Fryer's Blog in the Mountains

Service Breakdown: The Case of Nordstrom

It is really important that you have consistency across your organization dealing with customers.  Zappos comes to mind.  You would think Nordstrom would be good at this, but I guess that doesn't apply to Utah.   I have had issues with them before.   Just last month I wrote a customer comment card with my contact information.  Did anyone follow up?  No.

Shoe shopping wasn't much better.  They didn't have the right size.  The sales person gave us a list of stores who carried them but explained "We don't do transfers, you'll have to go online."  I thought this was fishy so I went to customer service who said "We don't do transfers, you'll have to go online."  Hmmmm, this must have come from the store manager.

So I went online.  Guess what?  The online store didn't have the correct size.  So I did an online chat and explained my situation.  The person was horrified that our Utah store didn't contact the stores who had the shoes.  So she contacted them and 10 minutes later a store in Maryland called and shipped us the shoes.

Nordstrom built a new store here.  I think they need a new store manager to go with it.

Health Care Reform: Avoiding the Billy Tauzin Effect

Health Care reform is a pretty straight forward proposition:  Improve patient health, for the lowest cost, covering the maximum number of people.  But the people in Congress many times have other agendas, namely how can they raise money to get re-elected or get a cushy job in the future.   Not paying any attention to those who elected them.

The last big overhaul was Medicare Part D which gave prescription coverage to seniors.   Unlike the VA system, Billy Tauzin lead the effort prohibiting Medicare from negotiating drug prices.  The result?  The VA gets their drugs for 58% less.  And Tauzin?  He leaves Congress and takes a $2M job with PhRMA the lobbying group.  Sticking the taxpayers with the bill.

Can't happen today?  Think again.   Comparative Effectiveness Research finds out the most effective way for treatment.   But Sens. Jon Kyl (R-AZ), Mitch McConnell (R-KY), and Pat Roberts (R-KS) introduced a bill to prohibit Medicare from using it to deny coverage for less effective treatment.   They want us taxpayers to pay the pharmaceutical companies for treatments that don't work as well as competitive ones.

I'm hoping the American public holds Congress accountable for their actions and keeps them on task.

Keeping up with everything: Bloglines & Evernote

I know you're not supposed to blog over the weekend, but since when did I ever do "status quo"?   I've watched Microsoft's "bing" commercials, even tried it, but I prefer other ways to keep up with the world and find things.  The first product I like is Bloglines.   Sites / people who usually say and do interesting things I subcribe (just 2 clicks).  Today I purged the list back to 25 feeds.   After not caring about some for over a month, hit the delete key.

Back in the dark ages when people actually read trade magazines, I had a file drawer full of interesting items.   I would just tear a page out of the magazine and stuff it into a folder.  Purged it about once a year or so.   Today I have Evernote do the job for me.  I have only a couple of folders, but it sure is handy for remembering, and it beats bookmarking everything.

Why US Healthcare is so Expensive: Measuring the Wrong Thing

"Whatever you measure, will improve".   In the case of Healthcare, reimbursements by procedure and office visits are measured, so they have increased 10x since 1960.    However the patients are not getting better.

As the Washington Post points out:

Of 37 industrialized nations, the United States ranks 29th in infant mortality and among the world's worst on measures such as obesity, heart disease and preventable deaths.

Bright young physicians trained at prestigious and expensive universities enter a profession built on perverse financial rewards. They, like assembly-line workers of the past, are paid on a piecemeal basis, earning more money not by doing better but simply by doing more.

Yet more care rarely translates into better health.

So pay more attention to measuring the outcome you want and don't fall into the trap of emphasizing false indicators just because they are easy.     

Chase Burns Quicken Customers

Turns out that after Chase got into financial trouble last year, they started charging their customers almost $120 / year just to download transactions into Quicken.  A friend called online banking twice to ask about the charges and both times they said "We don't charge anything, Quicken does".

After talking to Quicken, turns out that simply isn't true.   It took a bank manager's phone call to get Chase to fess up that indeed it is their charge.

Great marketing strategy by Chase.  Lie to your customers.

However there is a simple workaround.  Turns out you can download your transactions to a file and then import it into Quicken.   Takes a little extra effort, but you can think of better ways to spend $120.

Or maybe we all need to move to someone who doesn't charge.

Ticket Scalping and Revenue Allocation

A ticket with a face value of $50 selling for $250—a 400% markup—what’s happening?  Not only that, but this escalation in price happens within minutes of the commencement of ticket sales, through postings on eBay, craigslist, and other sites.   But with our insatiable appetite for live entertainment, new acts or older ones on revival tours, this has become a low risk, high return endeavor for scalpers.  Should those fortuitous souls who were quicker with a mouse click, be the ones who should profit by $200 or more?  Not by my view—they’ve contributed little, if any, value.

What is interesting, however, is that scalpers, unwittingly, perform an ongoing economic exercise, helping to determine an equilibrium price for event tickets, one based on supply and demand.  And, the anecdotes in our newspaper confirm that some people are willing to pay exorbitant fees for the privilege of attending these events.  Then the real question is:  can we use this new equilibrium price and allocate the revenues differently or more appropriately?

