Strategi-View


Physician in residence. Entrepreneur in residence. Professor in residence.

Why not, Customer in Residence? moser

Today, company and product visionaries persuasively argue that developing a close relationship with customers–being interested in, and genuinely understanding customers’ experiences before, during, and after their interactions with your product/service/employees–is either a source of competitive advantage or the source of a fatal flaw in the business.

From Amazon to Zappos (go figure the one acquired the other), and from USAA to that rascally Gecko, successful businesses (online and/or BnM) make a strong case for putting customers first, last, and in between.

Many companies manage to build a deep customer-first element into the core of their brands, and guess what? This really resonates with customers.

Not sure about that? Have a look at the new breed of customer service evaluations, and their impact on customers’ shopping decisions.

Customer programs aren’t new, but that doesn’t mean they’re not relevant. Quite the opposite. Consider:

At eBay in the early 2000s we ran the Voices program, where we invited buyers/sellers to eBay’s HQ to meet eBay employees and other community members, take a campus tour, and talk about features and issues important to the community. It was an instant hit with die-hard Community members who wanted their voices heard. And, a very large, rapidly expanding company was able to step outside its view of the world and learn from its customers.

More recently, furniture designer/craftsmen, Thos. Moser (http://www.thosmoser.com), launched a week-long CIR program, which they run 8 times a year. Moser’s furniture is designed, hand-crafted, and functional, and it generally appeals to furniture “collectors,” though I’m sure its broadly appealing designs are the inspiration for knock-offs.

At Moser, furniture-enthusiast customers apply for a spot in the Moser program via the website, and Moser selects customers on a first-come basis. Participants travel to Maine and work alongside a master craftsman while they build their own piece of furniture, which they crate up and take home with them at the end of the week.

The Moser program is a paid one (cost to customers ranges from $6K to $14K, and pretty much all-inclusive), but not all CIR programs are. You can also give away a free spot from time to time.

win

While all CIR programs have some form of associated cost to the company (employees’ time, cost to bring in customers, etc.), the benefits may actually be unlimited, long-lasting, and far-reaching:

  • They’re your customers. Get to know them! Who knows, they may want to work for you some day. And if you don’t, your customers may become someone else’s.
  • Think about cost to acquire and retain. Demonstrate your interest in, and commitment to them, and your customers will probably come back next time.
  • Great customer service is viral–it spreads by word of mouth from happy customer to friends and family around the globe.

Ask not what your customers can do for you; ask what you can do for your customers.

you-won

The following is a letter I wrote to my youngest sister, Sophie. I’m proud of her, as she is about to mark the end of her two-year commitment to the Peace Corps where she has served as a community organizer in a remote high-altitude village in the mountains of Peru. She currently lives with her sponsor family in an adobe house, which is state of the art in those parts. You can read more about her incredible experience here. With permission, here is the letter.

***

Boogs–

As you wind down your Peace Corps assignment in Peru I have some more (unsolicited) thoughts for you around the future. Your future 🙂

Deep, incredible international experience is now part of who you are. I am very excited for you, because I believe that an international education will lead us—and your generation in particular—to a rich life of insights, humanity, and livelihood.

The Economist has a special report about “innovation in emerging markets” in the April 17 issue, and I want to talk with you about some of these ideas as you set the table for your future.

Innovation is a buzzword of our times, in some ways born of the current global economic crisis. In a word, from a US perspective, we are in deep doggy-doo-doo because we’ve chosen to focus on being “the number one consumer society” and on delivering services, rather than on manufacturing things here at home.

We offshore manufacturing to a large extent because there was a time when people and countries with “fewer skills” were “cheaper” to hire than the American workforce. Prior to this era, though, Americans were known around the globe as “the world’s innovators.” Technology, democracy, capitalism (and all the products and services under these mega-umbrellas) are a few of the major innovations we’ve developed or refined.

The approach we took over the past 50-60 years worked for decades, but then problems began to emerge: These pesky things called the Third World and the Second World (that’s what we called them until the late-80s) started to change—and many of them evolved, sometimes (due to their sheer numbers) rather quickly. And they aspired to higher global status—as people, communities, nations, and regions.

And as the years went by, they changed more and we changed less, to the point when astounding events occurred in the global social and economic marketplaces, which caught us off guard.

