The Age Of The Consumer

If You Don’t Think Honesty Is The Best Policy In Customer Service… Your Days Are Numbered

"What do you mean you want to cancel your membership?!?!?"

“What do you mean you want to cancel your membership?!?!?”

I am simply amazed that certain less-than-ethical practices still persist in the martial arts industry… especially in light of the fact that now, more than ever, we exist in “the age of the consumer.”

What do I mean by this?

Well, observe the very website you are reading this article on… you’re reading a blog, also known as a “web-log.”

Blogs were one of the first “web 2.0” applications that allowed the general public to quickly and easily share information on a mass-scale. Other web 2.0 applications include:

  • Social networking sites
  • Micro-blogging (Twitter)
  • Social video sites
  • Social bookmarking sites
  • Review sites
  • Local business listing and “maps” sites

Every single one of the above allows the consumer a near-instant and virtually unlimited ability to influence the public for or against your business.

Review Sites Spell Doom For Unethical Martial Art Schools?

Think about it; everyone knows how important it is for local marketing purposes to have your business listed in Google Maps and Yahoo Local. But have you given serious thought to the review function of these sites?

Anyone can login to their Yahoo or Google account and post a review of your business – one that will remain online for an indefinite period of time, and that you have almost zero chance of getting rid of once it is published online.

Moreover, those reviews often get copied and aggregated by other “knock-off” sites… meaning the negative review may very well show up all over the internet.

And with the advent of Facebook and Twitter, with a few keystrokes a single consumer can almost instantly spread their discontent about a business to thousands of other consumers. It also deserves mentioning that Twitter and Facebook content is increasingly being used by Google to serve up information in their search results pages.

With nearly 100% of consumers searching online when shopping locally, it’s no small leap of logic to assume that too many negative reviews and opinions posted online about a martial arts school can have a very negative effect on business.

The Positive Side Of Consumer Influence

Of course, this can be a very positive thing… if you’re an ethical business owner who treats your customers the way you’d want to be treated were you in their place.

However, as my blog readers and newsletter subscribers are all too aware – unethical and “grey area” business practices seem to be the accepted norm in many martial arts schools in America.

However, I don’t totally hold the individual school owner to blame for the vast proliferation of shady business policies in martial arts schools. That’s because you’ve been fed a lot of really bad ideas about how to run a business over the last two decades – ideas that originated with the martial arts billing companies.

You see, these companies have a vested interest in seeing to it that their clients (martial art schools) stuck it to their students, since they are paid a flat percentage of the gross income they collect.

So, it works to their advantage to influence school owners by telling them that they should:

  • Sign new students up on the longest possible contract –
  • Hold students accountable for paying their contracts, even if they move, or have to drop out of classes due to a legitimate health issue, or lose their job –
  • Use a collection agency to chase delinquent accounts to the four corners of the earth –
  • Use a billing company to handle their accounts in the first place (a service that technology has made obsolete in recent years, as I recently pointed out in this article) –

The fact remains, however, that the above policies represent a really crummy way to treat your customers. Maybe shady martial arts schools could get away with this stuff in the past, but those days are numbered (well, at least we can hope… but you know how cockroaches always seem to keep coming back).

The Potential For Abuse Of Social Media

Yes, there also remains the possibility of abuse of this new technology. In the past, we (the honest school owners) had to put up with petty little underhanded business tactics being used against us by our less-than-ethical competitors.

This may have amounted to little more than having our brochures or lead boxes stolen (this actually has happened to me on numerous occasions), or having competitors openly trying to “steal” your students and prospects through promises of rapid rank advancement or by other means  (again, I’ve had to put up with these tactics as well).

But in this day and age we have to be aware that our competitors can easily create false profiles on social networking sites and other web 2.0 properties, and create fraudulent negative reviews of our schools. You may think this couldn’t happen to you, but believe me, it’s already happening right now.

