The pulse of Alexander Interactive

The New York Times reports ecommerce is shrinking this month, the first time since the industry began.

This is distressing news as we head into the holiday season. What can the industry do for 2009?

1. Improve incrementally. Test pages and categories at length. Small victories can lead to substantial gains in an economy looking for good news.

2. Improve correspondence. Talk to customers more often. Survey them, get their feedback, respond to their requests and suggestions. Because….

3. UX is king. Any degree of user experience improvement will be welcome at this time, and the easiest place to try harder is in customer service. Flexible, friendly assistance will create good impessions and loyalty, minimizing acquisition costs. And “minimizing costs” is the magic phrase right now.

I had just finished a terrific bowl of Farro Soup at Spiga, a small Italian restaurant on the Upper West Side, when the kitchen runner appeared with the entrees for our table.

My wife got the orata. Placed in front of me was a large, cheesy, white mass of pasta–not at all what I had expected.

“What’s this?” I asked the runner.

“That’s the lasagna,” he said.

“That’s not fettucine bolognese?”

“No sir, it’s lasagna.”

“But I ordered the fettucine.”

At this my wife piped up. “No you didn’t,” she said. “You ordered lasagna.”

“I did?”

“You totally ordered lasagna.”

“But I hate lasagna.”

“Well, you ordered it.”

“Why would I order lasagna?”

The runner, equal parts confused and amused, asked me if I wanted to exchange dishes.

“I don’t know,” I replied. “Can I? I mean, if this is what I ordered–”

“I can check, it’s no problem, if you don’t want this I will see.”

“Okay,” I said, feeling extremely guilty. “Please let the chef know it’s my mistake and not yours. I’ll eat the lasagna if I have to, since I guess I ordered it.”

“Oh, you ordered it,” my wife said.

“I think it’s okay. Let me see,” said the runner. He took the lasagna and disappeared into the kitchen. My wife gave me a who-are-you-and-what-did-you-do-with-my-husband look, and we waited.

Not five minutes later the runner reappeared with a piping hot plate of fettucine bolognese. I thanked him profusely.

“We’re happy to do it,” the runner said. “The chef said if it’s busy, we might not be able to, but since it’s quiet we want you to eat what you like.”

The chef voluntarily took back an $18 entree for no reason other than a customer’s mental error. No allergies, no spoilage, no poor preparation–just “oops, I didn’t want that,” corroborated laughingly, yet replaced at no additional charge, and with a smile. Several smiles, in fact, as our waiter ribbed me good-naturedly after the fettucine arrived.

In exchange, our very good meal became an outstanding one. The flavorful meal was enhanced by the excellent service. We left with a story to tell about our experience, which will encourage friends to try the restaurant for themselves. We will certainly be back.

Does your business dedicate itself to this level of customer satisfaction? What would you gain by doing so? What are you missing by not?

One of my favorite sessions at last week’s Web 2.0 Expo (and I’m not just saying this because he’s an old industry friend) was Lane Becker’s Customer Service Is the New Marketing. Lane runs Get Satisfaction and sees these things firsthand. His insights were smart and useful for anyone selling products in the 21st century.

Lane’s big takeaway: “Act like a hotel concierge.” Stark and obvious, it is nevertheless an important reminder to anyone in business. Consumers treated with respect and a can-do mentality will develop loyalty and appreciation above and beyond a basic liking of product or service.

This theory is important for us locally, both inside and outside Ai. We don’t have an account management team, which makes our project managers (and our president, and assorted other employees) directly responsible for keeping our clients happy. This makes communication a priority and minimizes siloed output, both of which Lane cites as vital to success.

Lane’s suggestions have a more obvious application with our clients, many of whom run successful ecommerce businesses. The more they listen to customers and gear their sites toward client satisfaction, the better they will be at pleasing and retaining business. And as Lane noted, even a modest increase in customer retention can nearly double a company’s profit.

These concepts also touch upon a recurrent theme of the expo (and of Web 2.0 in general): the power of users to beneficially transform businesses. The time has come for companies to embrace the shift in customer communication.

Last Friday my iPhone’s vibrate feature failed. I had a day or two of odd brrrraap buzzes, wheezy ailing things, and on Saturday, pfft! no more vibrate.

I went to Apple’s Genius Bar on Sunday, fighting masses of bored tourists on Easter to get my phone inspected. The technician (genius?) took a quick look at my phone and decided that I had broken the external silence switch when I dropped it at some point. “There’s your problem, right there,” he said cheerily.

Before I had the chance to get defensive, he had opened a drawer and taken out a small white box. Out came a new iPhone–refurbished, I’m sure, but visually perfect–and within five minutes the genius (technician) had swapped SIM cards and activated the new phone. He took my phone–nine months old, dropped several times, with the scuff marks to prove it–and put it in the box with an explanatory label.

And that was it. “Here you go,” he said, “you’re all set.” And I went home with a new phone in my pocket.

I tell this story not simply to add to the “cult of Mac” but to examine just why Apple has been so successful.

• Trust. The tech who met me listened to my request, quickly verified it, and moved onto solving the problem. No challenges, no curiosities, no wondering whether I had violated an arcane clause of my limited warranty. Heck, the tech even pointed out that I had dropped the phone–surely grounds for voiding my claim, and for which I had prepared an extensive explanation about timing, cause and effect, and so on. But it made no material difference to him.
• Ease. All I did to get my phone replaced was make an appointment, hand over the phone, and sign a form acknowledging my receipt of a new one. No other paperwork or, as noted above, difficult questions.
• Flow. The Genius Bar is, of course, free. I booked online, arrived late on Easter Sunday, and still got taken within minutes.
• Goodwill. The net effect of the above: I am a newly satisfied Apple customer, not only proud of my iPhone (proud! of a phone!) but delighted with my recent experience. I’ve spent the week telling people my story, which routinely elicits amazement and wonder: what other company is this easy to work with? This in turn continues Apple’s amazing halo effect, which translates into ever stronger sales.

The message, to any company selling products: treat customers with respect and make life easy for them. Individual transactions may have a higher cost than a cost accountant may prefer. But the long-term impact is undeniable.