Life of an Internet Entrepreneur

A few years back, I consulted at a restaurant which was having trouble making rent. The total space was small to begin with, and gave off a stuffy feeling. On one side was a row of refrigerated display cases, sporting an assortment of salads, poultry and beef.  Across the walking space was a row of bar-type seating facing a wall.  The theme of the mostly takeout restaurant was Mediterranean food in a homey atmosphere, and behind the register were large jars of pickles on display.  On top of the soda machines were wicker baskets (used as centerpieces) that were being stored for the occasional catering job. 

CompUSA, a nationwide computer and software chain, grew immensely in popularity in the late 90’s and seemed poised to own a significant market share in the personal computer and software market for the foreseeable future. Last week however, CompUSA announced it was closing 126, including ten out of eleven stores in New Jersey, a major market for computer sales. This massive change in market placement didn’t happen overnight though, so what happened?

Dominance

Early on in CompUSA’s existence, a different chain named “Computer City” challenged CompUSA. CompUSA, which had the better brand name, and offered special “free after rebate” sales, beat down Computer City, and eventually bought up the chain at a steal of a deal. One down, many more to go.

It’s amazing that we are in the 21st century and we seem to have solved many of life’s mysteries, yet can’t seem to get our hands on quality customer service. I have therefore decided to make a short step-by-step guide for companies that find themselves in trouble with customers.

They need to engage in what I call “Recovery Customer Service“, or recovering the trust of expectations that they lost due to their error.

The following are three main rules that executive officers of corporations should memorize, and instill in their customer service departments.

Recently, a lot of media attention has been focused on the threat that internet video is posing to traditional TV and cable.  While there is research that shows that users of video sharing sites watch less TV, I think it is important to look at the current challenges internet video poses before it can dethrone traditional TV and cable.

Environment

JetBlue Airways, founded just over seven years ago, was created for one purpose: to provide low cost American flights with top-notch customer service.  Their dedication to that goal made them one of the only profitable airlines since the 9/11 attacks, receive satisfaction rates that pummel their competitors, and even got them featured in a wildly successful business book.

On the stormy day of February 14, 2007, none of that mattered. Their most valuable differentiation between all other airlines, their “customers come first” attitude, was severely tarnished.  JetBlue Flight 751 kept passengers on board a stuck aircraft for over 8 hours, as well as cancelled around 1,000 flights over the next few days.  Passengers had trouble breathing on the plane and the attendants actually had to open the doors several times to let some air in.

Many of us who run businesses, especially small businesses, send gifts to our key clients each year during the holiday season.  The reason we all do this is because it is expected of us, but the real reason behind it is to improve relationships and even use this yearly event as a marketing tool.

So how do you stand out from the crowd and make your gift translate into the best return?

Make It Last

In case you hadn’t noticed, bottled water has become quite a big business in the last 10 years. The larger an industry gets, the more time and effort gets put into packaging and marketing. Let us take a look at how the packaging and marketing can affect consumer decision.

As with any industry, it is always entertaining to start with a few facts.

Quick Bottled Water Facts:

• $11 Billion US Market
• Average American consumed 28.3 gallons of water last year
• 2nd most consumed beverage in the US (after soft drinks)

Sirius Satellite Radio CEO Mel Karmazin has often said he would like to purchase XM Satellite Radio, the only other major player.  Today he may very well have gotten his wish.

Sirius would buy XM for $4.6 billion in stock, which gives current XM stock owners about a 20 percent boost on their shares.  The new company would have 14 million subscribers.

Under the deal, Mel Karmazin, the more charismatic of the two companies’ CEOs, would be the CEO of the new company, while XM Chairman Gary Parsons would retain his position in the new company.

As I’m sure you’ve heard by now, on January 31 several odd black boxes with lights were seen around Boston and confused for bombs.  The media jumped right on it, and before you knew it, there was a mass hysteria surrounding the story.  The boxes ended up being a publicity stunt for Aqua Teen Hunger Force, a cable show that runs on Cartoon Network.  What the media didn’t initially report was that these same boxes were also found in eight other cities.

The immediate thought that popped into my head when I heard about this was:

As people continue buying more items online, clothing has remained a purchase that most picky dressers prefer to make in a brick and mortar store.  All of that could soon be changing.  Before we discuss that, let’s take a quick look at the status quo for clothing purchases in 2007:

Why Do People Buy Clothing Online?

- Sometimes the clothing is less expensive
- You can buy it in your underwear
- No traffic/crowds
- You can compare from many vendors before choosing
- You have an unlimited inventory to choose from