I really love Starwood Hotels and I’ve stayed at many of their properties around the world, and enjoyed the benefits of the Starwood Preferred Guest Program. Having spent many nights with them, I was expecting a good experience when we decided to stay local for the Grasshopper yearly off-site planning session, and visit the Le Meridien property in Cambridge, MA.
Even if you pay for 24 nights and a conference room, the hotel’s “free WiFi” is going to cost you
In addition to paying for food, beverages and eight hotel rooms for three nights, we rented a conference room for our sessions. When we arrived early in the morning, I wasn’t expecting my room to be ready (and it was not) so I went right to the 3rd floor where our meetings would be held for the duration of our stay. After I grabbed a bottle of water and something to eat, a few others from the Grasshopper team joined me and we started getting ready to settle in with our laptops. Just as we did so, we discovered that the “free WiFi” that was available in all of the guest rooms and the lobby was blocked. Easy fix right? Wrong.
When we asked the conference manager if we could have the password to access the internet in the conference room, he came by a few minutes later and casually asked if we could sign something. Upon further inspection, that “something” was an agreement to pay $250/day for internet. That’s right: After paying for eight hotel rooms for three nights, for a total of 24 nights at an otherwise empty hotel (with free internet in the rooms) we were being asked to pay for using the internet in the conference room. I gave the hotel the benefit of the doubt and spoke with the hotel manager who referred me to the events and catering manager.
Making excuses never makes a customer feel better
After getting passed off to the events and catering manager, and listening to her many excuses as to why the $250/day price tag for WiFi was justified, and how she couldn’t do anything about it for us, she then told me, “All of the other hotels in this area charge the same or more and we call them every month to verify our pricing is fair.” I was at a loss for words. Looking past all of the problems—that the hotel manager did not care, could not help and just passed blame—I couldn’t believe that the events manager even admitted it was an actual policy to charge this access fee. Worst of all, she actually admitted spending time each month “calling other hotels” to “verify” their pricing!
So, what lessons did this experience reinforce? Here they are:
Lesson #1: Just because your competitors do something does not make it right.
If your competitors apply a ridiculous fee for conference room WiFi, you’re getting an opportunity to be different, so stand out and do the right thing. Don’t do what Starwood did and justify fees by saying that they make you “just like everybody else.” Instead, use the opportunity to differentiate yourself; offer a substantially lower price to use the internet in the conference rooms, or better yet, make it free, just like all of the WiFi in the hotel rooms!
Once giving the hotel and the management a chance to make things right, I turned to Twitter and voiced my frustration with these two tweets to test the Starwood Hotels social media team.
The social media team did respond and ultimately sent me an email and tried to work with the hotel. After explaining my issue, the person from their social media team called the hotel and spoke to “management”—probably the same staff members with whom I’d spoken initially. After all of this, here was the email I got from the social media representative on Twitter:
“Our role is to act as mediators between our properties and our guests, so that we can bring our guests concerns to the hotel level and encourage them to provide the highest level of service possible. Your concern that the hotel charges an exorbitant amount for meeting room internet, while offering the same amenity free of charge for guests in their rooms, is valid.”
Perfect setup for bad news, and the bad news was to come…
“I have spoken with Andrea, the Front Office Manager at the hotel, and explained your concerns. I mentioned that we appreciated the way in which you contacted us online without immediately blasting the hotel, the reasonable nature of your concerns, as well as the potential impact of a negative resolution. She did consult the hotel sales team regarding your comments, and the hotel has made their decision. In the end, their prices are competitive within the region, they will maintain the stance that their charges for meeting room internet use are justified.”
Lesson #2: Having a social media team is useless when they have no power to fix things. Just give them the ability to give $500 courtesy credit at minimum.
I totally appreciate that the social media team tried to make this situation right, and that the hotel had the final say, but the experience did point out some great lessons for any business or entrepreneur trying to understand how social media can help their brand.
