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I ordered over 500 boxes and they were delivered within 24 hours. It’s absolutely amazing and a life saver if you’re ever in a time crunch for materials. Plus their pricing is very competitive (shipping boxes are around $.30 each as opposed to the $2.50 you’ll spend at Office Depot).
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Kaeng Raeng Display in Whole Foods
I was recently approached by a Whole Foods Market store about promoting Kaeng Raeng as part of a focus on local companies. This would involve a pretty large display of my product and would require a substantial order size from the store. (see picture at right)
The store asked, in return, for a steep discount on the product. That’s perfectly fine for stores to want bulk discount, but here are some basic tips for negotiating these discounts to avoid making little to no money on the deal (and hurting your ability to negotiate in the future):
Stay Consistent: If this is your first time ever negotiating a bulk discount, sit down and brainstorm the potential future opportunities and how much margin you’d be willing to give up in those circumstances. Not all deals are created equal, but you certainly need a benchmark to avoid promising a steep discount to one retailer and trying to back away from that same size deal later. Stay consistent! The stores will have it in their own procurement system how much they paid – they’ll demand the discount again. So make sure that you create a benchmark that you’re willing to stick with. Consistency is huge in the natural foods world – changing your discounts radically from one store to the next or month to month will piss people off.
(Obviously) Don’t Offer Too Low a Price: Here’s a little secret about major retail chains (not necessarily true for small, independent stores): they’re willing to pay much more than you think. Often times stores or departments will have budgets they have to maintain and they try to negotiate under that budget. There’s typically a great deal of “wiggle room” for them to get creative with vendors. Also, the people making these decisions aren’t usually directly affected by the financial outcome. If they buy a lot of product that doesn’t sell, that particular purchase won’t affect their salary or job performance in the long run (there are exceptions, but you get the idea). Small, independent stores that are strapped for cash are a different story, but they don’t bargain as much as big chains.
Let the Retailer Do the Talking: It’s a common mistake (as in most negotiations) to provide numbers up front. You’re a small vendor, they’re the big retailer – let them do the talking. Here’s an example of how the negotiation might go:
Store: We’d like to purchase 5 cases of your product instead of 1. What kind of discount can you give us?
Brand: First of all, thanks for thinking of our product for this display. I think we can make this work. How much of a discount are you generally looking for?
At this point, the stores will usually throw out a range, and, depending on your past history, benchmarks, cost structure, etc. you can pick a number in that range (it’s usually 5-15%). If they don’t want to throw out numbers, they’ll usually say something like this:
Store: Well what kinds of discounts have you done in the past?
Here’s where you can give a number, but you obviously want it to be so low that they have to come back with another number. The key here is that you’re not playing “hardball” – you still want the store to do the promotion, so don’t scare them off. Stay friendly, especially if this is over email or phone where emotions are difficult to read. Try to sound upbeat, enthusiastic, or even naive that the number you just gave them is low.
Brand: We’d be happy to give you a 5% discount off of the wholesale price. Does that work?
If that doesn’t work, they’ll say so, and they’ll ask for a discount closer to 15%. At that point, you can either say “Well, I can offer you 10% but no more than that” or accept whatever they ask for. You can also ask them to purchase more product in order to get to the 15% discount, for example…
Store: 5% won’t work for us – we really were thinking more like 15%.
Brand: Based on what we’ve offered your chain in the past, we could do 10% for that volume, or we could do 15% but the order would have to be for 10 cases, not 5.
Be Willing to Have Graduated Discounts: Not all discounts should be the same – don’t use a flat rate. Filling large orders can be demanding for a small, growing business, but it can also mean great exposure for your brand (and of course the cash from the sale). Be willing to offer discounts based on the size of the order (as shown above). Again, keep benchmarks for these because you don’t want these numbers to change drastically from order to order. You might say, for instance, if the typical order is 1 case, you might give 5% off for 2 cases, 10% off for 5 cases, 15% off for 10 cases and so on. Part of your goal is getting the store to place a larger order, so push the up-sell.
Explain Your Interests: There’s about a hundred negotiation books written on this topic of the Pareto Efficiency Curve and all that but you don’t need an MBA to understand a really basic component of negotiation – explaining your interests (desires, wants, needs, etc). Cost is always on everyone’s minds, but perhaps you have other concerns with the deal that the store might not anticipate. Share them! Maybe you don’t have the resources to fill 40 cases for 100 stores so you’d prefer to start with something smaller. Or maybe the timing isn’t great for a big push and you’d like to wait until next month. Or you’re worried that if you’d denied the promotion, you’d make more margin selling them one case at a time. The stores will be more likely to find a solution that works for both of you if you can express your interests (note: for most retailers their only interest is profit).
Bargain with Things Other Than Your Product: Stores love demos – that’s where a representative comes to the store, has a little table display, and teaches customers about the product. It can be tastings, demonstration of how to use the product, or free samples (or all 3). Offering to do a demo as part of a larger order won’t cost you 15% of the sale and it’s actually preferred by stores. Another option are giveaways – we do reusable bottles. Those don’t cost us as much as free Kaeng Raeng pouches, but it has the same effect for the store.
