Ken Goldstein, on customer disservice.
Why do companies with big brands and tremendous momentum go out of business? One reason often discussed here is lack of innovation, which is often opaque, quite difficult to grasp when it is happening because you are in the midst of it, even enjoying a final gasp of success. Another is much easier to understand and very definitely within control — when you stop loving your customers.
Here is a summary of a recent actual customer service call with a well-known company in which I was the very real customer.
ME: But the replacement knob you sent me does not fit the appliance.
CUSTOMER SERVICE: It’s the one you ordered.
ME: No, not exactly, I called and gave you the model number of the appliance and told you which knob was broken, and this is the one you sent me.
CUSTOMER SERVICE: Well, it should fit. Did you push hard on it?
ME: It does not fit, so pushing harder will only break it.
CUSTOMER SERVICE: Maybe you don’t know how to install it. Would you like us to send out a technician? I need to advise you we bill on site service visits at a minimum $95 per hour.
ME: I don’t need a technician, it’s a $4.75 plastic replacement knob to turn the appliance on and off. It does not fit on the metal stem.
CUSTOMER SERVICE: Sir, if you don’t want me to schedule a technician to come to your home, there is nothing more I can do.
ME: Yes, you could send me the proper replacement part. I actually looked up the appliance online and have the serial number for the part I need. It differs from the one you sent me by two digits.
CUSTOMER SERVICE: That’s not possible, they are all the same. If you are not able to install the one we sent, how do you expect to install another one?
ME: I’ll take my chances that the right part will fit. Can I send this one back and get a replacement please?
CUSTOMER SERVICE: We don’t refund parts you ordered incorrectly that become open stock. You can order another one if you want, but you’re still going to need a technician to install it.
ME: You do understand this is a $4.75 part for an appliance that cost more than $1000. How do you expect to stay in business when you treat customers like this?
CUSTOMER SERVICE: Sir, we’ve been here for a hundred years and we’ll be here for a hundred more.
Then he hung up on me. Really. Somewhere there is an actual recording of this call, for training purposes.
Just so the damage is clear, we have a house filled with appliances from this retailer. As these need to be replaced, none will come from that retailer. The next house will also have none. How much did that $4.75 part and the mishandled call cost the seller? The future lifetime value of this customer. I know from having told this story to more than a dozen friends I am not alone.
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One of my very best former senior executives used to start each morning in our customer service department with the kick-off mantra: “Remember, our business would be so much better without all those pesky customers. Never forget that, how happy our days would be without them.”
Of course he was kidding, but just saying those words aloud every morning to our trusted heroes on the front lines reminded them how important they were to our success, or how much pain they could cause if they forgot what they were there to do — help keep our customers our customers. We would consider every inbound call a gift, an opportunity to repair any aspect of our relationship that might have been violated. Without our customers, we could not exist, and without the opportunity to hear and fix their problems, we knew we would lose them.
No one in a customer service role likes to get yelled at all day, but what’s the alternative? When the phone stops ringing and the emails stop coming, it is seldom because you are doing everything right. It is usually because the customers have been trained not to contact you or they simply aren’t there anymore. Not exactly a great alternative to customer complaints, is it?
Recovery, or “the art of the save,” is the process by which a negative becomes a positive. Every downside event experienced by a customer offers the single best opportunity you have to show your love. When you empower the people on your front lines to transform any possible negative experience by a customer into an opportunity to bond with them forever, you not only keep their business, you have a shot at recruiting an uncompensated evangelist. Solve a customer’s problem and exceed their expectations, lifetime value continues and they might even go to bat for you with their friends. Ignore or insult them with as many alternatives as there are in the marketplace, the tar pits of antiquity offer your final resting place.
Beating back the challenges of creative destruction is hard enough work. Is being nice to the people who pay your bills really that hard? If it is, get ready to join the march of obscurity and obsolescence. There are so many ways to lose what you’ve built and so few ways to win in the long run. Take heed and don’t lose the game for the things you can control.
Any presumption that a company lasts forever defies logic and history. Don’t give your employees reason to think that perpetuity is ordained or soon enough you’ll sink together in the ooze. Love your customers, every single one — those who complain the most are probably the ones who control the keys to your survival.
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Originally published on Corporate Intelligence Radio
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Photos: Main: sylvar / flickr, Inset: pacificit / flickr
I shared this with my business partner. We both agreed that our business is 100% a customer service business–every aspect of it. (We own a small group of regional Spin–indoor cycling–studios in the very crowded Los Angeles fitness market.) It’s all about building rapport and connection. For us the most crucial part we find is the first 15 minutes. We really encourage our instructors to arrive to their classes early so they can engage clients in an informal and caring way. Little things like a hand shake, a “how are you feeling,” or “let’s quickly check your bike fit again”… Read more »
Bryan:
Thanks for the comment. You have this 100% correct, and with your incredibly positive attitude toward customers, I would bet your business thrives. You never want to be a commodity if you have the option, and graciousness is anything but a commodity. And when you’re not a commodity, higher prices are definitely your option, regardless of the competitive environment. Congrats on your success to date and keep growing!
Ken
I think you hit a nerve, Ken. These folks have no clue that they saved a few bucks, but lost a few thousand. Oh well, Montgomery Ward, towards the end of its storied life, was much like the firm you mentioned…and that’s whey they’re gone.
Thanks, Dave. If they had told me the part was $20, I would have paid, I could care less. The multi-hour run around, two trips to their store, being told I needed to pay for a “technician” to properly install the knob — not only were they incompetent, they weren’t even nice to me, and they felt some sense of entitlement to their jobs. Thousands of dollars is the low end How many people have I told about this, telling them never, never to go to this store? And yet they still spend millions on TV, radio, print, and online.… Read more »
I hate it too, but its just as a much about how they treat their employees. Lets say they have some statistic that says 25% of people know what they are talking about and the other 75% are just installing a device part incorrectly. Well then they place stupid “goals” on their employees. They can only send out a certain percent number of parts else write-ups/bonus-docks or what ever negative reinforcement they have. Call and get and employee with a % that is too high? Bad bad bad customer service. Call back for someone else and they have a better… Read more »
You are so on the money, Bobby. Setting bad goals creates bad outcomes. When you are a manager, people will always respond to your reward system. Set it up wrong and you’ll get a terrible outcome, over and over until you have no customers left!
The holy mess of customer service at a Subaru garage (for warranty work else I would have gone elsewhere to start) is the singular reason I will never buy a subaru again. I have informed Subaru of this basically to get a letter back stating “here’s $500 off your next subaru but we see no issues.” The back story is the condescending way I was talked to and more over the subsequent horrible diagnostics that they had. I’ve never been more happy to see a warranty expire on any car than this one so I can go to reputable mechanics… Read more »
The cost of undoing damage like this really can’t be measured. I write about this all the time — a brand is a promise. Break that promise and no one wants to see your logo ever again!
A few years ago, My wife made a phone call approx 3 mins after 6pm, talked to her sister for an hour and a half. She knows what time it was because like most computers they are synced. Well we get the bill, and voila an 1.5 phone call at full rates. I called customer service, and was ultimately told “There is nothing we can do”. I said “Actually there is on thing you can do, cancel ALL MY PLANS”, You see, I have phone, internet and TV with this same company. About $150 a month in services from them.… Read more »
You are so right, Aspire. Recovery has to come before you lose the customer. Afterward is way too late. That’s no a save, it’s a buyback. Very seldom works!