If you’re going to go social, make it a serious component of your business, not simply a front that is completely disempowered to make any decisions. What’s the point of interacting with your customers on Twitter if in the end you can’t do anything for them? Make sure that your social efforts match up with those of your business—otherwise, social media won’t do anything for you. People will see right through it.
Lesson #3: Ask a frustrated customer what would make them happy, and you’ll make them a brand evangelist.
The hotel never asked me what would make me a happy customer (all I wanted was free internet, like in the lobby and hotel rooms). Worst of all, everyone I dealt with at Le Meridien in Cambridge seemed totally disinterested in helping me or making their hotel stand out among a sea of options in the Boston area. If they’d just taken the time to find out what would resolve the situation quickly and efficiently, I wouldn’t be writing this post. They also had other options: could have given a $50 discount, given the next day’s internet for free, maybe even tossed some free meals our way, almost anything to show they at least listened.
So, it’s pretty clear I won’t be raving about the experience I had at Starwood’s Le Meridien property anytime soon, but these are still some excellent (and very basic) lessons for entrepreneurs about creating brand loyalty and respecting your customer. If nothing else, we can take this bad experience and turn it into an enlightening one.
Everyone knows that the week after Christmas (and before the new year) is pretty slow; at Grasshopper alone, I think at least half of our office is on vacation. Certainly a good time for a break, but if you’re like the folks at Moosejaw, it’s also a great time to experiment with some fun (and slightly bizarre) marketing. Case in point is the online retailer’s promotional email sent out today, cleverly titled, “New Year’s Eve Frenching Service.”
Frenching service?! Right away I’m interested, since this is not the typical “10% off today only!” email. Why would a retailer who sells The North Face and skiing gear send this out? Curiosity piqued, I open the email and find this:
So, what is this? This is a stellar example of the kind of creative marketing that everyone is looking for, and can’t figure out. Even though the email had nothing to do with the products they sell, here’s why it worked:
- Amazing copywriting that grabs you. Groupon’s got over 100 writers. Why? Because they understand that they key to hooking people is with great, lively copy. Moosejaw’s email succeeds because the writing is hilarious, engaging, and completely irreverent. Most brands fail at emails like this because they play it safe with stiff, formal copy. Don’t. If you want to get noticed, include copy that grabs a reader’s attention.
- Timely messaging. This fun “promotion” would only work at New Year’s or Valentine’s Day so the timing was perfect. Even better that this is a historically “slow” week for email, so I might actually read an email from an online retailer versus sending it to the trash.
- Brand personality. Anyone can send an email with a deal, but this email is actually in line with the Moosejaw brand (which, if you know anything about their brand, is a little quirky, definitely different, yet still polished). When you get a box from Moosejaw, it is most likely reused (not recycled), the wrong size, and has lots of stickers on it. These people understand how to make their individuality work for them, and they attract customers who appreciate that level of quirkiness.
- Trust in team members. I doubt this came from some marketing genius at Moosejaw, but instead, a team member that had a fun idea and was allowed to run with it. In a typical company you could never send an email like that to your valuable mailing list, but at Moosejaw, you can do it. Guess what? It works—after all, here I am writing this blog post about Moosejaw.com.
This is creative email marketing done right. Nice job, Moosejaw.
Sitting in the Virgin Atlantic London Heathrow lounge for more than 8 hours today gave me a chance to see the operation from busy to slow, and then back to busy again. While waiting to depart for South Africa, I was lucky enough to enjoy some food, a quick rest and an entire movie on my laptop. Here are a few observations about the Virgin Lounge, created by a company I love.
All about the experience. As a flagship location for Virgin, the London Heathrow lounge is pretty big, but from the minute you enter it’s all about the experience. Case in point? Two greeters (not behind an impersonal window) welcome you, then you step inside to an entirely different universe. Fun, modern design, plenty to eat for free, friendly staff and the unmistakable “kid in a candy shop” mentality make it easier to forget you’re in an airport. Don’t want to talk to anyone? Make your own snacks and just kick back.
