Customer Service Matters

Just yesterday I had breakfast with Rene Lacerte, the founder of PayCycle, and we discussed the power of great customer service. When Rene first pitched me on the idea of PayCycle, the service was not yet built. Nonetheless, he was already discussing how he would integrate the customer support experience into the overall service offering. He rightfully pointed out that every change you make to an online service will have implications for the customer support team -- whether it is training, navigation, speed to resolution, etc. So from its inception, PayCycle's product management and customer support went hand in hand. Rene is now building his second customer-focused service called Bill.com and it too has been built from the bottom up with customer support in mind.

As we ate breakfast yesterday, Rene and I had a long discussion about the fact that despite being called Software as a Service, very few SaaS organizations put any emphasis on the "service" piece. Sure, you could argue that the "service" in SaaS is all about delivery and not about customer support. But that would be a mistake. Service businesses live and die based upon the satisfaction of their customers. While it is conceivable that your software could be sufficiently foolproof that customer support is limited to receiving "thank you"s from your happy customers, so far no one has quite found that Holy Grail. Customer support remains a significant piece of all SaaS organizations and the more a company recognizes that going into building their service, the more likely they will succeed.

So what does that have to do with the Rosewood Hotel? I was reminded of the importance of customer service this morning as I experienced the Rosewood Hotel's stunning disregard for their customers. For those of you who have not yet been to the Rosewood Hotel (and I would not recommend that you go), it is the new "high-end" hotel that was just built on Sand Hill Road in Menlo Park. For those of us parked in VC-land here on Sand Hill Road, it was a welcomed new place for breakfasts and lunches and, in fact, I have eaten breakfast there 12 times in the little over a month that it has been open. But never again. (Warning: herein begins a rant -- a well-deserved rant, but a rant nonetheless.)

Three weeks ago, when parking for breakfast, I was surprised to see broken glass in one of the parking spaces. As I left breakfast, I pointed the glass out to a maintenance person driving his golf cart by. I assumed it would be cleaned up. Two weeks later, the glass had still not been picked up, so when the manager of the Madera restaurant came by to say hello to me (after all, I was there every other day), I pointed out to him that there was broken glass in the parking lot that had not been picked up despite the fact that I had pointed it out two weeks earlier. The restaurant manager apologized and assured me that it would be picked up. To my shock, it was not. Undaunted, I figured I'd give it a third try. Two days ago, on my way to an event in a conference room in the hotel, I asked to speak to the hotel manager. A nice young man named Daniel came to talk with me and I recounted my tale of woes. I explained to him that while the glass hadn't particularly inconvenience me, that I thought it didn't reflect well on his hotel and that he might want to take care of it. He assured me that it would be cleaned up by the next time I visited, which I told him would be two days later.

I must say I was surprised to see the glass still there two hours later when I got out of my meeting, but I figured I'd give him the benefit of the doubt and assumed that it would be picked up by my breakfast on Friday (today). I was wrong. To my horror, as I drove up to breakfast this morning, the glass was still there. Was I cut by the glass? No. Did I get a flat tire from the glass? No. So why do I care? Because I think that customer service matters. I think that if you care about your customers, you should do more than pretend to listen to them. So rather than park, I drove up to the front of the hotel and explained to them (amidst a fair amount of swearing) why it was that I would not be eating breakfast there any more. The same manager, Daniel, was there and fell on his sword, taking full responsibility for the incident. But as far as I am concerned, it is too little too late. Such blatant disregard for your customers maybe deserves a second chance. And, if you are feeing extremely generous, a third change (particularly when the restaurant is so convenient). But not a fourth chance. So I guess I'm heading back to Il Fornaio for breakfast.

Customer service matters. And it matters more than ever in this age of blogs, and Facebook and Twitter. If you search for PayCycle, you'll find a whole lot of happy customers. And if you search for Rosewood Hotel, I'm guessing you'll see a whole lot of dissatisfied customers. You'll certainly find me there.

Update: Shortly after I posted this rant about the Rosewood Hotel, I got a call from Managing Director of the hotel. Through the power of blogging, twitter and facebook, the Rosewood's MD had read my complaint moments after I had posted it and promptly called a staff meeting to address the situation. He then came over to my office to offer up his apologies for what had happened and his commitment to make customer service a priority of the hotel. While I wish it had not escalated to the point of needing such attention, I certainly appreciate that the hotel's MD took it seriously enough to come to my office and have the discussion.

