Quick: what’s the biggest deal in this quarter’s sales pipeline? Was that the biggest deal in last quarter’s pipeline? How about the quarter before? Do you have deals in your pipeline older than your children?
If you’re answering yes to these questions, then you’re probably dealing with “rolling hairballs” in your pipeline. Rolling hairballs are bad:
They exaggerate the size of the pipeline.
They distort coverage and conversion ratios.
They mess up expected-value forecasts, like a forecast-category or stage-weighted sales forecast.
Maybe they’re real deals; maybe they’re figments of a rep’s imagination. But, if you’re not careful, they pollute your pipeline and your metrics.
Let’s define a rolling hairball
A rolling hairball is a typically large opportunity that sits in your current-quarter pipeline every quarter, with a close date that slips every quarter. At 2 quarters it’s a suspected rolling hairball; at 3 or more quarters it’s a confirmed one.
Rolling Hairball Detection
The first thing you need to do is find rolling hairballs. They’re tricky because salesreps always swear they’re real deals that are supposed to finally close this quarter. What makes rolling hairballs obvious is their ever-sliding close dates. What makes them dangerous is their size (including an accumulation of them that aggregate to a material fraction of the pipeline).
If you want to find rolling hairballs, look for opportunities in the current-quarter pipeline that were also in last-quarter’s pipeline. That will find numerous bona fide slipped deals, but it will also light-up potential rolling hairballs. To determine if an opportunity is a rolling hairball, for sure, you can do one of two things:
See if it also appeared in the current-quarter pipeline in any quarters prior to the previous one.
Look at its stage or forecast category. If either of those suggest it won’t be closing this quarter, it’s another big hairball indicator.
The more sophisticated way to find them is to examine “stuck opportunity” reports that light-up deals that are moving through pipeline stages too slowly compared to your norms.
But typically, the hairball is a big opportunity hiding in plain sight. You know it was in last quarter’s pipeline and the quarter before that. You’ve just been deluded into believing it’s not a hairball.
Fixing Rolling Hairballs
There are two ways to fix rolling hairballs:
Fix the close date. Reps are subtly incented to put deals in the current quarter (e.g., to show they’re working on something, to show they might bring in some big sales this quarter). The manager needs to get on the phone with the customer and, after having verified it’s a real opportunity, get the real timeframe in which it might close. Assigning a realistic close date to the opportunity makes your pipeline more real and reminds the rep that they need to be working on other shorter-term opportunities as well. (There is no mid-term if you fail enough in the short term.) The deal will still remain in the all-quarters pipeline, but it won’t always be in the current-quarter pipeline, ever-sliding, and distorting metrics and ratios.
Fix the size. While a realistic close date is the best solution, what makes rolling hairballs dangerous is their size. So, if the salesrep really believes it’s a current-quarter opportunity, you can either reduce its size or split it into two opportunities (particularly if that’s a possible outcome), a small one in the current quarter along with an upsell in the future. Note that this approach can be dangerous, with lots of little hairball-lets flying below radar, so you should only try if it you’re sure your salesops team can produce the reports to find them and if you believe it reflects real customer buying patterns.
Don’t let rolling hairballs pollute your pipeline metrics and ratios. Admit they exist, find them, and fix them. Your sales and sales forecasting will be more consistent as a result.
As a manager, I like to make sure that every quarter that each of my direct reports has written, agreed-to goals. I collect these goals in a Word document, but since that neither scales nor cascades well, I’ve recently been looking for a simple SaaS application to manage our quarterly Objectves and Key Results (OKRs).
What I’ve found, frankly, is a bit shocking.
Look, this is not the world’s most advanced technical problem. I want to enter a goal (e.g., improve sales productivity) and associate 1-3 key results with that goal (e.g., improve ARR per salesrep from $X to $Y). I have about 10 direct reports and want to assign 3-5 OKRs per quarter. So we’re talking 30-50 objectives with maybe 60-100 associated key results for my little test.
