Developing a Tasting Room Loyalty Program Part 2

By Dr Kathy Kelley--Professor of Horticultural Marketing and Business Management and Dana Ollendyke-- Extension Associate

In our previous post, we discussed what a loyalty program should do for your business--which, simply put, it should help increase your tasting room’s profits! In this post, we will discuss developing an outline for your loyalty program.

A loyalty program rewards program (photo credit: iQoncept/Dollar Photo Club).

The great thing about offering a loyalty program is that customers understand their basic function, as they most likely belong to other programs. Regardless of the type of program you offer, consider these key questions:

• Your overall goal – what do you hope to achieve?
• Will charge customers to join the program, limit the number of members, or will enrollment be free?
• How will customer purchases will be recorded?
• What questions will you ask members that will help enhance the program and their experience?
• What purchases will “count” towards loyalty program benefits, what can members redeem points on, and would a program co-developed with a complementary business be perceived as being even more attractive?
• How you will determine that loyalty has really been established?
• How and when might need to end the program (and steps for doing so)?

The next post in this series will focus on your overall loyalty program goal.

Are you Using a Mobile Payment System? Part II: Best Practices and Cyber Liability Insurance

Last week we introduced some of the basic policies and procedures a business owner should implement to keep their customers’ data and their business safe (Are You Using a Mobile Payment System? Part 1: Keeping Customer Data Safe).  We will finish the discussion this week by talking about being compliant and about insurance you may want to consider to further protect your business.

One more employee consideration

Aside from informing employees about how to handle, use, and store mobile devices it may be prudent to include background checks during the applicant screening and hiring process (bit.ly/1ftpQaA), if you do not already.  Some pre-hire background checks include requesting credit and criminal records (http://1.usa.gov/1uvVxV9).  Businesses that ask employees to handle payments, regardless if they are mobile device-based, have the right to require such background checks (http://1.usa.gov/1o36hbK).

Strategy for PCI compliancy

We introduced the concept of the PCI (Payment Card Industry) Security Standards Council and being compliant with their standards, but what does the entail?  The following table summarizes the responsibilities of the small business owner and the six goals that comprise “security best practices” (http://bit.ly/Oz1G1j).

Source: PCI Security Standards Council 

The PCI also has resources for small businesses, which they consider to be more vulnerable to security breaches than large companies, and several short videos to further demonstrate how retailers can protect consumer data (http://bit.ly/1rZWa5e).

What cyber liability insurance can offer

You may already have a comprehensive insurance policy or riders that protect your business incase of theft, fire, disaster, and even when essentials employee are unable to perform their duties.  As mobile payment systems and threats to these systems have evolved so has the insurance industry.  Cyber liability insurance is one such addition and “is designed to protect businesses” from:

• Lawsuit damages
• Lawsuit defense costs
• Breach notice costs
• Data restoration costs
• Breach extortion costs (http://bit.ly/1iUntyb)

The following site includes a list of questions that can help you assess your level of risk and issues that should be discussed with an insurance agent (http://bit.ly/1rZK0sX).  Just a few of those listed include:

• “What security controls can you put into place that will reduce the premium?
• What is expected of you to reduce or limit the risks?
• What and how big [of] a difference to your future premiums will a claim make?
• Do all portable media/computing devices need to be encrypted?
• Are malicious acts by employees covered?”

This source further suggests asking potential insurers if you, the small business owner, will have to participate in post claim tasks (e.g. alerting customers about the breach) or if they provide “a point of contact” to oversee all processes after a claim is initiated.

What might cyber liability insurance cost?

Of course costs vary by type of business, geographical market, and factors that impact your general policy (e.g. number of policies held, number of claims within a certain period) but according to one source “a cyber add-on to an existing liability policy might cost $300 a year while a separate policy could cost $1,000 or several multiples of that” (http://bit.ly/Sxrgqv).  Other sources state that policy premiums can be much higher (http://bit.ly/1shcr7Q).  Having cyber liability insurance may “pay off” even if a claim is never filled.  According to once source: “Cyber insurance also can help boost your business by giving customers and business partners more confidence in you” (http://bit.ly/Sxrgqv).

