Foodzie, the Artisan food company has a story. Actually, it has lots of stories. The food, the vendors, the founders, and the business model all have a story (or ten) to tell. There are so many stories to be told, the company launched a search for a head storyteller to share all of the tales with the world. Somehow, in the process of captivating “our customers with colorful insights and anecdotes about the producers and food,” a key component of engaging people was missed. Someone forgot to listen to customers and bring the service.

When service is missing, customers become storytellers. The Foodzie story is being told on Facebook by people less than enamored with their shopping experience and the changes made to the business model. Changing how you do business is hard. There will always be some who resist the process. But when customers who promote your company and the products question the value, there’s a problem.

If you are unfamiliar with Foodzie, it has been billed as the Etsy of food because it began as a marketplace for artisan food vendors to connect with foodies. The combination of tasting boxes and thousands of unique products was a winning model that appealed to foodies and media. The company was founded in 2008 by college friends, received venture funds, and grew quickly. Their success story has been told by traditional and digital journalists. After all, who can resist telling others about a growing business that was founded in a tough economy?

Foodies loved telling the story too. They wrote blog posts about the food that included pictures of the products and packaging. It was a marketing dream come true where customers used social media to introduce the company to new prospects. Until now.

It has been said that those who live by the sword die by the sword. The same channel that was filled with raves about Foodzie is now populated with questions about pricing, missing vendors, and delivery. Hopefully it won’t be the undoing of the startup, but the signs are troubling.

Just in time for the holidays, Foodzie unveiled a new shopping experience. According to Rob Lafave, Founder and CEO, they consider the website upgrade the “Foodzie 2 platform” where they have changed from a massive marketplace to a focus on curated featured products. In an interview with Josh Benson, Lafave said, “Our community members can come and find the best of our favorites and have a very focused experience.”

In addition to a significant decrease in the product offerings, there has been a 50% price increase in the tasting box. The explanation for the changes posted on the website reads:

“Based on customer feedback, we recently made a change to offer a more curated, ever-changing mix of products on the site, along with offering a selection of Foodzie Tasting Boxes to choose from each month. The new Foodzie Boxes deliver a greater experience to everyone, as we are able to offer full size items instead of samples, have the ability to include products like pickles and chocolates which we were never able to include before, and still keep the shipping free on everything purchased through our website.”

There may have been extensive internal customer feedback that warranted the changes in the business model and pricing structure, but the social channel is filling up with people who aren’t supportive of the new vision. Bloggers regularly promoting the brand have changed their message:

The company’s Facebook page is filling up with people wondering where the vendors have gone and commenting on the lack of value:

Foodzie began as a new marketplace for artisan food. Using the Internet to make it easy for foodies to connect with vendors is brilliant. But there as two critical points that were missed:

1. Social marketing works best when it begins with listening to the customer.

   Foodzie’s search for a Head Storyteller describes the position with this post on their blog:

   We have a story. Our producers have a story. The food has a story. Stories, stories, stories. Seems like a small thing, but it’s really kind of the whole thing. At Foodzie, we take our food seriously, but not ourselves too much. We’re obsessed with discovering the best products from independent foodcrafters and sharing who they are, how it’s made, and why we love it. As the Head Storyteller you’ll work closely with the founders (that means me!) and designers to weave these stories into every touch point with our customers.

   YOUR DREAM JOB AT A HIGH LEVEL

   Each day will be different (which makes it fun!) but at the core your work will tie back to these three:
   • Storytelling – Captivate our customers with colorful insights and anecdotes about the producers and food.
   • Brand Building – Craft content to communicate the brand.
   • Eating – Yep, it’s a very awesome part of the job. Gotta eat it to write about it!
   STUFF YOU’LL DO OTHER THAN EATING GOOD FOOD
   • All the time, you’ll create and be the strict enforcer of the Foodzie voice across multiple platforms including: blog, newsletter, site, Foodzie Tasting Box, and social media.
   • Daily, you’ll create conversation via social media, including Twitter, Tumblr and Facebook.
   • Daily, you’ll whip up how-tos, producer interviews and fun food stuff for the blog.
   • Weekly, you’ll deliver delicious discoveries via our email newsletter.
   • Monthly, you’ll dive deep, writing site and print copy for our top product selections that make it into our Tasting Box experiences.
   • As Needed, you’ll be crafting messaging on the site consistent with the brand.
   WE WON’T LET YOU IN THE DOOR IF YOU’RE NOT…
   • Obnoxiously obsessed with good food.
   • A pro food writer with stacks (digital stacks work too!) of articles/posts that make us hungry and make us smile. Years of work don’t matter as much as lots of examples of food writing we can’t put down.
   • A stickler for the small details.
   • Active on social media (the usual suspects).
   • Fast, flexible, and fast. We’re a startup!
   • A do-er, self-starter.
   • Fun.
   • A team player.
   • Hungry to be the best.
   • Living in the Bay Area.
   • Obnoxiously obsessed with good food.