One problem with the US approach was exactly around this notion of “innovation:” Often times, innovation occurs at the manufacturing stage, or level of an economy. When you outsource that capability, you give away a potential competitive advantage.

Think of how Japan (Toyota) passed the US (the Big 4) in automobile quality, performance, and cost in the 1980s. The Japanese innovated on their assembly lines by applying the ancient principles of kaizen (around “making change for the better”) to car manufacturing.

These innovations in business processes became known as ”Lean Manufacturing,” which in turn spawned another innovation called “Just In Time” business practices, whereby a company only manufactures/inventories products when customers order them, rather than producing millions of units and storing them (which costs money and erodes profits) while marketing them to customers (which costs money and erodes profits).

So finally American firms (like everyone else in the world) adopted Lean Manufacturing and JIT business practices/processes where/when it made sense in order to remain at competitive parity with the rest of the competitive world.

Another problem with the US approach was that it did not account for the rise of emerging economies, which possess the potential to grow vast middle classes (ones that dwarf the US market by factors of 10 and more!) very rapidly.

These so-called “emerging markets” have finally “emerged.” I remember when we stopped calling them the Second and Third World and started calling them “emerging,” to signify their non-static, yet still inferior (relative and subjective) economic qualities and status.

“Emerged nations” (let’s coin the term!) aspire to what they believe is their destiny, just like Americans did in their time of modern emergence.

Emerged nations are not as “cheap” as they used to be, and when they produce goods for the US today, those goods aren’t so cheap for Americans to buy anymore.

This trend toward “economic parity” will continue to drive forward until it costs the same (or more) to produce something abroad, at which point the incentive for the US to outsource the manufacturing functions will disappear.

So let’s keep track: First we lost a competitive edge to innovate by off-shoring critical manufacturing industries and functions; next we lost the benefits that the off-shoring originally held for us; and finally, we might have lost the fire-in-the-belly to “make things” and the business capabilities necessary to do so.

An example of this trend, which hits quite close to home, comes from Canada:

There was a long period of time when the US had twenty-five cents (or more) on the Loon. It was precisely under those economic conditions in 2003 when eBay—searching for an in-expensive English-speaking nation in which to set up a Call Center to serve its growing English-speaking user base (think Canada, US, UK, and Australia)—went to Vancouver (Burnaby, specifically) and opened the eBay Customer Service Center.

The Center bulged to 600+ employees over a two-year period. It was a boon for the B.C. economy, and it looked like a great play for eBay’s bottom line.

Until the globalization tsunami hit Western Canada’s shores:

On July 1 (Canada Day, ironically), 1997 the Brits had handed Hong Kong back to PRC, and many, many HK residents (Chinese nationals, not expats), removed their money from HK and went looking for a safe place (preferably English-speaking, which they’d grown up with in HK), and with better air quality, to invest it.

And they found Canada. Vancouver, specifically, located on the opposite shores of their beloved homeland. Pristine, ready, willing, and waiting.

Over the next decade real estate prices in Vancouver (and Burnaby) went through the roof, and then through the stratosphere, and they’ve been going up ever since.

This global economic shift (from East to West) combined with the softening of the USD (think 2001 dot-com bubble-burst, think 9/11 economic crisis; and then credit defaults, mortgages, and financial scandals since then), caused a “very perceptible” re-balancing of economic power in the North American region.

It was so “perceptible” that eBay Inc. shuttered the Burnaby Center last year because it was simply more expensive to operate in Canada than it was to operate back in the US and offshore, in India (for now, anyway).

I wonder if anyone on the eBay Facilities Search Committee back in 2002 was aware of the impending economic impact of 1997 on Vancouver. If they had been aware, I wonder if they’d have chosen Burnaby in the first place (it’s very, very expensive to ramp up, train, open, operate, and then wind down and shutter a 600+-person operation in a 6-year period).

But in contemporary implementations of corporations in America, we often find textbook cases just like this, where a strategy is formulated, ratified by the BoD, and implemented around the short-short-term (i.e. the Wall Street Quarter) despite knowledge (or at least well-informed strategic insights) that might inform a different course if the Long-Term had been the point of reference.

I wonder if we’ll ever know.