Don’t Be Afraid to Say No!: If a deal sounds too good to be true, it probably is. Brands can get suckered into promotions that involve giving away margins (or losing money on the deal altogether) because an end-cap or coupon in the mailer sounded like such a great deal. Don’t be afraid to ask questions about the promotion – how has it worked for other brands? How often does the store do this? Why did they pick your brand over others? And most importantly, don’t be afraid to walk away from the deal if it doesn’t sound right.
Lindsay Reinsmith is the founder and CEO of Kaeng Raeng, an all natural detox cleanse program made in Palo Alto, CA.
Filed under: For the Female CEO
In a previous post, I mentioned how important it was to have your nails looking nice as a business woman. Whether it’s shaking someone’s hand, pointing to documents, or handling product, focus can drift towards your nails by both men and women. If you’ve got chipped, scratched, or just plain ugly nails, it can be a major turn off and it certainly doesn’t look professional!
I was (I say “was” very explicitly here) a do-it-yourself manicurist for years. You couldn’t drag me into a nail salon. The tools are often reused, the chatter always in Vietnamese, and the price ridiculous for what I could easily do for myself. Until now.
Shellac Day 1
Introducing Shellac (or OPI gel), a hybrid of nail color and gel that doesn’t chip, scratch, peel, or lose its brilliant shine. It lasts 2 weeks and goes on just like regular polish – however, it’s impervious to nail polish remover, so in order to get it off, you’ve gotta go back to the salon and soak your nails (like gel or acrylic) but it only takes 10 minutes! It costs $35 per session (in Palo Alto).
Shellac Day 8
I first heard about Shellac from my mom and sister who swear by it – no wonder! It’s amazing. As part of my job, I move boxes, tape things, move things around, and generally use my hands a lot. I’d do my nails and 24 hours later have to re-do them. What a nightmare! With Shellac, I get my nails done and don’t even have to worry for 2 weeks. Yup, 14 days.
Shellac Day 15
Shellac truly is a hybrid of traditional nail polish and UV gel polish. Unlike soak-off gels it comes in a polish bottle and unlike traditional polish it cures/dries under a UV lamp. Though what I really liked is there is NO BUFFING. There is absolutely no damage to the natural nail in the process. So how does it work?
Shellac Light Color Day 1
Shellac paints on like polish – base coat, color, top coat – and is cured in a UV light so there is zero dry time. The colors are hypo-allergenic, and “3-Free” – no formaldehyde, toluene or DBP. The formula is thin and flexible like polish, so it not only looks natural, it provides strong natural nail protection with a resilient mirror finish that resists dullness and chipping, even during the most rigorous activities. Shellac has a few colors, but many more of the nail polish brands are coming out with their own line. The salon I go to, Zen Nail Garden in Palo Alto, has over 40 shades! It takes about an hour (including having the original color removed).
Shellac Day 14
Of course as your nails grow, the cuticles begin to show, which isn’t great for dark colors but basically unnoticeable for light colors (see pictures). Amazing!
Shellac "Wildfire" Day 3
Filed under: Financial Responsibility
That’s why I was so thrilled to find Onlinelabels.com which has just about every size imaginable for a fraction of the cost! I use them to buy the Click N Ship mailing labels we use with USPS.com. From Avery, those are $.32 each – from OnlineLabels.com just 4 cents each!!
It’s a definite solution for any small, frugal business.
By Lindsay Reinsmith, CEO, Kaeng Raeng
I am by no means a marketing expert. I have marketed my product mostly by trial and error, luck, and common sense.
I don’t recall why or when, exactly, I decided to produce an infomercial. I guess it’s because my product, Kaeng Raeng detox, is fairly unique and requires a great deal of “information” before consumers make the final decision to try our 3 day or 6 day detox program. A commercial, I thought, would add legitimacy to the brand. And since I’m a young, personable entrepreneur who could come across well on camera, it was possible to star in the infomercial (which is actually pretty rare for other nutraceutical businesses that are usually run by old men trying to get rich).
The infomercial has been a long time coming. I started researching production in February of 2010. I probably spoke with a dozen “full service” direct marketing agencies. What a nightmare. These guys are pretty much all scam artists (see my blog post “Growing a Responsible Business: Don’t Fall for Marketing Scams”). Basically for a hefty sum, they promised to “do everything” for you. Write, direct, produce, edit, air, and manage your commercial. I was skeptical that any one agency not connected to my business could pull that off successfully.
I learned fairly quickly that going through an agency to create and air the commercial was going to be a huge waste of money and I would have little to no control of the final product. I was quoted anywhere from $50,000 to $500,000 to produce a 30 minute infomercial, filmed in the bay area. On top of that, some of them make you pay royalties or give you limited access to the reel. Forget that!
I found most of these agencies, film studios, and media companies through Google searches. Once I found a company that looked decent on the web, I called them. There’s really no way around it. If you want to get business done, you have to be willing to spend hours on the phone. If I found a company that sounded decent on the phone, I asked for references from their past clients. If they refused, I hung up. Never work with a company that won’t let you speak with their other clients.