(A little side note… when I released Small Dojo Big Profits years ago, I almost immediately faced a slanderous smear campaign that was run against my book on the martial arts internet forums – the social networking sites of the day. My guess is that certain interests in the industry didn’t like what I had to say about the state of the industry, so they put their cronies up to it. Well, more than a decade later, I’m still here, and now there’s no way any one single entity can control the information that is disseminated in our industry…)

So, What Steps Should An Honest School Owner Take?

Here’s my advice to ALL school owners regarding the effects of social media on our industry:

  1. Treat ’em right – First off, STOP TREATING PEOPLE LIKE A PAYCHECK! What I mean is that you need to start acting as an advocate for your client, from the moment they contact you to the moment they move on from your school. Always, always, always act in the interest of the client, period. You can’t go wrong by doing right by people – make that your motto.
  2. Make sure you’re spreading the right “idea virus” – Second, realize that you need to have public perception and opinion on your side. And, the best way to do that is to refer to item #1 above. Social media is viral, ideas are viral, everything moves at the speed of bits and bytes these days… so start an idea virus about your business that says you treat people right and offer the best possible instruction to your students. Once it spreads, the effect it will have on your business is immeasurable.
  3. Encourage your students to tell others – Remind your students that you’d appreciate it if they reviewed your school on sites like Google Maps, Yahoo Local, Yelp, and so forth. Remember, first you have to be listed on those sites!
  4. Be aware of what’s being said about you online – Don’t obsess about this, because there are always going to be a few dissatisfied customers in the crowd. However, you should occasionally monitor review sites for signs that false negative reviews are being posted about your business. If you feel that’s the case, it’s your right to take it up with the site administrators, and to ask them to take any such reviews down. Be persistent; it may take numerous requests and lots of correspondence before you get results.

Final Thoughts

In the long run, I think social media will be instrumental in forcing businesses to adopt business practices that level the playing field for consumers… and the martial arts industry is no exception.

However, the bottom line is that you need to treat your customers right. It’s always a better policy to treat people fairly and deal with them in an honest fashion.

And, by doing so you may very well be cementing a positive public opinion regarding your school that will reap positive benefits for your business for years to come.

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Comments

comments

3 Comments

  1. Cathy Chapaty on May 26, 2010 at 11:26 am

    Mike,
    THANK YOU for validating a point of contention I’ve had for years. I’m a tiny martial arts school owner with a community-service focus. When I opened my school almost 5 years ago, martial arts business consultants told me I needed to charge some pretty pricey fees for my classes, have long-term contracts, etc., but that never sat well with me. I’ve gone the no-contract route ($88 per month for unlimited classes per week for ages 6 and up; $55 for twice a week classes ages 3-6). My students promote to black belt when they’re ready, not when a certain amount of checks clear. Since I’m on the complete opposite spectrum of the martial arts schools you mentioned (I won’t turn anyone away for inability to pay), I recently decided to form a board of directors and apply for non-profit status.

    And now, I feel right with the world. Is this a solution for all schools? Absolutely not. It’s just for me and my goals as an instructor and how I want to help make the community/world a better place.

    So thanks for your blog. Keep up the great work.



  2. Mike Massie on May 26, 2010 at 3:58 pm

    Cathy,

    I think it’s great you’re able to teach without making a profit.

    Many schools owners can’t afford to do so, but there’s an obvious need for non-profit schools that provide quality services at a lower cost to at-risk youth and in under-privileged areas.

    Keep it up!



  3. Anonymous on August 4, 2010 at 2:35 pm

    Mike,

    Thank you for claryfing. I feel really dumb for having signed a two year and a half contract with absolutely no right of cancellation (you mentioned illness or job loss for example). Now that the school has moved 7-10 miles away from the original site I am finding it very difficult to attend to class, no only for the time I will have to spend on the road but for the extra gas I will be using and the ecological damage for having to drive extra 20 miles a day (we are two members of the family attending at different times). I have tried to speak to the lending company and there is no reasoning with them. Your article is spot on.



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