We live in an imperfect world. Although we strive to do things well, things go wrong, mistakes happen. But what differentiates great companies from poor ones, or what can turn a great company into a poor one, is how they treat their customers when those problems occur.
Here are a couple of recent examples I’ve experienced that illustrate the wrong way to deal with customers.
We won’t admit fault, and we’ll do the minimum possible to make you go away
We have a Honda Odyssey minivan. It has about 120,000 km on the odometer. Recently we started having problems with it when accelerating. We took it into the dealership to get it checked out. The next day we got a call from the service department telling us that there was a problem with the transmission and that it would have to be replaced.
And the cost? About $4000!
Needless to say, we went into the dealership and had a very frank conversation with them. I’d done some research on the web and apparently this is a common problem with that vehicle. In fact, it’s such a common problem that there’s a website dedicated to this problem!
I told the dealer that this was clearly a defect from Honda and that it affected a lot of vehicles and that they had to get Honda to pay for it or I’d be looking at other recourse. A couple of days later we got a phone call from the dealer. They said they’d called Honda and that Honda would cover the cost of the new transmission. Great, what a relief, right? Wrong.
Honda will only cover the cost of the actual transmission — a remanufactured one at that! We have to cover the cost of labour and other parts (including nuts, bolts and the transmission fluid!) that were needed to replace the transmission. So while I don’t have to pay $4000, I’m still out of pocket about $1300, most of it for really overpriced labour. And is the effort to try to recover that $1300 going to be worth the time? What are my options? Sue Honda? Small claims court? Write lots of letters? Blog about it?
I’m sure the bean counters at Honda know this well and have a very clear policy. Even though it’s a well known issue and they could authorize dealers to inspect transmissions to see if there are potential problems, they wait until the problems are reported and then foot only part of the cost, knowing that few if any people will pursue it further.
We treat new customers far better than existing customers
My Blackberry stopped working one day. It was charging overnight. When I picked it up in the morning the screen was off. I tried turning it on and it wouldn’t turn on. I went through the usual process of removing the battery, reinstalling it etc. but nothing.
I called the wireless provider; they patched me through to RIM support, who walked me through a number of steps to try to get the device working. After about 15 minutes and no success, they told me to take it into one of the carrier’s stores to get a replacement as they determined it was non-functional.
When I got to the store, the CSR looked up my file, saw the note from RIM about the Blackberry, and said:
“Mr. Khan, as RIM has designated the device as non-functional, we can provide you with a replacement. How do you want to pay for that?”
I said, “What do you mean pay for it? It died overnight. I just want a replacement!”
“Well,” she said, “your 1 year replacement warranty expired 5 days ago, so unfortunately we have to charge you for a replacement.”
I couldn’t believe it. Seriously? Do they build these things to last exactly 1 year + a few days?
“OK,” I said. “How much is the charge?” I fully expected a nominal charge given that it was so close to the expiry date.
“Mr. Khan, it’ll be $300.” she said.
I started getting livid. “What!?! $300??? Let me understand this. I’m a customer. Have been for just over year. I pay you a hefty amount every month, and because the unit died, less than a week after the warranty, I basically have to buy it all over again?”
“Well, unfortunately that’s the policy.” she said.
“But if I was a new customer, and walked into the store today and signed up new, I could get this same device for about half that price?” I asked, pointing at a promotional sign in the store.
She looked back and said, pointing at a cabinet of not-so-smart cell phones “I can offer you one of these other phones for much less if that helps.”
I told her no thanks, that I needed a Blackberry and that I’d take it up on the phone with their customer service department.
At least 5 phone calls and several days later, I finally got through to someone who offered me a “one time only, just for you” substantial discount on a new Blackberry. Grudgingly I accepted, and paid the money. I needed to get a working Blackberry.
OK, as my warranty had expired, they technically were simply enforcing policy. But, my monthly cell phone bill can finance a decent car loan, and they made me jump through hoops for something that costs them virtually nothing. What options did I have, as I was under contract with them.
It’s no wonder that (at least in Canada) the national mobile carriers – Rogers and Bell — rank at the bottom of customer satisfaction surveys.
How should customers react?
In both of these cases, I’m going to react the same way. With my cell phone provider, I’m going to switch out as soon as my contract is up. Without question and I’ll take the rest of my family and any friends with me. With my vehicle — now that it has an almost new transmission — I’ll definitely use it, but when it comes time for a replacement, I’ll remember that $1300 surcharge I had to pay and look for another brand.
So the question for you is: Does your company behave this way — even remotely? And as a product leader, what impact or influence can you exert to change this.
We’ve all heard about the success of Zappos that is driven by their over-the-top customer service. How much of Zappos’ philosophy of delivering happiness can you instill in your organization?
Saeed
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