Competing with your customers

Excerpted from Transcompetition, by Harvey Robbins & Michael Finley, McGraw-Hill/Business Week Books, 1998

(c) by Harvey Robbins & Michael Finley

One of the funnier bits on the TV show Sniffled involved a restaurateur whose style was to badger customers to keep moving down the buffet line, to use their napkins, and to eat what's put in front of them. The bit, which came to be known as the "soup Nazi" episode, was based on real-life New York soupcon Al Yeganeh. The charm of the episode lay in the notion that one can berate and abuse one's own customers and stay in business.

In the summer of 1997, Yaganeh signed a nonaggression pact with longtime rival, Soup Man International. ABC News says that means that his soups will be sold in airports, gourmet shops and at international chains. If the Soup Nazi and the Soup Man International can work together, who are we to hold out?

Despite this success at partnering, Yageneh is unhappy. Even though the Seinfeld episode thrust him into the pop culture limelight, Yeganeh issued a statement saying he still wants to be rid of the Soup Nazi label. And he wants an apology from the person who put him the global spotlight, Jerry Seinfeld himself.

Is that any way to treat a customer?

The Barbie betrayal

We like to say we are living in the age of customer satisfaction, but there are gaping holes in this contract between businesses and the people who do business with them. There are many organizations who see their customers not as the reason for being in business but as a force to be tricked, lied to, bullied and ignored. This improbably supercompetitive attitude toward customers is more common than we like to think.

The relationship between businesses and their customers has often been parasitic. On the connectedness scale, parasitism is just one notch away from cannibalism. It's a relationship, but not much of one.

Take Barbie dolls, the world's best-selling toy. There are 250,000 people around the world who collect the dolls, as an investment hobby. In recent years these collectors have begun to grumble that Mattel, the maker of the doll, has been skimping on materials, issuing inappropriate versions of Barbie, and outfits that didn't fit.

The dispute stems, in part, from a series of manufacturing goofs and marketing blunders that hurt collectors.

Poodle Parade Barbie, a replica of a 1965 doll, was released with hair seemingly trimmed with a chain saw. Then came Barbie's friend, Francie, another vintage doll reissue, whose undersized shoes split when placed on her feet.

Mattel also misjudged the market, underproducing some collector dolls and overproducing others, causing prices to soar, then fall. Early buyers of Star Trek Barbie who paid nearly $80 each got burned, for example, when store prices later dropped to about $30 per doll.

But the final straw was when Mattel sued a fanzine for trademark infringement, after the magazine satirically portrayed a Barbie with alcohol and pills. Facing the storm from faithful customers, many of who buy 50 Barbies a year, Mattel CEO Jill Barad vowed not to give an inch. "What I do in my job, first and foremost," Barad said, "is protect Barbie."

Trademark infringement is a great way for companies to exercise the bully child within, and there is never a shortage of corporate lawyers to suggest this course of action. The anecdotes of overzealous litigation are as ridiculous as they are legion:

• Time Warner, owner of the rights to Batman memorabilia, sued a Denton, Texas rock band what was using the name Riddle Me This. Time Warner contended people would mistakenly assume the band is associated with Batman and Robin, the fourth installment in the Batman series. "I think the absurdity of it speaks for itself," says Eric Keyes, the lead singer and founder of the 6-year-old band.
• That same week, Federal Express filed infringement claims against a San Francisco coffee shop going by the name Federal Espresso. "We don't want here to be any confusion," said the spokesperson for a company whose great claim to fame used to be its focus on doing one thing well.
• Simon & Schuster sought an obtained an injunction In August 1995 against Dove Audio from distributing The Children's Audiobook of Virtues, as well as a planned book titled The Children's Book of Virtues. The book is a collection of public-domain stories about the benefits of right behavior. Evidently trademark protection takes precedence over teaching young people right and wrong, even when the "intellectual property" is 2,000 years old.
• Likewise, the Christian Broadcasting Network. doesn't think its 700 Club should be subject to parody, and filed suit in June, 1993 against Comedy Central's planned 800 Club satire.

• If you worked at Kmart over the summer and found it wanting as a career experience, and decide to post your own personal "Kmart Sucks" profile online, describing the personal habits of your immediate supervisor and the existential tawdriness of life under the blue lights, that long shadow over your lawn will be the giant red K come to discuss trademark infringement with your parents.
• If you're a lover of M.C. Escher's weird drawings, and you posted some on your website, imagining that any copyright on this 60-year-old art had expired, think again. Escher's estate has sold the rights to a CD-ROM publisher, and is bullying every site that has put up Escher images to take them down, or to severely limit their use.