I eventually figured out that the most effective way to get my infomercial online was to hire a film crew who would film and edit the commercial, allow me to have the rights to the commercial forever, and would be willing to do it for a reasonable fee, generally two lump sums: half before filming, half when the final product was delivered.
Any time you have a film crew or media company that has monthly retainers, walk away. There’s no incentive for them to get you your content in a timely fashion if they keep getting paid the longer the production goes on. Having a lump sum at delivery means they will work hard to get paid.
I decided to turn to my roots: I had a childhood friend who happens to have a film business based in Austin, TX. As part of a symbiotic deal (they enjoyed the work and experience, I needed affordable, honest work), we came to an agreement that was less expensive than the media agencies I had interviewed. They are able to use the footage as part of their portfolio to gain new clients, and I get to work with people I know and trust. It’s always a good idea to used qualified sources, whether it’s a business or personal recommendation. It’s important that others “vouch” for the crew you work with, since they are so critical for your business’ success.
Then it came time to create the content for the commercial. I wanted the commercial to be obvious, straight forward, and simple. I wanted the customer to know how to order, who to call, what web site to visit, without there being a big question about it. I created 3 different “call to action” segments that would air throughout the 14 minute commercial.
I began to “storyboard” the commercial. I wanted to have a host – someone who actually used the product, liked it, and would use it again. I focused on a female actress and model who might feel pressure in her job to look a certain way. Women relate to that – it’s why they love celebrities who gain and lose weight.
A friend of my boyfriend’s is married to a fabulous actress, model, and sports host named Ruby Lopez. We met for coffee to discuss the infomercial and what my general thoughts were. She was on board. She loved the product and happily recommended it to friends and family. She had a lot of experience hosting, so I knew she’d be a natural. She was also beautiful and talented – an amazing find!
Then it came time to write out the full script and arrange logistics for filming. I wanted to film in two separate locations on two separate days. There was also voiceover work, which required finding a quiet, echo-free room.
A close friend of mine who also participated in the commercial offered up her house (her kitchen and her back patio) for filming. Normally this is a huge hurdle for businesses. Finding a venue can be very expensive and logistically impossible. We had little to no issues with filming in her home. Again, using personal connections can save you a great deal of money and headache. I am forever grateful for her generosity and kindness.
The script changed slightly between drafts, but for the most part I had a clear vision of what I wanted: an introduction from the host, an interview with the CEO, a round table discussion with real users, and a kitchen demonstration of how to use the product. I watched dozens of other infomercials to get ideas, finding what I liked and what I didn’t like. Because Kaeng Raeng was so different from other products in the same industry, I struggled to find a way to convey all of the information without boring the customer.
Once I had finalized the script, I created a filming schedule. We had to film all of the scenes out of order, much like most films. To avoid multiple takes or re-filming the same scenes on separate days, we had a very clear plan for the filming order, as well as transitions, taping “white noise” (where you film just the sounds in the room or the filming location to have extra time to work with during editing), and scheduling all of the participants so we didn’t have a bunch of people standing around not doing anything.
All during this planning process, I had to find participants for the round table, a hair and makeup artist (who Ruby had recommended) and schedule the transportation, accommodations, and timing for all of those involved. I had a couple of pre-production phone calls with the film crew who indicated some things we needed to get beforehand, which included mics, a lighting kit, and a track. I had to find vendors in the SF bay area where we could rent these items at a reasonable cost. Another great task for Google search!
I also had to get my call center set up so we could direct viewers to a 1-800 number. I used a reference from a business colleague and found a 24-7 call center based out of Canada (I was very impressed with their client service and attentiveness!).
Additionally, I worked with a stylist briefly on wardrobe. However, if you know what you want people to wear in the commercial, you’re better off asking them to bring their own clothes, or going to the store yourself. If you’re totally clueless about what you want people to wear, hire a stylist. Otherwise, it’s a waste of money.
Throughout this entire planning process, I was struggling, personally, with getting ready for the commercial. As the owner of a weight loss product, I felt a lot of pressure to look thin on camera. There is a big difference between looking “thin” and looking “healthy.”
My product does work, but it won’t make you stick thin over night. It has helped me kickstart healthier living and lose weight several times. I knew I wouldn’t be a size 0 for filming, and why should I be? It’s not my full time job to be skinny, but I still felt a great deal of pressure to “practice what I preached” in the infomercial. I had never been healthier or in better shape the day of filming, but it was still a huge cause for anxiety. Not all businesses will face this, but if you’re the owner of your company and you’re going to star in your own promotional video, be aware that viewers judge, even personally.
The weekend of filming was a whirlwind. We started with a pre-production meeting to discuss the scheduling and last minute to-do’s. Then we did a second pre-production meeting at the two locations to mark where we would film, what we would need, and how lighting, sound, and background would affect production.
We started filming on the third day. We stopped after a few takes and watched the footage to see if I liked it. This turned out to be very important, because we ended up changing quite a few things after I saw how it looked.
We didn’t want to spend the money to rent a proper track, so when it came time to film the product “beauty shots” (where the camera pans over the product slowly), we ended up putting a towel on the hard wood floor, an ottoman on the towel, and the camera on top of the ottoman. To create the “panning” affect, we pulled the towel, which made the camera move smoothly across the floor. A track would have cost hundreds of dollars, but the towel was $2.99 at Walmart.
