4 Reasons Why an Online Business is the Best Investment You Will Ever Make

Auto Insurance? Just Google It

Google reportedly is gearing up to launch a shopping and comparison site for auto insurance in the United States.

The company has been operating such a site in the UK, dubbed “Google Compare,” for the past two years.

Although it apparently has been beset by delays, an entity called “Google Compare Auto Insurance Services Inc.” now is licensed to do business in 26 states, including California, New York, New Jersey, Massachusetts and Texas, according to Ellen Carney, principal analyst for insurance eBusiness and channel strategy with Forrester.

Google Compare is already authorized to transact business on behalf of a handful of U.S. insurers, including Dairyland, MetLife, Mercury, Permanent General Assurance, Viking Insurance of Wisconsin and Workmen’s, Carney reported last week.

Shortcut to Market

Perhaps most intriguing of all, Google Compare’s corporate treasurer recently gained authorization to transact on behalf of insurance-shopping site CoverHound, suggesting an acquisition may be in the works, Carney suggested.

“An acquisition of CoverHound gets the Google insurance entity to market faster in the U.S. than they’ve been able to get on their own,” she explained.

Meanwhile, it appears Google also is working with Comparenow.com, which operates in 48 states and Washington, D.C., according to a Wall Street Journal report citing a person familiar with the matter.

A Double Advantage

Google’s underlying motivation is likely twofold, said Rob Enderle, principal analyst with Enderle Group.

First, “Google is in the information collection and distribution part of the advertising business,” Enderle told the E-Commerce Times. “There is no more information-rich area than insurance, because insurance companies need to know a great deal of detail in order to monetize the risk and create profitable premiums.”

Second, though Google’s self-driving-car initiative is expected to drop premiums by as much as 90 percent for that class of car, “this will happen slowly unless these firms are pressured competitively,” he pointed out.

“With this, Google is effectively killing two birds with one stone,” said Enderle. “They are getting access to far deeper information about all of us, which can then be converted into revenue; and they can potentially, if the service is successful, drive a rapid decrease in premiums connected to self-driving cars, which would massively increase adoption.”

Powerful Combination

Regarding the economics of self-driving cars, “the models I’ve seen suggest that once the premiums stabilize after the self-driving cars go mainstream, their premiums will not only drop, but human-driven-car premiums will balloon massively,” Enderle said.

“Think of it: On the freeway you’ll have strings of self-driving cars running with little space between them, and the entire string will brake at once,” he explained. “The likely-tailgating human driver won’t even have time to say ‘oh cra…,’ and then his collision will drive five or 10 of the stopped cars together into a massive crash.”

Human drivers, in other words, won’t be able to keep up with the speeds at which self-driving cars make decisions, making them more likely than ever to cause accidents, Enderle suggested.

So, “Google will be driven to not only dominate this space but to aggressively make this outcome happen very rapidly,” he predicted. “They should fund it incredibly well and not care that much about initial profit, because they have a very powerful end game.”

Consumers, meanwhile, “will see prices lower than they otherwise might see as a result,” he added — “a powerful combination.”

Logical Next Step

Google has experimented with cost-per-action or lead-generation advertising for several years, noted Greg Sterling, vice president of strategy for the Local Search Association.

“In the search for new and higher revenues from advertisers and marketers, this makes a lot of sense,” he told the E-Commerce Times. “The company is able to sell a referral fee or a lead to insurance carriers at a much higher rate than it could get for a click-through to an insurance site.”

Though under the law Google technically may be “selling” insurance, “that’s not the objective,” Sterling pointed out. Rather, “it’s to enter a lucrative new lead-generation market. This is probably a model for other industries that Google will seek to penetrate.”

Carriers’ Concerns

As for the U.S. insurance industry as it stands now, there’s little doubt an entrance by Google will have a large impact.

“There is a two-syllable word that causes insurance people to go quiet really fast, and it’s ‘Google,’” Forrester’s Carney told the E-Commerce Times. “There’s a lot of concern among carriers about what Google’s intentions really are.”

Through Google Compare, Google presumably would get the “sales and marketing wow factor” of selling insurance policies, she noted, while carriers would get the much-less-glamorous job of handling the underwriting and assuming the risk.

Carriers, in other words, would “become an ingredient brand very distant from the consumer interaction,” Carney explained.

Google also would gain unprecedented insight into how carriers price individual policies, she pointed out: “They’d have some really interesting business intelligence that they’d be able to collect.”