Branding without logos. In the Virgin Lounge, everything is branded: the color of the LED lights in the ceiling, the leather couches, the menus and even the table numbers. Everywhere you look it just oozes Virgin Atlantic without having a single logo anywhere. But how do they do that? By selecting a “look and feel” and letting that carry over into every dimension of their brand both in the air (just look at the seats, the flight attendants’ uniforms, and the bar area) and on the ground inside of the lounge. It may be James Bond meets Austin Powers, and a little off-beat, but they don’t do anything half-way, which results in an extremely memorable brand that doesn’t rely on a logo as its only means of identifying itself.
Give the feeling of “free.” Inside of the Virgin Lounge, everything is “free,” from the martinis you order while you wait to the upscale deli where they’ll make you a sandwich exactly how you want it. Need internet access? That’s free, too. How about a service from the on-site spa? Yup, one service per visitor is free as well. With all of these amazing amenities, it’s fun watching Virgin Lounge newbies’ faces; they’ll look at the menu (which has no prices but also does not say it is free) and then ask a server just for confirmation that everything before them is in fact, free of charge. At the Virgin Lounge, they make you feel like a rock star, even though, who are we kidding though, none of this is free since you’ve paid (or used American Express points like I did) for an Upper Class ticket. Somehow, though, it doesn’t matter—by purchasing a ticket, Virgin makes you feel like you’ve purchased a lifestyle.
Hidden process improvements. When you sit back and think about it, it makes a lot of sense to serve full dinners to passengers in a lounge where you have staff and a kitchen compared with on a plane. I am sure it saves on food costs, makes the staff on the plan happier and the best bonus of all:it feels exclusive to the customer.
Double duty. Spending so much time in the lounge, you get to see all the uses of it and it is for more than just passengers. There were a number of Virgin staff having meetings, talking with clients, and making use of the space. I might have expected to see flight staff, but there were none, however a group of at least ten staff had a meeting for an hour upstairs. Greatway to use the space you already have.
Turn a cost center into revenue. For a number of years, Virgin has offered the Bumble and Bumble salon at the lounge and even on planes at one point I think and it use to be all free with the limit of one service. Now you can get as many services as you want, but the first one is free and there are upgrades to all the free services. Nothing is too expensive but what a great way to turn a cost center into a revenue center; I have no idea if it’s profitable or not, but same staff and resources are generating some revenue now.
It was a very pleasant day in the lounge and I am sure I will visit again, just hoping some day (though doubtful) I will run in to Sir Richard Branson here.
This past season I completed four sprint triathlons after a friend completed his Ironman journey. Beyond finding a sport made for entrepreneurs that I enjoy, I now know why all entrepreneurs should cycle.
- Unknown roads with hills
Even with GPS, you will end up on roads you have never been on and turn corners to see hills that just hurt to go up, which is very similar to the entrepreneurial journey. You might even expect the hill that is coming, but on that day, for some reason, it is just more difficult than the last. You might find the next week that you fly up that hill. As entrepreneurs we travel down roads all the time that we have never been down and need to figure out when to turn to get back on course or when to push further away from the course. The experience on a bike is just like this because it forces you to confront physical limitations that translate into the same kinds you face in business.
- Flat tires and limited tools
Shit happens, but then you need to figure out how to adapt quickly with limited or the wrong types of tools. It could be a flat tire or a shifter breaking and you are 30 miles away from your start—whatever the situation, you need to figure it out and get going again. This happens all the time as entrepreneurs, from servers going down to customers leaving; no matter what the obstacles, you figure it out and keep going.
- Unpredictable drivers
Until you are on a bike, you never realize how stupid and careless drivers can be to cyclists. From turning in front of you to beeping when they pass, it is nothing you can plan for or expect, it can throw you for a loop. Sound familiar as an entrepreneur? Competitors make changes that effect you, market conditions change without warning, and lots more.
