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OK – normally I don’t write blogs bashing companies when I have a bad experience, mainly because I don’t have that much time available.   But I had an experience last weekend at a local Target store that can serve as a great lesson on customer service.  So I decided to share it.

The Background

My 12 year old son recently received a Target gift card from a friend for his birthday.   He also received a new Xbox 360 from his parents for his birthday.   Last weekend he decided that he wanted to spend his gift card on the game “HALO 3″, so I took him over to Target to pick it up.

While at Target, we noticed two HALO games in the display case.   One was HALO 3, the other was HALO WARS.   Not being able to tell the difference between the games we asked the Target employee who was working at the Electronics counter about the difference between the two.   We were told that HALO WARS was the ‘newest version’ of the popular game.   What he didn’t tell us was that HALO WARS is a totally different STYLE of game and isn’t anything like the HALO 3 game my son originally wanted.

An hour later, after opening and realizing the difference, we returned to Target to exchange the HALO WARS game for the other version.   That’s where the fun begins.

Make Sure Your Sales Team Knows the Product

Back at the Target store when attempting to return the game we purchased, I was told it couldn’t be exchanged because we had opened the box.   The fact that I had purchased it only an hour before – didn’t matter.   The fact that the sales rep had told me it was the same type of game – didn’t matter.   When I challenged the sales rep to be accountable for the fact that he didn’t warn me it was not the same style of game he simply said – “I don’t know the differences in all the games”.

Don’t you work in the department?  Isn’t it your job to answer customer questions about the products?  If you don’t know, shouldn’t you have asked?

A Blown Chance to Remedy the Situation and Save A Customer

My family spends about $2000/year at this local Target.    Frankly, I’ve always been pretty satisfied with the store.   The service isn’t always great, but the stores are clean, the quality is pretty good, and I can usually find what I’m after quickly.    But since I spend a good bit of money at this store, I’m miffed that the staff isn’t taking responsibility for sticking me with a $40 game and wasting my son’s birthday present.

I decide the best strategy is to speak with the GM of the store.  Surely she will care enough about my business to resolve the conflict.   I understand the software piracy issues and implications – but there are always amicable solutions to any customer problem if you are creative.   Or at least I thought there were…..

After explaining the situation to the GM, and validating it with the employee (who was defensive, but honest about the sequence of events) I was told that “Target’s policy is that no games can be returned once opened.   Even though the employee should have been more informed of the products, there was nothing they she could do”.  Flabbergasted,  I pushed back.   Surely they didn’t want to loose a customer who spends $2K/year over a $40 game because of a ‘policy’.   Surely there is a creative solution.   I can understand the dilemma over the copyright issue so I offered other alternatives:

- Give me the other game and eat it as a loss

- Give me a gift certificate for the lost amount and I’ll buy the correct game

- Give me a coupon for $40 off my next purchase of $200 or more

- Give me $40 worth of underwear or t-shirts

- Donate something to my son’s school

Anything to make me whole and to demonstrate that Target takes accountability for the fact that it’s sales reps should know the products they are selling.

Crickets could be heard…..

I took my worthless, but brand new game down to the local ‘Game Stop’ specialty store.   They gave me trade in credit for it against a new game and, geeks that they are, were appalled that the Target sales rep didn’t know the difference between the two games.   They felt bad enough that they actually gave me an additional discount off of the replacement game!

The next day I found the local Walmart and my family hasn’t been back to Target.   We won’t go back for at least a year.

The Lessons

There are a few good lessons for all of us from this situation.

1) As a consumer buy from people who clearly know the products well.  I won’t be buying games from anyone other than a Game Stop store from this point forward

2) Make sure that your sales people know the products they are selling.    When they make mistakes, teach them to be accountable.    Target could have won me for life if either the sales rep or GM had just been accountable for the situation.   Instead, they lost my business.

