However, most businesses rely on word of mouth and customer loyalty. And because of that, huge amounts of effort and resources need to go into keeping the customer happy. A friend of mine sent me this infographic called The State of Customer Service in a Consumer Driven Market and it reminded me precisely why I made the decision I did.

Now, don’t get me wrong. I’m glad that customer service is taken so seriously. And I get as irritated as the next person when a big company’s bureaucracy takes me for granted as a consumer. But yeah, there are also plenty of loony’s out there, and the less of them you have to deal with in your business, the better.

Click to enlarge

Source: ClickSoftware Field Service Management

At first glance, Paypal sounds like an amazing service; transfer your points/gold/dollars/XP from one account to another in a matter of seconds, making it just as easy to buy from eBay as it is to open a small online store. But there’s a dark side to Paypal which has been emerging more and more as of late.

Services like Dwolla have emerged to compete with the behemoth, offering considerably lower fees and less inconvenient ‘validation’ time periods. The negativity surrounding Paypal extends further than just its terms and conditions — the company’s choices regarding socially relevant matters have been criticized as well. Here are four reasons Paypal doesn’t deserve your money.
 

“Funds Release” Time

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PayPal has recently implemented a policy which allows them to withhold merchants’ receipts up to 20% in a ‘rolling reserve’ (to cover chargebacks and refunds) for up to three months. Small businesses were outraged, but PayPal stood their ground and stuck to their canned email responses when contacted with pleading emails. Businessweek lambasted the new policy as ‘disruptive to cash flow’ and said it could put some companies out of business.

Although Paypal claims that it notifies its sellers of the policy 30 days before implementation, many upset customers claim that they weren’t contacted by Paypal whatsoever. Companies successfully using the service for years and years.

High Rates

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The more expensive the transaction, the higher the fee charged by Paypal. There’s a 2.9% transaction fee on each sale, plus a additional $0.30 per transaction. International sales, however, pay a 3.9% fee. It sounds small, but it adds up. A sale of $500 is charged a fee of $14.80. That’s fourteen cheeseburgers, a movie ticket, a lawn chair from Target, three large Red Bulls, or two whole lunch specials from the Chinese place. Three, depending on where you live.

The fees aren’t the only bad part; the way they came about were pretty shady. PayPal created the fees, available for viewing in their ToS section and nowhere else, without notifying anyone. They snuck them onto the website and quietly began charging unsuspecting customers.

Other services have popped up, charging smaller fees or none at all. Dwolla is one, and charges $0.25 per transaction, regardless of the amount. Dwolla is also interesting because they don’t rely on credit or debit cards linking to each account; they simply hook up your bank account directly to their service. WorldPay and SagePay also offer similar services.

Deplorable Customer Service

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Paypal is notorious for responding to customer concerns with cold, indifferent canned responses. Most importantly, it’s hard to find a phone number on their website, especially if you don’t have a PayPal debit card or aren’t a pro number. The premium number is costly to use. Multiple emails asking for help are answered with the same copy and paste response.

Although every company has a few unhappy customers, googling ‘Paypal sucks’ turns up a slew of angry blog posts by people Paypal has burned. Most complaints are about unreasonably banned accounts, transactions gone wrong which end up getting ‘rectified’ at the victim’s expense, and the dreaded ‘verification’ suspension Paypal seems to randomly place on accounts belonging to legitimate small businesses.

The impersonal responses are insulting and condescending, repeating the same vague phrases in every email. Chris Rossi, for example, was permanently banned after purchasing a programming service from a vendor. When he looked into the matter, it turned out that the vendor had been banned for the sale of pornography — causing every single person he had ever received money from to be banned as well, regardless of what the sale was for. All five emails from Paypal include ‘Your account has been permanently limited. Customers who are permanently limited for violating the Acceptable Use Policy are not permitted to open new PayPal accounts” and don’t address his long list of evidence in his defense at all.

Bad Decision Making

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Paypal is, overall, bad at making decisions. Internationally recognized as less-than-the-best, the company is prone to reversing transactions, charging fees, withholding money, and canceling accounts without notice or a response afterwards.