There are potentially some other options:

1. The performers and their management group could offer tickets at these inflated prices, pocketing the excess profits, dreaming deliriously of the pools of money they could be swimming in.  As the performers actually entertaining us, a case could be made for them deserving the excess funds, but the public may view them a money-grubbing so-and-so’s;

2. Again, tickets could be offered at the inflated price, but the holder of record, who actually attends the event, could use their stub to submit for a rebate.  This would force scalpers to lay down more capital to acquire tickets and bear more risk related to their ability to markup the tickets and successfully sell them, hopefully dissuading them from doing it at all.  This option has all kinds of logistical and cost issues from lost ticket stubs to the cost of cutting checks to individuals;

3. Finally, we could take a page from some charities.  They offer a gala dinner and dance with an individual price of $250, but the payee also receives a tax receipt for $125.  This would provide event goers with an additional benefit, while forcing scalpers to, again, assume more risk, and it could benefit local charities.

The underlying assumption I’ve made is that all event patrons are willing to pay the $250, which we know is not true, but wouldn’t it be great to eliminate the scalpers who add no value and continue to ratchet up the cost of attending these types of events.

Ryck Marciniak

Guest Blogger

Health Care Effeciency: The VA System Outperforms

I chuckle when I hear someone say "Everyone knows that _______".    And if you repeat it enough times and send it in enough chain emails it must be true?   

Here's one: 'The government cannot run anything well".   Then comes out this report.  Turns out the VA delivered health services with cost increases of .3% annually per enrollee .  Medicare's increase was 4.4% per year.   And how much have your insurance premium's been rising?  Employer's went up 5% last year.   Worth a closer look.

Here's another one: "Healthcare in Canada is so bad, a large number come to the US for treatment".   Turns out that isn't true.

Before you make assurtions take the time and go through multiple sources.   You will make better business decisions.  Getting to the root causes and solutions is time consuming, but well worth it.

The Trick to Low Price High Volume Businesses

With Cloud Computing, cheap computer and easy merchant services it doesn't take much to start a business.   Making it a successful business is a whole different thing.

The first mistake people make is confusing price with value.  The trick here is to deliver a high value product / service, but at a low price.   If your competitor charges $6 and you charge $5.50 that doesn't mean you get the business.  At some point price becomes irrelevant.   What do you get for your six bucks?

The first and most important place to start is service. 

• Can your customer figure out what you have?
• Can they get answers quickly?
• Can they buy it easily?
• Are there no surprises?
• When something goes wrong can they get help?

You must stand behind what you have.   I have been using a hosting service for the last 10 years.  They got good reviews, I signed up. I got an email from them the other day inviting me to check out some new goodies they offered.   Turns out by clicking a button they would install a copy of SugarCRM for you.  (this is the open source equivalent of Salesforce.com.) 

I pushed the button.

It installed and I logged in.  The first question was to confirm a time zone.  I did and the system crashed.  Horribly.  So I filled out a trouble ticket.  And here was my reply:

Hello Bruce,

I have tried logging in the Sugar CRM application and noticed that the issue you are facing is with scripting. We suggest you to contact the application vendor and fix the issue from your end.

If you have any further questions, please update the Support Console.

Sincerely,

Stan Harper
Technical Specialist

Nice.  So they will have 100% installation failure and I'm supposed to fix it.

Let's just say I won't be recommending these guys to anyone soon.  

So make sure you walk through every offering you have from end to end from the customer's perspective.  And that will serve you well.

DTV + RCA Box = Success

It works great.  We hooked up the old TV in the kitchen with the $40 RCA box and a single rabbit ear antennae.  Hit scan to get the channels.  And everything comes in loud and clear.  

The best part is the remote.  By coding the TV remote, one remote integrates both the TV and the box.  Great design.  And it works.

So glad we're close enough to the transmitters to not require any fancy reception.  For those of you in fringe areas, best of luck.

Just in Time Patient Data: A Solution for Electronic Medical Records (EMR)

Bruce Schneier's post on "Unfair and Deceptive Data Trade Practices" pointed out how the RealAge quiz sells your answers to drug companies who then send you spam targeted email.

And this got me thinking about the nightmare of EMR.  When your patient data is in color coded paper files, it's a lot harder for abuse.   And there are the conflicting interests: the insurance companies who want to spend as little money as possible, the doctors who (hopefully) want you to get better, and those who want to maximize reimbursements (e.g. revenue), the drug companies who want to sell more.   But in the end, there is one person who needs to be in control.

The patient.

And this needs to be the bottom line of any good EMR system.  The patient is in control.  But data exists in many different silos of information, held by different parties, for different purposes.   In reality this is a policy based data access problem.

The solution in "Just in Time" patient data.    If you check into an ER, the attending physician should be able to pull together all relevant information real time.  When done, it goes away.   The monolithic solutions proposed by Walmart and Google are doomed for failure from the beginning.  There is no way people want to put that much information in just one place.  Ripe for abuse. (remember the Patriot Act?)

note: or someone steals the information and holds it for ransom.