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When Your Customer Service Goes Viral
Thanks to cell phones and social media, the stakes when handling customers have never been higher.
Here are today’s highlights:
Business owners say they are losing confidence in the economy.
Would a recession bring everyone back to the office?
Remote work has been complicating compensation.
Ron Rice founded Hawaiian Tropic.
Business owners say they’re losing confidence in the economy: “Fifty-seven percent of small-business owners expect economic conditions in the U.S. to worsen in the next year, up from 42 percent in April and equal to the all-time low recorded in April 2020, according to a survey of more than 600 small businesses conducted in May for The Wall Street Journal by Vistage Worldwide, a business-coaching and peer-advisory firm. The measure is one part of a broader confidence index that in May posted its largest year-over-year drop since the Covid-related shutdowns of April and May 2020. Despite rising prices, the portion of small businesses that expects revenue to increase in the coming year fell to 61 percent, down from 79 percent in May 2020.”
“‘It just feels like there are all of these factors that are out of our control, and it doesn’t seem like there is a light at the end of the tunnel,’ said Minnie Luong, owner of Chi Kitchen, a manufacturer of kimchi and other fermented Asian-flavored vegetables.”
“The Pawtucket, R.I., company, which has eight employees, has faced a roughly 50 percent increase in raw-materials costs and shortages of glass jars used in packaging.”
“‘Customers that would typically buy a truckload are buying half a truckload,’ said Drew Bahner, chief executive of Expanded Solutions, an Oklahoma City-based manufacturer of expanded metal products used for industrial applications, fencing, and other security needs, and patio furniture.” READ MORE
The decade of cheap Uber rides is over: “That is because Uber has lost an astounding sum since its founding in 2009, including more than $30 billion in the five-odd years since the company’s finances became public. Together with earlier losses and a similar strategy at rival Lyft, this has amounted to an enormous, investor-fueled subsidy of America’s ride-hailing habit. Those days are over, Uber CEO Dara Khosrowshahi told employees in a memo last week: ... ‘We have to make sure our unit economics work before we go big.’”
“How Uber rights the ship is not for me to figure out, but one obvious answer is that rides have been getting—and will continue to get—more expensive.”
“Average Uber prices rose 92 percent between 2018 and 2021, according to data from Rakuten; a separate analysis reports an increase of 45 percent between 2019 and 2022.”
“Both Uber and Lyft have added a surcharge for riders that helps drivers account for high gas prices. And all that was before last week’s ultimatum.” READ MORE
Remote work continues to complicate compensation: “These challenges have created business opportunities. Startups such as Deel have emerged to manage payrolls for remote workforces. Radford, a product of Aon Corp.’s human-capital business, compiles salary information from 5,500 companies into a global compensation database that businesses use as a guide. It’s now introducing new ‘location analytics’ tools to help companies decide what to pay distributed workers. About 25 percent of companies no longer differentiate pay by geographic area, up from 19 percent last year, according to WorldatWork.”
“‘It’s one of the hardest business problems to solve right now,’ says Daniel Yanisse, co-founder and chief executive officer of Checkr, a provider of background checks for hiring based in the Bay Area. About 40 percent of Checkr’s staff live 50 miles or more from one of its six offices. ‘We’ve fully embraced remote work, but how do you adapt to all these locations?’”
“‘There’s no objective answer to how to structure remote worker pay, because there’s no answer to how to structure pay in general,’ says Jake Rosenfeld, a sociology professor at Washington University in St. Louis whose research focuses on pay variations.” READ MORE
Will remote workers be the first to be laid off in a recession? “On Blind, an anonymous corporate message board with verified members, tech workers have been fretting about layoffs and the potential end of remote work in recent weeks. ‘Will recession / layoffs bring everyone back to office?’ one employee of software firm Carta wrote in late April. ‘Yes it will, no doubt,’ a Google employee responded.”
“In a separate thread, an Apple employee wrote that tech companies missing revenue targets and making layoffs are a ‘dream come true for [the return to office] lobby.’”
“Michael Solomon, who manages software engineers and tech executives through his talent firm 10x Management, told The Post that remote work is a ‘great tie breaker’ for bosses deciding which employees to lay off.”
“‘If all things are equal, the person in the office might have an advantage,’ Solomon said. ‘But if you’re a top performer, I don’t think it makes a bit of difference.’” READ MORE
Everything is changing for car dealers, including their geographic boundaries: “Honda announced today that it’s rolling out a new dealership design, one that takes up less square footage and is modular and flexible; what was once showroom space, for example, can be transformed into offices for employees. It’ll also have electric vehicle chargers, as the company aims to sell half a million EVs in the US by 2030.”