In 2010, Paypal suddenly reversed all exchanges marked as “personal” coming in or out of India. Without notification, they screwed over hundreds of people and many businesses who were left with overdrafted accounts — not only had many vendors already withdrawn the removed money, but others were left uncompensated for services they had already completed.

During the same year, donations to Cryptome were frozen and $5300 removed. PayPal refused to explain this action.

A few months later, two other legitimate and high-traffic accounts were closed without notice or acceptable response. Finally, the Wikileaks fiasco ensued in December 2010 when Paypal permanently banned an account taking donations for WikiLeaks. A PayPal VP eventually admitted that this was the result of pressure from the US State Department.

A government puppet with little to no respect for the customer, nor how he or she is treated, doesn’t deserve your money. Even if you settle for Paypal, the other services are at least worth checking out.

If you’ve ever been on hold for two hours trying to resolve a mistake you didn’t make in the first place, then been sent to a different department, then never received the money a company owed you, then you’re one of many victims. Of cheating, that is, which is implicit in too many corporate DNAs. With the advent of social media and collective ratings, companies are changing their bad habits. Yet many still don’t call their delays, unaccountability, and withholding information for what they are: cheating. Here are several ways they do it.

Withholding Information

Ever had your carpet cleaned by one of those “budget” carpet cleaners who advertise via direct-mail coupons with insanely cheap rates? Then gotten the bill and found that they charged you $150 for your hallway, even though your living room cost $39? They conveniently avoiding mentioning the hallway caveat when you signed up. That’s withholding information, and rip-off artists from home economics specialists to insurance conglomerates love doing it. The use of legalese is an especially handy tool. If you sign on the dotted line and don’t bother reading and interpreting every line of your 20-page contract, chances are, they can get you somewhere. Health insurance companies, with their multiple deductibles and ever-changing qualifications, not to mention medical coding language that only trained professionals can decode, have this down to a fine art.

Lagging

Some companies—this is especially true for big, sluggish ones—tend to mess something up on your account, then take half a year to fix it. The idea, whether the corporation is conscious of it or not, is to wear you down to the point that you don’t pursue your refund, policy correction, earned airline miles, or other types of credits that you deserve. You let the company “keep it” because it’s too much of a pain to try to obtain it yourself. As a result, the company cheats you of your rightful currency, but you feel too exhausted to keep trying. An example of this I’ve encountered several times, with an airline that shall not be named—alright, United Continental—is earning miles on a partner airline and just not having them appear as mileage credits. Trying to get those miles takes months, and you have to send in boarding pass stubs. So much for computerized efficiency in airline alliances.

Complicating Everything

Lagging and complicating make good roommates in corporate bilking games. If you’ve ever tried to contact a live customer service person, or even find an email contact for an Internet company, you know what I mean. Like lagging, complicating things may be an implicit customer-service delay tactic, though I’ve seen companies do it as a deliberate strategy. As a customer, you grow so confused by which button to press to get access to an operator, or which link goes to a customer service form, that you either give up trying to contact the company or feel inclined to chew out whoever you do finally get in touch with. Perhaps you complain online, or get your problem solved through a forum, but guess what? The company didn’t waste its time and manpower holding your hand, and you, if you grow frustrated enough, might just give up your pursuit of an answer and call the company an a-hole.

Displacing Blame

It’s the system’s fault! Ever heard that excuse? Granted, it sometimes is the system’s fault, but that doesn’t give companies the excuse to write you off, which they sometimes do. Another tactic, favored by bureaucrats and companies big enough to install them, is to shunt you off to a different department. This creates delays and complicates everything. It may require faxes, signed papers, and other documentation. Moreover, a company may have been withholding information, leading you to lose the money you thought you were entitled to.

For example, a state I used to live in once decided, based on its own filing error, that I owed it money. So it levied my bank account and took the money for itself, plus a $75 lawyer’s fee. When I asked for the money back, the state admitted its error and refunded everything but that $75, for which I had to “contact a lawyer.” Which lawyer was not an easy task; the state did not readily supply this information. It was unaccountable for a fee incurred by a contractor based on its own error. If that doesn’t make it hard for an average Joe to get his hands back on his change, I don’t know what does.