We filmed with two cameras – one that was a wide shot, the other a close up shot – and used wired mics. Filming indoors was a breeze, but the outdoor portions were more difficult. We chose to film on a day with a noise ordinance, so there wouldn’t be loud noises like construction. Unfortunately, most of the neighbors in the area had chosen this day to vacuum, sand their houses, play loud music, and generally disobey the ordinance. There also were a lot of airplanes that flew overhead which caused the most noise.
We often had to wait for 30 seconds of silence here and there to shoot, which made it stressful for me and the actors to have our lines ready to go to grab in one take.
Playing director was both fun and frustrating. I wanted to get specific reactions and intonations from the actors, and I struggled with correcting them and demanding more takes as a novice in the commercial making industry. If you’re more apathetic about how specific parts come out, I’d recommend appointing someone else director. But if you’re like me and you’re fairly controlling, you’ll want to play this part.
We also struggled with weather on the second day. Filming in the rain is not impossible. We held umbrellas over the cameras, and the lack of direct sunlight was actually a plus. The only problem was that our clothes got wet, which was visible to the camera. We managed to find a way to sit so that only our legs got wet, but not our torsos; a less than ideal situation, but completely doable. It was also very cold – in the 50’s – and I was in a blue tank top since we were trying to make it look like we filmed in the summer (we filmed in late October).
Rather than have the production catered, I purchased and made the food myself to save money. Little decisions like that can save you significantly.
Once the filming was over, I went through all of the raw footage to pick out the clips I wanted to use. I narrowed it down to about 16 minutes, and went through several rounds to get the footage to 14 minutes, 15 seconds.
I knew I wanted music, but I didn’t want to deal with royalties, licensing, and all of the other hassles that come with using someone else’s music. I wrote six basic melodies for the piano and sent them to the sound guy from the crew. He worked magic with the melodies, creating some beautifully harmonized pieces for the video. If you can write your own music, it’s much easier than licensed, even royalty free.
Finally, it’s a good idea to create a specific landing page for the commercial. We directed the consumers to a different URL that currently forwards to the home page. We have a one-page, easy to use landing page with everything they’ll want to know, including the full length video for them to watch again. This makes tracking easier, since only those who see the commercial will visit that URL (it’s not used in any of our other marketing materials).
Wish us luck! I am hopeful that all of my hard work and dedication to my brand will pay off in the end. I hope some of this advice can help other small businesses and entrepreneurs produce their commercials at a low cost.
I have a love-hate relationship with the US Postal Service. For one, they are the most affordable service for shipping out Kaeng Raeng. The average cost to send a 3-day program around the country is around $7 (I charge $5) and the average cost for the 6-day program is $12 (I charge $10). UPS and Fedex can’t even compare. Their rates are double that of USPS and their software isn’t well integrated with Stamps.com and other shopping cart softwares.
USPS has a fairly easy process with their Click N Ship program and integration with Stamps.com. They also pick up product from any location, including offices and residential, and their Palo Alto lobby is open 24 hours.
Overall I’m impressed with USPS. How they can get a letter from one side of the country to the other for less than 50 cents boggles my mind. They deliver millions of pieces of mail a day with an incredible track record. Kudos.
For some reason, however, they don’t do so hot delivering Kaeng Raeng packages. It’s an unusually high percentage of my packages that somehow get “lost.” I use delivery confirmation and at least once or twice a week a customer emails and says that although the delivery confirmation says “delivered” they didn’t receive their package.
I have two people on my shoulders. One is the skeptic who doesn’t trust people. “The customer is lying,” she says, “she just wants a second box of Kaeng Raeng shipped for free. Don’t believe her. USPS has tracking for a reason. She received it, she’s lying to you.”
The other one on my shoulder is just as doubtful, only against USPS. “Those big government agencies can’t do anything right,” she says. “Think about the DMV. What a nightmare. You’ve had packages get lost before. Believe the customer. Blame USPS.”
Either way, it is standard in the industry that the merchant, the one who chose USPS in the first place, has to suffer the consequences of lost packages. Often times USPS will mark a package as delivered and then 3 weeks later it gets sent back to me. I don’t know why, but this happens far more frequently than it should.
So what should I do? It’s too expensive to switch to UPS or Fedex, and there’s no way for a customer to PROVE that a package DIDN’T get delivered. In the past when a customer has claimed that the incorrect product was sent to them, I’ve asked them to take a picture with their cell phone or mail me back the wrong product. If they’re lying, they usually disappear, caught in their scheme to get free product.
But when the claim is “nothing arrived” how can I get any proof of that? Am I really stuck between believing strangers or the post office? Wow, what choices.
Overall I have to trust my customers. Even if I don’t, it’s my duty as an honest merchant to give them the benefit of the doubt and rule in their favor (even if I have my own personal suspicions).
Is there anyway to get a better track record from USPS? Or will I continue to suffer unusually high percentages of packages “lost” in transit?
Suggestions welcomed 
Brought to you by Kaeng Raeng. Be healthy. Be strong.
