Judge a book by its cover at your own peril

One hundred and ten years after its 1818 founding in New York City, venerable retailer Brooks Brothers opened its second store, in Boston, on that city’s famed Newbury Street. A cautionary tale for the ages happened one morning when a man entered the store in tattered clothing, wearing rubber boots, and smelling a bit rank. The “up” salesman would not wait on him (the associate whose turn it was to help the next customer). The other salesmen looked away, busying themselves with anything else to avoid the unwelcome stranger. When the man finally asked for help from anyone within earshot, he was pawned off on the most junior salesman, who had no choice but to offer some assistance. Then, in the next two hours, the stranger ordered up $10,000 in custom-made suits, shoes and furnishings. (As you might guess, the “up” man tried to claim the sale as his own, to no avail). When the young salesman began asking the stranger about himself, he learned the man just arrived in town from his home in Vermont, where he was the owner of a highly successful hog farming business.

Fast–forward to the reverse situation. What happens when customers are the ones judging salespeople? According to a recent article in the New York Times, a new study found that people give higher customer satisfaction ratings to white male employees than to women and members of minorities, even when their performance is the same. In one test, about 12,000 patients in an HMO rated their doctors. The number of follow-up email messages doctors sent to patients increased their patient ratings only when the doctor was a white man. In another experiment, students watched videotaped interactions between a bookshop sales clerk and customers, and were asked to rate the customer service. Three actors played the part of the sales clerk—a white male, a black male, and a white female. All used the same settings and scripts. The subjects shown the white male clerk rated the bookshop’s service 19% higher than subjects who viewed the other two actors. Even women and people of color gave white males higher marks. Since over 60 percent of employees have at least some of their pay linked to customer satisfaction results, these biases are not just socially undesirable, they hit female and minority employees squarely in the pocketbook.

According to David R. Hekman, the lead author of the study and professor at the University of Wisconsin, Milwaukee, “Someone needs to call customers out on their biases.” Hopefully, if people are made aware of their subconscious biases through coverage of studies like these, they will be less likely to penalize female and minority employees on satisfaction surveys. Another possibility would be to create employee evaluation tools that are truly objective. Techniques such as video analytics can deliver a bias-free analysis of the customer experience. Any other ideas on how we can eradicate the hidden biases that occur when shoppers evaluate employees (or vice versa)?

Hyatt’s random walk down service street

Last month, Hyatt Hotels’ C.E.O., Mark Holamazian, announced that Hyatt Hotel employees will be performing “random acts of generosity” for some customers, such as comping a bar tab or waiving charges for a family breakfast. Bloggers have noted that conducting a publicity campaign around gestures hardly seems random, and runs the risk of angering those who don’t receive the largesse.

Rob Walker’s Consumed column in this week’s New York Times Sunday Magazine points out that the Hyatt campaign is an effort to leave the customer grateful. Walker cites a coming paper in the Journal of Marketing which argues that a customer who is made to feel grateful is likely to become “enduringly loyal.” Humans enjoy reciprocating out of gratitude, and we feel guilty when we don’t, which is a phenomenon that businesses can exploit. But, as Walker writes, in order to inspire gratitude, favors must be performed “as a function of free will,” not merely in service of company rules. Loyalty programs sponsored by hotels and airlines do not automatically inspire gratitude; instead, frequent customers feel entitled to the free flights and hotel nights, and strategize to gain the most generous rewards for the points they’ve earned.

It’s not wrong for Hyatt to be ramping up customer service, especially now. Service has always driven loyalty, especially when customers are giving more thought to how they spend each dollar. One recent study found that nearly half of all customers feel service has declined since the recession started, and more than that said they’ve recently cut ties with a company due to a service lapse. It’s no coincidence that Nordstrom, with its legendary customer service, has recently trounced competitors such as Macy’s and Saks in terms of sales and stock performance. But we question whether Hyatt’s scattershot, random approach is the best way to go. Hyatt, and other businesses, might be better off building a reputation for top-notch customer service available consistently to all customers. What happens to customers who – having read about the plan – expect but then don’t receive any random generosity? And what about those who receive it a first time but may not “randomly” ever get it again? What happens to their loyalty? What do you think?

Saturday morning at the hardware store

I walk in and a clerk approaches to ask if I need help. I tell him I need a flashlight, just something basic. He walks me to the appropriate spot in the aisle, and begins describing the selection.

“We’ve got your Eveready. $3.95. Not the greatest, but does the job,” he says, starting at his lowest price point. “Then there’s this Energizer. Better grip. $6.99. Or we’ve got a Sylvania. Good for the garage. It’s $12.99.”

He takes a step to the right, moving toward something else, as if he’s signaling that we’re about to enter a special new universe.

“Of course,” he tells me with a knowing look, “you could get this.” He begins hefting a powerful looking cylinder of silvery black metal and then starts thwacking it slightly menacingly on the palm of his other hand.

“This,” he pronounces, “this is the one the cops carry.”

Of course, he had me at the product demo, but the law enforcement piece put me all in. I buy two of them……at $49.99—each.

There are a number of lessons here, not the least of which is the incalculable sales value of story in the store. This was a pitch-perfect bravura performance, and in case you’re thinking today’s workforce isn’t trainable in this skill, you need to know that this associate was not some old-timer hardware store guy—but a 20-something “kid.”

Starbucks goes “sophisticated and upscale”……?

In the you’ve-got-to-be-putting-me-on file, MSNBC and Starbucks just announced the launch of a special marketing initiative between the two companies whereby the Seattle chain will become a name sponsor of the cable news programmer’s “Morning Joe” show, with Joe Scarborough.

The deal allows for on-air Starbucks brand plugs, announcements, and visual references within the body of the weekday news-and-talk program. Future remote broadcasts may take place within Starbucks locations around the country.

Starbucks CEO Howard Schultz, in commenting on the deal, said the “Morning Joe” show makes great sense for his company, calling the audience “sophisticated and upscale.”

Let’s get this straight. With its business suffering in profound ways, with hundreds of stores closing, with its reputation as the place where the urban elite go for lattes, with millions of consumers forced to cut back on even small indulgences and others avoiding even the hint of conspicuous consumption as bad manners in a reeling economy, with the company doing everything it can to say its $4-per-cup image isn’t deserved, with all that……they’re now ballyhooing a deal to reach the posh and polished?

I'm only slightly kidding to wonder if they'd be better off doing a deal with NASCAR.