For Your Protection

Ten years ago Bill Gates said that U.S. banks were “dinosaurs". Most of us at IBM thought at the time that this was a harsh comment for an IT industry executive to make about it’s customers. However, at this stage, I have to admit that I am quite disappointed with the progress made in the banking industry. Yes, there is a lot of online banking but there still remains a huge amount of paper, faxes, forms, and hassles.

One of the areas that is overdue and ripe for automation is the bank "wire". Whether you have the money, borrow the money, or are receiving the money, it is often convenient to move the money using an electronic funds transfer — otherwise known as a "wire". A bank wire moves money from your bank account to a car dealer’s bank account, a home equity loan account to pay off a bank loan or for a real estate closing, or from your bank account to a son or daughter’s checking account for college expenses. Paypal has made moving money really simple — a few mouse clicks to send or receive payment from an eBay auction. In the world of banking, it seems the goal is to make moving money as hard as possible.

A recent real estate closing convinced me that my bank (a large national one) is truly behind the times. Like the majority of their peers, they seem unable to adapt to the Internet. There are regulatory compliance issues but I am convinced these serve more as a crutch — an excuse — to not change faster. Here are the instructions provided to customers who want to make a wire transfer.

In order to make a wire transfer the customer must get "All Wire Forms and necessary paperwork" to the "Risk Management Area" by 3 PM the day prior to the day of the transfer. The overnight package must include "original signatures" and a "copy of a valid driver’s license". If you get through all the hoops the wire goes out the on the third day of the process. But before it goes, and for "further protection", the bank calls and asks a bunch of security questions and the amount of the last check drawn on the account "prior to completing your wire transfer". If you happen to be traveling and can’t take their call, the wire does not happen.

You can buy or sell merchandise and trade stocks online but when it comes to moving money, the process is incredibly cumberssome. Is the bureacracy really "for your protection". I don’t think so. It is culture and unwillingness to change. Is a really secure electronic funds transfer online possible? Of course. There are numerous technologies available to implement encryption and authentication, including biometric identification such as on the Lenovo ThinkPads. Even the IRS has implemented a secure approach for e-filing tax returns. Tens of millions of people use it. It works.

To add insult to injury I received a letter in the mail the other day from one of the largest banks in the world. "It is our policy to reconfirm the following wire instructions" which they have on file in case they are needed. The letter contained my name, address, phone number, the ABA routing number for the bank, and my bank account number. The letter opened with "For your protection". So for my protection the bank sent a letter through the postal system with their name emblazoned on the envelope containing a lot of valuable information that an identity theft would love to get their hands on. A major source of identity information comes from thieves going through physical mailboxes looking for letters from banks. People have to buy shredders because of their banks. Do the banks have privacy policies? Yes, and most of them say in essence, we have your information and we will use it to develop new business and we will share it with our partners. If you want to "opt out" you have to write them a letter. For their protection.

Epilogue: Ten years ago, some predicted that "local" banks would be gone by now. Today they are flourishing. People know their local banker and if they need a wire, they just call and it gets done. Authentication gets done because the people know each other.

Five Percent

At a speech in New Orleans on Monday I said we were just five percent of the way into the Internet — that of all the things that could simplify our lives and save us time, only five percent of them are here so far. New companies such as Pandora are pressing the envelope to do great things but unfortunately many existing companies have not kept pace with expectations.

This morning I checked on the status of a medical prescription at Express Scripts, my "online" pharmacy. The web site had an order number but did not show the name of the medication. Clicking on "check status" gave a line that said "In pharmacy" — since May 6. No information available. Sending an email to them is hopeless — I have done it before — they respond to the email by telling you to call if you need information. I called and was told they had received the prescription on May 3 and it then takes them three days to enter it into the system. Four days later they determined that it needs "prior authorization" and so they faxed a form to the doctor requesting that he fax a form to the insurance company who would then need to fax a form to customer service who would then notify the pharmacy it is ok to ship the medication. The pharmacy and customer service are the same company. There is no feedback to the customer at any point. Meanwhile everyone is calling everyone and the doctor’s office is so overloaded with calls about prescriptions that you can’t get through to them. This is the status of online pharmacy. Five percent would be an overstatement.