I’d like some progress tracking, scoring at the end of the quarter, and some basic reporting. (I don’t need thumbs-ups, comments, and social features.) If the app works for the executive team, then I’ll probably scale it across the company, cascading the OKRs throughout the organization, tracking maybe 1,200 to 1,500 objectives per quarter in total.
This is not rocket science.
Importantly, I figure that if I want to roll this out across the entire team, the app better be simple enough for me to just try it without any training, presentations, demos, or salescalls. So I decide to go online and start a trial going with some SaaS OKR management providers.
Based on some web searches, PPC ads, and website visits, I decide to try with three vendors (BetterWorks, 15Five, and 7Geese). While I’m not aiming to do a product or company comparison here, I had roughly the same experience across all three:
I could not start a free trial online
I was directed to an sales development rep (SDR) or account exec (AE) before getting a trial
That SDR or AE tried to insist on a phone call with me before giving me the trial
The trial itself was quite limited — e.g., 15 or 30 days.
At BetterWorks, after getting stuck with the SDR, I InMailed the CEO asking for an SDR-bypass and got one (thanks!) — but I found the application not intuitive and too hard to use. At 7Geese, I got directed to an AE who mailed me a link to his calendar and wanted to me to setup a meeting. After grumbling about expectations set by the website, he agreed to give me a trial. At 15Five, I got an SDR who eventually yielded after I yelled at him to let me “follow my own buyer journey.”
But the other thing I noticed is that all three companies started our relationship with a lie of sorts. What lie? In all three cases they implied that I’d have easy access to a free trial. Let’s see.
If you put a Free Trial button on your website, when I press it I expect to start an online process to get a free trial — not get a form that, once filled, replies that someone will be in touch. That button should be called Contact Us, not Free Trial.
7Geese was arguably more misleading. While the Get Started button down below might imply that you’re starting the process of getting access to a trial, the Get Started Now button on the top right says, well, NOW.
Worse yet, if you press the Get Started Now button on 7Geese, you get this screen next.
Tailored tour? I pressed a button called Get Started Now. I don’t want to setup a demo. I want to get started using their supposedly “simple” OKR tracking app.
15Five was arguably the most misleading.
When you write “14 days free. No credit card needed.” I am definintely thinking that when I press Get Started that I’ll be signing up for a free 14-day trial on the next screen. Instead I get this.
I didn’t ask to see if 15Five was right for my company. I pressed a button that advertised a 14-day free trial with no credit card required.
Why, in all three cases, did these companies start our relationship by lying to me? Probably, because in all three cases their testing determined that the button would be clicked more if it said Get Started or Frial Trial than if it said something more honest like Contact Us or Request Free Trial.
They do get more clicks, I’m sure. But those clicks start the relationship on a negative note by setting an expectation and immediately failing to meet it.
I get that Free Trials aren’t always the best way to market enterprise software. I understand that the more complicated the application problem, the less a Free Trial is effective or even relevant. That’s all fine. If you haven’t built a viral product or work in a consumer-esque cateogry, that’s fine. Just don’t promise a Free Trial on your website.
But when you’re in a category where the problem is pretty simple and you promise a Free Trial on your website, then I expect to get one. Don’t start our relationship with a lie. Even if your testing says you’ll get more clicks — because all you’ll be doing is telling more lies and starting more customer relationships on the wrong foot.
Just when I thought you couldn’t get worse, you have managed to again perform well below expectations. How?
I now believe that you have a deliberate policy to bounce low-tier flyers from reserved Economy Plus seats. How do I know this?
I am a relatively high-tier United flyer, happily achieved not through flying you much anymore, but through legacy status as multi-million mile flyer. With that status, you treat me just barely well enough for me to think about flying on your airline on competitive domestic routes. (Though I avoid your international business like the plague.) You may have noticed I dropped from flying about 100-150K miles/year to maybe 30K/year as a result of changing to alternatives like Virgin America.