As a consumer, do I love sites like Gilt Groupe, Groupon, Living Social, BuyWithme.com etc? You betcha!
But as a merchant who sells primarily on the Internet, these sites can be harmful, if not deadly, for your brand. It’s not that these sites are intentionally mean to merchants – quite the opposite. They truly want to enable better exposure and marketing for brands, particularly local retailers like stores, salons, and restaurants. And for some of those local retailers, the business model of giving your service away for 50% off can mean hundreds of new customers coming in the door.
For branded consumer products, however, I would warn any merchant against considering one of these steep deal sites or members-only sites.
There are 3 basic reasons why sites like Groupon are BAD for your business.
1. Price point. We live in an era of “sophisticated” “savvy” consumers who are too cheap to pay full price. The milllennial generation (which includes myself) is plagued with young consumers who feel entitled to discounts. We refuse to pay for anything. We grew up in an era of Napster, bit torrents, ebay, craigslist, comparison shopping sites, Walmart, and IKEA. Not to mention discount airlines, cheap food, and a recession that brought merchants to their knees.
Now the emergence of these deal sites only solidifies our belief that coughing up any significant amount of money for a service or product is just unnecessary. As a consumer, I am, admittedly, guilty of this. I try my best to get things for free or at a steep discount. I routinely call Comcast every 6 months and threaten to go to AT&T if they don’t keep me at the introductory low rate for Internet. I haggle my way out of paying credit card annual fees. I always check retailmenot.com before clicking submit on any online purchase. Almost everything I own I purchased on ebay or 6pm.com. There are many ways to describe this behavior: frugal, sophisticated, even just plain smart. But it’s also obnoxious and harmful for small, growing businesses.
If you put your product or service on Groupon for 50% off, what makes you think anyone, at any time, will ever pay full price again? I learned this the hard way promoting my product for 50% off on a health blog. Yes it led to a huge increase in sales and created a brand new group of consumers who could order again. But do you think they’ll ever want to pay full price? Not when they know I’m willing to sell it for 50% off! I routinely get emails from these customers asking if they can have it for 50% off again, or they’re not going to buy it. Great. Now I’m being bullied into lowering my price points.
In the natural foods world, you have to be strong against big brands who insist you sell them your product below wholesale pricing. If you cave and offer them the product for cheaper, they will never allow you to sell the product to them at true wholesale pricing. Most of the time you end up barely breaking even or making pennies on each sale, often incurring enormous emotional and mental cost in the process. It is one of the first rules of selling through retailers: maintain your price points!
Online deal sites are even worse. Even if the deal comes and goes and you don’t intend to run another one again, remember that the internet is written in pen, not pencil. If someone googles your company’s name to try to get a coupon code, they’ll stumble across the old deal listing and realize they “missed out” on 50% off. They’re more likely to wait until you run a similar deal, or they write demanding the discount. In just one day, you’ve lost your price points and you’ll never be able to secure them again.
2. Margins. It’s no surprise that if you sell your product or service for half off what you normally do, your margins are also cut in half. Even if you have a high margin business, you’ve adjusted your costs based on gross margins. Cutting those margins will hurt the rest of your business. That’s not sustainable. Period.
3. Timing. Just like apparel retailers need Christmas to get them into the black, other brands have certain times of the year that are crucial for success. For weddings, it’s the summer. For weight loss, it’s January. For restaurants, it’s the weekend. These deal sites may try to be accommodating, but they can run a promotion or deal at the worst possible time for your business. When sales are normally at their highest, you don’t want a 50% off promotion to slash your revenues in half. Often, brands do not get first pick on timing, which can lead to some long-term negative implications.
In the end, you’re better off running internal discounts, like coupon codes, at no more than 25% off if you want to lock in customers during a low period for your business. Those coupons are in your control and you can align them with other promotions or conditions (like 25% off any order above a certain threshold).
Take advice from a merchant who learned the hard way: avoid deal sites and members-only sites.
Filed under: Customer Service
BY LINDSAY REINSMITH, CEO, Kaeng Raeng
Before owning a nutraceutical company, I, like so many, regularly practiced “anger behind the screen”: the practice of sending nasty emails to customer service. Often this involves making outrageous demands to merchants with the cowardice and fear that only comes with hiding behind your computer screen. You wouldn’t ever act like that in a retail store; but because of the anonymity of the internet, it’s free game to say whatever the hell you want.
It’s very easy to be nasty over email. The email’s not even going to a person, right? Just some automated system. And if it is a person, well then they’re probably in India and don’t care.
As the receiver of some of these angry emails, I can tell you that in many cases, they go to a person: a person who may or may not care or be offended by such unnecessary anger, but is certainly human.
I’m referring to the last 10 days of my product’s success after being featured for 50% off on VitalJuice.com. 50% off is a hefty cost for me to incur, but the upside is the sheer volume of orders that have immediately proceeded the promotion. And of course the potential for repeat customers and industry recognition, both necessary for success in this market.