Then I made a reservation at Marriott.com. At the end of the form was a "comments" box and I entered some things that I thought would be helpful. Upon hitting the submit button I got an error message saying "Comments too long". The form only accepts 45 characters — a ridiculous limitation in these days of inexpensive storage. Well designed online forms that limit the text input tell you how many characters you have remaining. Not this one — there is no indication given of how many characters have actually been entered and the text box actually has four lines of 64 characters each. You just keep shortening and entering submit until it is satisfied. What could they be thinking? The confirming email arrived quickly but because they had embedded some javascript in the email to make it look pretty, it could not be printed. Travel sites generally are getting better but they still do a lot of dumb things.

The point that top management of these and many other companies are missing is that the perception of their company and their brand is no longer based on their past history or even the reputation of their products and services. The way we see them is the way we see their web sites. Unfortunately, a lot of things we see are not pretty. Increasingly our loyalties will shift to the companies who make our lives simpler and save us time instead of frustrating us. Many are trying hard but they have a long way to go.

Phone Service

Chris Herot, from Lexington, Massachusetts, wrote in response to the prior post about the telephone services offered at the Stamford Marriott. He agrees there is a "declining number of people will pay those outrageous charges by raising the price for the few suckers who remain". He provided an example where upon checking out of a hotel recently he was confronted with a charge for more than $10 for a two minute phone call.  He said the front desk sheepishly acknowledged it was a rip-off. They cheerfully removed the charge from his bill.

On a positive note, the more enlightened hotels are starting to offer a bundle of services people will pay for. The Marriott "Wired-for-Business" connectivity offer which enables guests to "Work smarter with unlimited…" in-room high-speed Internet access plus local and long distance phone calls for $9.95 per day is not a bad deal unless — you have your own EV-DO service and a good mobile phone plan. There is also some innovation going on In the directory assistance area where 800-FREE-411 is providing a nice alternative to the old-fashioned 411 system.

But what about customer service? This week received two telephone company bills — both had significant errors — caused by outdated backend batch-oriented systems. One took 21 minutes to resolve, the other one 49 minutes. Some would say that telephone customer service is an oxymoron, but I have noticed a significant difference in recent months in terms of attitude. Although I have had issues with Comcast, Verizon, and Cingular, the customer service representatives act like they care. Unlike the past, they apologize for service problems, they thank you for your business, they identify with the problems you have, and they sincerely work to get them resolved. At Verizon, the reps are empowered to offer on the spot credits to resolve issues. Competition seems to be driving these companies to start caring about their customers. You can lock customers in with contracts but you can’t make them happy unless the service reps show good attitude. I see a real shift in a positive direction. If we can keep the regulators and lobbyists in Washington from reducing competition we can expect to see service and pricing get better and better.

Hotel Not On Demand

Some people don’t agree with me that we are only 5% of the way into what we can ultimately expect from the Internet, but everyday I see examples that convince me that it is true. Tonight I visited Hilton Hotels online and tried to reserve a room. I got the following user-friendly message….

We’re sorry but we are unable to process your login. You may book your reservations without login. Be sure to provide your HHonors account number on the Guest Information form.

I know I have an account and I know the password. I tried various options and finally gave up and called. After multiple "please pay attention because our menus have recently changed" routines I got to a person. She was very nice and informed me that the "servers are down for maintenance every Thursday evening from 9-11 PM". I could try again after 11PM or try again in the morning. What amazed me most was that this person thought that was ok. She has been convinced by the company that this is just how it is. Don’t they realize that for two hours customers will just click on "anotherhotel.com"? And don’t they realize in California the "maintenance" is closing out customers from 6-8 PM? And that in many parts of Asia, is prime morning time? What could they be thinking? Certainly not about customers and on demand.

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Power To The People: Still Not Getting It

Open source and open standards are taking hold, big-time. Web access to numerous public and private services are also growing rapidly. The ability to search, find and link to information of all kinds is truly awesome. In spite of this, there are many companies that still seem to be in the dark.

