Friday, September 23, 2011

Suggestion box

Your credit card statement comes. There’s a charge ascribed to some company with an obscure name you don’t immediately recognize, but there’s an 800 number associated with it. So you call the number, speak with someone who eventually answers, and find out that, indeed, this was a purchase you made and agreed to pay for. You hang up.

What has this cost the company (which is obviously set up for just this transaction and probably goes through the process many times an hour)? The call cost something. The representative’s time cost something. Let’s call it $5 (wild guess), which is a cost they then have to build into their prices, probably lowering total units sold.

But there’s a solution. I just received the following email:
Dear Dick Margulis,

This notification is just a friendly reminder (not a bill or a second charge) that on Sep 9, 2011, you placed an order from [obscure company]. The charge will appear on your bill as “[even more obscure rubric]”. This is just a reminder to help you recognize the charge. You will not be charged again.
Bingo! One email, sent by automated script two weeks after the purchase, alerting me to what I’ll see on the bill. Total cost: less than a penny.

Some employee of the company suggested that strategy and hopefully got a reward or a promotion for doing so.

I don’t know if you’re old enough to recall when every box of Kodak film came with a folded sheet of instructions printed on lightweight paper. You may not even be old enough to remember film, but just go with me on this. Kodak had an employee suggestion program. Any employee could write up a suggestion, and if the suggestion was implemented, the employee would get a hefty reward. The number that sticks in my mind is ten thousand dollars, which was nothing to sneeze at fifty years ago.

Well, one inspired employee came up with the idea of printing the instructions on the white inside surface of the yellow box itself, rather than on a separate piece of paper. The cost of the reward was recouped within weeks of making the change, perhaps within days.

A decade or so before that, another Kodak employee noticed that the Brownie camera kits sold as Open Me First Christmas presents were being returned in large numbers because of dead batteries. The batteries were dead because they were inserted into the cameras when the packages were put together, in July, so they could be shipped to stores in time for Christmas sales. The employee suggested packing the batteries in a separate slot in the box, rather than in the camera. Problem solved. Returns cut to a negligible level. Millions of dollars saved.

When was the last time, in this age of MBA-led corporations with their attitude that all innovation comes from the top, that you saw an employee suggestion box?

Just asking.

2 Comments:

Blogger Benjamin Lukoff said...

There's one at my workplace, but we're a nonprofit.

As for the unintelligible credit-card statements, the e-mail solution is a good one, but wouldn't the best one of all be to make sure those lines make sense?

1:34 AM  
Blogger Dick Margulis said...

Two responses:

1. Does your nonprofit pay money for good suggestions? They should. If a suggestion is going to save them an expense (perhaps freeing up more money for the good work it does or enabling it to hire more staff), then it makes sense for them to offer a cash incentive.

2. Vendors don't have a lot of leeway in what the credit card company puts on that line. Sure, it would be better if the system were designed differently. But given the control exercised by the card companies, vendors have to be creative. I'm sure you've purchased fonts from little companies that, rather than gin up their own custom back end use a service company to manage their shopping cart and credit card billing. What was that $37 I spent at we-bill-for-others.com???

7:30 AM  

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