By request, I logged in for the last eBay Town Hall meeting to see if I could glean some pearls from the very popular and successful Internet giant. After all, why reinvent the wheel when we may be able to find pieces to apply to business in general?
Summary:
eBay held an open Town Hall Meeting on its website, accessible to all eBay members and staff. Members logged in using their member ID and password and were invited to submit questions of any general nature online, either in advance or live during the meeting. The meeting was hosted by Bill Cobb, President of eBay North America, who was joined by various executives and staff members. A panel of 10 members was invited to corporate headquarters to provide feedback, but also asked questions live during the meeting. Mr. Cobb provided a brief summary of "What's New" at eBay, which included mention of the new format eBay Express, to be launched in spring of 2006.
Issues raised by eBay members:
Regarding limits placed on the number of times members can contact other members via email: eBay is not limiting the number of times contact can be made regarding specific transactions, just general contact.
This is an issue for many companies with large member bases that must interact, especially in business to business transactions. One way to minimize problems in this area is to assign a representative, broker, or trade director to each member. This makes that corporate representative or franchisee the single point of contact for a group of members. In a large member base, those who act as brokers can control the flow of information and direct traffic to where it will be most usable. More of the communication can be between brokers, or between brokers and members, which also controls the quality of the communications. Corporate can maintain a consistent message, thus improving branding and goodwill. It also becomes much more difficult for "phishers" or other scam artists to do their evils when company representatives act as gatekeepers.
Regarding how to eliminate excessive fees members charge each other, especially shipping & handling: eBay tries to set policies, procedures, and "rules for the marketplace" that discourages any undesirable behaviors such as this. They will continue to look at this issue, as well as changes/additions to policies and procedures that will encourage desirable behaviors/habits.
In situations where salespeople, brokers, independent licensees, or franchise owners are the direct contact with members, it becomes critical for corporate entities or franchisors to police what clients are being charged. The methods of "skimming" usually do include overcharging clients, not to mention failure to record some transactions all together and pocketing the cash. In a franchise situation, this can also mean under-reporting revenue in order to avoid or reduce royalties. Each company needs to have the proper internal controls to prevent and detect such activity. Some solutions can include software that makes misreporting difficult, especially if they are linked to inventory levels, if appropriate. If transactions between customers are part of the business, setting "rules for the marketplace" can keep price gouging or inflation in check. Whatever the business model or industry, be sure that the rules, policies, and procedures that are put into place encourage the behaviors desired in both employees and client, and discourage the behaviors that are undesirable.
Regarding fee increases, which always cause a rash of complaints by members: eBay sets their fees and updates them to discourage the "bad guys" from joining. They want only serious buyers and sellers as part of the marketplace, so they set fee levels that they feel are "Best for the Marketplace." They also try to show how they are always "Investing in the Marketplace" and not just lining corporate pockets, which is a common perception among members. They will also try to keep their fees competitive at the same time.
Fee increases are a part of doing business, and complaining about fees seems to be a part of being a consumer. It is human nature to not want to pay more for something you pay on a regular basis. However, companies need to base their fee structures not just on customer wants, but on the value of the product or service to the customer. Some consideration of cost of goods and fixed costs needs to me made, but fair market value is based on the perceived value placed on the product in the current marketplace conditions. Businesses can inject some influence over the perceived value by educating customer on the benefits of using their product or service over the competition. This is a primary role of marketing, and should also be a part of every opportunity to communicate with each customer. Charging too little leaves money on the table, which is a common cause for business failure. It also can encourage an increase in customers who do not fit your target demographic. After all, if a client cannot afford you, do you really want them as a client? Constantly evaluating and updating prices can be nerve-wracking for the business owner or manager, but is an important part of doing business.
Regarding their feedback rating system: should eBay allow members to view at a glance all of the negative feedback of other members? Although eBay always suggests looking at a member's feedback, good and bad, if you are considering transacting with someone, it is a "Buyer Beware" world out there. They are also reluctant to make negative feedback so visible because sometimes one silly mistake in the past can look very bad and discourage others from transacting with someone with an otherwise good record.
Although this is a very valid reason for keeping complaints less visible, there are ways to make such information available without making it the center or attention. In the case of eBay, all feedback, good and bad, about a member are just a few mouse clicks away. Other companies have instituted variations of a "black list" to keep undesirables out of the marketplace. This should be used with caution, as the information needs to be highly accurate, and available only on a need-to-know basis. Law suits can arise if incorrect and defamatory information is made public. A similar situation exists any time someone is completely banned from transacting with a company or its client base. Care should be taken to avoid creating situations where someone has his/her livelihood taken away.