An open question for insurance carriers would be how to ensure that their policies were among the top few to get quoted and seen by consumers in Google’s results, Carney added.

“Do you pay for that? How does it work?” she mused. “I suspect Google honestly hasn’t thought about this yet.”

Blank Page for Regulators

On an even higher level are the potential regulatory implications, Carney observed.

“The sky is the limit for these guys in terms of what they know about us,” she explained. “What are the social and ethical limits that we’ll be able to put on Google’s use of this information? Where does the line get drawn?

“We have to get to that point,” Carney concluded. “Right now, it’s kind of a blank sheet for regulators.”

Katherine Noyes has been reporting on business and technology for decades. You can find her on Twitter and Google+.

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The Way to a Customer’s Heart Is Through Your Employees

Companies need to understand that their employees are key to keeping customers satisfied as they increasingly focus on the customer experience this year, said Bruce Temkin, managing partner of the Temkin Group.

Temkin identified eight customer experience trends for 2015:

Corporate Culture Conversations

CX Training and Engagement

Voice of the Customer Renovations

Mobile Formulations

Brand Revaluations

Customer Journey Deliberations

Contact Center Loyalty Aspirations

Human Resources Participation

Companies will need to train their staff in these areas, Temkin advised.

However, “all the training in the world for the masses of employees will fall short if the leadership team is not on board,” he told CRM Buyer.

“Training is only valuable when it’s helping employees understand how to fulfill their role in delivering on the company’s mission and fulfilling its brand promises,” Temkin explained.

“If leaders aren’t clear on those things, then training will be a wasted investment,” he cautioned.

Examining Some of Temkin’s CX Trends

“The most disruptive of the eight, if it materializes as a measurable trend, is contact center loyalty aspirations, which goes hand-in-hand with CX training and engagement,” said Eric Quanstrom, CMO at Pipeliner.

Training contact center staff to be more relationship-focused “is a total shift from the cost-center mentality, [which] would acknowledge that relationship marketing is a value-add rather than a cost center,” he told CRM Buyer.

Corporate culture is critical, Temkin said. Customer-centric cultures are based on the four CX core competencies: purposeful leadership; compelling brand values; employee engagement; and customer connectedness.

The demand for CX training and engagement will increase this year, Temkin predicted.

Improving the mobile customer experience is also going to be important.

Seventy percent of customers used a smartphone to make a purchase in the last six months of 2013, the CFI Group reported. However, 41 percent of corporate tech interactions with customers merely facilitated checkout processes.

“Companies need to rethink their operational processes and identify which ones can be significantly improved by incorporating mobile interactivity from customers or employees,” Temkin said.

The Ambiguity of Customer Feedback

Clear feedback from customers is one of the most powerful forces in an organization, so many corporations are building voice of the customer programs, Temkin found. Many of them need to update their approach and technology.

However, enterprise intelligence, rather than customer feedback, is one of five trends that will reshape how companies deal with customer insights, he posited.

Customer feedback remains very valuable, “but you can only get so much from surveys,” Temkin said. Instead of pushing surveys for the sake of gathering numbers, companies “can tap into many different sources of insights about customers, including learning more from employees.” Understanding what customers are trying to achieve, their overall goals and journeys, “provides the context for developing true empathy and proactively meeting the real needs of customers.”

Customer feedback alone isn’t sufficiently predictive, acknowledged Rob Enderle, principal analyst at the Enderle Group.

“The customer knows what they want today; you need to know what they want tomorrow. Enterprise intelligence … includes markets and the competition,” he told CRM Buyer.

What More Is Needed

“I might be in violent agreement with [Temkin's findings], and I have a book coming out in a few weeks — Solve for the Customer — to prove it,” said Denis Pombriant, principal at Beagle Research Group.

Still, the Temkin report isn’t really disruptive, he told CRM Buyer. “The core disruption is subscriptions … . Subscribers are fearless about abandoning vendors that don’t meet their needs, and that is the truly disruptive thing.”

The Temkin report doesn’t include what Pombriant calls “the moment of truth.”

A moment of truth is something an enterprise builds a brand promise around so that it can develop process support using journey maps and workflow, he said. “It’s useless to think about engagement without first saying ‘this is what I can do or concentrate on,’ and ‘this is what I don’t worry about.’”