   The need to listen and respond to customers is missing, but being a “strict enforcer of the Foodzie voice” is included. Perhaps things would be different today if the customer voice had been the focus.

2. Long term corporate success is dependent on the ability to deliver.

   Companies have to provide the value and service expected by customers. Foodzie is in the direct marketing business. The concept may be unique, but they have to deliver the selection, pricing, and timing expected by their customers. Consumers are well trained in the best practices of direct marketing companies.

   These practices include billing the credit card when the product ships, packaging that protects the products from damage, and responsiveness to customer feedback. Foodzie bills subscribers on the first of the month and waits to ship the products until the third week. Not only does this practice skate dangerously close to violating the FTC ruling, it escalates operational costs by increasing “where is my order” inquiries, and reduces customer satisfaction:

   

   

It’s always best to learn from the experience of others. If the Foodzie founders had spent a little time learning from the direct marketers who have fine-tuned managing customer expectations and the logistics requires to fulfill orders, they might have avoided the train-wreck happening on Facebook.

Or, they could have simply learned pricing and business model lessons from Netflix.

The pleasant voice coming from his GPS saying, “Turn right point five miles ahead” barely entered his consciousness. It was a beautiful summer day with little traffic. He was lost in thought, planning the meeting with his client. If it went well, things would change for him and his firm.

When the voice said, “Turn right point one mile ahead” he thought about how nice it was to have a GPS to handle the navigation so he could think about more important things. He glanced at the screen to see that he had approximately ten miles to go to get to his destination. He returned to his planning.

The road changed as he drove from paved to gravel to dirt. This was the first time he had visited this client. He knew that their office was located close to the national forest, but didn’t expect the rough terrain. He wondered why the people who had visited earlier hadn’t mentioned it. Surely it would improve around the curve ahead.

It didn’t. The road ended abruptly. When he tried to turn around, his wheel dropped into a hole and he was stuck. According to his GPS, he was still seven miles from his destination. After assessing the situation, he decided to call the highway patrol for assistance. The voice on the phone asked, “Where are you located?”

“I’m not sure. I was on Interstate Forty when I made a right turn.”

“Did you take an exit?”

“No, it was a right turn. The road was paved, then turned to gravel, and then dirt before it ended.”

“We’ll send someone to help. You are on a forestry service road. Do not leave your car. There are bears in the area. Do you happen to have a GPS?”

“Yes, why do you ask?”

“Please update it and use some common sense next time. Help is on the way.”

The story of someone blindly following an electronic device until he is lost in the woods is amusing. But, what if that story was about your business? And, instead of you getting lost, you were losing customers? It’s certainly not funny.

When was the last time you updated your business intelligence reporting system? If it wasn’t in the last year, you are making decisions that affect the life of your company with outdated information.

Your customers have more choices than ever before. Their activity and performance has changed more in the last five years than in the previous fifteen. If you are using the same data and tools to monitor and measure, you may be missing key components.

Things like your best customers are being replaced with hit-&-runners. Or, you’re wasting marketing dollars by targeting people who will never purchase your products or services. The data is available, but your legacy system will not retrieve it.

Business intelligence needs to be reviewed and updated on a regular basis. How you gather the information is as important as what you gather. There are four issues with the information management in every company:

1. Market dynamics ~ Things are changing at a rapid pace. Access to new information is increasing. We need to capture and use it to improve our marketing and customer relationships.
2. Customer awareness ~ Privacy is a major issue. We need to be aware of people’s concerns and zealously guard their personal data. As keepers of the trust, we lose every time there is a data breach.
3. System accuracy ~ Somewhere along the line, GIGO (garbage in, garbage out) has been forgotten and we assume that the information coming out of the system accurately portrays reality. When marketers let this happen, their company loses. While programmers may be great manipulators of bits and bytes, they are lousy business analysts.
4. Work-arounds ~ Every company uses work-arounds to make marketing and order management systems fit the needs of the organization. This tweaking alters the data landscape and can corrupt the reporting system.

If you haven’t reviewed and updated your business intelligence process in the last year, do it now. If you don’t, your decisions may be based on faulty data. Your business GPS will guide you down the wrong road, so update your executive information system before it is too late. Your customer retention and profitability is depending on it.

Recalculating…

It used to be that when your company received the first order from a new customer, it was a test. You were being tested on quality, responsiveness, and delivery. Every thing was new to the person making the purchase and the handling of the order determined whether or not there was a second order.

