Outrageous Customer Service


In this social media crazy-world, the consequences of not treating our customers well are larger than ever. We, as those running or coaching businesses, need to be fully attuned to the quality of service we are providing.

Customers can be classified into four groups:

1) Customers who have been offended

2) Unsatisfied customers who showed up today, but will abandon our business as soon as they get an opportunity

3) Mildly satisfied customers

4) Raving fans who spread word of our product or service every chance they get

We shouldn’t rest until all of our customers are raving fans. We need this not only because a word-of-mouth testimonial from a satisfied customer is one of the best forms of marketing available, but also because there is no way for us to tell the difference between groups 2 and 3. They rarely identify themselves.  

Consider this scenario:

You visit a restaurant that provides inedible food and even worse service—the waiter even openly mocks you. You'd likely complain to the manager and/or walk out mid-meal, right?

But suppose the much more likely scenario occurs:

You visit a restaurant where the food is decent but not as good as the last place you ate. The waitress is pleasant but doesn't take your order exactly right, and one of your appetizers comes out a bit late. You discuss with your dinner companion that you probably won't be coming back to this restaurant. A minute later a manager stops by to ask how your meal is. If you are like most people, you respond that everything is very nice and thank him for stopping by. The manager makes note of your positive feedback, moves on to the next table, and mistakenly assumes that his team has served you well.

 Why do most of us lie to the manager? We lie because we don't owe him anything. We're nice people. We haven't been grievously harmed and thus refrain from vocalizing our feedback.  Instead we simply smile, pay the bill, walk out, and never return.

So it is with our customers. They rarely provide honest feedback unless they are in groups 1 or 4. We have no way to tell the difference between groups 2 and 3 because they won't tell us. We must delight them at every opportunity and do our best to push them into group 4.  

How can we increasingly move our customers into group 4, even when inevitable customer service failures happen?

Some companies erroneously contrast the “cost of the lost customer” and the “cost of fixing their mistake” in order to determine if they should attempt to make amends. This is an inappropriate approach. Not only might the cost of shrugging off a frustrated customer be much higher than we expect (search "United Breaks Guitars" in Youtube for an extreme example and note the millions of people who have viewed it), but it ignores the moral principle that if we harm someone we should make it up to them, regardless of the cost. It’s the right thing to do. Period.

As an added bonus, fixing our mistakes regardless of cost usually results in only a short-term loss that yields tremendous profitability in long-term because customers will become very loyal. 

How can we train our front-line staff to recognize and respond proactively to customer service failures?

As John and Martha King of King Schools say, in most customer service resolution interactions there are usually only two roles that can be played: "It's no big deal" or "That's outrageous." We get to pick which of these we'd like to play. And when we do, (almost by default) the other party slides into the other role.

Try it out. The next time you interact with a disgruntled customer, take an attitude that his complaint is no big deal and watch how quickly he starts to vocalize how “outrageous” your treatment of him is. He'll quickly turn to his friends and social media to tell the story.

If instead, you sincerely apologize for the failure and take the attitude that it’s outrageous that he was treated in such a way, he'll almost always default into a "It's no big deal" attitude, and the issue will soon be over.  

Does this mean that the customer is always right and that we should give them whatever they demand when we make a mistake? Certainly not. In my experience, giving a customer whatever he demanded could have sometimes been detrimental to his safety and/or the safety of others (it was in my aviation training business). This is not an option.  

We should:

1) Sincerely apologize. Don’t say, “I’m sorry that this happened to you.” That is a cop out. Say, “I’m sorry we made a mistake.”

2) Take the attitude that it is outrageous that he has been treated this way.

3) Proactively offer (before being asked) a remedy that attempts to make the customer whole (even if this costs more than you think the customer will ever spend with your business).

4) If the customer makes an outrageous demand that could/will either harm himself or cost you much more than you have cost him, say, “I do feel terrible about this and really want you to come away from this interaction with my business better off than before you arrived. What you are asking for doesn’t make sense to me. I’m happy to offer you X.”

5) Empower all of your front-line staff to follow steps 1-4 up to a certain dollar amount of X without your permission or fear of punishment for offering a customer too much. If you later find that a customer was offered more than an amount to make him whole, use it as a staff learning opportunity, not a punishment opportunity.  If you really can’t trust your front-line staff to make such decisions, you haven’t trained them well enough and need to fix this—today.

 
As soon as the issue is resolved, be sure to conduct an internal analysis of exactly where the failure occurred and why. Bring all involved staff members into the creation of the analysis. The purpose isn’t to punish staff members who erred, but instead to ensure that company procedures are improved so that the issue doesn’t happen again.

David Cusimano is Founder of Emerge Dynamics, a Founding Partner of Gulf Search Capital, and a faculty member in the Goldman Sachs 10,000 Small Businesses Program. 

 

Comments

Popular posts from this blog

The Importance of Company Specific Risk (CSR) in Business Valuation

It's All About Profit. Right?

Searching for Global Economies That Foster Private Company Prosperity: An Exploration of Chile