3) Be creative.   Sometimes you can’t give the customer exactly what they initially want in a conflict situation.  But it’s important to be creative and find a way protect the relationship.  Good companies teach and encourage their leaders to find mutually beneficial solutions to problems.   The inflexible application of Target’s ‘company policy’ by the GM not only lost my business, but compelled me to create negative PR.

Oh, and I almost forgot -Halo 3 is a fun game to play.    Thanks Game Stop,  we’ll be back to buy more from you in the near future.

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Yesterday SugarCRM announced new pricing for it’s flagship products SugarCRM Professional and Enterprise, as well as simplified pricing and a brand new entry level product SugarCRM Express.    By eliminating price differences for on-demand and on-premise versions, while lowering the price to $360/user/year for PRO and $600/user/year for Enterprise, Sugar also signaled it’s strong desire to be the leading “Open Cloud” application provider.   The lower prices gives SugarCRM customers more value at a lower cost – just when they need it most – in the middle of the worst economy in 80 years.

The CRM Guru, Paul Greenberg agrees – check out his ZDNet blog from yesterday.

The changes also make great sense for SugarCRM as well as the general partner community for two reasons.

First is the release of Sugar Express, which allows Sugar, for the first time, to obtain a revenue stream for those who only need the functionality of the open source (Sugar CE) version, are not ready to pursue the higher Professional versions, but still want a reliable support program. They are basically taking on the non-sanctioned companies out there who aren’t in the partner program, who are hosting/selling CE hosting services and generating revenue without contributing to the community. This is a good thing to protect the brand – to many customers who think Sugar is a bad product because they choose a ‘fly by night’, non-sanctioned company who was hosting CE and not doing it very well.

Second, by standardizing on one price for each version (instead of a lower price for on-premise vs. on-demand) Sugar will actually increase it’s total revenue dramatically and get better leverage from their open cloud environment.  It’s no secret that the majority of Sugar implementations are on-premise. By standardizing the pricing, giving all customers an on-demand environment (while still allowing them to go on-premise if they like which is a KEY DIFFERENCE from other SaaS vendors) they will a) generate more net revenue by capturing more hosting service revenue b) ensure a better experience for customers and c) get better cost leverage out of their hosting environment.

Sugar is also working hard to enable the partners to more effectively implement and configure the Pro and Enterprise applications in their cloud environment with the Cloud Console (rebranded version of Data Center Edition).

Some partners with hosting services will complain that Sugar is taking hosting revenue away.   That may be true if all the parter was doing was loading Sugar on a box.   But there is clear room for value added hosting services in Private Clouds, especially where the customer wants to retain complete control at the root and database level or even better, host mutliple open source applications, connected together, in the cloud.   Levementum uses private clouds on Amazon EC2 to allow customers to manage BOTH Compiere and SugarCRM applications that are integrated as one solution.

Sugar is still on the track as the first Open Source business application to go IPO.   It’s fun to be along for the ride.

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Software conferences are usually marginal at best.   Agendas are usually filled with sessions light on substance and heavy with promotion.   Exhibitors and partners are a ‘means to an end’ – there to help fund the event with access to customers their primary reward.   I’ve always found conference’s mediocre events of marginal value.   Rarely does the software company succeed in creating an experience where all involved get something really valuable.

SugarCON Bucks the Trend

This past week my team and I attended our third straight SugarCON event.  For those who don’t know, SugarCON is the seminal event for customers, partners, and followers of SugarCRM.  This year’s event was the largest to date – with over 600 in attendance.  Considering that this is only the third conference for a very young company (Sugar was founded just over 4 years ago), what struck me most about this year’s event was it’s overall quality.   Three things stood out in particular – the quality of the participants, the session agenda, and the breath of discussion about using SugarCRM as a platform.

The customer’s at this years event were, by and large, more sophisticated in their understanding of Sugar’s value and how SugarCRM could be used as a platform for more than basic CRM.   To their credit the team at Sugar did a great job of facilitating the sharing of ideas with two full agenda tracks dedicated to customer case stories.   The majority of the customers I met with were seeking to use Sugar’s rapid modeling tools (known as Studio and Module Builder) to integrated sales and operational processes and go well beyond a cookie-cutter CRM implementation.

