Something Bad is Going to Happen. That’s Out of Your Control.
But you can always control the way you respond to it.
Treating customers well is one of the cheapest, easiest ways to surprise and delight them. And treating them poorly is one of the surest ways to chase them away. So I’m often baffled by the decisions some companies make about how they handle customer problems and concerns.
This is easiest to demonstrate through examples, so let’s start with one that I experienced myself: I just spent a month fighting with a company over a missing replacement part for my dog’s GPS collar.
It started when Federal Express lost the package. That’s just bad luck and not something the company could control—but they certainly had control over how they dealt with it. And boy did they mess that up. It went on for weeks, with endless emails and a lot of stalling and buck-passing.
Finally, I lost my patience. Here’s what I wrote:
The items I ordered have a cost-of-goods of less than $1.00. Why are you fighting me on this?
Good customer service is not making ME wait for you to find the missing shipment. I shouldn’t have to wait for that. I paid almost double to get two-day shipping, and it’s now coming up on three weeks.
Good customer service is YOU taking responsibility for it being lost and shipping me a REPLACEMENT so I don’t need to wait another three weeks for the product I expected weeks ago.
Had the customer service rep at Whistle (oops, did I just let that slip?) simply shipped a replacement order the moment I reported the original missing, two things would have happened.
First, they would’ve saved money. Most estimates I’ve seen put the loaded cost of handling complaints at $7-$10 per touch, so given how many times we interacted, shipping me a replacement no questions asked would’ve saved them $50 or $60.
Second, and more importantly, they would have surprised and delighted me by showing they were willing to do whatever it took to make this right. They would have had an appreciative customer rather than a bitter one. Instead, they signaled that they didn’t trust me. Their actions all but accused me of trying to trick them into shipping me an extra $4.00 part, and they were willing to spend ten times that to make sure I didn’t get away with it.
The math makes it pretty obvious what the best solution is. But if that’s the case, then why is bad customer service so prevalent? “We believe in great service” seems to be a platitude that everyone trots out but rarely does anything about. It’s in the Bullshit Hall of Fame right next to “We only hire A players” and “Our company is built on respect”.
In each of those cases, it’s not what you say, it’s what you do.
At Netflix, when we were still shipping DVDs, our most common customer service ticket was for a lost or stolen disc. And our response was remarkably simple and consistent: we shipped them another one. Immediately. No questions asked. At a cost of around $20 per DVD.
Could our customers have been defrauding us by just keeping the disc and reporting it stolen? Maybe. But I’ve always believed that most people are honest. So why not make things easy for the 98% of the people who are honest, rather than making it hard for everyone just to snare the 2% who are bad actors.
It’s simply bad business to treat customers poorly. It can take hundreds of dollars to find a customer, but just one bad service experience to lose them. You have no idea how easy that is.
When I worked in New York City, back in the pre-internet era, I’d call for a town car when I needed to head to the airport. There were probably a hundred similar companies that provided that service, but I always called the same one. Their cars might be filthy, the drivers surly, and the fees outrageous, but old habits die hard. Every time I needed a car, I’d head right back to that same dog-eared card in the Rolodex.
Until, that is, a car missed a pickup. And that would be that. I’d tear the card out of the Rolodex, find a new service, and stick with the new guys until eventually they were late. There was only one thing they had to get right, and failing to do so was fatal. Today, in the internet era, it’s even more important to get things right since the switching costs are so low.
Zappos has a concept they call “Delivering Wow” that is at the heart of all their customer interactions. They will do whatever it takes. Agents will ship replacements prior to asking for the original to be returned. They’ll upgrade shipping to get shoes to a customer in time for a special event. They’ll even let a customer keep a pair of mis-delivered shoes, so they can donate them or give them to a friend rather than going through the hassle of returning them.
At MacWarehouse, my third startup, occasionally our inventory would get out of balance and we’d mistakenly take an order for a product that wasn’t actually in stock. Once we realized our error, rather than risking their disappointment, we would send someone out to purchase the identical item at retail…even if it cost far more than what we were selling it for.
I also got a report every evening listing the handful of customers who, despite our efforts, were not going to get the product they had ordered when they expected it. I would personally call every one of them, let them know what was happening, apologize for it personally, and tell them what we were doing to make it right.
Getting to “Wow” for your organization is not out of reach. Be creative. How would you want to be treated?
Solving a customer’s problem in a single touch usually is much less expensive than having it kicked around for weeks. And even in cases where doing the right thing is expensive in the individual case, you’ll find that the percentage of cases where this happens is so low that it’s barely noticeable in the aggregate.
You can help this along by ensuring you’re measuring the right things. Tracking “customer service efficiency” or “per-incident cost” will push you toward lowering your headcount and trying to shorten interactions. So go the opposite way. Try to minimize touches per contact. Give your staff the time to adequately deal with each problem the first time they see it, rather than pushing it off to a future call.
One of the best ways to solve a problem the first time is simply to trust your customers. Ask yourself what percentage of your customer service time is spent getting your customers to prove that they deserve your help, rather than simply taking them at their word? Besides cutting down on the number of touches per incident, you’ll find that the real benefit of this approach is the effect it has on your bottom line.
Building a product that surprises and delights your customers is hard enough—don’t miss the opportunity to do that with the way you treat them.
Things are always going to go wrong. You won’t always have a lot of control over that. But you will always have control over the way you deal with it.
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Podcast Episode 72
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