But back to the main point: Not only that, but the larger issue is that those “emerged economies” will begin to focus their attention on their own, truly vast markets of consumers (whom we have almost wholly ignored, btw) instead of “existing to serve the US markets.”

Here are some of the main issues that will confront companies that attempt to market to those “emerged markets” (per the Economist’s special report article called, “Easier said than done”):

“As companies work their way down the income pyramid, the problems proliferate. Distribution is tricky: modern retail chains account for only a third of consumer goods sold in China and a fifth in India. Branding can have pitfalls: the locals may be suspicious of foreign products. Companies may find themselves up against feisty rivals that they have never heard of, not to mention unscrupulous pirates. And China’s rural areas account for 54% of its population but produce a much lower share of its GDP.”

It goes on:

“Companies in search of the much-vaunted fortune at the bottom of the pyramid have to start not with consumers but with non-consumers. They need to get inside poor people’s heads to develop new markets, shaping people’s tastes and establishing habits.”

This plain talk sounds crude and opportunistic at first blush; however, the context of the point about “non-consumers” and “shaping people’s tastes” is we must attempt to objectively define the challenge of marketing to an “emerged market” whose people really don’t know how to be consumers yet, despite their desire to move from ag-based economies toward a more free market-styled one, and that we (in the US and elsewhere) don’t know how to market to “emerged markets.”

The challenge we all face is how to approach this dynamic with a balanced view of capitalism, humanitarianism, and with a view to preserving cultures and values. (An excellent book that delves deep into these issues is “Capitalism with Chinese Characteristics,” by Professor Yasheng Huang of MIT’s Sloan School of Management.)

Opportunity knocks—It beckons you, little sister, to have a look deep into the future. Your future:

By any standard, you have a world-class college education. Not only that, you’ve studied broadly rather than narrowly by learning about social sciences, literature, and political science. I remember reading one of your early college papers (I was on a flight to the Burnaby Center, I believe, when I read it) about understanding radical Muslim behavior.

It was a well-researched and passionately written paper, which left me inspired and wanting to learn more (though it could have come off as trite and plain in less capable hands).

As a young person, you were ahead of the Awareness, Passion, and Sensitivity curves.

And now, as the country and other limbs of the economic globe have stumbled and fallen into recession, you chose to employ yourself as a volunteer in Peru, which “is considered an Emerging Market according to the MSCI.”

You were pulled to Peru, as I understand it, for humanitarian reasons, which is the best news because that’s given you even more platform from which to listen and learn, and to help as possible.

Your choice was not (again, as I understand it) motivated exclusively or even partially by capitalism, per se.

Back to the Economist article for a second:

“Some companies even employ corporate anthropologists…Heavy investment in education is also essential. Unilever has teamed up with various NGOs to teach people about the importance of washing their hands and other aspects of personal hygiene. So far more than 130 million people have undergone such instruction, which makes it perhaps the biggest educational exercise in human history. This has helped not only to create a market for the company’s soaps and detergents but also to forge a bond of trust with potential consumers.”

When I learned about Unilever’s initiatives, I naturally thought of your own “Healthy School” initiative in Peru, which the Peruvian Ministry of Health acknowledged by awarding your school and work with national accreditation. My eyes widened as I thought of the possibilities.

Above I emphasized that capitalistic notions did not motivate you and I think you know I applaud that. My reasoning is simple, and twofold:

First, it’s critical for young people to learn how to give when they are young and open to ideas. Volunteering is all about giving. And while parts of capitalism are sort’a-kinda about giving, it really isn’t about that.

Second, going abroad provides you with a critical (and differentiated) point of view about what capitalism could be about. Is our 20th century US implementation of it (along with the legal and social frameworks, our taxation frameworks, and our sense of “community” and social welfare, etc.) really the right one for today and the future? What does the rest of the world–especially “emerged nations”–have to say?

Can we imagine an implementation that is appropriate? One that will serve a broader notion of the terms “worker” and “owner”?

I think so. But I think others in the world will be framing it this time. With contributions from the West, no doubt.

So where will you fit into this? Where do you want to fit into this future that is happening right now?

Is it important to you to “contribute” to the shaping of the future? I think for most people this thought is too abstract to act upon, and too daunting.