After a breach is detected

So, what do you do when you experience a security breach?  Insurers and IT security experts stress notifying the authorities and your insurance company as soon as a breach is expected. Also, finding and repairing the breach quickly is crucial, as well as keeping records of all procedures that were followed after the incident (in addition to having a good record keeping system to begin with; http://bit.ly/1uwoAb3).

Though no one ever wants to experience this type of disaster, taking precautions, being diligent in your practices, and being prepared is a must.  As our use and dependence on technology grows, with all the associated benefits and advantages such systems provide, it can only be assumed that business owners will need to be aware of possible security situations of which they will need to be aware.  

Kathy Kelley is a professor of horticultural marketing in the Department of Plant Science
Robert C. Goodling, Jr. is an extension associate in the Department of Animal Science

Are You Using a Mobile Payment System? Part 1: Keeping Customer Data Safe

We have blogged a bit about mobile payment systems and the benefits they offer consumers and small businesses (Why You Might Want to Consider Offering Mobile Payments); however, what does a small business owner need to consider before implementing a system or when they switch mobile payment companies?  As with every business decision, the owner needs to do some research and make sure that the proper guidelines and procedures are followed to ensure a good experience for all. 

This week’s blog, the first of a two-part series, will focus on some of the security considerations pertaining to the device itself.  Next week’s blog will discuss measures, including insurance, small business owners can take to protect their businesses should the mobile device go missing or worse.  

What is at stake?

You very well could experience a security breach that (though not restricted to using a mobile device to collect payments but applicable to every method you use to collect cardholder data) with consequences that include:

An example of a mobile payment card reader.  Wikipedia.org

• cost of reissuing new payment cards,
• fines,
• termination of ability to accept payment cards, and
• "going out of business" (bit.ly/1iwnFUd).  

Still, even with these penalties, many businesses have been able to process credit cards with mobile payment systems without experiencing any problems.

Why is there so much concern about compromised data or a security breach associated with mobile devices? 

As you can imagine, and maybe it has happened to you, it is easier to misplace a smartphone or other mobile device compared to a register or computer that is either tethered to something or too heavy or bulky to just carry off without anyone noticing.

A safeguard that is suggested includes securely storing the device, in a safe for example, when not in use or fastening the device to a heavy, bulky item (such as a desk or counter) with a combination lock and cable, much as you would a laptop or desktop.  Concern is further based on “traditional security controls such as [anti-virus], firewalls, and encryption [not having] reached the level of maturity needed in the mobile space” (bit.ly/1ftLIm3). 

How can a small business owner using a mobile payment system protect customer data and their business?

Let’s first start with the device that you will use to collect payments.  A list of equipment and systems can be found here (Why Mobile Payment Systems Might Work for Your Business), but you’ll also need to consider device ownership, who can use the device, and (in certain instances) whether an employee can use the device for more than just collecting payments. 

If you are not already familiar with the PCI (Payment Card Industry) Security Standards Council, they work “to educated stakeholders (merchants, processors, financial institutes, and similar) about the PCI Security Standards…and promotes the awareness of the need for payment data security to the public” (www.pcisecuritystandards.org), in essence “keeping your customer’s payment card data secure.” bit.ly/1ix8PN3.  Retailers who accept credit cards are required to be compliant with the standards (next week’s blog will include an overview on how to be complaint).

Device ownership: BYOD vs COPE

The PCI strongly discourages what is referred to as BYOD (bring your own device), which involves employees using their own mobile device to process consumer credit card payments.  Instead the device should be owned by the business, regardless if it is used solely for “payment and acceptance for transaction processing” or for both business and personal tasks (bit.ly/1hayiqv).

Some companies do buy corporate-owned personally enabled (COPE) devices which they distribute to managers and other employees who process payments at remote locations.  In such instances these businesses permit employees to use the device for both business and personal use.  This allows the business to install and update software that might not necessarily be appropriate for an employee-owned device (bit.ly/1iCHYyj).  Updates can be pushed to devices and the business can seize the device when needed.  This particular arrangement is not unreasonable as employees are often provided with desktops, laptops, and tablets to use in their homes and when traveling. 