Richard Adhikari has written about high-tech for leading industry publications since the 1990s and wonders where it’s all leading to. Will implanted RFID chips in humans be the Mark of the Beast? Will nanotech solve our coming food crisis? Does Sturgeon’s Law still hold true? You can connect with Richard on Google+.

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Gmail Struggles for Air in China

China last week apparently began blocking Gmail, and the outage was still in effect on Tuesday, although to a lesser degree, according to reports.

A sharp drop in traffic from China to Google services began last Friday, according to its Transparency Report, and the company could find no explanation in its own systems.

China’s “Great Firewall” censorship program is to blame, according to GreatFire, a Chinese free-speech advocacy group.

Closing the Last Loophole

China’s disruption of Gmail access actually began gradually several months ago, when the nation began blocking other Google services, including search. That tightening of control occurred as the 25th anniversary of the June 1989 Tiananmen Square Massacre approached. However, users could still access their Gmail accounts from email clients via the IMAP, STMP and POP3 protocols, according to GreatFire.

At the height of the blackout, Chinese citizens had no access except through circumvention tools such as virtual private networks, Reuters reported.

It’s not just individual Chinese citizens who rely on Gmail for their communication, noted Sophie Richardson, China director at Human Rights Watch.

Companies and even government officials use the service too, she told the E-Commerce Times, so the consequences of a Gmail outage could be more far-reaching than they might seem at first glance.

Advantage Baidu?

It’s also interesting to note the timing of the event, which comes just a few weeks after a U.S. visit by Lu Wei, China’s Internet chief, to meet with Apple CEO Tim Cook and Facebook CEO Mark Zuckerberg, among other American technology officials.

Given the new situation, “you have to wonder what message gets sent to corporations like that,” Richardson noted. “They want to do business in China but depend on being able to use these services predictably.”

It’s also difficult to discount “both the past hostilities the Chinese government has directed at Google and also the advantages that accrue primarily to Baidu,” she added.

There’s little doubt that the Chinese government is behind the outage, and it’s nothing short of “the beginnings of what I would characterize as a cyberwar,” said Michael Jude, a program manager with Stratecast, a division of Frost & Sullivan.

The move is almost certainly purposeful, he said, and is comparable in many ways to North Korea’s recent Internet problems.

“This is only the tip of iceberg,” Jude told the E-Commerce Times.

War Games

In general, there are two primary ways to wreak havoc on the Internet, Jude suggested. “One is to simply shut down your opponent’s Internet facilities. The second is to deny your opponent access to your people and companies. We’ve seen examples of both recently.”

First, there was the attack on Sony, a single company; then there was the Internet assault on North Korea.

“Now, we’re seeing a shutdown of access into what’s arguably the largest growth market on the planet,” he said. “The level, scale and scope of access denial is escalating. Something is going on — this is a harbinger of things to come.”

From a strategic point of view, the move could be intended as “a very clear message that we need them more than they need us,” Jude suggested.

Of course, while China may be a manufacturing powerhouse, it falls short on innovation, he added. “That’s why IP rights are such a big issue between the U.S. and China — they’re stealing everything they can get their hands on.”

If the United States were to get serious about securing its intellectual property, China would be “in a world of hurt,” said Jude. So, in the current situation, “if U.S. policy makers don’t blink, I think China will.”

Katherine Noyes is always on duty in her role as Linux Girl, whose cape she has worn since 2007. A mild-mannered journalist by day, she spends her evenings haunting the seedy bars and watering holes of the Linux blogosphere in search of the latest gossip. You can also find her on Twitter and Google+.

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Staying on the Right Side of That Wiggly Clickbait Line

It’s well known that certain second-rate media outlets use provocatively misleading headlines to attract viewers and parlay those figures into increased ad revenue, but some better known outlets appear to be resorting to clickbait as well.

For example, Time earlier this year published the findings of a Gallup poll with the headline “Americans Are More Afraid of Being Hacked Than Getting Murdered.”

Popular Mechanics’ similar take on the same story: “People Are More Afraid of Being Hacked Than Murdered.”

This is how Gallup itself put it: “Hacking Tops List of Crimes Americans Worry About Most.”

A host of other headlines implied that Americans were more fearful of hacking than pretty much anything else.

Of course, the Gallup report actually suggests no such thing. Its researchers asked participants how often they worried about various crimes, not to what degree they feared them. Neither surprisingly nor sensationally, most people felt they were more likely to be victimized by hacking than an array of other possibilities.