For others, though, the notion is only abstract to the extent we are unwilling to grapple with it, to formulate it. For these folks, it is an opportunity not an obstacle.

One answer might be to live and work in the US, either “letting it happen” (passive implementation) or trying to influence as best as you can from within “corporate America” (slightly less passive to slightly proactive implementation).

Another answer might be to live and work abroad, either with a multinational (from anywhere, not necessarily the US), or for a “local” firm. Not sure either of these would be more proactive by definition.

Unilever (an Anglo-Dutch multinational) and P&G (a US MN) both take a longer view than most:

“The techniques they use include “embedding” employees with local families in order to study their day-to-day behavior. P&G sends young marketing people to live with Chinese peasants for months on end.”

Or you can take your own long view, one in which you do not think in short-terms nor do you think about personal gains. Instead, you think about big economic trends. You think of the gaps, and economic dis-parity. You let your mind go to those places for inspiration and information about where things are headed. And, if you’re inclined, you pick one or more of those, and influence in every way you can, by all available means at your disposal.

In short, you continue—as you began in Peru—to develop deep relationships one day at a time, and for the long view, regardless of where you are or with whom or for whom you work.

If you do these things, you will find fulfillment and you will have a tremendous impact. All the rest (passion, love, sustenance will follow naturally).

Here ends the unsolicited thoughts for your consideration.

xo

JD

© 2009 John Dila

This article is reprinted from STELLAService.com from 4/16/10.

***

The term “customer experience” is vast and getting bigger all the time. Practitioners chunk it into component pieces, like website design, reliability, responsiveness, security, fulfillment, personalization, information, empathy, and so on.

Over the next few weeks I want to explore various facets of customer experiences that firms should tend to sooner rather than later because often a firm can make dramatic improvements by focusing on “low hanging fruit” they haven’t even noticed is there for the picking.

Today, I want to build on Nicole’s post from last week–the one that led with the cartoon about phone support hold times and how they’re calculated (which I LOVED, btw :)).

But instead of looking at phone hold calculations, I want to share an experience we had at eBay a few years ago about what chat hold time actuallylooks like to customers, and how a company might go about managing it to advantage by listening to customers and setting/meeting basic expectations.

After all, great relationships–especially ones between companies and customers–start and end with setting expectations and building trust. Michael C. Jensen, in a fall 2009 article, explains this connection:

“The Law of Integrity has a critical effect on business: increased performance…One’s word to one’s self is a critical part of integrity…By failing to honor our word to ourselves, we undermine ourselves as persons [or companies] of integrity…and we will appear to others as inconsistent, unreliable or unpredictable.”

If you say what you mean, and follow through–even if you set the bar low–you have a great chance of building solid, lasting trust.

But if you set an expectation and then totally fan on it, you break your word, and any shot of building trust is gone with the wind.

A few years ago, I wondered how many times customers contacted eBay’s Customer Support (CS). I asked around and quickly realized we had no idea what the total monthly volume was. Why? Because each team ran its own business and the systems for each channel (i.e. chat vs. phone vs. email) were in silos that didn’t talk to each other.

So we decided to count manually, which took some time. After about a month, we came up with the number: eBay received north of nine million customer contacts per quarter in the U.S. marketplace (ebay.com) across all channels combined.

Then we did some deep-dives to figure out how many contacts were chat vs. email vs. phone for each specific issue that members contact eBay about. And within each channel, we tried to discover as many insights as possible to help us drive new strategies for setting and meeting expectations with our customers.

We learned that about 8% of the chats initiated by our customers about Selling issues were being abandoned. We defined abandonment as when the member initiates a Chat but closes the Chat window before the Customer Support Representative (CSR) responds. Here’s an illustrative graph of what that abandonment looked like:

This graph–with its sharp drop-off and long tail–shows exactly the points at which customers abandoned their chat with eBay because a CSR hadn’t responded yet. In fact, it shows that about 50% of customers abandoned the chat session after waiting just one minute. After 3-4 minutes, only 20% of the customers are still willing to wait for a rep.

The data provided several insights into customer behavior: We found a small percent of chatters were (0 to 6 sec.) were just exploring the chat feature; we also discovered that after 2-3 minutes we’d lost about 80% of our customers.