Like diplomacy, social media has become the refined, sharp-edge of a sword that executives and CEOs prefer to leave for mid-management. Some business leaders, however, have realized that the subtle art of human interaction is one that they can benefit from, and that their business needs to survive.

Below you can learn who has leveraged social media, and what they are hoping to gain from their experiences. From Google to Toyota, BlendTee to Digg, discover what marketing puppeteers are really trying to get from the public.

1. WHO: COO Jim Lentz

COMPANY: Toyota

WHERE: Twitter @ Toyota

WHY: To introduce the plural of Prius

WHAT: Frank conversation with Toyota fans

Using Twitter and user-selected questions, the team at Toyota decided to engage his customers in open, honest conversation about the future of green energy, the Toyota company itself, and how the auto industry is helping the economy in the process of recovery.

2. WHO: CEO Reeta Roy

COMPANY: MasterCard Foundation

WHERE: Twitter @MCFoundation

WHY: To build a presence online

WHAT: To share her Uganda-based reports on where donations are going

With more than 760 followers on Twitter, Reeta Roy is able to spread the word about what MasterCard is doing with the $2 billion foundation during her field work in Uganda and Kenya. Her intention, utilizing social media, is to build-up the brand by tweeting.

3. WHO: CEO Kevin Rose

COMPANY: Digg

WHERE: Vimeo; YouTube; Diggnation

WHY: To access over 3.3 million viewers

WHAT: To share site news via weekly podcasts called “Diggnation”

Accessing a huge viewership during his weekly, scheduled podcast, Kevin Rose also posts frequently on YouTube and Vimeo. His online presence is large enough that his own name is often trending as a popular search term. Rose, like others, is using social media to build his authority and brand recognition.

4. WHO: CEO Aaron Patzer

COMPANY: Mint.com

WHERE: Mint’s YouTube channel

WHY: To educate customers on company products

WHAT: To provide basic information, which has been viewed 700,000 times

Founder of Mint.com, VP of Intuit’s Personal Finance Group, and cutest accountant on the planet Aaron Patzer knows how to engage viewers implementing social media. From the Mint.com YouTube channel, he educates people on products, general information, and special features. While their videos and image is low-maintenance, their quality and branding is exceptional.

5. WHO: CEO John Pozadzides

COMPANY: iFusion Labs

WHERE: OneMansBlog.com; Woopra

WHY: To develop new approaches to web analytics

WHAT: To quiz viewers via Viddler and his blog about their experiences

An insightful man, John Pozadzides understands that people love nothing more than talking about themselves. Using OneMangsBlog.com to question his huge fan base, Pozadzides fine-tunes his web analytics services, Woopra. With nearly 500,000 page views, this CEO shows no signs of stopping.

6. WHO: CEO Bob Parsons

COMPANY: GoDaddy Group

WHERE: BobParsons.me

WHY: To share success tips, in order to build a readership

WHAT: To implement quirky tactics to amuse viewers

Gimmicks, shenanigans, corny ploys, and coy attempts to be in earnest, are all featured in the vlog, which provides success tips and hot girls in skimpy clothes. Why did Parsons make the list, then? His Super Bowl ad from 2010, “Too Hot for TV,” was just the tip of his whirlwind romance with social media: his viewership is off the charts, and people seem to dig his fun-loving antics.

7. WHO: CEO Tony Hsieh

COMPANY: Zappos

WHERE: Twitter @Zappos

WHY: “To waste time together.”

WHAT: He claims his goal is, “Let’s entertain each other. And not try to sell each other anything.”

Sky-rocketing from 600,000 followers to nearly 1.8 million in a brief period of time, Hsieh has proven that his laid-back approach to social media is endearing for fans. His tweets are innocent and playful, making no brand promises, thus succeeding in leaving a positive brand image.