My wife, however, is a low-tier United flyer. The way you treat her is simply appalling and quite possibly illegal. One purpose of this blog is to highlight the myopia of your CRM program where, among other weaknesses, you have literally for decades missed the basic possibility that high-tier flyers are married-to and/or parents-of low-tier flyers. When you hose the low-tier flyer, you hose the high-tier flyer partnered with them. But the real point is you shouldn’t treat anyone the way you routinely treat my wife.
For about the fourth time you have bounced her out of a pre-reserved Economy Plus seat — thus it is clear to me that this cannot be a series of accidents but a deliberate policy.
Today you bounced her (and my son) from 11EF to 32AB on a 737-900 (literally the worst seats on the plane) even when we were traveling together. I was never notified. No email was sent. I learned this at check-in time. #nice
However, this is topped by my “favorite” story where my wife had paid $90 extra for Economy Plus. Minutes before departure, she was called up at the gate and handed a new boarding pass for a non-economy plus middle seat. No explanation was offered. No refund was given. Yes, you paid $90 extra for Economy Plus but someone more important came along, so we’re moving you back to 37E because we can. She was so stunned she said nothing at the time. If you this transactionally, you got away with it. #congrats. If you view this from a relationship perspective, you burned her forever. Any time I want to fly United (and that’s less and less) she reminds me of the story and says we can’t be certain we’ll get our assigned seats. Today again you proved her right.
So it’s clear what you’re doing. You’re making two promises that you seem to have no intent on delivering upon:
A low-status flyer can buy-up to Economy Plus and have a guaranteed seat. This promise is clearly now false. They can have the seat only if it is convenient for you at departure time.
A high-status flyer can bring 1-2 low-status flyers with whom they’re traveling up to Economy Plus. Today you proved this promise false as well.
Given the frequency with which this occurs it is clear that this is not bad luck or coincidence. This seems to be policy. And I think it’s probably illegal. You’re probably CYAed by some regulation never intended for this purpose. But what you’re doing is nevertheless wrong.
From a customer experience (CX) perspective, let me make clear what you’re doing.
With your normal, crappy, bad flight attendants, no video screens, worst-boarding-process-of-any-airline, service I’d guess you are driving survey responses on a net promoter score (NPS) survey from maybe passives of 7-8 down to detractors of 4-5. Lucky for you, people don’t expect much from airlines so you can get away with this.
However, with the failure to honor pre-reserved seats you are actively creating detractors — and not just 2-3 out of 10 detractors, but 0 out of 10 detractors. Like “I never want to fly United again” detractors. Like “I’ll fly one-stop to Denver because I can’t stand United” detractors. Like “even if it’s business/first, I don’t want to fly United” detractors. In fact, I have trouble of thinking of a better way to make people hate you more than repeatedly making the promise of reserved seat — and in cases collecting a supplement for it — only to fail to honor that promise.
It’s not an accident. It must be policy.
This year I’ll probably fly 30K miles on United out of a total of 200K. Next year my goal is zero.
I thought I’d take a quick read of the Zendesk S-1 today, so here are my real-time notes on so doing. Before diving in, let me provide a quick pointer to David Cummings’ summary of the same.
40,000 customers in 140 countries
2012 revenues of $38.2M
2013 revenues of $72.0M, 88% growth
41% of revenues from international. (High for a SaaS company at this size, but makes sense given their roots.)
Net loss of $24.4M and $22.6M in 2012 and 2013, -30% net loss in 2013
Zendesk approach: beautifully simple, omni-channel, affordable, natively mobile, cloud-based, open, proactive, strategic. They do this well. (I’ve always viewed them as a very well run, low-end-up market entrant.)
Founded in Denmark in 2007.
115M shares outstanding anticipated after the offering with seemingly another 40M in options under various options and ESOP plans. (Seems like a lot of dilution looming.)
65% gross margins. (Though they don’t break out subscription vs. service which probably depresses things a tad.)