Regarding Live Channels of Support vs. Email Only Support: eBay is preparing to include some of their most active members on their customer support team. Although the primary demographic for eBay is very comfortable performing all buying and selling functions via email and website interface, there will always remain a demand for live customer service via telephone or in person. Doing business in this day and age should always include some basic customer service options:
1. A website that offers general information about the product or service. The more detailed the information, including pricing, the more customers will feel comfortable spending money with you. A comprehensive FAQ section should always be kept up to date with the answers to questions most commonly asked by customers. Be sure to include all of the avenues available to clients to contact the business, the hours of operation, and if appropriate, a map and directions to the location.
2. An email address where non-urgent inquiries can be sent, day or night. Be sure that someone is dedicated to responding to such inquiries within 24 hours.
3. Have established hours when a live person will answer the telephone. Voice mail and other automated systems work well for the hours when the business is closed, but caution is urged before deciding not to staff the telephone with a live human during normal hours of operation. Many a potential client has been lost when they call during the business day and a machine answers. Many of these customers will hang up and continue calling other companies until a live person answers, and most of the time, that company who answers the telephone will win the client. If a potential client does leave a message, be sure that the client receives a response within 24 hours, though the sooner, the better. Businesses will have to gauge their customers' needs to determine their own mix of customer support options. What may be surprising to some is that I am not including a recommendation for having a storefront, office, or other means for customers to see you in person. Although the "brick and mortar" operations is the traditional necessity for a business, the Internet and our reliance on it has freed many business models from this one huge overhead cost. Of course, many businesses will absolutely need to offer a way for clients to come to you, especially in a retail operation, there are also many ways to run a business that does not require ever seeing the client. Also growing in popularity is the option for the business, or at least a representative, to go to the customer. This has been in part because of the growing home-based offices and operations, and in part to the number of business owners who are way too busy to leave their own business.
Regarding a request to avoid making any changes to the website during the very busy 4th Quarter: eBay is now taking seriously feedback they have received that such changes are especially problematic when transaction levels are at their highest, and will take this into consideration when scheduling maintenance and upgrades on the system.
In any business model where telephone or Internet transactions play an important role, it seems obvious that maintenance on such systems should only take place during off-peak times. However, it is just as important to consider that peak and off-peak times can include certain days of the week, or times of the year. As eBay is hearing from members, the busy Christmas season is the worst time for most businesses to lose access to their technology. Also consider posting scheduled maintenance on your website, and if any changes or upgrades will be made, be sure to specify what will change. As is often the case when dealing with money: Nobody likes surprises!
Regarding what safeguards are in place to protect members from "phishing" emails: eBay wants to make it clear that any email that asks for personal or credit card information is NOT from them! Bill Cobb mentioned that there is a little known "phisher" list of companies that run these scams, which is shared among the legitimate businesses in the industry.
If it is so obvious that you should never provide your personal information or passwords to someone who asks via email, why are there so many scam artists out there? Because it is worth their time and effort to keep trying! Don't fall victim or allow your clients to. Make sure your business has policies in place to never request client information via email, and educate your clients to know this. Also have other safeguards in place to protect your customer information, including encryption and firewalls. Consider sharing information on known scammers with others in your industry knowledge is power and customers who have an extremely bad experience with your competitors in an area that you have in common may decide to steer clear of your industry all together! Think of the barter and trade exchange industry. You either know about it and love it, or know little to nothing and fear it. This is one industry with limitless potential to offer members and businesses options for buying and selling without using cash, and yet past problems with scams and some bad apples in the industry have hampered growth over the years. Reputable companies are now emerging from the field and have been winning back both respect and clients.
Regarding the probability of more "Discount Days" in the future: eBay does like to offer discounts on their transaction fees during times when the market is traditionally slow, and will continue to offer these on an occasional basis.
For some business models, offering coupons and discounts seems an obvious way to fill in slow sales periods. I urge great caution, however, in using discounts as a part of daily business year round. Too much money is left on the table every day by companies that don't charge what their product or service is worth, as mentioned above. An important consideration should be made for what kind of client base is wanted and needed. Do you really want to base your business on a client base that is always looking for the lowest bidder? If so, you will find a high customer turnover rate plagues you, as this base is not know for its loyalty. Or would you rather educate the buying public to know that your product is the premium in quality, and therefore price? Perhaps fewer clients who are much more loyal and spend much more per transaction is the more stable way to grow your business. Some clients are turned off all together at offers of discounts or coupons.
-Jennifer Blaney has spent the past decade managing small businesses, from privately owned, to franchised, to corporate owned operations. She has held every role from housecleaner to telemarketer to Vice President of Operations. She holds a BS degree in Business Administration. Jennifer has a passion for small businesses, and a special place in her heart for business owners and entrepreneurs. She is currently the GM of a publicly traded franchise that serves over 22,000 member businesses.
(This is a re-post of my article on Gather.com. For the original article and its associated comments, plus the rest of my collection, please find me at: www.jsblaney.gather.com)