Things have changed. You are still being tested, but the first order doesn’t always mean the start of a new relationship. Sometimes you can do everything right and order number two will never come. Or, there will be a rapid series of orders from an individual before he or she disappears. The Internet has changed the way companies and customers connect. If marketing remains the same, profits will decline with the revenue per customer.

Before the World Wide Web, customers were pre-qualified because companies had to find them.

Direct mail campaigns, advertising, and public relations focused on getting sales information to the right people. They still do, but now people can search for specific products or services and find businesses all over the world.

Some people in this untargeted group are looking for a one time buy. The quality of your service has nothing to do with their failure to make a second purchase. It was a one shot deal. Your challenge is to identify these customers as quickly as possible so you don’t invest marketing dollars in a lost cause. To do this, you have to have an intimate knowledge of how buyers move through their life cycle so you recognize the differences between hit-&-run customers and those with sustainable activity.

When newbie customers make their first purchase, there are three paths they may take: Hit-&-run; Discount; and Active.

The hit-&-run customers are the hardest to identity. They place one to five orders imitating an active buyer before leaving. The discount customers only order when there is a sale. And, the active customers build lifetime value.

It is possible to convert hit-&-run and discount customers into active ones, but you have to catch them early in the process. To do this, you have to know how to identify them and what motivates the shift. You also have to minimize the marketing investment. This is where an integrated marketing strategy pays for itself. When you have a program that uses email, direct, mobile, and social together, you can selectively choose the best contact for each stage in a customer’s life cycle. It allows you to simultaneously improve relationships, increase revenue, and reduce costs.

The next post looks at the identifying characteristics of hit-&-runners.

Expectations are a funny thing. You often receive exactly what you expect. It doesn’t matter whether you expect the best or the worst. This is especially true when the expectations are applied to people’s behavior.

Several years ago, my family had a Halloween scheduling dilemma. We were invited to a party that conflicted with the time most children visited our home in Atlanta. After careful consideration, I came up with a solution – a self-serve treat station. I created a sign that read, “Happy Halloween! Thank you for stopping by. Please take one candy bar for each person.”

My plan was to place a chair on my porch with the sign on the back. A large bowl filled with one hundred candy bars would be on the seat. Since we normally had 80-90 tricksters, everyone should get one. When I started setting it up, my husband laughed at me. And, then he laughed some more. And, even more.

When he finally stopped laughing, he told me that for a smart person I could do some really foolish things. After all, didn’t I know that the first child would pick up the bowl and dump it in his or her bag?

No, I didn’t know that because I expect the best from people. I continued with my plan. We went to the party, had a great time with our children, spent some time listening to people laugh at my ignorance, and then returned to find about twenty candy bars in the bottom of the bowl. I tried to refrain from saying, “I told you so.” I failed.

Customers are your best friends and should be treated as such.

Your customers are the same as the children who visited our home that night. If you expect the best from them, most likely they’ll deliver. Of course, there will be the few that disappoint you, but the majority won’t.

So, instead of having an “I can’t take another complaint from a customer” attitude, try, “I can’t wait the help the next person.” Trade “you can’t please anyone these days” for “we have the best customers.” And, don’t stop there. Spread a few or your great expectations around the office, too. You know that grumpy person, three cubes down? Share a smile, a candy bar, or a compliment.

It’ll make your day easier AND your customers and office mates will love it.

Have a Happy Halloween!

A post on Hubspot Blog explained “Why Direct Mail Can’t Help Your Business Grow” and recommends that you stop mailing your promotional pieces. When I first read it, I thought about commenting. There were so many points that needed correcting.

I thought about explaining how good direct marketers can predict response rates within fifteen percent of the results to dispute the claim that direct marketing can’t be measured. Great direct marketers can get within five percent on a regular basis, but we’ll just stay with the good because there is no need to show off. The kumbaya folks wouldn’t get it anyway.

Quantitative analysis of response rates, sales, average order, inquiries, conversion rates, acquisition, retention, lifetime value, lifespan, and attrition requires more than an opinionated blog post or 140 characters. It requires analytical skills that that takes intensive study and due diligence to acquire. You can’t spend a few hours learning how to use a free tool to become an expert.

Because, you see, direct marketing uses those skills to plan, test, analyze, and improve. And when you are done with one campaign, you review it, analyze the results, and do it again better than before. Good direct marketers will tell you that they are always working to improve their ability to connect with their customers.

The primary reason that I decided to not comment on the post is that fighting the “Direct Marketing and Email Marketing is Dead” crowd is like trying to empty the ocean with a bucket. You could do it, but what would it gain?

So, I’m taking a different approach. If you are naïve enough to believe them, follow their lead. It’ll reduce the mail and email that my clients’ customers receive. Less competition means more sales. Thank you.