20% of revenue spent on R&D. (Normal.)
52% of revenue on S&M. (High, particularly for freemium which is notionally low-cost!)
22% of revenue on G&A (Normal to high, probably due to IPO itself.)
$53M in cash at 12/31/13
Headcount growth from 287 to 473 employees in year ended 12/31/13, up 68%
They have experienced security breaches:
“We have experienced significant breaches of our security measures and our customer service platform and live chat software are at risk for future breaches as a result of third-party action, employee, vendor, or contractor error, malfeasance, or other factors. For example, in February 2013, we experienced a security breach involving unauthorized access to three of our customers’ accounts and personal information of consumers maintained in those customer accounts.”
“[We are] highly dependent on free trials.” (These guys define freemium model for enterprise software in my opinion.)
S&M org grew from 85 to 165 employees in period ending 12/31/13.
Owe $23.8M on a credit facility. (Rare to see this much debt, but probably a smart way to reduce equity dilution.)
The three principles that drive the founders: Have great products. Care for your customers. Attract a great team. (Beats “Don’t Be Evil” any day in my book.)
Dollar-based “net expansion rate” (closest thing they discuss relative to renewals or churn):
“We calculate our dollar-based net expansion rate by dividing our retained revenue net of contraction and churn by our base revenue. We define our base revenue as the aggregate monthly recurring revenue of our customer base as of the date one year prior to the date of calculation. We define our retained revenue net of contraction and churn as the aggregate monthly recurring revenue of the same customer base included in our measure of base revenue at the end of the annual period being measured. Our dollar-based net expansion rate is also adjusted to eliminate the effect of certain activities that we identify involving the transfer of agents between customer accounts, consolidation of customer accounts, or the split of a single customer account into multiple customer accounts. […] Our dollar-based net expansion rate was 126% and 123% as of December 31, 2012 and 2013, respectively. We expect our dollar-based net expansion rate to decline over time as our aggregate monthly recurring revenue grows.”
$66M accumulated deficit
Have data centers in North America, Europe, and Asia
4Q13/4Q12 growth rate = 83% compared to 2013/2012 growth rate = 88%. (Suggests growth is gently decelerating.)
Cashflow from operations in 2013 = $4.0M.
But they had -$24.1M in cashflow from investing activities. (This is confusing because it’s a mix of items but broken into $12.4M in “marketable securities, property and equipment,” $7.1M to build data centers, and $4.7M in capitalized software development. I’m not an accountant but if you ask me if “the business” is cashflow positive, the answer is no despite the $4.0M positive cashflow from operations. Building data centers and developing software, regardless of accounting classification, are all part of running the business to me.)
I am surprised they capitalize R&D. Most software companies, far as I know, don’t.
The FMV of the common stock is depicted above, by my math an annual 68% appreciation rate.
Huge number of leads are organic: “the quarter ended December 31, 2013, 70% of our qualified sales leads, which are largely comprised of prospects that commence a free trial of our customer service platform, came from organic search, customer referrals, and other unpaid sources.”
SVPs listed (CFO, R&D) earn $240K base + $40K bonus
Automatic 5% share expansion / “overhang” built into the stock option and incentive plan. Pretty rich in my experience and haven’t noticed anyone else doing it automatically before.
Letting execs buy stock with promissory notes … hum, I thought that went out with leg warmers. Both loans were paid off by 12/31/31 and maybe that’s why.
CEO will own 7.1% of shares after the offering, including 4.3M (of the 8.1M beneficially owned) granted as options at the 2/14 board meeting. (Seems odd to me; a huge option grant right before the IPO. Hum.)
“This is how the customer relationship will end. Not with a whimper, but a bang.”– adapted from TS Eliot
I’m not new to customer relationship management (CRM), customer loyalty à laFred Reichheld, or customer experience management (CXM) as it is now more recently and holistically labeled. I spent a lot of time working on CRM from the business intelligence (BI) angle during my near-decade running marketing at Business Objects. Recently, I was general manager of customer service applications at Salesforce.com.