GarageTek has a great product and appears to be the leader in garage organization systems. I am really happy with their system, except that their tool holder is not very good and their selection of other hanging accessories is limited and what they do have is not available online. Their franchisees are small businesses that only have hours when I don’t so it is hard to buy from them. That’s one of the key reasons why e-commerce is booming — people can buy at midnight or six in the morning. I was sure that by now there would be competitive OEM "garagetek" accessories available online and I found some at Sporty’s Toolshop but I was not sure they would be compatible. Even though the Sporty’s accessories appeared to be compatible, the product specialist could not say because she "never heard of GarageTek". I asked who the manufacturer of their accessories was but they said it was "against their policy to reveal that information".

Knowing I could return them if they did not fit, I ordered a few accessories from Sporty’s. They are very nice — much better than what GarageTek offers. The products came in packaging that said "Suncast" and so I checked out their website. It said

NOTE: To avoid competing with our retailers, we will only sell replacement parts on-line. For a listing of the retailers where you can purchase our product please click on the Find a Retailer link listed above

The link showed a list of "bricks and mortar" retailers with no websites or email addresses. They did not even show Sporty’s as one of their retailers even though that is where I had bought the products.

The "bunker" mentality that ignores "power to the people" was understandable ten years ago but at this point the Sporty’s and Suncast approaches seem Neanderthal at best. Whether it is manufacturers who are protecting their retailers, governments who regulate wine sales, or wholesalers who protect unjustified layers in the supply chain, demand from consumers on the Internet will ultimately determine the channels of distribution. The businesses that understand that and create an on demand model will be the winners.

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Two New Books

Two new books arrived this week that may be of interest.

Naked Conversation – How Blogs are Changing the Way Businesses Talk with Customers by Robert Scoble and Shel Israel is very timely with all that is going on in the world of blogging. I know Robert from Microsoft. He has been active in evangelizing the potential of blogging and very much practices what he preaches, even when his postings may at times not be consistent with company practices. The book explores how blogging has changed the rules of communication and competition and gives business owners the tools to launch an effective blogging strategy. Robert and Shel interviewed many business leaders including Mark Cuban of the Dallas Mavericks, Bob Lutz from General Motors and Johanthan Schwartz of Sun Microsystems.

Let Go to Grow – Escaping the Commodity Trap by Linda S. Sanford with Dave Taylor is about strategy and management practices. Normally pretty boring stuff, but Linda and Dave have organized the book in a way that makes it flow very nicely. It is all about driving innovation and gaining productivity — both urgent topics for anyone in a leadership position today. The book explains the concepts of componentization, outsourcing, and off-shoring in a clear but strategic way and then lays out an approach for leveraging the concepts across an enterprise. Practical case studies about Dell, eBay, GE, Procter & Gamble, and Toyota bring it all home. I have known Linda for quite a few years. She has had a number of top-level executive positions in systems, storage, and global sales and is now Senior Vice President of IBM’s internal On Demand Transformation and Information Technology initiatives. In addition to being one of IBM’s highest-ranking women, she also serves as a member of the Women in Technology International Hall of Fame and the National Association of Engineers. She was named one of the 50 Most Influential Women in Business by Fortune magazine, one of the Top Ten Innovators in the Technology Industry by Information Week, and one of the Ten Most Influential Women in Technology by Working Woman. She is also a nice lady!

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Five Percent

There is much ebullience about booming online sales. In an interview on CNBC a couple of days ago, the CEO of Circuit City attributed the positive company results "in large part due to on-line sales". Specifically, he said the ability to shop online and then pick up the item in the nearest store twenty minutes later was a unique feature that customers love. It is indeed a nice feature, and others are offering it too (see in store pickup stories in patrickWeb).

In spite of the rosy online sales stories, we still have a very long way to go. I actually feel we have most of the way to go — we have only seen five percent of what we are going to see — in both our business and personal lives. Although growing at double digit rates, the e-commerce sales in the third quarter accounted for just 2.3 percent of total sales. It will be very interesting to see what the final numbers show for all of 2005. (See Census Bureau for data on this). Whatever the numbers may show, the real point is that businesses and their websites have a long way to go to become on demand at meeting our rapidly rising expectations.