Though it wasn’t part of the poll, it’s probably safe to assume that given the choice, most people would prefer having their credit card information stolen to being murdered.

Does the rampant misdirection of these headlines indicate that even major publications are sinking to the level of less reputable outlets in the competition for eyeballs and, hence, ad revenue?

The Curse of Digital Technology

Eighty-two percent of people in the U.S. get their news using a desktop or laptop computer, and 54 percent using a mobile device, Pew found earlier this year.

What Pew calls “commercial digital native sites” — or online news sites — are giving legacy news organizations a run for their money. For example, Buzzfeed.com claims 17 million unique visitors a month, while The Washington Post has 19 million. Yahoo is the top news site online.

Meanwhile, Internet ad revenues hit a new high of $23 billion in the first half of 2014, the IAB reported. Mobile revenues increased 76 percent, accounting for $5.3 billion of that haul.

In short, competition is keen, and only the fittest will survive.

What Happened With Gallup’s Poll

This brings us back to the Gallup report. Time and several other online news outlets merely parroted Gallup’s own misleading headline, sometimes tweaking it for even more drama. Few questioned the poll’s methodology or conclusions.

“It’s a Gallup poll, on the Gallup website,” Andrew Sherry, spokesperson for the Knight Foundation, pointed out. “The questions and answers are available for download, so you are free to analyze for bias.”

The questions and responses were “about free-floating anxieties,” said Charles King, principal analyst at Pund-IT.

“Given the massive attention that data thefts this year at Home Depot and Target received, I’m not really surprised that credit card theft was top of mind for so many respondents,” he told the E-Commerce Times.

The Media-Analyst Tie-In

“There is a symbiosis between media and analysts to a degree,” said Dean Bubley, founder of Disruptive Analysis.

Media like reporting on trends and forecasts and quoting experts, while analysts want to be seen and perceived as influential and as authority figures in a particular area.

Often, surveys, especially in the high-tech world, are paid for by vendors.

“There are often themes, but they tend to be driven by vendor product announcements,” Bubley told the E-Commerce Times. “It happens over months and not days, though.”

The larger analyst firms tend to be less contrarian, less prone to risky visions that might prove wrong, and more willing to repeat “standard” mantras, Bubley wrote, pointing to the “years of hype and hockey-stick curves about RCS, mobile payments, mobile TV,” and other examples.

In many cases, survey findings appear to be published verbatim, with few or no questions asked about the methodology or bias or who’s sponsoring them.

It’s “becoming more and more evident to more and more people that so-called objective polls are being skewed subjectively,” King said. “The problem is likely to continue, so it isn’t impossible to foresee a day when subjective polls poison the well for broad swaths of objective market research. In fact, it’s probably already happening.”

Collateral Damage

So is this part of a cynical money grab with unstated collusion between the media and analysts, or is the problem of survey results being published with few, if any, questions being asked by the media more in the realm of unintended consequences?

The problem is “certainly more common because the number of news outlets has increased exponentially in the past decade, and the pace of publishing has accelerated, so many more items get published with only perfunctory review,” Sherry told the E-Commerce Times. “However, the reader is capable of learning to discern which are the most credible brands and reporters.”

Other factors are the increased pace of publishing and the reduction in newsroom resources such as fact-checkers. Further, editors’ workloads have become considerably heavier because their headcount has been reduced.

The War on Clickbait

Few things raise readers’ hackles as much as clickbait, and sites mocking the phenomenon are all over the Web.

They include Upworthy; @SavedYouAClick ClickHole, which mocks BuzzFeed; and @HuffPoSpoilers, which mocks tweets from The Huffington Post.

Facebook earlier this year cracked down on clickbaiting with a NewsFeed revamp.

Nobody wants to read something that’s dull and boring, so journalists are trained to put snap into their copy and headlines. The question is, where does creativity end and clickbaiting begin?

“Commercial journalism has always depended on the eyeballs it hoped would parse paid-for ads,” King said. “A short trip to the library to revisit the heyday of the ‘yellow journalism’ favored by William Randolph Hearst and others still has an ability to shock with the brutality of its prose and the unbridled pandering to people’s worst instincts.”

There’s the rub. By its very nature, news is transient and designed to be readily absorbed, and to be noticed, publications have to arouse the public’s interest. News organizations have to tread a very fine line that’s continually shifting as public tastes change over time.

“Publishers will continue to use what works, but they need to think about both clicks and credibility if they want to be longlasting media brands,” Sherry said. “Some publishers use clickbait-inspired headlines to share serious news, Upworthy and Policymic among them.”