Basic mobile device security policies

Some of the more recognized security policies that you should implement:

•    Don’t store any sensitive cardholder data on the mobile device, or on any electronic equipment for that matter.  If you are using the smartphone or tablet and/or a mobile app to save customers’ addresses, birthdates, etc. for the purpose of keeping track of purchases (i.e. loyalty program) take steps to encrypt the data and only collect and store what is absolutely necessary. 

•    Be selective about what apps you download to the device and question why apps might need access to contacts, calendars, location services, etc. on the device.

Source: Pixabay.com

•    Require each employee who needs to have access to mobile devices to have a unique username and password.

•    Employees should be trained on how to properly use the device and owners should educate them on how to maintain device security. 

•    Don’t “jailbreak” or “root” your devices (iPhone, iPad, iPod touch, Android phone or tablets).  Jailbreaking or rooting a device allows the owner to download “additional applications, extensions, and themes” not available at the Apple App Store (bit.ly/1luD6Mb); however, Apple states on its website that doing could: shorten battery live, allow for security vulnerabilities, cause apps to crash, prevent future software updates, and similar (bit.ly/1iDCiEq).

•    Update your operating software.  Often you will get a notification but check the setting on each device often in case a push notification doesn’t go through. 

•    Keep apps up-to-date, too.

•    Beware of phishing emails (emails from individuals posing as legitimate companies with links to malicious software) and SMS texts.  Don’t click on any hyperlinks or URLs that look suspicious. 

All of these procedures, and other applicable best practices, should be included in your employee handbook and operations manual.  Just as you would expect your employees to adhere to a code of conduct when dealing with customers you should expect the same for those who have access to business-owned mobile devices.

No matter what type of device, mobile or stationary, that is used to collect payments it is the retailer’s responsibility to ensure that customer payments processed properly and that only the appropriate data is stored – and that it is stored correctly.  In next week’s blog we will continue the discussing and help you further ensure that you are operating a safe mobile payment system and have a policy in place for any issues that might occur with either a missing device or compromised cardholder data.

Kathy Kelley is a professor of horticultural marketing in the Department of Plant Science
Robert C. Goodling, Jr. is an extension associate in the Department of Animal Science

I Seem to Have Lost a Customer Someplace!

by John Berry, Extension Educator, Lehigh Co.

How much is one customer worth?  How much does it cost the business to lose one customer?  More than you want to know, and probably more than you can measure in real dollars.

Most people only measure the dollar loss of a sale, or how much revenue was lost for the year.  Big mistake.  For openers, multiply that times 20 years.  Losing a customer once could mean they never shop with you again.  And don't even begin to count the people the could have recommended.

The loss of a customer is more than the
dollar amount on one sale.

Then the real losses begin to pile up.  Besides telling everyone in the immediate vicinity, they will tell all their office mates, everyone at the next association meeting, everyone at the next annual trade show and convention, and - if you do a real bad job of recovery or service - report it to people in local media.

The real cost of a lost customer is the different between "cost of lost" and "cost to fix."  Now measure that against the cost of servicing, fixing, discounting or replacing the situation, defect or problem when you first learned of it.  Seems like a pittance compared to the paragraphs above.

The painful part comes when you ask yourself "How did this happen?" "Could I have prevented this from happening?" and "How can I prevent this from occurring again?"

If you have ever lost a customer you aren't alone.  It's not a one person battle.  It's not a one-idea solution.  You need specific facts before any ideas on how to minimize the issues can be formulated.  Start by switching places with the customer.  Try to use your stuff in their environment.  Try to call yourself from their office.  Wear their shoes, and walk around in them for awhile.  Ask your customer brutal questions.  The ones you don't want to hear the answers to.

Get closer to the customer's "real" life.  Meals and ball games can reveal relevant truths that arms length relationships won't uncover.  How do you do this with your existing budget?  You can't.  You must have a "win back" budget.  Funds that are earmarked to fix problems, create resolve, and build goodwill.