Customers, especially on the internet, are demanding. Plain and simple. If you go into Nordstrom, you’d be embarrassed to say some of the things you might say over email: that you’re disappointed in the company, totally shocked by the shipping time, completely inconvenienced, or that clearly this is a scam. No, you wouldn’t do that, because you have a person with dignity looking you in the face, other customers around to hear you, and you’d be too embarrassed to open your fresh mouth.
But over the internet, customer service is an entirely different animal. There is a big part of me that wants to respond curtly to customer complaints, mostly about processing times, and remind them that I’m only making about $4 profit on their order. For goodness’ sake, I give all customers about a 50% discount on shipping costs, too! They should be so grateful for 50% off and with that comes a little bit of sacrifice. If they want their order to come at magic carpet speed, they should probably fork up the full retail cost.
However, that’s not an appropriate response to customers, especially not when it comes to consumer products. No matter what the customer paid, the product they receive is the same as someone who doesn’t get the discount. Often times, if a customer uses a coupon code, they don’t get a worse quality product. They just got a deal. You have to stand behind your product at all times, not waiver based on revenues.
The airlines, hotels, rental car companies have all based their customer service strategy on pleasing their best customers and ignoring the masses. If you please the repeaters, then the rest you can treat like shit and it doesn’t matter because they buy based on price anyway. Sometimes this backfires. The advent of Yelp, RipOffReport.org, and several other review sites have made it impossible to treat people like shit without it being splattered on the Internet. Airlines have also suffered from increases in competitive diversity in certain geographic areas, such as the introduction of JetBlue, Virgin America, and other niche airlines.
The largest contributor to customer satisfaction is one word: competition. Your customers can get a product like yours pretty much anywhere, or at least that’s what they think. They’ll return to the company that treated them properly. There are exceptions of course – if you really love a product, you might put up with quite a lot. Proactiv, for example, I believe, has horrible customer service and painfully long shipping times. But I would have acne without it, so I use it. I don’t care how rude they are.
Having a good product is the first step, but treating the people who buy it correctly is the second.
Particularly when it comes to natural foods, word of mouth, customer recommendations and mere human decency dictate that all men are created equal – that you have to treat everyone the same, no matter how much they ordered.
As a small business owner, I always cut corners with costs. I order the basic packages and beg for cheap upgrades. I do the bare minimum for software and try to get an open source version so I can add the cooler features entirely on my own. I don’t steal, but I certainly try to work the system. Trust me, I’m frugal.
So when I call one of these companies with questions or concerns, I’m always perturbed that they treat me like scum because I’m paying $100/month and not $1000. Well I’m still a customer and I can still take my business somewhere else. Companies learn this the hard way – they piss off too many $100/month customers and all of a sudden they’re out millions in revenues. With the tiniest bit of effort, they could preserve every customer. But ugh, effort, who wants to do that these days?
More specifically with my customers, the important thing is keeping my cool. When you’re as closely intertwined with every tiny detail of the company as I am, it’s easy to choose one of two ways to handle customer complaints: ignore them, or take them very personally. I try everyday to find middle ground, but usually I am offended and hurt by the things that people say, mostly because I think they are completely untrue or exaggerated. I’m a good person and I run an honest business – why can’t they see that? What’s with the hostility?!
For example, September 6 was Labor Day Weekend. While you might have been at a BBQ, the beach, or a family get-together, I was answering customer complaints about shipping times. I had to keep reminding people that the post office doesn’t work on that weekend, so no, they wouldn’t have their order by Monday. This was basic math, people.
Since when did we all get so damn impatient? People order the product at 8 p.m. on a Friday night before Labor Day. Technically, they ordered it on Tuesday morning given business day standards. And by 6 am on Wednesday morning, they’re emailing with complaints wondering what kind of a scam company wouldn’t have sent them their product by now. Um, the kind that uses humans for fulfillments, not magic droids. Sorry I can’t teleport your order to you.
This isn’t even to mention that my fulfillment center got completely slammed with orders. Shipping out a 6-day supply of Kaeng Raeng is no easy task. It involves finding the appropriate level of product, labeling it, packing it into a box, labeling the box, printing the shipping information, double checking everything for accuracy, shipping out the product, and updating the online system to reflect the new tracking number. And, for most orders, shipping costs me anywhere from $12-$15 and I charge $5.
That’s not the customers fault that the product is hard to fulfill, but they could certainly be more understanding as to the complexity of ordering and fulfillment. To bring some rationality back into the conversation, I finally added an official shipping policy to the site: please allow 3-5 business days for processing then 2-3 business days for shipping.
Most companies use first class mail or UPS ground which can take 1-2 weeks just to ship. One of the ways I try to make up for processing time is by shelling out the money for Priority Mail fast shipping. I know that if you order a product on a Wednesday night and it doesn’t get shipped out until the following Wednesday that that can seem like a lot of time, especially if you can’t wait to use the product. I can understand that, except that that is only 3 business days, which isn’t a lot of time, by industry standards. Well, no one thinks about that.
Look, I’m not a policy freak. In fact, I hate that about companies, especially if they have a policy that’s just dumb. Think about airport security and all of their policies and how you can never reason with them. Frustrating, isn’t it? Why I’m allowed to bring 3oz of hair gel but not 4oz and why I can’t bring my own bottled water or why I have to take off my jacket and shoes or why I have to turn my blackberry off while we’re taxiing out on the airplane – all of these things just make your brain hurt because all of them are reactionary and make no sense.