Richard Adhikari has written about high-tech for leading industry publications since the 1990s and wonders where it’s all leading to. Will implanted RFID chips in humans be the Mark of the Beast? Will nanotech solve our coming food crisis? Does Sturgeon’s Law still hold true? You can connect with Richard on Google+.

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Netflix’s Very Big Deal

Dish Network last week announced that it had integrated the Netflix app into its set-top box. The video streaming service is now available to Dish subscribers with a second-generation Hopper Whole-Home HD DVR.

This integration of the services allows Dish customers the ability to stream Netflix movies and TV shows from the same platform that is used to access linear TV channels.

“Pairing Netflix with Hopper represents the consolidation of two incredible video experiences,” said Vivek Khemka, Dish senior vice president of product management.

“This app integration eliminates the need to switch television inputs to access content on varying devices,” Khemka added. “It gives our customers easy access to their favorite shows and movies, on both Dish and Netflix, without ever having to leave their Hopper.”

OTT to the Box

This new partnership essentially brings Netflix, which has been a leader in the over-the-top (OTT) category, to a traditional set-top box platform. This means that Dish subscribers can switch to Netflix content using the same device, same remote control, and same video input as they would for watching content on Dish.

Despite this greater integration, Netflix will still carry a subscription, and Netflix search results will not be integrated into the Hopper’s native search, at least for now. Dish has suggested that titles on Netflix could be integrated into the Hopper’s search functionality, though.

“Since many households subscribe to both Netflix and a traditional pay-TV service, the new Dish-Netflix relationship will give customers easy access to a wide variety of complementary programming,” said Susan Schreiner, an analyst at C4 Trends.

“A new paradigm for demand content is about to disrupt the entertainment ecosystem, given the combination of Dish’s robust video entertainment experience across TV shows, live TV and movies, coupled with Netflix’s vast library and household penetration in the U.S.,” she told the E-Commerce Times.

First American Deal

While this news marks the first such deal for Netflix to be integrated with a pay-TV service in the U.S., it did have prior deal in the UK, noted Richard Cooper, director of video media at IHS Technology.

“In the UK, Netflix started this strategy with Virgin Media last year,” he told the E-Commerce Times. “This latest deal just signals that Netflix is looking to compete with premium media channels — and with this deal, it can reach 14 million Dish subscribers.

“For Dish, it adds the huge content that Netflix offers,” Cooper added.

Netflix Broadens Its Reach

Because Netflix has operated as an OTT service, it has required that its subscribers have some device — such as a supported game console, Blu-ray player or streaming video stick — to receive the content. This assimilation into an actual set-top box could be a major game changer for the company.

“For as long as Netflix’s streaming has existed, subscribers have needed to watch it either through a mobile device, or a Roku/Apple TV/Chromecast device, or a gaming console, but never through their cable box,” said Schreiner.

“They (Netflix) are keen to progress from an OTT environment to reaching everyone with a TV set,” said Cooper.

“That has been part of their ongoing strategy; to move away from secondary screens such as computer monitors and tablets and reach the principal display in the home,” he noted.

“This increases their reach as a premium TV provider,” added Cooper.

Video Disruption

While this deal no doubt will increase Netflix’s reach, it also could radically change the premium video market in other ways.

“The way in which audiences consume movies and television is now entering a new era of disruption,” suggested Schreiner.

“It will be interesting to assess the repercussions and transformation from the Dish-Netflix relationship across the ecosystem — as well as the momentum of Netflix and its other recent deals, like its recent deal with CBS,” she added.

“While Netflix could offer a cost-effective way for telcos to compete with cable and satellite and deliver attractive premium content,” she suggested, it “might it also constrain telcos [and cable providers] into becoming dumb pipes.”

Peter Suciu is a freelance writer who has covered consumer electronics, technology, electronic entertainment and fitness-related trends for more than a decade. His work has appeared in more than three dozen publications, and he is the co-author of Careers in the Computer Game Industry (Career in the New Economy series), a career guide aimed at high school students from Rosen Publishing. You can connect with Peter on Google+.

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Surviving 4 Inescapably Unfair Aspects of CX Delivery

Ever built a house of cards? It’s critical to start with a sound foundation to support your later efforts. No matter how sturdy your start is, however, a wrong move anywhere along the way can bring down the house and cause all your work to be for naught.