I’m also not new to France. I’m an admitted Francophile, have lived in France for five years, and helped build one of — if not the — most successful enterprise software company in France. I am thus quite familiar with French customer service where the problem is not that the experience is never good – some of the best customer experiences of my life have been in France — but rather that it’s highly bi-modal  and resists industrialization.
This post began life entitled “The Ten Reasons I Will Never Fly Air France Again.” But the passage of time, the realization of a lack of alternatives on the SFO/CDG route, and a diving catch by the Air France Twitter Support Team, caused me to change it. Nevertheless, it stems from a horrific experience I had this summer with our return flights from Corsica . Instead of dwelling on the idiocy of the entire experience or its parts, I will attempt instead to extract lessons from it. Details will be dumped to footnotes.
All customer interactions are moments of truth which combine to shapes the ultimate experience. During very many of these moments of truth Air France failed and failed badly. Let us now try to learn from their errors.
Ten Customer Experience Lessons from My Recent Air France Nightmare
10. Do not expose seams in partnerships or international operations
9. Do not hide behind industry-speak to explain why you can’t fix my problem
8. Do not tee-up failure with either inane or error-prone policies
7. Do not value customers one-dimensionally
6. Be ready to give when you are ready to take
5. Don’t make your customer loyalty program the best reason NOT to use your service
4. Admit fault where due and act accordingly
3. Be mindful of my costs in dealing with you
2. Empower your agents to fix problems, particularly supervisors
1. Have a social media support team all with supervisor++ powers
Let’s now drill into each of these with more detail and specific examples, the most outrageous of which earn a #Kafka tag for the circular torture to which the customer is exposed.
Do Not Expose Seams in Partnerships or International Operations
Air France showed major operational seams not only with their partner Delta but also with their own US operations.
When I call the (US) 800 number listed on your website, do not answer the phone “Delta/Air France.” You know what number I called. Answer the phone accordingly.
If you choose to use a partner (i.e., Delta) to take calls for you in a region, then empower them fully. (After eventually getting a supervisor I said, “I presume you are more empowered than regular agents,” to which she replied, “Not on Air France; I can’t do anything.”)
Supervisors at your partner should have instant access and call-transfer ability to supervisors at Air France. (At the end of our failed 90+ minute call to Air France that ended up in a Delta call center, the Supervisor put us on hold for 10 minutes “trying to find a number” we could call at Air France only to tell us she didn’t speak French and couldn’t find one on their website.)
Do not expose me to problems because the partner you chose to work with actually did something on my case. (At one point, we were told we’d bought our tickets on Delta — which wasn’t true — and ergo that Air France couldn’t help us. #Kafka)
Do Not Hide Behind Industry-Speak To Explain Why You Can’t Fix My Problem
As we suffered through this experience, I realized that most of the time we spent talking to call center agents was spent with giving us increasingly detailed and often different explanations – all buzz-speak laden – as to why they couldn’t fix our problem.
I don’t care who issued my ticket.
I don’t care if my ticket needs to be re-issued.
I don’t know what issuing a ticket means.
I don’t want to know what issuing a ticket means
Therefore I don’t care if the original agent making an issuing (or is it issuance) error is the root cause of the problem.
I don’t actually care what the root cause of the problem is.
I simply want you to tell me that I can fly on the flight on which I purchased my ticket and on which you had confirmed me multiple times.
Do Not Tee-Up Failure With Either Inane or Error-Prone Policies
Two inane policies were root causes of our troubles, far as I can tell. The first was this kind of scheduling:
Schedule flight 99 at 2 PM
Subsequently reschedule flight 99 to 8 PM
And insert a new flight 97 at 2 PM
Please imagine the Who’s on First discussions this then drives between customers and agents.
“Hi, I’m on the 2pm flight on August 3rd.”
