So far, we talked about Permission Marketing, Unleashing the Ideavirus, Purple Cow, The Big Moo, and Free Prize Inside. In this lesson, I will talk about a very different book: Small is the New Big: And 193 Other Riffs, Rants, and Remarkable Business Ideas.
Why Bigger Isn’t Necessarily Better.
Most of the book is not related to the title, but Small is the New Big is a simple concept. Small businesses have the flexibility to outmaneuver large businesses. Economies of scale can be outflanked by smaller, nimbler businesses that can adjust quickly. Big companies are bogged down by tunnel-vision, bureaucracy, and centralized control.
Customer Service or Customer Disservice
Nowhere is this more readily apparent than in customer service. Have you ever had the feeling that the customer service department was running a psychological experiment to see how long it took to drive you mad? Godin offered a tongue-in cheek Modest Proposal for customer service. Here are the details of the plan.
It is a fully computerized operation that answers in a polite voice and it costs two cents on the dollar to run. After all, big businesses seem to think the purpose of customer service is to save money, not to fix problems. Godin explained the proposal:
The goal is to make the customer feel as though the (computerized) operators are doing their best, but of course they never actually do anything. Keep track of the conversations and the record number. Keep transferring people. Promise to call back, but never do. Sooner or later, the customer gives up and walks away. (If the firm does their job right, the customer blames himself, at least a little bit, not for not being more patient.)
End result? Not only are operator costs saved, but you don’t even have to fix any of your products!
Yes, it’s a stupid idea. But it is cheap. If cheap is what you want, then go do this. If customer service is what you want, maybe it’s not such a good idea to obsess about being cheap. Customer service, we see time and again, is a profit center; it is the cheapest form of marketing.
There is a reason that www.despair.com sells a demotivational poster that reads: “CUSTOMER DISSERVICE: Because We’re Not Satisfied Until You’re Not Satisfied.”
The Bottom Line Isn’t Always the Bottom Line
Sometimes people don’t care and other times, policies designed to contribute to the bottom line go haywire. Godin wrote:
This morning, I headed to the bank. Some poor guy was arguing with the ‘customer service manager.’ The problem? He had $4 in his checking account as he was waiting to close it. The bank charged him a monthly $5 service fee. The fee bounced. Then they charged him $30 for bouncing the fee on an inactive account.
The manager was trying to explain the policy, but the bottom line is that all the bank’s real estate, all the ads, all the marble, all the computers—all were wasted, because they were enraging the guy. Over $4.
How stupid. I wish I could tell you that is the exception, rather than the rule. I am afraid it is not.
I had a similar experience this week with a large bank. I had a credit card through Barclay’s bank. To save money, they pushed us to enroll in online billing. Then, we missed the online bill and racked up late fees. That is our fault, but that is not where the story ends.
My wife paid the bill but the next day when I went to close the account I found that after she paid the ludacris fees that damaged my credit score, they tacked on another $1.31 the next day—the day after we thought we had paid all of our late fees. We were about to enter the crazy cycle again. This is remarkable, and not in a good way. The cow is purple, but it has mad cow disease.
The customer service rep was unhelpful. My credit score is damaged, and much of it was driven by an impersonal system that disallowed the rep from helping me. I didn’t have strong feelings about Barclays bank before, but now I absolutely can’t stand them, and in this lesson, I am telling more than a hundred people. And I will continue to tell this story for many years to come.
This is why small is the new big. Small is human. Small allows people to think for themselves. Customer service that cares about people and doesn’t place policies over common sense provides small competitors a large advantage over big bureaucracies.
What About You?
Are you thinking big? In what ways do you, as a small business-person, have an advantage over the behemoths?