Delivering good customer experiences is like that: You can do extraordinary work in planning the basics and even get customers to buy from you. Yet at any point along the way, a single mistake can void all the good things you’ve done and send the customer packing.

It doesn’t seem fair to those charged with managing all the elements that create good customer experiences; all that work, only to have fickle customers bail over one faux pas. Life isn’t fair, though.

Unfairness No. 1: One Strike and You’re Out

Customers now expect perfection. They’ve always expected it, really, but business was so poor at delivering it that customers came to accept flawed experiences. Think of the way your parents spoke about “the phone company” with weary resignation. It was like that with most of the businesses they patronized back in the days when the seller controlled most of the conversation and thus could dictate the experience.

Today, the customer is in control of the conversation, as should have been the case all along. That means there’s more competition in most things, and customers can seek out sellers who provide the experiences that buyers want. The shift in the balance of power also has eliminated the luxury of businesses making mistakes in delivering that experience. It’s a one-strike-and-you’re-out world. You may not think that’s cricket, but that’s what it is (almost exactly).

Unfairness No. 2: You’re Blamed for Everything

The thing that upends the customer experience may have nothing to do with the people officially charged with designing or managing customer experiences. Often, the weak link lies not in sales, marketing or support, but in some other area of the company that the customer encounters.

Maybe your controversial CEO says something that offends a customer. Perhaps someone in accounting makes an error that takes the customer time on the phone to resolve. How about a shipping contractor making a mistake and delaying delivery of a product to a buyer? All of these are out of the hands of the people traditionally tasked with the customer experience — and yet customers view them all as part of their experience with the seller.

If companies are serious about delivering a great customer experience, it’s an all-hands evolution. Everyone in the business — even people you don’t expect to interact with customers — has to be made aware that their actions have the potential to alter how the company is perceived.

That includes the executive staff and the board of directors, especially in the era of social media and 24-hour news. It also includes any contractors, resellers or distributors you use to reach the market; the customer doesn’t spend a lot of time discerning who is or isn’t on your payroll.

Anyone who is involved in selling or supporting your products is part of your organization in the customer’s eyes. It’s not easy, but try to deliver and sustain that message to the people who represent you in the field.

Unfairness No. 3: Your Customers Are Hiding

Your customer’s experience with you begins without you even knowing about it. Part of that is intentional on the business’ part — marketing, advertising and content all aim to throw out a net and capture the attention of potential customers. These days, customers do a lot of research on their own as well.

On the B2B side in particular, their experiences begin long before they signal any interest. (Sixty-six percent to 90 percent of the buyer’s journey precedes contact with a seller, Forrester’s Lori Wizdo estimated). It seems unfair — you hardly have a chance to build an experience that way.

Actually, that’s not correct. The things you do with content on your website — and with contributions to third-party media — allow you to preplan a significant amount of the precontact customer experience.

Can a customer go from early-stage interest through education to decision-making through links in your content without having to jump back to Google to do another search? Is there a discussion of terminology to help the customer understand the vernacular of your market and your products? Do you curate content as well as create it, so customers feel like they are being given resources instead of a sales pitch?

If so, you’ve gotten around this unfairness. However, most businesses are still grappling with it.

Unfairness No. 4: Customers Come With Baggage

No matter how well you plan out a customer experience, your customers are going to create their own. You have an agenda (to close sales, probably), and it’s unreasonable to think that your customers don’t have agendas of their own, too. Their goals may not match yours; they may enter the experience you’re creating at a different stage than you expect. Things in their lives may alter the perception of the experience you’re creating.

You can’t take this personally — we all experience it. Have you ever been out last-minute Christmas shopping, in a frantic panic to find what you need? No well-crafted experience is likely to change your mindset short of one-stop success in finding everything on your list. The same phenomenon takes place in a less-charged way with nearly every purchase: The customer brings half the equation to the table — and try as you might, sometimes the customer’s variables negate the experience you’re trying to create.

What can you do about it? We all know from our teenage years how effective whining about the world’s unfairness is. A better approach is to employ a more mature emotional skill — empathy — and to think through your customer experience plans with some personas in mind: the customer in a panic; the buyer with the browbeating boss; the neophyte entrusted with a big buying decision; and so on.

If the customer experiences you’re planning can accommodate the baggage the customers bring — or at least have enough flexibility to adjust to fit them — you’ll have a much better chance of winning those customers over for the long term.