“That would be flight 97.”
“No, flight 99.”
“No, flight 99 is at 8 PM.”
“No, my paper says right here that flight 99 is at 2 PM.”
“No, flight 99 is at 8 PM … wait, when did you print your paper?”
“Right after I bought my ticket.”
“Well, I see your problem. Back then flight 99 was at 2 PM. But now it’s at 8 PM”
“But I booked the 2 PM because I wanted to travel at 2 PM, not because I wanted flight 99.”
“Well, the 2 PM is sold out. I’m sorry. You should have booked early.”
“But I booked six months ago and I was on it.”
“No you weren’t, you were on flight 99.”
By the way, even if you somehow thought it was a good idea to schedule flights in this way, wouldn’t it then also be a good idea to automatically move people from flight 99 to flight 97 – i.e., to tell them they had a flight number change as opposed to a departure time change? (To see how Air France compounded this mess, read footnote .)
The second inane policy is an oldie-but-goodie. Air France, has for decades at this point, had a “business” or premium economy seat within Europe that exactly the same as a regular economy seat. No extra width . No extra legroom. No ability to advance-reserve seats. And I believe (and certainly on our flights), no difference in food or beverage .
There is no difference between Air France intra-European premium economy and coach
Do Not Value Customers One Dimensionally
Airlines can get too wrapped up on miles / flight frequency as a measure of loyalty and value. I believe yet another root cause for our troubles is that I am currently a low-frequency (i.e., bottom tier) frequent flyer on Air France.
Let’s do some math to illustrate my point. Hypothetically, let’s say I make the decision and buy tickets for 6 people who travel to France every other year on $4500 discounted business class tickets. That’s $27K every two years or $13.5K/year. Let’s say Pierre travels for a small business, is careful about his fares, and flies 8x/year to SFO at an average of $1.5K/ticket. Pierre is logging 88,000 miles/year on Air France and paying then $12K. I am logging 2750 miles/year and paying $13.5K. Pierre is a probably a penultimate tier flyer and treated pretty well. I am treated like junk. Yet, are we that different? Who is, in fact, more valuable?
This is why all businesses need to be very careful about how they value customers and, to the extent they want to treat them differently as a function of value, not be one-dimensional in making such assessments. Specifically, I think airlines  need to be more focused on:
Profit than revenue
Revenue than frequency
Decision makers than passengers
Because these can be hard to measure (e.g., decision maker) we tend to not measure them. But I can assure you that in two years someone will be making the airline decision for the bi-annual France trip. Just because identifying the decision maker is difficult, doesn’t mean that there isn’t one or that he/she doesn’t matter.
Be Ready To Give When You Are Ready To Take
This one is simple, yet broken with stunning frequency. Here’s the rule: if you’re ready to charge me for something when I take it, then you need to be equally ready to return my money if you take it back.
I mentioned this already in the context of Air France silently downgrading us from premium economy. United did the same thing to my wife recently. She is a bottom-tier United flyer, but had paid extra for a specific seat, paying something like $68 extra for a bulkhead only to find when she was about to board that someone else had been given her seat. (I suspect because they were high-tier frequent flyer.) They moved her back one row, without her consent, just handing her a new boarding pass. But the seat they moved her to cost only an extra $30, and nary a mention was made of the $38 difference. That’s garbage. If you want to charge for something we a customer takes it, you need to pay them if and when you take it back.
Don’t Make Your Customer Loyalty Program The Best Reason NOT To Use Your Service
As customer experience consultant Shaun Smith likes to say, “customer loyalty programs don’t generate customer loyalty.” What they do generate is a lot of system-gaming and one-dimensional customer evaluation.
I remember shortly after I moved to Paris many years ago, I had a full-fare business class ticket from Paris to Tokyo on Air France. When I tried to check-in they said they were going to downgrade me to economy because I was the least frequent flyer in business class.