When you get back in - thank the customer for dumping you.  Tell them that without the loss of their business, this innovative solution would never have been possible, and you are willing to offer some (major?) concessions for a re-try at the business using these changes.  Notice we have not apologized or groveled.  Customers are less interested in apology than they are in great ideas, recoverable actions, and solutions to their problem.

And finally, get real.  Know the difference between a problem and a symptom.  Losing customers is a symptom.  Poor service, poor product, late delivery, or back-orders are problems.  Remember, it never costs as much to fix the problem as it does to not fix the problem.

Is Customer Service on Social Media for You?

by Sarah Cornelisse, Sr. Extension Associate, Dept. of Agricultural Economics, Sociology, and Education

I'm sure you've all seen them - the stories, comments, or other posts on Facebook, Twitter, Google+, or another social platform from people dissatisfied with some aspect of a product or a service from a business. More so than ever, consumers are turning to social media to share their annoyances and horror stories.  However, they also turn to social media to connect with brands and businesses - to seek information,  ask questions, and resolve problems or concerns.

A 2012 Nielsen report provides some insight to consumer views regarding customer service via social media, or "social care."  Their findings include:

• Almost half (47%) of social media users engage in customer service activities through these networks. And of that 47%,
• Seventy percent (70%), do so on a monthly basis.
• Thirty percent (30%) prefer social care over contacting a company by phone.
• Facebook, through both the company's page and the user's personal page (29% and 28% respectively), are where users are most likely to comment or ask a question.

If your business has an existing presence on social media and is looking for a competitive edge, or just to improve your relationship with your followers, taking on social care may be something to consider.  However, it does require commitment.  Here are some tips I've come across for using social media as a customer service channel.

• Be proactive. Listen and participate in conversations. You can learn so much from simply listening to what your customers, or the public, are saying on social media.  If a conversation is happening and you can add to it, do so.  Through active listening, you'll be ahead of the curve in knowing what's important or of concern to them.

• Focus on social interaction as a competitive differentiator. One reason the buy local movement is popular is because consumers like to know the person(s) from whom they're buying.  You can bring the same focus on relationships to your online interactions with consumers.  When you're separated from individuals by a computer screen it's easy to put off replying until a more convenient time or to send short, clipped responses. However, by being personal and personable, you can build trusting relationships with your customers and followers that they will appreciate and value. 
  

  "When executing social media customer care, canned responses are unacceptable. Responses must be personal, and it’s essential to strike the right tone." (Source)

  Additionally, if consumers see inconsistency in your social care, they'll know that you're not committed to them.  A study by Conversocial, found that 88% of respondents said that they would be less likely to do business with someone who didn't answer questions on their social media pages.  This leads us to the next tip...
  
  
• Define a process and framework for dealing with customers. How, and when, will you respond to requests?  What's your strategy for dealing with complaints? Creating a response map (see example below) may be useful, as you'll want to have a consistent response strategy for everything that comes your way, even praise.   With some aspects of your response strategy, such as response time, it may make sense to make this known upfront to your customers with short notices on your social media page, or through an automatic reply.
  

  

  Source: http://www.conversocial.com

  When complaints are involved, be sure these points are addressed in your response framework:

• Understand what's behind the complaint before responding.  Sometimes, the complaint made is just the tip of the iceberg, and the real issue lies deeper.  Ask the complainant clarifying questions as appropriate if you suspect this is the case.
• Follow through on all channels.  If a conversation moves from one channel to another, say from Facebook to email, make sure you indicate that this has taken place.  This will allow others who have seen the start of a conversation know that you are in contact with the original poster.  You may also want to post the final resolution, or answer, on the original channel for others to see and for the complainant to verify that they have been assisted.
• Follow up after problems have been solved.  Once you have provided a solution or rectified the situation, follow up after a reasonable length of time to ensure your customer's satisfaction.

It is possible to provide excellent customer service using social tools, just check out this customer's experience with Netflix. 

"If you’re not engaging customers during the entire product life cycle through social media, you’re missing out. Because someone else will."

                   - Dennis Stoutenburgh, co-founder of Stratus Contact Solutions

Note: Where businesses or trade-names are mentioned, no endorsement is intended.