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Posted by on Jun 12, 2013 in Entrepreneurship, Featured, Food For Thought, Managing People | 2 comments

The Root Cause of Good and Bad Customer Service

The Root Cause of Good and Bad Customer Service

 

Have you ever felt like reaching over and hugging the person behind the counter? Have you felt like reaching over and beating the person up? We all have our good and bad customer service stories. Some people are more vocal about it than others. Some even make it a mission to get back at the company that dished out bad service and to let everyone know how bad the company is.

It’s always been important for companies to provide good customer service. A statistic says people will share a positive experience with an average of five people and will share a bad experience with an average of nine people. Today with social media, the word spreads a lot further and reaches hundreds if not thousands of people. One bad review online can mean lost customers.

As competition intensifies, companies need to differentiate themselves to make sure their customers pick them. Customer service is one of the most important ways to do so. If you have a company you are loyal to, you know what I mean. A friend of mine is so loyal to a coffee chain that they know him by name and start his order as they see him walk through the door.

“Being on par in terms of price and quality only gets you into the game. Service wins the game” – Tony Allesandra

Two Real Life Examples of Customer Service:

Most companies talk about how important the customer is and how they care about customer service. Talk is cheap. Action speaks louder than words. So, I had two encounters as a customer with different companies that are very representative of what good and bad customer service looks like.

These encounters are called “Critical Service Encounters” in marketing and they reveal a lot more than words.

Lets Start With The Good Encounter:

I walked into a Massimo Dutti store a few months ago to buy a tie. I picked one I liked, which luckily was on sale. I walked up to the cash and handed it over to the cashier. He seemed to have some trouble with the system and ended up calling his manager over. As they whispered to each other, I heard enough to figure out that the tie was not on sale anymore but they didn’t update the price tag.So I told them “I’m ok to pay the regular price for the tie. No big deal really”.

The manager insisted to keep the sale price and entered a code to bypass the system and force the sale price for the tie. I thanked them and smiled as I stood waiting.

I started chitchatting with them while they were fumbling with the cash register. My wife and I told them I was buying it for an interview I had the next day. They wished me luck, then the manager went back to the machine and punched in his code to add another 10% discount to the tie. I was so surprised and delighted by the gesture that I was speechless. I finally told them it will be my good luck tie (in the aftermath, it didn’t have enough good luck juice).

We walked out of the store with a smile on our faces and talked about the pleasant experience. Of course, we told my in laws as soon as we saw them.


Now The Bad Encounter:

My wife bought me a MacBook Pro for our wedding anniversary last year. She got a good deal on it from one of the kiosk retailers in a mall. They gave her a good price and assured her the laptop came with the standard Apple one year warranty.

That was great and the Macbook worked great. I take good care of my stuff, but one night while I was wrapping up to go to bed I accidentally dropped it on the floor. The fall caused a dent in the corner and one of the screws fell out. Also, the hard drive started making a knocking sound (metal on metal) randomly.

So, I went to the Apple service center to get it fixed. It was still under warranty. The friendly guy behind the desk gave me bad news though. He told me the laptop was actually bought from Hong Kong more than a year earlier, so it was technically not under warranty anymore. He tried to see if it can qualify with my receipt, but since the seller was not an authorized Apple reseller the purchase date on the bill from the seller would not be accepted by Apple. He suggested for me to go to the seller to get it fixed by their service center. He advized me to insist on them replacing any necessary parts with original parts (they tend to use cheaper and less reliable parts).

So I went to the retailer and explained the situation. From the get go, the guy at the counter seemed like he was trying to find a way out… to get rid of me, the pest customer that will cost them money. While the Apple service center technician was trying to find a way to get it fixed under warranty, the seller’s guy was trying the opposite. He seemed annoyed at the fact that there was three days left on the warranty.

His first attempt was: “Ok sir, I will take it to our service center, but it will take a long time”.

“How long?” I asked.

“Maybe a month or more”.

I countered immediately: “I was just at the Apple service center and the technician told me it would take them a day for them to fix it. I don’t understand why it would take you a month if it takes them a day! I can understand if you tell me a few days or a week, but a month doesn’t make sense.”

He back-peddled a bit and eventually relented to getting it done quicker.

I got a call the next day from the salesman:

“Hello Sir… our technician told me since the Macbook was opened by the Apple service center technicians, the warranty is void.”

I didn’t tell him how retarded that statement was. Instead I said “The Apple center technician did not open the laptop. It stayed there on the counter while I talked to him the whole time. The problem, like I told you, is that I dropped it once and one of the screws at the bottom came off as a result. I did not open it and still have the screw. No one opened the MacBook”.

“Ok sir, I will check with the technician and call you back”.

A few minutes later, I got a call.

“Hello sir, it’s me again. I spoke to our technician and he told me that our warranty does not cover water spills and drops. So I’m sorry, but the Macbook is not under warranty”.

I was expecting that, so with the same firm, but polite, tone I said: “That doesn’t make sense. I bought the Macbook with the understanding that it has a one year Apple warranty. The guy at the Apple service center told me he would fix it if it was under warranty. Your salesman assured me I was getting the same warranty when we bought it.”

Like a robot, he said: “I’m sorry sir, but our warranty doesn’t cover drops and spills. I don’t know what the salesman who sold you the machine said, but this is our policy”.

To make a long story short, I concluded it was a dead end. So I just went over and picked up my Macbook with a heavy dose of disappointment and frustration (see second sentence in this post).

My final words to him were “you guys saved yourselves a few hundred dollars today, but you lost thousands of dollars since I will not be buying anything from you and will make sure everyone I know doesn’t buy from you”.

Lessons Learned:

I learned to only buy from certified resellers, but I learned a much more important lesson about customer service.

It’s All About Perspective.

If you have a short-term perspective on customers, you will approach these interactions as problems you want to find a way out of. You will feel successful if you save the company money and get rid of the pest customer that complains when you do. The dangerous part is that you will be blind to the lost future business from those customers. You will miss out on their repeat business, referrals, and word of mouth. The owner of the electronics retailer will not “see” the money his company will lose out on when I decide to buy my future electronics elsewhere. He won’t see that growth in his business though.

If you have a long-term perspective, you will view these encounters as an opportunity. You will be happy to lose a penny today to please a customer, especially if it is honoring a “promise” you made (sale price or warranty). You will enjoy seeing customers return. You will even have a key metric to measure how much repeat business you get. It will be an important engine to your company’s growth. You will have better growth than companies with the short-term perspective. And that growth will cost you less than attracting new customers (repeat business costs less than customer acquisition).

Derek Sivers shared some great examples about how his company focussed on pleasing customers through the little things in his book “Anything You Want“.

What customer service stories and policies do you have? Share in the comments below.

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