CONCLUSION

Whether upper-management industry insiders are leveraging social media simply to answer questions and build brand recognition, or to pick the brains of readers and forge new bases for analytics, they all have a fervent desire to understand social media users. Search YouTube, Twitter, and other networks for your favorite brands, and you might just find a CEO or executive willing to answer your most pressing questions.

With a downturn in the economy and a resulting reduction in sales and services, some businesses involved in sales and service may need to to lay off full-time employees, reduce the hours of existing employees, or employ part-timers. With this uncertainty in the workplace, the overall performance and motivation of some employees could fall. This leads to poor customer service. In our world of social media and online feedback, this then results in a reduction in sales.

Customer service managers need to work harder than ever in today’s business environment. The following are 3 fundamental skills managers need to apply:

1. On-the Job Training

An experienced customer service manager will therefore need to handle the personal problems and issues of customer service employees sensitively and positively during such critical periods. Most business owners also realize that on-the-job mentoring and training a new part-time employee, for example, on how to find their way around complex databases and systems, can be time consuming and cause frustrating delays for customers.

2. Effective Communication

An experienced customer service manager needs to ensure a workplace program is introduced for those employees in need of help and support. Because many businesses rely heavily on the experience and skill of their employees who work in customer service front-line positions, it is important for a supervisor or manager to have effective communication and personal management skills to understand the diverse problems that employees can encounter inside and outside the workplace.

By having this ability, a good customer service manager can implement positive steps to tackle most problems encountered in the workplace.

3. Managerial Support

Nowadays, it can be difficult for one-parent households to cope with the demands of having to work and juggle family commitments at the same time. For example, a family emergency like having a sick child who needs to be looked after in the home is one such situation that can occur at short notice and therefore needs to be dealt with some consideration. In general, if a problem can be resolved by a supportive customer service manager to help restore a customer service employee’s keenness and confidence in their workplace, it can be a positive win-win situation for both the employee and business in the long term.

Also, by dealing positively with an employee’s workplace or personal problems it will in turn encourage the employee to provide quality customer service and help to enhance the reputation of the business.

Official bio: Brandon Walker is the creator of customer service skills, a website designed to provide helpful, informative and advice to small and large business owners on how they can deliver exceptional customer service to their clients.

‘Tis the season of giving, especially to those who gave to you during the year. That is to say, clients.

Personally, I would rather give a gift someone delights in, not something they will absentmindedly stick in a desk drawer. But this giving philosophy brings up the delicate matter of expenses. For one, the IRS says that you can deduct no more than $25 for each gift given from your taxes. Secondly, you don’t want to bankrupt yourself giving nice gifts, nor do you want to appear as though you’re bribing your client.

Be selective who you spend the big bucks on (hint: they may have also spent big bucks on you), and save the cards and calendars for the people with whom you have more of a vague relationship. EBay has a good article on the topic here.

Below are 25 gifts that clients are sure to appreciate, in no particular order:

1. Engraved coffee mugs. Engrave your brand on the higher-quality travel mugs to make more of an impression with this traditional gift. For something different and unique, try engraved pint- or whiskey glasses.

2. Engraved pens. Again, quality is necessary to give this overplayed gift memorable. Spend some extra cash on exclusive pens for your best clients.

3. Books. Finding the right book for your client is easier than you think. What are the latest industry reads that she might not yet have read? If she commutes, get her an audio book. If she has kids, buy her a humorous collection about parenting. If she’s a foodie…you get the idea.

4. Jewelry. We’re talking about tasteful cufflinks, not diamond earrings. Other tasteful items might include tie clips, money clips, or trendy bracelets or necklaces (for women). Jewelry can work well if you know what to give.

5. Flowers or an Edible Arrangement. These gifts are a safe bet for female clients or males you know well.

6. Holiday gift basket. Go for wine and chocolate rather than Oreos and popcorn. Several retailers offer you the option to design your own.

7. Season tickets. This special gift doesn’t only cover sports teams. Operas, ballets, theatre companies, symphonies, and zoos also offer season tickets. Clients will appreciate this gift in a hard economy.

8. Golf or ski passes. Another version of the season ticket. You may even consider offering a gym membership, if you’re completely certain that it won’t send the wrong message.

