The Open Source Pragmatist

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.

Business & Politics, Insight & Thoughts, Uncategorized Add new tag, customer service

As we trudge through the weak economy looking for ways to attract new clients and grow our business, the old Marketing 101 adage comes to mind:

“Your best new customers are the customers you already have”

At Levementum, we’re finding that this rings true in an amazing way.

With our SugarCRM, Compiere, and Magento Open Source service offerings, we’re finding that the hit rate (on new Open Source apps) for customers that previously have implemented one of these outstanding products, is well over 50%…an amazing rate of Opportunity conversion.

Why is that?  I think its a reflection of how these clients have crossed their own chasms relative to the key “Objections” raised in the course of a Commercial Open Source sale.

When we talk to a new customer - one that has never implemented an Open Source product at an enterprise level, the four concerns we tend to see are:

1. Concerns about the Project/Company viability.

2. Concerns about support and SLA.

3. Concerns about Intellectual Property rights of derivative works.

4. Concerns about quality and features.

Clearly these objections are colored in the spirit of Open Source as a “new” and “disruptive” force, and customers have to be carefully navigated through these discussions.

The key  is, once the bridge has been crossed with one application project, the propensity to steamroll through these objections on the following application project is very high.

We’re finding that SugarCRM customers love Compiere…Compiere customers love what SugarCRM has to offer, and we’re also seeing an interest in Magento from customers of both SugarCRM and Compiere.  Again I propose its because they’ve already taken the Open Source plunge - and already subscribe to the unparallelled value proposition that they can take advantage of:

1. Control of Your Own Destiny.

2. Cost Benefit and TCO.

3. The Quality factor (as a strength)

We’re hoping to continue to see more and more progress - its a bet Levementum has made in spades - and why we continue on our path to being at the forefront of service firms that help Enterprises make sense of how to deploy broad Open Source solutions as an enabler for their own value propositions.

We’re in exciting times in the world of Open Source…The strength of the community has been, well, the community!  I see the opportunity for the SugarCRMs, Compieres and Magentos of the world to cross pollinate - share customers - share ideas - define boundaries - maximize opportunity value.  Its a win win for everybody, mostly for our customers .

Insight & Thoughts, Software & Technology compiere, crm, ecommerce, erp, levementum, magento, open-source, pentaho, sugarcrm, talend, varien

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.

Insight & Thoughts cloud-computing, compiere, levementum, open-source, sugarcrm

The VAR Guy recently introduced an upcoming webinar entitled, Can You Profit From Google Apps And Amazon’s Cloud?

“Instead of discovering the risks (and rewards) on your own, learn from three VARs who already profit from Google Apps and the Amazon Elastic Compute Cloud (EC2)…

This is a rare opportunity to hear from three VARs describing their own business success and challenges with the Google Apps Reseller program and Amazon Web Services. Forget the industry hype. Get the real story from three solutions providers that are working in the cloud today.”  THE VARGUY

Levementum’s Geoff Mobisson is a part of the panel and will be sharing how Levementum deploys open source CRM and ERP applications in the Amazon Elastic Compute Cloud (EC2) for their customers.

if you are interested in the growing trend of cloud computing and its influence and opportunities for open source software REGISTER NOW for this insightful webinar scheduled for April 15th, 2009

Industry, Insight & Thoughts cloud-computing, open-source