- Focused time
The disease that is entrepreneurship (and yes, it’s a disease) makes for very busy lives; I know from experience that it is impossible to get focused time other than in the shower. Riding a bike for 40 miles gives you the opportunity to put down the phone and email and concentrate on riding. When you get away from these time- and energy-sucking activities, that’s when you’ll get the great big ideas that change the world and all that good stuff.
The rest is all a bonus: get outdoors, see amazing things that would pass you by in a car, and great exercise. Go get a bike today, venture out to places you might not otherwise and enjoy life.
As entrepreneurs and human beings, we make mistakes everyday in our business, but most of the time the mistakes are small enough so that it doesn’t land us in the press for all the wrong reasons. On Monday, October 11th, Chargify made a massive mistake in making the announcement about a change in pricing; as far as mistakes go, this one was pretty gargantuan. Plain and simple, we did a horrible job of communicating a change that wasn’t driven by greed or stupidity, but was part of our desire to better support our customers that are really trying to grow viable businesses. I could sit here all day and try to convince you that our change in pricing really was part of a plan to provide better service, but really, does it matter? When it comes to matters like these, the intentions do not matter as much as perceptions, emotions and how we treated the community.
Having spent the last two days focused on what we did wrong, and responding to the numerous inquiries and complaints from customers, I’ve had a great opportunity to identify where we screwed up. If that reflection were not enough, I also watched as two (1,2) posts about the Chargify price change made it to the top of Hacker News with over 180 comments (mostly negative). Then, of course, there was the article on TechCrunch, and a blog post on Inc. pointing out our blunder, too. To put it simply, the last twenty-four hours have sucked, and they should never have happened, but they did, and now we need to learn something and try to earn back our customers’ trust.
Communicate early and often
Just one of the huge mistakes we made was sending one email, without any warning, notifying all customers of a large price increase. This broke a trust that we had developed with our customers over a long period of time, and will take much to repair. We should have communicated our need and desire to remove free plans and provided more information about how this would happen, and over a period of time leading up to the change. Maybe this could have been as simple as starting the communication three months ago, or as difficult as calling every single customer and talking to them on the phone to notify them of the change. Bottom line is that we should’ve done it better. It just wasn’t right.
Perceptions matter, so be open with information
As a result of our horrible communication, the perception of the pricing change was that it was because we just wanted more money, but that wasn’t the case. We should have shared the data we collected for over a year that demonstrated quite clearly to us that only 0.9% of customers were paying us at all, and that there was a direct correlation between those that did not pay anything and a high volume of support requests. Even though this informed our decision to make a change in Chargify pricing, we didn’t bother to share that with you. Mistakes like these are important lessons and we learned that we should’ve told you a long time ago what we ourselves were finding in the data collected.
Free customers go out of business or never launch
Many of you have asked why we don’t just go back to offering some kind of free service. A year ago, we here at Chargify thought it made sense to offer a free plan—after all, wouldn’t it just allow more people to start and grow their business to the point where they’d be paying customers anyway? It’s a good idea, but as it turns out, that’s not what happens. In the past year, we discovered that those businesses that we thought would initially pay nothing and then grow into paying customers just never ever did; for the most part, launches never happened and they went out of business. The hard truth is that many, many people try to turn hobbies into businesses and it just doesn’t work. While everyone deserves a shot to start a business, our theory that non-paying customers would eventually turn into paying ones just didn’t pass the test when it was put into practice. Although we should’ve shared this with you so that our decision didn’t seem out of the blue, we simply can’t support free accounts and provide the kind of service we want, plain and simple.