9. Concert tickets. Not as pricey as season tickets, but delightful nonetheless.

10. Plants. These classic office gifts are easy to buy, but harder to deliver. Lucky trees, bonsai trees, and cactuses ship well. If you can deliver the plant yourself, try a philodendron, miniature palm, or Christmas cactus.

11. Gift certificate—retail. Everyone loves free stuff. Receiving a gift certificate to a clothing store, music store, bookstore, or sporting goods store is like getting something for free. Though gift certificate are impersonal, it’s hard to go wrong with them.

12. Gift certificate—restaurant. Find a high-end restaurant in your client’s city or town and buy a gift certificate for dinner for two. This gives you certificate an element of surprise, and shows that you’re willing to do a little more work to please your client.

13. Something homemade. Although chocolate chip cookies may be a little blasé, there must be something that you’re good at crafting. Greeting cards, seasoned hot chocolate mix, mulled wine mix, cinnamon bark, and other yummy holiday edibles are easy to make at home. If you moonlight as a sculptor, potter, metalsmith, painter, or other artisan, even better—send them one of your fine creations.

14. A self-published book. Sites like Blurb.com http://www.blurb.com/ allow you to easily design and publish books on-demand. They supply professional layout templates and materials; all you have to do is insert your words and images. These books can make marvelous portfolio/promo pieces for artists, designers, and photographers.

15. Fancy luggage tags. If you can’t afford to send Burberry tags, at least go for leather—everyone appreciates this small but handy gift. The Timberland Global Tracking tag is another good idea.

16. Universal Hybrid Solar Charger. Solio offers portable, eco-friendly, and stunning solar chargers form $25-$170. The magnesium version is gorgeous, expensive, and sure to impress.

17. Pet gear. Pet schwag is still trendy, despite the fact that the economy has made pets less affordable in general. Fancy dog- and cat collars are easiest to buy; if you know your client’s pet, try getting something you think will suit it best. People love to adorn their animals.

18. A gift certificate for your goods or services. This could include an evaluation, a consultation, a session, or a certain percentage off your client’s next requirement or order. Remember to label it as a “Thank You” or “Customer Appreciation” gift.

19. A donation to a nonprofit in your client’s name. Try to get them to share the name of their favorite nonprofit, then send them an official card or gift receipt from that nonprofit, if they offer it, indicating you’ve made a donation.

20. Calendars and cards. If you must. If you absolutely must.

21. Liquor. Wine and whiskey work well. For something a little different, get them something festive, like Kahlua or Lambic. Make sure they actually drink.

22. Bluetooth headset. If they already have one, upgrade them. If they don’t have one, introduce them.

23. Wireless mouse. Like the Bluetooth headset, everyone can use this little device.

24. Thumb drives/memory drives. Ditto here.

25. Digital picture frame. This is the gift that nobody wants to buy for themselves, but everyone thinks is cool. Your client will like it.

Scouring today’s business headlines, I came across headlines like British Airways Logs Biggest Gain Since Lehmann Collapse and US Airways Sees Profit for Year.

It’s not like Americans have more disposable income for travel, so what gives?

Fees, for one. Like banks before them, airlines have become learned in the art of pilfering crumbs from your payment, one small upcharge at a time. If you’ve ever tried to get a “$9 fare” on Spirit or Allegiant, you’ve witnessed the masters at work. If you’re someone with a bag to check who happens to need in-flight food and leg room, prepare to sprinkle an extra $75 on top of that rock-bottom fare. Delta’s baggage fee collections alone went up 116% this year, according to this government report.

The clincher? Airlines don’t have to pay federal taxes on most of the fees they charge. They’re making a killing on what are essentially mandatory under-the-table tips.

If you’ve noticed longer lines for your flight, that’s also part of the airlines’ strategy. They’re offering fewer flights, suppressing flight supply. The same number of people want to travel, so airlines both fill flights and are able to charge more per flight. According to this Reuters report on US Airways:

The airline said passenger revenue per available seat mile, an important measure, rose about 12 percent in the month of September from a year earlier, including feeder aircraft. Load factor, or the percentage of seats filled on planes, rose to 81.8 percent in the month from 78.8 percent a year before.

