Thursday, May 22, 2008

Customer Service in the Internet Age

The above links to an MSNBC article of the title:
"Complaining Couple Banned from Cruise Line".

Briefly, the article discusses how a cruise line (Royal Caribbean) chose to permanently decline the business from a particular customer (that sounds nicer than "ban"). Apparently, they had found reason to complain ... and apparently ask for meaningful financial compensation ... over 80% of the time (5 out of 6 cruises).

There's a few interesting points in this topic.

First, there are most definitely consumers (such as the Morans) who will frequently exploit any excuse to forcibly leverage a cost concession. In this regards, Royal Caribbean is better off without them and does have the right to decline their business.

However, there is the issue with 'freedom of opinion' on discussion groups. It is safe to say that literally no discussion group has been free of pressure from special interests to delete or amend existing comments, which frequently leads to censorship issues.

There is an old saying that the Internet interprets censorship as network damage and routes around it

In general, this potential problem rapidly becomes a slippery slope when the Message Board is being hosted by the company...a case of where Marketing trumps ethics and fear of "Brand Damage" is more important than hearing real consumer feedback (in order to improve the Brand): it is a manifestation where the corporation reveals a lack of confidence in the strength of their Brand.

A few years ago, I was a reader of just such a group that was hosted to benefit Divi Resorts (a Timeshare company) and there rapidly became a zero tolerance ... enforced through censorship ... for any and all possible criticism from their customers. As such, the group was a sham: nothing more than a marketing mouthpiece, not a source of honest, balanced information, or for frank consumer/supplier dialog... something that would be more expected when one has spent $10K+ for a timeshare. And what was the fate of property that Divi had rejected years worth of customer 'feedback' about? Its death spiral continued until it was shut down in 2006. Glad I'm not a big investor in Divi Resorts, as any company who clearly chooses to ignore repeated warnings about their product's shortcomings is not going to be particularly successful in the long run.

Thus, the general conclusion that I have come to is that the only discussion groups that can be functionally trusted are those upon which censorship is impossible, which is USENET, or a Message Board whose official published policy is that all discord will be discussed fully in the open for the public to witness firsthand (good luck finding one of these).

But there is good news for this for consumers in that the Internet - - despite its shortcomings - - has been a resource that has restored some power back to the consumer, for previously isolated individuals can now communicate, and it is common to compare the company's response. It used to be that a company could merely tell 50 customers, "Gosh, you're the first one that this has ever happened to!" to try to smooth things over and to minimize financial recompense, but today, that claim is far more likely to get caught and thus revealed as a lie.

Since its only a fairly small percentages of consumer who have caught on to this information sharing, and that information is still dispersed across the 'Net, a businesses' tactics to use 20th Century spin-doctoring will still work 80% of the time. However, the downside risk is that when it doesn't fly, that business gets hit hard because their claims get destroyed by these collaborative power of 21st Century communications, and then they get nailed a second time ...even harder... for having flat-out lied to multiple customers.

This is not the case here with Royal Caribbean, but the amazing part is that a surprising number of companies still "Don't Get It". Here, RC was in a pattern of responding to individual complaints - - they didn't see the pattern until it was pointed out to them by other consumers.

And for the Morans? The Internet revealed their pattern of behavior, which in this case is now helping a business to avoid future complaints from them. Yes, its a two-way street: they made their bed, so now they have to lie in it.


Tuesday, May 13, 2008

Election Politics for the "bad-at-math" taxpayer (and Journalists)

In the news today is that our esteemed political leaders want to suspend the current Administration's practice of adding to the USA's Strategic Oil Reserve.

The argument being promoted is that those 70,000 barrels/day are part of the reason why gasoline is approaching $4/gallon.

Well, let's apply some classical "Supply & Demand" examination of this claim:

As per the US DOT (URL above), the amount of crude oil imported in 2006 (the 2007 numbers will be updated in June 2008) was...

10,118,000 barrels/day

And US Net Petroleum Imports were:
12,390,000 barrels/day

Plus there was also U.S. Crude Oil Production:
5,102,000 barrels/day

So we're asking about the significance of 70,000 barrels/day in the contect of (12.39 million + 5.1 million) used per day:

70,000 / (12,390,000 + 5,109,000) = 0.004 = 0.4%

Assuming that the difference results in a linear cost savings,
0.4% of $4 is a whopping 1.6 cents per gallon

Why gosh! I'll only need to buy ~200 gallons of gas in order to save all of $3.

If $3 is going to make/break your life in 2008, drop me an email explaining how: I'll consider sending you $5 and you can name your children after me and make me your write-in candidate in November. At least McCain's and Hillery's "18 cent Fed Tax" moratorium was willing to spend all of $30 in their attempt to buy your vote.

So the conclusion is here that the math shows that the crude oil deposits into the Strategic Oil Reserve is a non-issue in the marketplace: the total change potential is for less than one half of one percent. Thus, this is simple election year wrangling in the form of a "Strategic Political Topic Reserve", which the Lawmakers will use to make themselves look like they're busy working hard for you, the common taxpayer.

But unfortunately, as the saying goes, don't confuse Activity with Progress.

And let's not forget our Journalists out there: how many of them are bad at math and won't think to run the numbers?