I call this the “dark side” of CRM. Companies start segmenting customers by some variable that they hope correlates to a key business driver like profit or revenue. This then has two effects. Regardless of their go-forward business value:
People who historically score poorly on that variable are treated poorly, creating a huge disincentive to join the system.
People who score well on that variable are treated well and quickly develop a sense of entitlement, creating inflated expectations that are difficult to meet.
Frankly, I liked Virgin America a lot more before they had their frequent flyer program because they used to treat everyone well. Now, they’re discriminating like everybody else.
Admit Fault When Due – And Act Accordingly
As we endured our nightmare, after many argumentative exchanges, the agents with whom we spoke eventually determined that the person who put us back on the earlier flight had made an error in somehow not properly re-issuing our tickets. So, while they were not quick admit error by any means, they eventually did.
However, what happened next was appalling.
“Yes, I can see the problem. One of our agents made a mistake. And there is nothing I can do to fix it.”
The prior sentence is one that should never be said in your call center. If you know the mistake is on your side, then you must do something to fix it. Period. Always.
Be Mindful Of My Costs In Dealing With You
Because we called the US support number, we were paying in excess of $1/minute in order to speak with the call center agents. The US agents pay no heed to this — despite well knowing we were in France. Worse yet, they’d periodically pop back in saying “bear with me” and turn off before we could say anything, so we couldn’t even make an educated ROI decision on whether we wanted to keep holding. I’m guessing of the 5 combined hours we spent connected to call centers that 70% of it was on hold. (That’s $210 on hold out of total costs of $300.)
Only when dealing with the French call center — where it customary to pay high telecom fees to be connected — did the agent show sensitivity to our costs, offering to call us back instead of putting on hold. Thank you for that. Companies/agents should do it more.
Empower Your Agents To Fix Problems, Particularly Supervisors
It’s well known that both agents and customers are happier when agents are empowered to fix problems. By my math, our problem could have been fixed for about 300 Euros ($420), assuming they’d have to bump/compensate two people to the later flight in order to honor our committed reservations. That could have been done on a volunteer basis so the recipient would be definitionally happy. We would have been happy. Everyone would have been happy.
Instead, we spent $300 on phone connection fees. Air France spent 5 hours worth of agent time, call that $300 more. Air France had to then buy 4 tickets on another airline, call that $800. In addition, the Air France social media team had to deal with me and my tweets (and delete my post off their Facebook wall). All in, Air France spent $1100, we spent $300 and nobody was happy. And they might well have lost a customer for life.
Perhaps you can’t empower every agent to re-book people onto their original but now sold-out flights. But you can empower your supervisors. Otherwise, all your agents can do is say no and explain why they can’t fix problems.
Have A Social Media Support Team with Supervisor++ Powers
“If you make customers unhappy in the physical world, they might each tell six friends. If you make customers unhappy on the Internet, they can each tell 6,000.” — Jeff Bezos via the Desk.com blog
One of the important parts of the social enterprise message at Salesforce.com is reflected in the Jeff Bezos quote above. It’s a key reasons why people also say things like “service is the new marketing.” The fact is, in a social media world, when people are unhappy they can tell lots of other people very quickly — and that’s precisely what I did, both as a way to vent as well as to test if Air France had its social media act together.
While I wouldn’t give Air France an A in social customer service, I would give them a solid B+. While a bit slow on the first round, they did reach out to me via Twitter direct message, and even tried to call (but after I was “done” for the day on trying to fix the issue). So while they were unable to help on the segment 3 issue (and I’m ergo unable to determine just how empowered they are), they did manage to fix the less serious problems I had checking in on segment 4. I received Twitter direct messages about my problem, they fixed it (overnight), and the even called me the next morning (think: multi-channel service) to make sure I knew they had done so.
My friends at the Service Cloud at Salesforce.com figured this out long ago. Customer service organizations need to integrate social media into the contact center, they need to use classical CRM (e.g., loyalty tier, dollars) and social media metrics (e.g., influence, Klout) in order to determine case escalation rules, and then get high-impact and/or high-pain customers to top-empowered agents so they can resolve problems quickly and turn unhappy customers into loyal fans.