While it is truly amazing what many websites have achieved, we continue to see some things that make us scratch our heads. Any of us could cite personal cases. Here are a few examples I experienced in just the last couple of weeks. A major financial services company had the following at the top of a financial statement — "ONLINE STATEMENT this is not a legal statement". Huh? A hotel (for of a global chain) in Philadelphia told me they can’t access any of my account information and that their headquarters can not access any hotel information. On purpose, they said. I emailed their customer service about it and here is what they said — "I apologize that the hotel was unable to locate your account information, and I apologize that our online sales office doesn’t have access to your personal billing information at hotels. Some of our hotels, per our members request, require written authorization, with your signature, in order to protect your privacy. As such, we are unable to view records of your stays at hotels or add missing stays without a copy of your hotel receipts".

Still not convinced we are only five percent of the way there? One of the world’s largest parcel delivery company’s website said "Pickup is not available in your area". I had entered a nine-digit zip code. The website wanted five digits. Rather than saying I had made an error or just looking at the first five, they processed the zip code and concluded they didn’t deliver there. I could not convince customer service that this was a website problem. They said it was my fault for entering it wrong. A giant healthcare website has a list of their providers "online". After calling the doctor’s office for an appointment, they said "He hasn’t worked at the practice for two years".

Meanwhile the advertisers are getting desperate to get our attention. Pop-up boxes and flash movies that we have to watch or click to get to what we want. "Contact Us" forms require a mini-survey and pre-categorization of our question before we can ask it, and then a message is sent to them with no copy to us.

We have a long way to go — the good news is that it is happening — steady progress is being made. Already companies are being judged by their websites and the final numbers for 2005 will encourage even more competition to get us moving toward ten percent!

Other patrickWeb stories about On Demand

1-800-FREE-411: Update

The Free 411 concept is the easiest thing to explain! This is an audio update to the original story. Click play, stop, or pause buttons on the podcast player.

1-800-FREE-411

Remember when 411 calls were free? Those days are gone — now it can cost up to $3.49 for an information call. In spite of the cost, there are billions of these calls made per year. I admit it — I avoid calling 411. It’s not that I can’t afford it — it’s a matter of principle. I don’t want to pay for information that I know is available free on the web. Fortunately, there is a new way. A startup called Jingle Networks, Inc. has developed 1-800 FREE-411 (1-800-3733-411). No charge for the call and no charge to be connected after they give you the number you are looking for. How do they do it? A new business model.

Call 1-800 FREE-411 (1-800-3733-411) and request a phone number for "Sally’s Hair Salon" and you may get a message saying, "Hold while we look up that number". "If you would like a $5 discount for your first visit to Steve’s Hair Salon, press 2". "If you want the number for Sally’s Hair Salon, please wait and you will be connected at no charge". Try it yourself, or listen to a live demonstration of my experience in trying this.

Jingle Networks, Inc. was one of the companies that showed their new product or service at the DEMOfall Conference in Huntington Beach last week. You can see a list of all the companies at the Demo site or see a short list of the things I found particularly interesting here in the "conferences" category of patrickWeb.

Tags: 411 directory information long distance

Seven to Ten Days

There are many things in the queue to write about but I can not resist commenting on an email I just received. Awhile back I was looking for some video conversion software and I found something I thought would be useful and purchased it at Sorenson Media. I then began to receive regular emails from them and subsequently decided I no longer wanted to hear from them. I clicked on the "unsubscribe" link in their email — at least they had one, unlike Circuit City and others. I then received the following from them in an email — "john@patrickweb.com will be removed from our mailing lists. Please allow 7-10 business days for this request to be processed". Seven to ten days? Most web sites provide email confirmation of a purchase within seconds and yet Sorenson needs 7-10 days to update their databaes? Seems that "7-10 days" has become part of a lexicon. It is like "I’ll get back to you on that". Hello? This is the 21rst century. Please stop using language that sounds like it is coming from another planet. How about, "We received your request. We regret that you have chosen to no longer receive our mailings and we immediately removed your email address from our list. You will no longer hear from us, but we do hope you will come back. You are always welcome at Sorenson Media".

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