Similarly, I hate when you deal with a company who has a stupid policy, or one that doesn’t exactly apply to your situation, and the customer service rep acts like an automaton just repeating the policy back to you over and over again. Treat me like a fucking person already!
Recently I was with a girlfriend at a resort that her family had frequented for over 2 decades. The entire staff knew her family and often gave her perks and freebies due to their loyalty. When the hotel restaurant got a new manager, he started enforcing some of their new “policies” on everyone, even though it was knowledge at the hotel that regulars got certain discounts.
When we were confronted with one of these discrepancies, my girlfriend mentioned that the 5 days in a row prior we had received a discount on the same items. All he did was repeat the policy over and over again, not once saying he was sorry or bothering to ask the other staff members about the discount. We weren’t asking to get treated like royalty or receive some outrageous discount that had never been done before. We wanted consistency, and when that couldn’t be given to us, we wanted to know why not. Repeating the policy does not a valid answer make.
What was our final response? We stopped going to that particular restaurant and gave another one our business. In the end, the restaurant lost more money by pissing off the customer than they would have just continuing to give the freebies. Especially since this guy was the only one enforcing the policy, he was alienating himself and angering customers who were told one thing on one day and another thing on another day. Sometimes, common sense wins over policy.
Technically, Kaeng Raeng, for example, has a no return policy due to FDA regulations. Have I refunded money to unhappy customers before? Of course! I’m not a monster. If you drank it and hated it, I sure as hell feel sorry and want to make you feel better. I have a conscience, a heart, and a soul, but I also have a business to run and can only do so much.
If you want to run a successful customer service follow the three basic rules:
1. Treat everyone the same
2. Have a super obvious, clearly defined policy
3. Follow through on that policy but treat people properly if an unforeseen circumstance interferes with the policy
One of the most fascinating things I’ve learned in running a business as a woman entrepreneur is how differently I’m treated in my interactions simply because I am a woman. If I’m aggressive in a negotiation, I’m seen as a raging bitch. If I don’t make this big show about how guilty I feel about getting my way, I’m a selfish, heartless snow queen. But if I act any other way, well then I’m a woman.
It’s not shocking that women earn significantly less than men at the same jobs. That attitude starts long before the workforce, with our deep-seated notions that women are gentle, caring creatures that don’t have what it takes to be ruthless (and if they do have what it takes, then you don’t want to work with them). Mostly, it comes down to whether or not you have the guts to let people think you’re a bitch (even temporarily).
I’ll use a real-life example to frame my point: when my boyfriend and I signed a lease on a new house, the agreement said the house would be professionally cleaned before we moved in. A week before move-in day, I went by the house and noticed spiderwebs, a filthy floor, dirt in the window sills, and windows/mirrors that had not been windexed. My thought: this place hasn’t been cleaned. So I sent a very friendly email to the landlord asking nicely if it could be cleaned prior to us moving in. What I got back was a phone call full of attitude and spite – “it HAS been cleaned,” he said, “what is it that still needs to be done? if I don’t have a list, I can’t have my people do anything about it, I’ve done everything I can, you’re being difficult.”
What’s with the ‘tude? It was clear from the minute I stepped in the house that had it been cleaned, they had done a half ass job. How was this my fault?
Frustrated, I asked my boyfriend to send an email that basically said “it’s my understanding the house needs to be cleaned before move-in.” Hours later, the landlord responded “I’ll have it cleaned again.”
WTF? I get an irate phone call and basically undertones of “I think you’re a bitch” and he gets back “sure, no prob.” Sigh.
Personally, I’m not a snow queen by any sense. I’m actually a very nice person with a big heart and a huge conscience. I feel bad about hurting other people, emotionally or financially. It’s one of the things that’s kept me sane in running a business in nutraceuticals and during this recession. If you’re ruthless, you can rip people off and make a lot of money… but that’s not my style.
No no, instead I worry about other people, to a fault. I don’t like inconveniencing anyone and I’m largely non-confrontational. I try to separate business from personal as much as I can, but I’m only human, and the human element drives a large part of the small natural foods industry. If you piss everyone off, you won’t get anywhere. It pays to go the extra mile and be nice to people. It’s an industry of favors and helping each other out – why wouldn’t you be caring and friendly?
I’m a softy to the point where I won’t even tell cold-calling marketing/PE firms that I’m not interested. Instead, I always use the excuse that I’m in my car and can they call me back next week. Most of them forget – those who are using a CRM software call in the early morning when my phone is on silent and it goes straight to vmail. Win win, I suppose.
So when it comes to cutting corners in my business, it’s an emotional, difficult struggle for me. I run most of the operations myself, so finding ways to do this efficiently hasn’t been a problem. But when I had to re-negotiate a contract with a third party I was working with, I dreaded it. I stayed up late nights, stressed out, and spent hours on the phone with friends and family dissecting the situation. What was my problem? It was a BUSINESS decision for FINANCIAL reasons. If I were a man, I thought, and I made the decision that was best for the balance sheet, no one would have blinked an eye. But when a woman does it, she’s being inconsiderate.