We used the insights to determine new chat hold time “targets” and also to employ “chat hold scripts” which we’d previously only used randomly for promotions. For example, you can tell customers how long they will have to wait (set the expectation), and you can show wait times (show that you’re trying to meet the expectation).

You can also try to engage the customer with useful information while they wait (like offering a Seller-appropriate Help page), or you can offer them another channel of communication (like immediate access to a phone rep in some cases, or a call back by a rep).

The key is to communicate the expectation clearly, and then stick to it like it’s your only chance to win that customer.

In our times of online communities, global commerce, and radical online competition, no firm will succeed with a haphazard strategy of appearing “to others as inconsistent, unreliable or unpredictable,” as Jensen says.

Customers just won’t stand for it, and your competition will eat your strategy for lunch.

© 2009 John Dila

In the beginning, people shopped online because it was “cheaper;” the thinking was that online stores didn’t have the same cost overheads brick-and-mortars had and so they passed on the savings to consumers. This probably was the case, and it likely still is, to some extent.

But the past ten years has brought fierce competition for online dollars, and the online shopping experience is constantly evolving.

Today, “cheap” is not the only (or even the most important) reason why we shop online: Convenience, selection, delivery speed, and even belonging to a “community” of like-minded shoppers (think KarmaLoop and Apple) are today’s reasons for much of the money being spent online.

Getting good, if not stellar service online is more and more important to consumers. Today, if the service sucks, you won’t go back.

Today, The Dila View highlights the launch of a new firm —STELLAService.com–which brings objectivity and transparency to assessing and rating online customer experience on the Internet.

STELLA–launching today–will analyze and rate all online businesses and give each one a STELLARating (a number from 0 -100) indicating how good (or poor) its online service is. Formed in April 2009, the company’s Advisory Council and highly trained analysts represent today’s thought-leaders in the area of online customer service, and bring this focus to bear on the independent STELLARating methodology.

Consumers can look for the STELLASeal on websites and will be able to recognize quality online service immediately–and avoid those companies with poor scores.

In turn, low scores will help poor-performing companies identify weaknesses, improve their service, and attract more customers (especially repeat customers!).

In March, STELLAService’s CEO, Jordy Leiser, commissioned an independent research survey “to examine the value of great customer service in the U.S. economy, with a particular focus on how great customer service impacts the online retail category.” The research concludes:

“Consumers in the online retail category are willing to pay even more (10.7%) for great service, which should come as no surprise given the comfort and peace of mind that most consumers want while purchasing from the seemingly distant and remote online marketplace.”

View the results and dollar figures (it’s not a small number)!

Now that the firm has officially launched, watch for the STELLASeal on sites where you intend to shop. If you see it, you’ll know someone you can trust has closely evaluated the company and has rated its performance.

STELLAService would love your comment and feedback. You can find us on FB, Titter, and all the usual places, or you can contact me directly (jd@stellaservice.com).

© 2009 John Dila

There’s a fascinating report in the Feb27 issue of The Economist about “the data deluge,” which everyone should read.

Photo courtesty of The Economist

Photo courtesty of The Economist

Of course, the article is weeks old by now, and no one is likely to go back to find it.

The topic, though, is fascinating because it’s a snapshot of something that’s been happening for a long time and that’s still in play: As a race, humans are creating more and more data, and we are at a point when we can actually see some of the results of this trend with the naked eye.

In fact, data will only become more important to each of us—individually and as a global community—in more and more practical, structured ways in the coming months and years.

Some economists opine, “Data are becoming the new raw material of business,” and we–teachers, students, buyers, sellers, gardeners, technologists, healthcare workers, bankers, governments, all of us–would be remiss if we don’t take time to understand what this might mean.

Here are a few quotes/highlights from the article, which will spawn several upcoming shorter blogs about these trends in data and policy that are shaping human daily life.

#1

“Torture the data long enough and they will confess to anything.”

#2

“A new kind of professional has emerged, the data scientist, who combines the skills of software programmer, statistician and storyteller/artist to extract the nuggets of gold hidden under the mountains of data.”

#3

“Just as the microscope transformed biology by exposing germs, and the electron microscope changed physics, all these data are turning the social sciences upside down…Researchers are now able to understand human behavior at the population level rather than the individual level.”