Empathy, combined with the smarts to do the groundwork of perfecting your processes, convincing your entire company to be aware of their impact on customer experiences, and setting the stage in the avenues where customers have experiences with you before making contact, can help you gain more control and feel less like the customer experience world is inherently unfair.

CRM Buyer columnist Chris Bucholtz is content marketing manager for CallidusCloud and a speaker, writer and consultant on topics surrounding buyer-seller relationships. He has been a technology journalist for 17 years, focusing on CRM since 2006. When he’s not wearing his business and technology geek hat, he’s wearing his airplane geek hat; he’s written three books on World War II aviation.

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Feds Pounce on Sprint for Phone Bill Cramming

The United States government is delivering a one-two punch to Sprint over the practice of cramming — allowing third parties to place unauthorized charges on customers’ bills.

The Consumer Finance Protection Bureau on Thursday filed a civil suit against Sprint over the issue.

Meanwhile, the Federal Communications Commission reportedly is planning to hit Sprint with a US$105 million fine.

Coordination between the government agencies “is not atypical,” said David Reiss, professor of law at the Brooklyn Law School.

“Frequently federal government agencies coordinate their actions for better results,” he told the E-Commerce Times.

It’s possible that the FCC was negotiating with Sprint prior to the CFPB taking action, suggested Robert Jaworsky, a partner at ReedSmith.

“I doubt the FCC will take any action while this lawsuit is pending,” he told the E-Commerce Times.

The CFPB’s Allegations

Sprint charged wireless customers for unauthorized third-party services from 2004 through 2013, costing them millions of dollars each year, by creating a billing and payment system that provided third parties with unfettered access to its customers’ accounts, according to the CFPB complaint.

Sprint automatically enrolled customers in this billing system without their knowledge or consent, and many customers were unaware of the unauthorized charges, the bureau maintains.

Sprint continued to operate its system despite numerous red flags, including high refund rates, along with complaints from customers, law enforcement agencies and consumer groups, the CFPB claims. The carrier retained 40 percent of the gross revenue collected for the third-party charges, totaling “hundreds of millions of dollars.”

Sprint took advantage of its customers, treated them unfairly in various ways, mishandled or ignored complaints about the unauthorized charges, and didn’t track them, said CFPB director Robert Cordray.

Sprint refused to provide refunds to some customers, instead telling them how to block future third-party charges, he added — and sometimes it referred victims back to the scammers themselves.

On the Side of the Angels

“We are disappointed that the CFPB has decided to target Sprint on this issue, and we strongly disagree with its characterization of our business practices,” Sprint spokesperson Stephanie Vinge Walsh told the E-Commerce Times.

“Sprint took considerable steps to protect wireless customers from unauthorized third-party billing and is an industry leader in proactively preventing unauthorized charges,” she claimed.

“We recognize this is an important issue for our customers, and we consistently have encouraged any customers who think they may have incurred an unauthorized third-party charge on their phone bill to contact Sprint to resolve the issue,” said Vinge.

Sprint vetted each company seeking to bill its customers, and Its billing safeguards “align with the government’s own recommendations,” she maintained.

Assessing the CFPB’s Suit

The bureau’s claims are “simply allegations” and the issue will be decided in court, said ReedSmith’s Jaworsky.

“Regardless of the outcome of the lawsuit, if it has the effect of persuading Sprint to conduct a review of how it’s handling this kind of transaction, that could result in benefits to consumers,” he remarked.

“The CFPB is more than just a watchdog,” said Greg McBride, chief financial analyst at Bankrate.com. “It’s a watchdog that bites.”

The CFPB’s “willingness to exact sharp penalties and their penchant for enforcement is a huge deterrent” to continued misbehavior on the part of companies, McBride told the E-Commerce Times.

“When the penalties for bad behavior go up, it doesn’t mean bad behavior doesn’t happen,” he pointed out, “it just means there’s a higher price for it that any nefarious actor will have to be aware of — and that’s good for consumers.”

Consumers can protect themselves by checking their bills and challenging every unexpected charge, no matter how small, McBride advised, noting that “you can steal two bucks from 1 million people more easily than you can steal $2 million from one person.”

Richard Adhikari has written about high-tech for leading industry publications since the 1990s and wonders where it’s all leading to. Will implanted RFID chips in humans be the Mark of the Beast? Will nanotech solve our coming food crisis? Does Sturgeon’s Law still hold true? You can connect with Richard on Google+.

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