It is amazing how much self-explaining and apologizing we do as women when we make a difficult decision. We start every difficult conversation with “this has been a tough decision” and “I’m really sorry to end this agreement.” Sorry? It’s just so natural, I guess.
I’d like to believe in the natural foods industry, a small and communal group of professionals, everyone feels this way, not just women. But what I do know is that at the end of the day, I had to suck it up and let go. I had to leave my emotional baggage at the door and bring only business facts to the negotiating table. I was going to get my way, and it didn’t matter how much I worried about the other person’s emotions.
I think, in the end, it was the right decision. It wasn’t easy, but I’ll be the first person to tell you that I’m not a stoic businesswoman who can just go through the motions without giving a damn. I doubt any person is, or at least that’s what I hope. I hope every man and woman in business cares, deep down, and is appearing perfectly composed and unscathed for show.
Here’s my advice to other young women entrepreneurs: everyone’s an actor and you’re part of the play, so play your part. It’s OK to leave your emotions at the door. Everyone’s probably got their own guilt they’re carrying around with them about each decision they make that affects other people. It’s up to you to appear as if you don’t. Because as soon as you come out of character, you’ll lose the respect of your colleagues.
Women should feel confident that making decisions on finances alone is perfectly acceptable and does not make you a bitch, no matter what people say or what you think. It’s also OK to have a conscience. But you have to do what will keep your business alive, and deep down, everyone in business understands that. Even the snow queens.
-Written by Lindsay Reinsmith, Founder & CEO of Kaeng Raeng
Filed under: Customer Service, Marketing | Tags: bay area optometrists, buying eyeglasses, Customer Service, cute eyeglasses, cute eyeglasses bay area, cute eyglasses palo alto, how to run a small business, how to run customer service, how to up-sell, outsourcing customer service, up sells, where to buy eyeglasses
When it comes to learning from mistakes, you might as well learn from someone else’s.
This week I had an interesting experience in customer service: the optometrist.
I need glasses, but have been putting off getting them because 1. that is admitting that I am getting old, and 2. glasses are expensive and only the ugly ones are cheap. When I started researching optometrists in the bay area, I learned from my insurance provider that in order to get the benefits applied to your frames, you had to buy them from the same place where you had an eye exam. Well, that was simple to me: find a place with cute glasses and then get an appointment there. All optometrists are basically the same, right?
While my doctor’s appointment was as pleasant as can be (very adorable young woman doctor with lots of energy), I hadn’t calculated in my strategy that a place with REALLY nice eyeglasses might also be a TOTAL RIPOFF. I started to try on Chanel, Fendi, and Dior (oh my!), giddy with joy about applying all the insurance credit to these expensive frames and come out having to only pay about $200.
However, one thing was odd: the optometrist recommended I get both distance glasses and reading glasses. Harmless enough, but when I asked the woman selling eyeglasses if reading glasses were just the same ones they sell at CVS and Walgreens with the basic mag prescription, she said no, I had to order glasses through them. Well that was fishy, given that my reading magnification only needed about +1.
Hmm.
So I decided in my head I was going to focus on the distance glasses and re-visit the reading ones later. But here’s where the up-sells started happening: the frames were already expensive, but of course the lenses were bad too: their basic price of lenses was $95, plus another $55 to get the polycarbonate, plus an additional $130 for the anti-reflective coating, plus an additional $200 for the high index (thin plastic). There was NO way I was talking my way out of those up-sells. I kept saying “I don’t think I need the extra $330 in cost for fancy lenses” but no no, she insisted. I started to get frustrated, and she kept laying on the pressure. I did what most consumers would do in that situation: I told her I would think about it, but really I rushed home to search online for a cheaper option.
There’s a sort of sad ending to this story. I am the typical generation Y consumer – the “find everything on the Internet for cheaper” kind of consumer. I do a lot of research, almost never pay for shipping, and can bargain shop my way into paying up to 50% less than in the stores. This is awful for brick and mortar businesses, and yes I do sometimes feel bad.
This time, in my head, I had promised myself I would give the business to a local eyeglass shop that certainly must be struggling to sell Chanel frames in a bad economy. It was win-win, after all. Now, however, I plan on buying my frames online from a direct-to-consumer site that offer $70 lenses with all the perks, no pressured up-sells, and no human interaction. Oh, and the frames are at wholesale pricing. Of course my insurance doesn’t cover this, but that’s the interesting part: even without the insurance involvement, I can still get a much better deal working with some offshore eyeglass dealer than my local optometrist’s office. One point Internet, zero optometrist.
That’s the problem with up-sells: they can completely backfire when applied too harshly on the wrong type of consumer. I was not about to get bullied into spending $400 when I could spend $200, and the saleswoman should have read that about me right away.
I learned a valuable lesson: over up-sells, high pressure situations, and inconveniencing the consumer are all BIG turn offs and will result in the consumer taking her time and money elsewhere. When it comes to selling to new consumers, follow the golden rule: treat them as you would like to be treated.