#4

“What we are seeing is the ability to have economies form around the data—and that is a big change at a societal and even macroeconomic level.”

#5

“Data are becoming the new raw material of business: an economic input almost on par with capital and labor.”

#6

“The amount of reading people do, previously in decline because of television, has almost tripled since 1980, thanks to all the text on the Internet.”

#7

The data-centered economy is just nascent…You can see the outlines of it, but the technical, infrastructural and even business model implications are not well-understood right now.”

#8

“Best Buy, a retailer, found that 7% of its customers accounted for 43% of its sales.”

#9

“Wal-Mart is a good example. The retailer operates 8,400 stores worldwide, has more than 2M employees and handles over 200M customer transactions each week.”

#10

“Visa, a credit-card company, in a recent trial with Hadoop [a new technology]  crunched two years of test records, or 73 billion transactions…The processing time fell from one month with traditional methods to a mere 13 minutes.”

© 2009 John Dila

Hi–

I have a big favor to ask:

I want you to take a short survey that will help an early-stage startup company that is launching this spring (go directly to the survey!).

Here’s what’s in it for you:

First, you get to help shape the beginnings of a brand-new company by giving your views on important aspects of customer service; second, you can follow the course of an early-stage startup as it enters the market; and third, you can win an iTunes gift card for doing it!

Here’s the background:

I currently have the opportunity to advise this early-stage startup that’s breaking into the online customer service rating business.

Many companies and research firms today are talking about customer service and user experience; this startup is taking a decidedly fresh approach to it.

We’re running a survey to discover your preferences for customer service when you shop online.

The company, which is in stealth mode (meaning, it has not formally launched yet), will use the survey responses to build key aspects of its strategy and business.

Here’s the link to the survey (it takes about 3 minutes to complete):

https://www.surveymonkey.com/s/onlinecustomerservice

Click  EMAIL SUBSCRIPTION over on the right to follow!

Thanks for your help!

JD

ting-ting-ting …

The remarkably understated tinkling of Christmas-candle-chimes triggers powerful memories of Christmas past if you had one of the candle-mobiles in your home when you were growing up. If you don’t know what I’m talking about, watch this.

“When we were children, the chimes were irresistible,” my friend Paul (an experienced product manager) told me: “The fascination of the open flame; the magical phenomena of angels slowly starting to move and then picking up speed until they struck the bells. Every Christmas, without knowing it, we were schooled in the laws of physics—Convection, aerodynamics, and centrifugal force converged in this elegant tiny tin invention.”

Yet while Paul and I—and hundreds of thousands of other Baby-Boomers and their children—lit the chimes at the end of last year, a trench-war was being waged around the commoditization of the very angels that tinkled in our Holiday living rooms.

Like the children who remember them from the ‘70s, the Christmas-candle-chimes industry matured and lost its innocence.

Now, with only a few players left and time on patents run out, prices and quality are plummeting—like Lucifer—a Morning Star burned out and falling to Earth.

No-one’s going public in the Christmas-candle-chimes industry this year.

Things have gotten so bad, as we’ll see, that one can imagine a Christmas Day not long from now when no new chimes tinkle.

In fact, the industry competition is extreme around quality and price, and not, for example, around today’s typical app-driven differentiation—no third bell, no improved angels, and no louder ting-ting’ing in this market.

One firm tried to differentiate its product by including a “Party-Chimes” kit at no additional charge—three horses and a clown which you could use instead of the angels for secular celebrations. The strategy was to catch the off-Christmas sales and bolt ahead of the competition in market share.

But judging from the lack of equine availability anywhere online today, the horses went the way of the Dodo.

Nay, Christmas-candle-chimes were perfected decades ago, and trademarked and patented—Angel Chimes™—the Kleenex® tissues of their industry, in pieces by various and sundry inventors spanning Europe and America as far back as the early twentieth century.

Their appeal to this day remains firmly rooted in archetypal elegance and steeped in legendary Scandinavian tradition.

For that reason, the Christmas-candle-chimes industry is all very doggy-dog, as they say.

For example, the most famous Swedish manufacturer—the original patent owner of Angel Chimes™—Andersson & Boberg (they sell the ones that come in the classic circa 1972 brown box featuring a blond Swedish girl in pig-tails lighting the Chimes with a wooden matchstick) quietly shuttered its operations at the end of last year (2009).