• If you're a lifelong admirer of J. D. Salinger's Catcher in the Rye (the favorite book of four out of five unbalanced loners), the agent of the author will come a rapping on your virtual door. By all accounts, the reclusive and seemingly indifferent J. D. Salinger has the most ruthless agent of any living writer.
  • Most absurd of all, in our view, Toys R Us came down hard in September 1996 on a web site with the easily confused name of Roadkills R Us.

    Note that none of these companies is selling goods under the aggrieved company's name. Few are even in the same business. But the lawyers say that unless the trademark is defended it becomes void, as Frigidaire and Xerox and Polaroid and Scotch Tape did. Wait, aren't those trademarks still valid?

    In the 1960s, Walt Disney sued penniless underground publisher Paul Krassner, for a poster Krassner created showing Snow White and the Seven Dwarfs engaged in an orgy. The intent was clearly to shield Disney characters from satirical intent. Disney won, and put a unique publication out of business. But by crushing Krassner, Disney put itself on course to become the company it is today, making as much money merchandising its name and characters as it does by making movies. Where does an 800-pound mouse sit down? Anywhere it wants to.

    Moral: intellectual property should be defended, but when the mighty squash the puny, beware the Brute Cycle.

    Lost in cyberspace

    Another good example is occurring in cyberspace. A major debate of the last couple of years has been the right of commercial mailers to bombard customers with junk e-mail. You know the type of mailing: offers to sell business kits, hard porn, investment opportunities, miracle drugs, magazine subscriptions. If this mail were faxed, it would be illegal, because it ties up the recipient's equipment without permission. But no such law protects customers from junk e-mailers.

    And it is sinfully easily to compile e-mail address lists. Programs called spiders can cull 75,000 names per hour from a host of Internet sources, and turn around and mail to 1,000,000 people in a single day, without spending a cent on postage or printing. The typical customer gets five or six pieces of this stuff every day, and unless the activity is criminalized, that number will leap exponentially in the months ahead -- and it is time consuming and annoying to shovel one's virtual sidewalk clear of cyber-debris every few hours.

    The point is that the relationship between seller (the bulk e-mailer) and customers is way on the left side of the scale of connectedness. Forget "the customer as partner" -- these customers are no more meaningful to the sellers than plankton to a whale. Indeed, they don't consider end-customers "customers" at all; they are simply data their paying customers (the businesses that buy lists or buy list-making software) gobble up.

    As ever in such relationships, the Brute Cycle is automatically invoked. Already suits have been filed against web sites and conduits like Cyberpromo for behaving bestially in cyberspace. At the speed the nets are growing, Cyperpromo may be driven out of business by enraged customers by the time you read this. And like many a predator, their deal may not seem so bad -- short-term riches, followed by a bloody uprising.

    The final obvious great example in our time is Major League Baseball and the Players Association. Ostensibly about competition, most players compete more for salaries and bonuses than to win games. Teams care more for getting free new stadiums from their communities, or better offers from other communities.

    As prices skyrocket, the thing that made baseball great -- the bond between players on the field and spectators in the stands -- has vanished. In the free agency era, teams mean nothing. In a global system, locale itself means nothing. And who wants to spend $100 on an even that means nothing, and the popcorn was popped three days earlier? What is there to root for but empty professionalism?

    Compare the empty spectacle of American baseball with the collaborative brand of "social soccer" played in Africa:

    I was in the city of Douala in Cameroon, and the Cameroonian team had somehow gotten to the quarterfinals of the World Cup, playing England, and so the whole city, the whole nation, was involved in this one game. The people thronged together in the streets to watch on public TV sets, or massed in bars, with dirt floors, if they had the wherewithal to buy one beer and the emotional forbearance to nurse it. Nowhere, ever, have I seen people care so about their one thing, this game of their country. This was not overemphasizing sport. It was overemphasizing belonging.

    When the customer is brought back into the equation, baseball may begin to rebuild its status as national pastime. But not before -- the game is bullying its own fans, and those fans will apply the Brute Cycle with a hot dog and relish.

    It works both ways

    Of course, brutes don't have to be managers or organizations. Workers can behave abominably, as the history of labor shows. Customers can be the worst of all. Think of drunken louts at the ball park, or high school students who attack their teachers. Even Nordstrom, the department store that set new records for bending over backwards to please customers, won't take abuse at the hands of customers with obvious larceny in their hearts.

    In each case, the solution is to turn the Brute Cycle to your favor. Encircle and expose. Eighty-six (ostracize) the hell-raising fans for life. Brand the attack on the teacher as the act of cowardice that it is, and communicate to other kids the uncoolness of it. Spread information about devious customers to every branch of your company, and across company lines so that your competitors will also forego the pleasure of their business.