Dear Office Depot, AIG Warranty and Toshiba: Please educate your employees about your products and services

Rick Lepley, Executive Vice President, North American Retail, Office Depot
Mark Holifield, Executive Vice President, Supply Chain, Office Depot
Chuck Rubin, Executive Vice President & Chief Merchandising/Marketing Officer, Office Depot
Paula Martin, Vice President of Mobility, Office Depot

Taro Hiyama, Vice President of Marketing, Toshiba Digital Products Division
Carl Pinto, Director of Product Marketing, Toshiba's Digital Products Division

John Doyle, President, American Home Assurance
Matt Frankel, Senior Vice President, AIG Warranty

Dear Sirs:

I was all set to buy the Toshiba M45-S355 at Office Depot on Saturday, August 27, 2005. List price $1449. There were two discounts listed with this machine, one mail in for $150 and another in store for $50. I was also prepared to buy the 3 year Performance Protection Plan (PPP) from AIG Warranty for $444.99.

In addition I was also going to buy a Targus® Defcon Cable Lock for Notebook Computers for $29.99 and the Samsonite® Notebook Computer Case for $82.80.

The grand total sale would have been $2006.78. But I didn’t buy anything from Office Depot. Why?

Several reasons. I've been looking at notebook computers all week. Thursday August 25 I was at the Office Depot store on Geary Avenue at Masonic in San Francisco. I was looking at another laptop as well, the Toshiba M55-S325. The store associate and I talked about the various features of the two laptops. I noticed that the M45 had more memory as well as a bigger screen. I also noticed the sale of the M45 expired on Saturday. I wanted to compare prices at other stores before I bought. I also wanted to check the reliability specs of the new model I was now considering. I went to CompUSA, Office Max and called Fry’s. Then I returned to Office Depot on Friday August 26 to ask more questions, specifically about your Extended Warranty so I could compare it to what the other stores were offering. The associates I talked to Friday evening weren't sure about the details of the PPP. I talked to a friendly trainee, but he didn't know the specifics of the Screen Protection policy vs. the standard policy.

No one else in the store knew details about it either. They didn't have any fine print to show me so I could compare. Since I had the PPP 800 number from the trainee’s brochure, I called it while still in the store to see if they could explain. Unfortunately the person I talked to could not explain what the criteria were for the Screen Protection policy. I might have bought the laptop and the PPP right then, but since I didn't have the details I had to go home empty handed.

Saturday I went on-line and looked up the details about the PPP. Unfortunately I didn’t find what I was looking for on-line, so I called them again. The man I spoke to was very helpful and explained what the Screen Protection would cover. It sounded like a good deal and I decided to go for the 3 year plan.

Before I left for the store to buy the laptop and the PPP, I dug up my Office Advantage number and checked to see if the products I was going to purchase were covered (I couldn’t tell based on my research online) and left for the store. When I was at the store I told a sales associate I wanted to buy the Toshiba Satellite M45-S355. He went to a computer and came back and said that they didn’t have any in stock. I asked if I could order one or get one from other stores. He checked and said there weren’t any available. I asked if I could buy the computer today and have it delivered next week before I left on a business trip. He said that they weren’t sure if any would even be available by Tuesday, but that I should wait and try back then. I explained I was going out of town and I wanted to make this purchase before then. A manager came over and I asked him if there were any other people he could check with at the warehouse to see if I could buy it today for delivery this week. He told me that they didn’t have any more, that there had only been a few available and that they had sold out early in the week. He also said that even if there were some in the warehouse they couldn’t sell me the computer today with the rebates. If I came in next week and they had any, they would be sold at the full price of $1449.

At this point the offer felt like a bait and switch deal. If any of the Office Depot associates had told me that this computer wasn’t even available I would have stopped considering it or focused on the model I was initially considering. Yet it was still there, luring me away from another similar purchase. If there were notebooks still available when I was in the store on Friday, and an associate had known the details about the Screen Protection in the PPP (or at least had a copy of the fine print) I could have bought it then.

Finding details of the Screen Protection Program was an incredibly difficult process. I asked three associates, went on-line and made two phone calls to get the answer to a straight forward question about the primary differentiator of this plan vs. the standard plan. I would think that a $444.99 product that offers Office Depot a high margin would be better understood so that it could be sold. As it was, the lack of knowledge about your program held up my purchase.

My questions
Pricing and Display Practices
If the product is no longer in stock, why was the model still out on the floor with the sale price? I called customer service Saturday night after I left empty handed and was told that the store manager could have offered me the floor model, (which he didn’t). If I went back into the store on Sunday would that model be on display for other unsuspecting customers who might get their hopes up and attempt to purchase one? I did notice that there were a few models that were not on display, so clearly this store has removed products in the past, but evidently not this one.

Sales Associate Education
I can understand a trainee not knowing all the details of the PPP plan, but why weren’t print outs of the fine print available in the store? The trainee went and printed up a spec sheet of the laptop for me, why wasn’t a PPP sheet with details available? Perhaps if anyone in the store had the correct information at that time, one of the computers would still have been in stock and I could have purchased it.

Extended Warranty Information
If I’m buying a $444.99 insurance policy that is 1/3 the cost of my computer, I’d like to know the details, especially if there is a $200 premium on the specific protection I’m concerned about, the Screen Protection. If the associates in the store don’t have the info, I would expect someone at the PPP 800 number to have it. I shouldn’t have to leave the store to find this information. I understand this is a HIGH MARGIN ITEM for Office Depot. I shouldn’t be forced to call the Extended Warranty vendor or be told to “go online” while I’m standing in the store to get the detail I need to make an informed decision. As it turned out, I DID decide to purchase the PPP with Screen Protection after I talked to a knowledgeable person at the vendor. (Of course now I have purchased nothing, so the PPP was not purchased either.)