Deliberately decreasing flight supply works wonders on the ol’ bottom line. Speaking of artificial supply, fuel prices have also stayed moderate, keeping gas costs for airplanes manageable.

There are also more tasteful business reasons for the increase in profit. Keeping an entire fleet to one model, the way Southwest does with Boeing 737s, means that pilots and crew only need to be trained for that airplane. It “also lowers inventory, record keeping and maintenance costs, and it minimizes the number of technical manuals, tools and spare parts. Also, fleet management is greatly simplified,” according to Boeing, which proudly makes the point on its website. Focusing on more profitable routes, outsourcing flights to fellow network carriers, and even good customer service are proven paths to profitability for airlines.

It’s too bad that airlines, after 2001′s $15 billion airline bailout, are also resorting to more shady measures to boost their bottom lines.

A Vietnamese hacker has hacked 400 iTunes accounts in order to give his iPhone app bestseller status. PCWorld has more:

Reports emerged on Sunday that (hacker Thuat) Nguyen gamed the App Store ratings in the Books category, by purchasing his own apps using hacked iTunes accounts. At one point, the developer’s apps occupied 42 of the top 50 apps sold in the Books section, and users reported purchases of up to $500 with their accounts.

Brie, who also develops iPhone books apps, was affected by Nguyen’s gaming of the App Store ratings. Despite Apple’s claims, he speculates that to achieve such high ratings for his apps, Nguyen had to hack into Apple’s iTunes servers and skip the normal security steps, or run an automated scripted program.

MacRumors has more on what Apple is doing to protect users:

The total number of iTunes users number about 150 million. Apple is said to be increasing security to help minimize this fraud by asking users to enter their credit card security code more often. If not compromised at iTunes, itself, then users likely revealed the passwords inadvertently through phishing attempts, keyloggers, or easy to guess passwords.

The hacked iTunes case proves two things. One, despite a reputation of relative infallibility, Apple is still a big company prone to the same mistakes and threats as any big company. Secondly, Apple, like many big companies, is getting away with being dismissive, having a lagging response time, and not having top-notch customer service (I’m referring to complaints I’ve read about Apple not emailing customers about their compromised accounts right away).

In other words, Apple is just another big company. But its brand and reputation are so strong that users are still shocked by negative reports about company products or services. I think Apple should make an effort to be less complacent and ramp up its customer service to maintain its brand, which is still just about as good as gold. Otherwise, reputation-wise, the company risks eventually becoming Microsoft II.

Three iPhone owners have filed sued Apple for misleading advertising, false advertising, and unfair business practices when selling its new iPhone 4. Bloomberg has the story:

A New Jersey resident and a Massachusetts resident who had bought the new mobile phone filed separate complaints yesterday in federal court in San Francisco, each seeking to represent other iPhone buyers in a class-action, or group, lawsuit. A separate complaint was filed this morning in Maryland, alleging Apple and wireless carrier AT&T Inc. were negligent in marketing the phone.

Maryland residents Kevin McCaffrey and Linda Wrinn claim in their complaint that Apple and AT&T “actively suppressed and concealed the fact that the iPhone 4 could not be held in a manner consistent with the normal usage of wireless communication devices.” They seek unspecified damages and a jury trial.

Those lawsuits certainly heated up the PR stink against Apple. I bet Apple won’t do anything, though unless it faces a class action suit. Correction: There is now a class-action lawsuit.

Sony is recalling 535,000 C- and F-Series Vaio laptops. The Vaios have been reported to get hot enough to bend, warp, and burn skin. Wired has more:

The F-series and C-Series Vaios have been sold into various markets around the world: Japan, Asia, Europe and the US, although so far Sony has only received 39 reports of overheating problems, says the Wall Street Journal.

To see if you’re affected, head over to Sony’s diagnostic page and check your serial number (found on the barcoded sticker on the bottom or rear of your machine). If you are, grab the BIOS firmware update and you should be running cool again in no time.