationship through mutual following. (This illustration was presented by their PR consultant in one of the SXSW Core Conversations. Didn’t catch his name.)

2. Steve Barnes writes Table Hopping, a lively restaurant blog on the Albany Times Union website. When he reported that Red Lobster was going to offer flame broiled fish, skeptical readers commented that installing a flame broiler is very expensive and they were probably going to just sear it with a poker. But then the Red Lobster president himself found the thread and commented that indeed they were going to install flame broilers with a plausible explanation.

Not only did this defuse the negativity in the comment thread, but it got a new post from Steve Barnes himself: “Check out comment No. 18 on the post below about Red Lobster. It’s from the company’s president — yep, the top guy of a 680-location chain — and it’s not a canned reply but one that addresses specific comments made by Table Hopping readers.”

That’s good PR you can’t buy, but you have to work for it. And what is happening here is that Red Lobster is monitoring comments throughout the social media space using a tool like radian6 or boorah, both previously mentioned on Otisregrets, to keep track of comments so they can be responded to.

A company offered a $10 billing credit over the holidays if I clicked through to their site from a promo email. My statement showed up, no credit, an inquiry to customer service went unanswered, so I contacted PR department and sent them a pdf of the ad along with the email thread. The response:

In response to your inquiry about the $10 off credit, please note that the offer for this credit expired 12/31/08, as indicated in the PDF file sent. However, to reestablish your happiness as a Bill Me Later customer, we have credited your account $10.00. Please be advised that you shall see this change on your next billing statement.

Uhuh. First of all, if she’d checked my file it would be clear that the purchase was made during the eligibility period. Even if not, the customer is always right. To “reestablish my happiness” it would be helpful to eliminate the nyah-nyah.

Today’s SF Chronicle has an article on boorah.com, one of the growing number of services that allows business owners to get a perspective on how they are being talked about on social networks. (Others include circos.com for hotels, and radian6.com for businesses in general.)

Curious about boorah, I looked up Jack’s Burger House in Dallas. The front page of the review has the comment that “The waiters were terrible , it took us 30 minutes to be seated even though I made reservations 2 weeks in advance , and the food tasted like it came out of a can and was way over priced … It was absolutely TERRIBLE!”

Problem #1: Burger House is a hole-in-the-wall burger restaurant. If you tried to make a reservation they’d laugh. Problem #2: this review doesn’t actually exist; if you click through to the “more” it doesn’t appear among the expanded commentary. My guess is that there is some kind of database sweeper that goofed and pulled the data from the wrong place… but meanwhile there is what looks like a real restaurant review on a real reviewing website, bad news for Burger House if anybody reads it and certainly for boorah which will need to fix this problem, stat.

A cautionary tale with the moral being, don’t throw that “go live” switch before you’re sure you’re ready for the world to see your website.