“The supply chain bottleneck means new car dealers have fewer vehicles on hand to show off to customers.”
“Meanwhile, inspired by a new breed of electrified direct sales companies, like Tesla and Rivian, big automakers started experimenting with letting customers reserve and even buy their cars online.”
“Historically, automakers assigned each of their dealerships a specific region. But the internet ‘has really started to break down the geographic boundaries that used to limit the sales potential of a dealership,’ says Kerrigan.” READ MORE
David Gelles writes that it’s time to reassess the influence of Jack Welch, the former CEO of GE once labeled the “manager of the century”: “It was a career defined by a ruthless devotion to maximizing short-term profits at any cost, and punctuated by a foray into misinformation. And it opened the door to an era where billionaire C.E.O.s are endowed with vast power and near total impunity. G.E., too, is still reckoning with Mr. Welch’s legacy. For two decades after he retired, a succession of C.E.O.s tried and failed to return the company to its former glory. Then last year, G.E. management admitted defeat and made an announcement — the company would be broken up for good.”
“When Donald J. Trump is elected president, when Jeff Bezos argues about inflation with the White House, when Elon Musk negotiates his $44 billion deal to buy Twitter by using the poop emoji — this is the world that Jack Welch helped create.”
“His pupils, though, went on to run dozens of other major companies, including Home Depot, Albertson’s, Chrysler, and Boeing. Most of them failed.” READ MORE
Ron Rice, the “Suntan King,” founded Hawaiian Tropic: “As Ron Rice told it, he was sitting in his lifeguard stand on Daytona Beach, when he got the idea that made him a multimillionaire. Looking out at the beach towels, umbrellas, and surfboards scattered across the white Florida sand, he spotted someone applying Coppertone, one of the few suntan lotions then available in the late 1960s. He thought he could make something better. Mr. Rice, a part-time lifeguard who taught high school chemistry and coached football, was not exactly an expert at skin care. But he had shown an entrepreneurial spirit since he was a boy, when he spent his summers selling homemade honey, cider, black walnuts and live rabbits from a roadside stand near his home in the Blue Ridge Mountains.”
“Within a few years, he had a factory in Ormond Beach, Fla., and was distributing his products worldwide, building an empire of lotions and tanning oils that he promoted with help from star-studded Hawaiian Tropic beauty pageants. ‘Suntan is sex’ he said. ‘That’s what it all boils down to. Sex and vanity.’”
“Mr. Rice’s relationship with his female employees came under scrutiny in the late 1990s, when he was sued by two women who alleged in separate lawsuits that he had sexually harassed them at work.”
“Although the cases made headlines in Florida, they seemed to have little impact on Hawaiian Tropic, which had net sales of more than $110 million in 2006. Mr. Rice sold the company to Playtex Products the next year for $83 million ...” READ MORE
An incident in a Chicago store shows how social media has raised the stakes on customer service: “What happened next on that May 8th day has become a viral sensation on TikTok, leading to countless death threats against the store owners, and even their dogs. The Fox Club shuttered its doors, and locked down its social media accounts. ‘People have been reaching out on our cellphones, our work landline voicemail, personal emails, my business email, every Instagram account we’ve ever had — threatening us, saying that they’re going to come burn the store down,’ said designer Lizzie Cook, a co-founder of The Fox Club. ‘It’s traumatizing. Death threats to kill our dogs, threats that if they ever see our faces, there’s going to be consequences, that Humboldt Park doesn’t want us there. Thousands of these messages.’”
“[Candace] Behrens posted the 1 minute and 44 second unedited video to her @candyland44chi TikTok channel the same day, and it snowballed into hundreds of thousands of views and thousands of comments online.”
“‘Hi. I understand you don’t have a return policy. We’re recording this for my social media,’ Behrens says as she approaches a store associate seated behind the counter. ‘I have a large following.’”
“‘I didn’t handle the customer very kindly,’ [Chanel] Marshall said. ‘I was very frustrated with her as you can see in the video. I think the camera just caught me off guard and my employee who was there.”
“Cook said the pair are so shaken they don’t know what to do when it comes to reopening their store, which they opened in 2019.” READ MORE
THE 21 HATS PODCAST
Dashboard: It’s Still About Hiring: This week, Lou Mosca, COO of American Management Services, which works with small businesses around the country, talks about why hiring—and not recession or inflation—remains his clients’ biggest concern and what he and his clients are still learning about recruiting. Plus: Lou sees banks over-reacting and warns about the dangers of online lending.
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If you see a story that business owners should know about, hit reply and send me the link. If you got something out of this email, you can click the heart symbol, you can click the comment icon below, and you can share it with a friend. Thanks for reading, everyone. — Loren