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Posts Tagged ‘Customer Service’

And the Financial Institution Most Likely to Be Late Responding to a Consumer Complaint Is . . .

One day last spring, I saw in a Google alert that the Consumer Financial Protection Bureau (CFPB) had announced that it was for the first time making public a consumer complaint database.  At the time, I was teaching a course in Empirical Law & Economics at Yale and decided to call an audible.  I came into class that day and projected the raw data (which you can see for yourself by clicking here) and asked the class how we might make use of the information.

With incredible dispatch, Jeff Lingwall and Sonia Steinway merged the complaint data with other datasets and together we started to put together an initial draft analyzing the complaint information.  When the CFPB made the database public, they actively encouraged “the public, including consumers, analysts, developers, data scientists, civic hackers, and companies that serve consumers, to analyze, augment, and build on the public database to develop ways for consumers to access the complaint data or mash it up with other public data sets.”  This paper is our attempt to respond to the Bureau’s call to action.


How Does that Steak Frites Happen?

If you want to remind yourself what a really good magazine article can be, check out Willy Staley‘s N.Y. Times Magazine piece “22 Hours in Balthazar.” Balthazar is a SoHo restaurant that’s been around long enough to be an institution but is still good enough to inspire devotion from scene-setters, tourists, and locals alike. How?

That’s the question the article (and photographs) answer, in an elegant and fact-filled manner. For instance:

For now, everything is quiet at Balthazar. The last guests from the night before left just a few hours ago, and the nighttime porters are still finishing their thorough scrub of the restaurant. But the delivery trucks are starting to arrive all over again, idling on Crosby. Men in lifting belts wheel hand trucks stacked high with food from across the globe: 80 pounds of ground beef, 700 pounds of top butt, 175 shoulder tenders, 1 case of New York strips, all from the Midwest; 5 pounds of chicken livers, 6 cases of chicken bones, 120 chicken breast cutlets; 30 pounds of bacon; 300 littleneck clams, 110 pounds of mussels from Prince Edward Island, another 20 pounds from New Zealand, 50 trout, 25 pounds of U10 shrimp (fewer than 10 pieces per pound), 55 whole dorade, 3 cases of escargot, 360 Little Skookum oysters from Washington State, 3 whole tunas, 45 skates, 18 black sea bass, 2 bags of 100 to 120 whelks, 45 lobster culls. That’s just the fish and meat order.


Wine at the Opera

At the opera last night we pre-ordered a glass of wine for the first intermission.  We paid before the opera and the glass was at the prearranged place after Act 1.  We’ve done this many times in Germany and increasingly in the U.S.  Why do the opera houses do this?

Competitive pressure is absent—they have a monopoly on drink/food at intermission.  Despite this absence, providing this opportunity raises the house’s profits.  Without the usual long wait at intermission, more customers will buy food/drink—so revenue increases.  This policy puts less pressure on workers—they don’t have to rush during intermission to serve people; in the long run this reduces the wage the opera house has to pay for equal-skilled labor—costs are reduced.  Everybody wins—and I’m surprised this policy isn’t more widespread.


Should Companies Pay Us for Waiting?

My Dutch friend walked into his bank for a short transaction and was kept waiting for 45 minutes. Infuriated, he told the manager that his time was too valuable for this.  Ten days later a credit of €25 appeared on his account!  

Why can’t service organizations that keep you waiting an overly long time all do this?  Admittedly the proper price is not easy — Bill Gates’s time is more valuable than mine. But companies that offer a credit on your account if you have to wait more than some posted time would have a competitive advantage in attracting clients; and the threat of payment would provide lower-level managers an incentive to improve efficiency.  The only example I know of this practice is our plumber, who advertises that if he is more than 30 minutes late, the cost of labor is waived. (HT to GAP)


Why It Pays to Pay Employees More

We blogged a while back about how some retail firms succeed by hiring more, not fewer, floor employees, and by treating them particularly well. Among the examples: Trader Joe’s and Whole Foods; among the counterexamples: Michael’s.

This prompted an e-mail from Hal Varian, Google’s chief economist. (If you don’t know of Hal you should, as he’s an impressive and fascinating guy — check out the Q&A he did here a few years back.) His e-mail reads:

Saw your piece about Trader Joe’s et al.  Here’s one reason to pay people more than their market wage (from my textbook):

Gabor Varszegi has made millions by providing high-quality service in his photo developing shops in Budapest. (See Steven Greenhouse, “A New Formula in Hungary: Speed Service and Grow Rich,” New York Times, June 5, 1990, A1.)

Varszegi says that he got his start as a businessman in the mid-sixties by playing bass guitar and managing a rock group. “Back then,” he says, “the only private businessmen in Eastern Europe were rock musicians.” He introduced one-hour film developing to Hungary in 1985; the next best alternative to his one-hour developing shops was the state-run agency that took one month.