Historically, Andersson & Boberg made their original, highest-quality Chimes in Gefle, Sweden (on the Baltic Sea, across the way from the Gulf of Finland, Estonia, Latvia and all those wintry places).

But Globalization—Gefle’s personal Grinch—finally found the sleepy little northern town, and alit on Andersson & Boberg’s operations. The firm finally buckled under all that weight, and it made the tough decision to close forever because it could no longer compete on price with Chinese knock-offs, whose quality is “remarkably good…for the price,” according to a major U.S.-based online seller, Harlan Jacobsen.

Jacobsen’s been selling the Chimes (starting with the Swedish ones and adding quality Chinese offerings later, when the Swedish patents ran out) to Americans since the early ‘70s.

He sells the “Chinese Chimes” online for about $8 (including postage and handling). They’re more expensive if you actually go to a retail store and buy them off the shelf (for obvious reasons)—except if you luck out and get a set for $2 at Walgreens or some other big-box. But they’ll be knock-offs, you can be sure.

The Swedish product cost about $15.95 (including postage and handling) last year. “They were a very hard sell at roughly two-times the price as the very good Chinese substitute,” Jacobsen told me.

The Swedes—being Swedes—were unwilling to compromise quality, so they shut down their historic operations forever. They were simply unable to keep costs down given the relatively high value placed on labor in their country.

That’s where the story would have ended if the Swede’s were not competitive.

But it turns out they are, and Andersson & Boberg packed up and sold its equipment and Angel Chime trademark (the brand) to a firm in Turkey, which is setting up manufacturing operations it hopes will produce quality at least on par with the Chinese substitute product, in time for Yuletide 2010.

Since they couldn’t beat ‘em, Andersson & Boberg decided to join ‘em—‘em being the globally-distributed workforce that now influences our collective economies, trade policies, and immigration policies.

Jacobsen—a wholesale customer (not an end-consumer like Paul and I) from Sioux Falls, South Dakota—says he will carry the new Turkish-made Swedish product if, and only if, its quality is at least as good as—you guessed it—the Chinese version he stocks and sells to his bargain-hunting American customers.

Harlan Jacobsen notes there are at least three Chinese manufacturers and three corresponding levels of quality. “The bad ones,” Jacobsen reports, “are not worth the weight of the tin they’re made with.”

And he’s right. The cheap versions most likely do not incorporate the patented (and more expensive-to-manufacture) glass-bearing-pin (or similar technology) required in order to reduce the friction enough so the turbine spins freely and the angels can ting the bells smoothly and continuously year after year.

His best guess is the new Turkish product will run about $9.95—still a good 20% above the Chinese version Jacobsen carries.

So, not only was Andersson & Boberg competitive for a long time, they’ve gracefully exited the angel scene and aspire to breathe new life into their brand posthumously: They are betting the new Turkish operations can manufacture Angel Chimes™ at least as well as the Chinese (a tall order), and at a competitive price, while carrying their brand name forward into future Yuletide memories.

The Swedes even traveled to Istanbul to share all the manufacturing intelligence (aka, tricks of the trade) they’d garnered from decades of experience as the global leader of angel production and sales (this is known as “knowledge transfer” in organizational development- and learning-speak).

“Only people who had them growing up and brought them out every Christmas as a kid remember them fondly,” Jacobsen muses about the ritual of the chimes and their spell.

If the Swedes are right, our children may be able to buy Angel Chimes™—the one we all grew up with, whose box features the pretty Swedish blond girl—for decades to come.

On the other hand, if they are wrong, Andersson & Boberg will watch helplessly as their fallen angels succumb to cheaper, unoriginal, tawdry knock-offs made with pins that rust over time, grinding their angelic tinkling vision to an untimely halt.

One man’s misfortune might be another’s opportunity, though. Vintage Christmas-candle-chimes are likely to go through the roof either way. At the time of writing, for example, there were several sets on auction at eBay valued at more than four-times the going retail rate.

Happy New Year, 2010!

© John Dila & Paul Dyck 2009

You can purchase the Chinese and Turkish-Swedish (if they live up to expectations) Christmas-candle-chimes from Harlan Jacobsen online: http://angelchimes.com/

Next Page »