To be clear, Air France did not do that to me. The modest help with a modest problem did little to offset the frustrations and mishandling of our segment 3 problems. But it was nevertheless encouraging to see that, in social media support at least, they were taking a few steps in the right direction.
 Some of the best customer experiences I have had in my life were in France and largely uncorrelated to price/cost. Yes, the Tour d’Argent has stunning service, but I’ve also had tremendous experiences at tiny country bistros or cafes.
 The net result of which was (a) a ruined afternoon the last day of our vacation, (b) several hours on the phone with Air France / Delta, (c) paying about $1/min for those several hours, (d) numerous attempts at blaming us for what was clearly an airline error, (e) a large amount of frustration including the obligatory argument with my spouse, (f) a failure to honor our reservations for 4 of the 6 people in our group on segment 3 of our flight, routing them on another airline to another airport, (h) doing the prior point despite ultimately having empty seats on the aircraft, (i) uncompensated downgrades from premium economy to regular economy, and (j) several more hours wasted when problems repeated themselves on the check-in for segment 4, the final return segment.
 Air France never actually notified us of this change. We noticed it only after a new person joined our group, bought her ticket on the same flights as we had, and then we discovered the discrepancy. We then called Air France, were assured that everyone had been transferred back to the 2 PM flight, now flight 97, received multiple email confirmations that this was the case, only to discover on trying to check-in that flight 97 was “sold out” and that half of us had no reservation whatsoever and half were on flight 99 at 8 PM.
 While I think this is now discontinued, back in the 1990s they had a really weird configuration where seats on the right side of the plane could slide their arms towards the middle creating a 2-3 configuration on what’s normally a 3-3 plane. Ergo, the lucky folks on the right actually got wider seats for their money whereas those on the left got nothing.
 Lest the relevance of this not be obvious, we were paying premium economy in conjunction with our business class long-haul segments and, due to my size, I really appreciate, need, am willing to pay for, and indeed paid for a larger seat with more legroom and/or the ability to get a bulkhead or exit row. Having your reservation nuked and squeezed back in at the last minute is the recipe to get seat 29B which is where, indeed, they put me.
 I believe that United has been moving in this direction for the past several years.
I’m Dave Kellogg, advisor, director, consultant, angel investor, and blogger focused on enterprise software startups. I am an executive-in-residence (EIR) at Balderton Capital and principal of my own eponymous consulting business.
I bring an uncommon perspective to startup challenges having 10 years’ experience at each of the CEO, CMO, and independent director levels across 10+ companies ranging in size from zero to over $1B in revenues.
From 2012 to 2018, I was CEO of cloud EPM vendor Host Analytics, where we quintupled ARR while halving customer acquisition costs in a competitive market, ultimately selling the company in a private equity transaction.
Previously, I was SVP/GM of the $500M Service Cloud business at Salesforce; CEO of NoSQL database provider MarkLogic, which we grew from zero to $80M over 6 years; and CMO at Business Objects for nearly a decade as we grew from $30M to over $1B in revenues. I started my career in technical and product marketing positions at Ingres and Versant.
I love disruption, startups, and Silicon Valley and have had the pleasure of working in varied capacities with companies including Bluecore, FloQast, GainSight, Hex, MongoDB, Pigment, Recorded Future, and Tableau.
I currently serve on the boards of Cyber Guru (cybersecurity training), Jiminny (conversation intelligence), and Scoro (work management).
I previously served on the boards of Alation (data intelligence), Aster Data (big data), Granular (agtech), Nuxeo (content services), Profisee (MDM), and SMA Technologies (workload automation).
I periodically speak to strategy and entrepreneurship classes at the Haas School of Business (UC Berkeley) and Hautes Études Commerciales de Paris (HEC).