How Many Workers Is the Right Number for a Retailer? Stories from Trader Joe's, Michaels, and Whole Foods

A reader named Quinton White points us to an interesting article by Jim Surowiecki in The New Yorker about how retails firms are succeeding by hiring more workers and spending more money training and rewarding them. Surowiecki writes:

A recent Harvard Business Review study by Zeynep Ton, an M.I.T. professor, looked at four low-price retailers: Costco, Trader Joe’s, the convenience-store chain QuikTrip, and a Spanish supermarket chain called Mercadona. These companies have much higher labor costs than their competitors. They pay their employees more; they have more full-time workers and more salespeople on the floor; and they invest more in training them. (At QuikTrip, even part-time employees get forty hours of training.) Not surprisingly, these stores are better places to work. What’s more surprising is that they are more profitable than most of their competitors and have more sales per employee and per square foot.


A Cheap Employee Is … a Cheap Employee (Ep. 79)

Our latest Freakonomics Radio on Marketplace podcast is called “A Cheap Employee Is … a Cheap Employee.” 

(You can download/subscribe at iTunes, get the RSS feed, listen via the media player above, or read the transcript below.)

It’s about the question of whether low-paid employees are indeed a good deal for a retailer’s bottom line as the conventional wisdom states.

The piece begins with a couple of stories from blog readers, Eric M. Jones and Jamie Crouthamel, which were solicited earlier here. (One of the true pleasures of operating this blog is having a channel by which to turn readers into radio guests — thanks!)


Listen Carefully as Our Menu Options Have Recently Changed

Moving houses has always been like having three teeth removed without anesthetic. These days the pain is accentuated by having to wait on the phone hearing, “Please listen carefully as our menu options have recently changed.” That’s corporate-speak for, “Don’t even bother pressing zero hoping to speak to a human. That’ll just put you back at the beginning.”

My latest such adventure started with an email from the phone company (Verizon). I was told that a technician would come to hook up our new service during the time “window” of 8 a.m. to 5 p.m. If a window is an opening in a wall, then 8 am to 5 p.m. is more like the whole wall. Trying to shrink the window, I spent more than an hour on hold for one person after another who could only forward me to someone else equally unhelpful. The circular chain of authority finally snapped when the last person claimed (all this discussion is at 10 a.m. on the day itself) “We have absolutely no way to reach the technician.” And then asked “Have I provided excellent service today?”


A Great Answer From a Flight Attendant

A while back, I wondered why flight attendants don’t get tipped. Here’s a nice response from a reader named Barb, who retired after 36 years as a flight attendant with US Airways. Her suggestion sounds pretty perfect to me. I particularly liked her “schmuck” observation:


Something to Think About While You Wait in Line at KFC

Photo: emile I’ve loved the chicken at KFC ever since I was a kid. My parents were cheap, so KFC was splurging when I was growing up. About twice a year my pleading, perhaps in a combination with a well-timed TV advertisement, would convince my parents to bring the family to KFC. “What is so ironic about the poor service . . .


You’re Hired: Now Quit

Say you’re hired for a new job. At the end of a four-week training period, your new boss offers you a big bonus to quit right then. Would you stay on the job, or take the money and run? Zappos employees interact on Twitter. Think of it as an employer’s test for whether you’ve come on board for the money . . .


Maybe This Guy Should Be Running Delta Air Lines

I recently blogged about a suboptimal customer service experience with Delta Air Lines. (As a couple of commenters pointed out — see Nos. 28, 36, and 44 — one of my assumptions was probably wrong, but that doesn’t change the thrust of the story very much.) So it’s nice to report a really good customer service experience. We recently had . . .


Do Restaurants Blacklist Low-Spending Customers?

I’ve been reading and enjoying Super Crunchers, the new book by Ian Ayres that we excerpted earlier on the blog. One section of the book deals with the data that firms gather on their customers, and how the firms can use that data to address customer habits: Hertz, after analyzing terabytes of sales data, knows a lot more than you . . .


Outrageously Good Customer Service

There are not many strong incentives for individuals to provide great customer service. There may be small financial rewards that accrue if customers routinely tell an employee’s supervisor what a great job they did; but if someone owns the business, the rewards are greater because positive word of mouth will generate new customers. Not surprisingly, many reports of great customer . . .


One Further Note on IBM Service

I blogged the other day about the nice service I got on having my IBM laptop repaired. The second commenter on the post, “Kent,” wrote this: Why is the co-author of Freakonomics buying overpriced insurance/ warranty for a computer?! He then goes on to cite our friend Tim Harford as arguing that add-on insurance for things like computers, cell phones, . . .


Should IBM Run the DMV, CIA, and TSA?

I blogged a few days ago about the sad fact that my beloved three-year-old child, a.k.a. 2687, a black IBM (Lenovo) laptop, had to be repaired. The LCD had gone dark. I tried to get it fixed locally, but none of the vendors recommended by IBM could move fast enough. Nor were any independent outfits like Geek Squad up to . . .


Confessions of an I.R.S. Auditee

Last April, we wrote a column about tax cheating. It included a passage about the I.R.S.’s National Research Program, “a three-year study during which 46,000 randomly selected 2001 tax returns were intensively reviewed.” The goal was to determine some of the specifics of tax cheating: what kind of incentives work and don’t work, what kind of people are more likely . . .


Happy Customers = Happy Stock Price?

We haven’t written much on this blog about customer satisfaction outside of this little rant about rancid chicken and, even more tangentially, this one about mood-tracking software. But here’s something worth looking into a bit more seriously. Claes Fornell, a b-school professor at Michigan and the man behind the American Customer Satisfaction Index, has co-written a new paper asserting that . . .