Office Depot Advantage Program
I couldn’t determine if the extended warranty purchase would be part of my potential rebate. I saw that the computer was excluded, but I couldn’t tell if the PPP was considered a business service or not. When I called the 800 number to inquire, I couldn’t even leave a message because “the mail box is full”.

Manager Discretion
I got the impression from that manager that since this was such a good deal; I shouldn’t have waited until Saturday to buy it. Of course if he had asked me I would have told him I was ready to buy the product earlier in the week if only someone had provided the right information. I might have bought another laptop had this one not been on display in the first place and lured me away. I had spent a considerable amount of effort finding out info about Office Depot programs this week.

As I stood there disappointed and annoyed by my inability to spend $2006.78, I got the impression that it really wasn’t his problem, that someone else was really to blame for my inability to purchase this product. It appeared that he had NO INSIGHT into the status of current or future inventory of these Toshiba laptops. He didn’t even have insight into the projected inventory for the next day! Maybe the people at headquarters making up the sale prices and dates for sales are to blame. Or maybe the people in charge of the supply chain are responsible for not giving insight into the inventory for the following week. Maybe it is Toshiba’s fault for not delivering as many notebooks as promised. Whatever the problem was, there was clearly a lack of communication about inventory, potential inventory, products, pricing and potential pricing. I can understand this information being a mystery to a trainee, I can understand not telling a customer about a future sale price, but a manager at the store should not feel so left in the dark it impacts his ability to sell thousands of dollars worth of products.

Gentlemen, the bottle line is this: My credit card was burning a hole in my hot little hand, I had already switched models once, I was prepared to buy a laptop, accessories and a service plan, yet no one suggested another notebook model or worked to keep a sale in the store or even within the Office Depot network.

Epilogue
Today, Sunday, August 28, 2005, I went to CompUSA to buy a laptop. I’m now the owner of a Toshiba M45-S355. Interestingly, the manager of the CompUSA Stonestown’s store also didn’t have any in stock. He also was promised several M45-S355s that didn’t materialize. His response to this situation was different.
1) His sales associate called other stores to find one.
2) Both he and his sales associate knew the details of their extended warranty.
3) He offered to sell me the demo model, which I declined because I wanted a new one, and one was available in another store.
4) He contacted the other store, asked them to hold one for me and gave me the name of the person to talk to and directions to the store
5) He gave me his card and asked me to call him if there were any problems.

I’m not a big customer. I don’t represent a Fortune 500 company. My potential purchase would have been merely a drop in the bucket in your multi-billion dollar sales for the quarter. I just thought you might be interested in the story of one lost sale, the customer that got away and the reasons why.

Sincerely,
Mr. Spocko

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I sent this off on Sunday night. It will be interesting to see what response I get. I'm getting ready for EschaCon and I didn't want to be laptopless!

UPDATE 8-29-2005
Well I got a very nice call from the district manager from Office Depot. I'm guessing that one of the execs at Office Depot will find his name on my blog from Googling it and want to know how it was resolved after he pushed the issue down to the district manager.

I pointed out that it appears to me the problem lies further up the ladder than the local level and since I didn't send this letter to shake them down for a better price, I would love to ensure that the people at the various companies look at their education and communications processes instead of placing the blame at the local store manager or associate level.

Unanswered questions:

-> What was Toshiba's role in this? Are they promising inventory and not delivering?
-> What was the inventory system's role? Do they not provide information on purpose so they don't sell items at a low price when they can sell it at a higher price next week after the sale is over?
-> Is the supply chain director giving managers enough information? Why not?
-> What role do the pricing people have in this deal? Is there a "We would rather sell only a few units at this low price." policy?
-> How come AIG didn't provide detail about their $444.99 policy?

The nice district manager said all the right things, but I told him that I would be most satisfied if this mess got pushed UPSTREAM instead of down. Sure it would be great if some 10 dollar an hour sales associate knew what was going on, but what's the deal with the multi-million dollar inventory systems?

I'm trying to HELP all these companies do a better job. Maybe I should have held off on my purchase and then got them to match prices and pull a laptop out of someones store in Modesto, but that is not my style. I got the machine I wanted at the price I expected with the service I needed, just not at the store that was closest to me.

Now if Office Depot, AIG or Toshiba want to contact me to explain how much they have benefited from my comments and how it will help customers in the future, that would be swell.

I fully expect that when these execs run across their names in this document they will be on the horn to the lowest person they think of who is responsible to see if this "situation" has been resolved. Then they will want to figure out how to get this off my blog. Hey, here's an idea--call me! You have my number, I won't bite. I spent a lot of time figuring out who you were and how to contact you. I've made it easy for you to contact me. I won't remove my post, but I will update it if experience warrents it.

In my experience most executives are so far away from their customers they couldn' t name 3 end user/customers if their lives depended on it. If they want to give me treats (an extra battery for the laptop, a wireless travel mouse, a wireless PDA with a service plan, etc.) I wouldn't stop them, but that would seem a little greedy on my part. Of course if they want to hire me to talk about my customer experience that would be even better. But I didn't write this for that purpose. Because of my experience in multiple industries I see things that the average customer misses. And because I would rather teach than argue, I always want to help--and when possible--get paid for it.

I told the nice district manager I'm available to talk to anyone, my one fear is that the only people who will take any heat on this deal are the associates and manager at the local store. I didn't name them on purpose, although I have all their names. Although they bear some responsibility, my sense the problem lies elsewhere. So if THEY find this page, please understand I'm not mad at you. I'm just trying to help you do your job better for other customers.

LLAP,

Spocko