Focus on Partners

However, I was more surprised with the focus SugarCRM placed on their partners this year.   In addition to an entire agenda track of sessions dedicated to the partner community, the conference included two additional days for the first “Partner Boot-camp”.   The dedicated sessions gave the team at Sugar a forum to facilitate collaboration amongst the partners, expose us all to new ways of providing value to our customers, and give feedback to Sugar on product features, strategy, and our takes on all this ‘cloud’ business (my thoughts on the cloud to come next week.)  The quality of the partners has also improved over prior years.   We saw a diversity of high quality and creative offerings from companies like Redpill (SugarCRM Training and Integration in Europe), Lampada (Offshort SugarCRM Development), and OutDare (CTI Integration).   The team at Levementum looks forward to working with these companies in the future.   Kudos to Mitch Lieberman, Jeff Campbell, and Paul Oh of SugarCRM for the extra focus on partners.   John Robert’s emphasized the importance of partners for Sugar’s growth strategy in his keynote for the bootcamp.  He backed it up with a great event.

Most Important Takeaways

The most valuable things I took away from the conference this week were:

• Sugar’s new Authorized Learning Partner program geared to expand customer access to quality SugarCRM training.
• Paul Greenberg gave a great keynote on the priority companies should place on customer retention during ecomonic downturns.   Paul continues to demonstrate why his unique insights on our industry are worth following.
• The awesome new CTI integration available from the guys at Outdare – while they need to add some additional work flow scenarios into their offering, the initial release is pretty dazzling.
• Cloud computing is on everyone’s mind, but means something different to each person you talk to.   It’s clearly hip to talk about “The cloud” (and SugarCRM is no exception) but we need to all do a better job of educating ourselves and the marketplace on the concept.   Most definitions are too narrow.
• Sugar’s product development team, led by Clint Oram, provided a good picture of the upcoming 5.5 and 6.0 releases.  As usually his team mostly hit the mark.   Although I’d like to see more emphasis on improving the flexibility of the mail plug-ins to match Sugar as a platform.   Stuff I was excited about:
  • A new REST base API layer to complement the current service layer
  • Rules based Studio capabilities for conditional UI interaction, dependent drop downs, conditional actions, etc.
  • Expansion of the portal to provide true Partner management capabilities – a key feature for companies with diverse sales channels.
  • Team Hierachies and ad-hoc team assignment in the security model
  • Improvements in Theme and UI management including better stubbing in the UI layer to help developers influence UI behavior in upgrade safe ways
• The ‘Phrase that Pays’ is now part of the sub-culture of SugarCRM events.  Congrats to Jason Nassi, who runs Sugar’s Support Team on being invited to the official PtP executive committee.
• Data Center Edition – Sugar’s toolset for managing deployments and licensing of Sugar has great potential for those of us providing managed administration of Sugar in the cloud.   There are also great applications for Business Process Outsourcers and call centers (more on that later).
• SugarCRM’s expansion continues with a new office in Munich, a support center in China, and conference plans for Europe in the fall.

Final Thoughts – Valuing the Cloud

At SugarCON, everyone was talking about ‘Cloud Computing’.   It was part of John’s keynote, the exhibitors displays, the customers questions.  But it’s such a vague concept that more often than not confusion trumped clarity.  I’m convinced more and more that the ‘cloud’ is not a place or thing, but a concept of leverage.  It’s about leveraging the best services and technology available.   It’s also about enabling that leverage when we design information related products and services.   I propose that we should value most, the tools that give users the most flexibility in leveraging the services and information ‘in the cloud’, without constraints.  I’ll elaborate further in my next post.

I’d like to personally thank John Roberts and the entire SugarCRM team for conducting such a valuable event.   I’m looking forward to next year’s event.