Comments

[https://me.yahoo.com/a/9fpd1qQlv56VqxUybAe4mn.wvoBMeDxlSpzk.g--#53147]

Was there last night for first time and agreed on the hotel ...

But not on "very few SaaS organizations put any emphasis on the "service" piece"

I think this is almost categorically wrong. If you look at any SaaS company that has gone up to say $10m in revenue, 50% of the reason is customer service. Beyond that, perhaps not, but the only way you can get people to buy as a SaaS vendor getting going is a quid-pro-quo that service and support will be great ... it's a key reason BigCos take a risk on an up-and-comer

When I look at the AppExchange reviews for example for all the top performers there, almost all rave about support ... b/c you can get there without it ...

[rickbucich]

David,

You make a great point with the hotel. When I worked at a hotel while in college, they had us watch a video about the customer who doesn't complain, they just never come back. It really resonated with me because complaints for the most part are easy to rectify and are often useful for building relationships depending on how well the issue is resolved.

You gave them ample opportunity to fix the problem but it fell on deaf ears. Not only are they potentially losing your business but there is also that silent portion of potential repeat customers with whom they have lost. Marketing costs are too high to get people in the door just once, you have to bring them back over and over to be successful, hence why loyalty programs are so pervasive now.

I know personally, some brands with whom I have had issues are those that I am most loyal to now.

[https://me.yahoo.com/a/husvqG5vuMsTiP.5aHV00GPi#c7676]

I had such a bad experience with Mastercard today that I went back to re-read your rant about Rosewood (which thought was quite amusing...although I really do like that place - except for the terrible acoustics in that very LOUD dining room. Too many hard surfaces).

MC sent me a new card a couple of weeks ago. Then they called me to discuss potential fraud on my account. I checked the account online and found a zero balance so I did not call them back until today.

It turns out one of their merchant's servers was hacked so it was just a precaution. The problem was that when they issued a new card I had to register it online to see the latest charges and balances - and if I had done so I would have seen that I had a small balance on the account to pay off last month. Well, I missed the payment deadline. They charged me $39.99 late fee, plus $2 in interest.

When I asked them to reverse the late fees and interest, they refused. I immediately cancelled the account and paid it off. I'm sure I could have escalated the situation to a manager and gone through the hassles of getting the charges reversed but why bother? Not worth it. I just moved on.

BTW, it was my Shell Mastercard. I got 5% rebate every time I got gas at Shell. Given that I have a 3 mile commute, I probably blew an entire year's worth of "savings" on that one late fee. Oh well.

[https://me.yahoo.com/a/ED7YCjFz2YeD3.pTC0qa.PvK9g5BtuU-#686db]

So, after the visit from the Managing Director, are you satisfied that they (Rosewood) are serious about improving customer service and will you be back for Breakfast?
Funny that at an established Hotel, like Four Seasons Silicon Valley, you would never even second guess the level of service provided and the first person you would have pointed out the broken glass to would have themself initiated the clean up. Rosewood needs "Old World" service in their "new" world.

[https://me.yahoo.com/a/PpYYnUgQrMOHRmliTLWnGUv4rXtDjWQ-#e6c62]

Contrary to popular opinion, outsourcing of customer service operations is improving customer service overall. Due to the low cost, it is now easier to get a customer service representative on the phone. Representatives overseas also tend to be happier with their jobs, and it comes across over the phone.

[https://me.yahoo.com/galonga#9a47a]

The problem here is the company proved it makes empty promises, so who is to say tomorrow it will not make another on an issue that REALLY mattered?

I´d probably do the same.

Al Costa
1hourflex.com

[garechiga.myopenid.com]

David,

Sorry to hear about your experience. Rosewood is a hotel management company, I have yet to visit their property in Palo Alto, however Customer Service is key and your experience was not acceptable. Your message regarding delivering effective customer service put me in the place of question, "how does one (a business) actually deliver an effective customer service experience." My opinion is that it requires 2 denominators; training, and hiring the right people. Training provides constancy, which equates to 20% of customer service; the right person provides the rest and then some (80++).
I have not yet visited the Palo Alto property, that being said, my personal experience with Rosewood has been exceptional. I leave an open invitation for you to come and experience a Rosewood resort that has effective customer service, Cordevalle San Martin CA. I have no ties to Rosewood other than I am a member at Cordevalle. I truly love Cordevalle.

[https://me.yahoo.com/a/eameM0UavIwUDQtY5dRmc5YScWMRjQ--#b055a]

Seems the bigger the company the less customer service you get. If i ever get 'big' i will make sure i remember how i got there and provide equal customer service no matter the size of the sale.
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