“What bleeds, leads”
Everyone knows this phrase from our media-obsessed culture, and it holds true for tech blogs and the related community when a company makes a gargantuan error. Chargify’s price change hit the top of Hacker News twice, garnered almost 200 comments, and then the icing on the cake for a shitty day were a couple of articles on TechCrunch and Inc.com. Like other web app startups, we had tried to get TechCrunch coverage for a long time, and although they loved covering one of our competitors, they never covered Chargify until it was time to report something negative. We can argue about the merits of even wanting to be on TechCrunch, as my friend Paras Chopra did in his post, “Demystifying the TechCrunch Effect,” but we did actually get the coverage we wanted, and had very high signup days. So, while we should issue a big thank you to TechCrunch for the press, we don’t plan to screw up as royally as this again, which means we probably won’t ever be covered by them in the future. That’s fine; we’d rather have happy customers instead.
Free customers have the time to complain
There is a big difference between bootstrapping a business, which I have done a number of times, and trying to test a hobby to see if it is viable as a business.
Over the past year, we discovered that the customer that never paid had the highest support load. Once we made the announcement about the price change, the same applied to complaining about Chargify across multiple public channels. Those customers that were working on a hobby business, or just something they were not investing in significantly, seemed to have the time to tweet all day long, post multiple negative comments on every possible channel available, and shout the loudest. This is not to say we did not get valid complaints from great customers—boy, did we ever—but their complaints were well considered, included real information and were mostly in private forums.
Freemium gets a lot of talk; thankfully few use it
Everyone’s always talking about freemium, but very few people actually use it, and we discovered this in looking at our customers for the past year. The reality was that less than 0.4% of customers had any sizeable number of free customers on their accounts. For the small amount who did, Chargify has taken care of them and will not charge them. We should have communicated why the pricing was simplified to include just customers with no distention and handled the few edge cases better. Freemium is a hot topic these days, but far less people are actually using it than is widely reported.
Stand firm, but listen
Making a big decision that may change the direction of a business is not easy and you must stand firm in that decision, but be open to listening to and engaging the community. We will not offer a totally free option as that is not good for our business or for our customers, but we did make a $39 plan available to those that supported us during our growth. Should we have offered this option before our major announcement? Yes. Would we love to go back and do it over again? Yes, but the reality is that’s not happening, so we need to do the next best thing and support those who have supported us with a $39 plan.
This is a huge and unsettled topic about which we are still getting feedback on each day. Maybe we should have offered a grandfathering option, maybe we should have given a grandfathering option to those that already integrated, maybe we will do all of this, but at this point we have not. The issue here is that it really depends on the business, the pricing change and how dramatic it is for each customer. Looking back, the best option would have been a grandfathering option which allowed the previous pricing but only included community support. Still an open topic.
After personally replying to more than one hundred tickets, tons of comments across multiple publications and on Twitter, threads on Hacker News and many other channels, it was important to look back on all of this feedback and see what went wrong so our team (and others) can learn from it. Regardless, we broke your trust, trust that took a massive amounts of time to build, and now we may never get it back. I don’t have any neat solutions for you and I don’t want to feed you crap. All I can say is that we have learned more from this mistake than from anything before and will use that knowledge to change the way we think about everything related to Chargify. That might not seem like enough of a mea culpa from me, but our desire has always been to empower entrepreneurs to succeed with real tools and solutions for growing business, and that mission hasn’t changed. That was the driving force behind this pricing change, and whether you believe that or not is your call; we will show you our commitment to you, our customers, with our actions now.
Big Omaha 2010 was a great experience, thanks to Jeff, Dusty and their entire team.
After seeing the Shepard Fairey Supply & Demand show at the ICA Boston last year I wanted an original piece and after much searching and time I got this amazing one. It is an AP (artist proof) on metal in a great matching frame. Information about the piece can be found at zarts, a pretty cool site for art information.
A few months ago a friend from LA invited me to talk at EO Alchemy 2010, what a great event. Amazing set of speakers, great event production, and everything was done right. Here is the video of me speaking at the event. Warning: I start a bit slow as I had been up for 24 hours.