Regardless of the industry you work in, whether it’s in service like insurance or hospitality, or retail/wholesale like a gift shop or manufacturer of custom equipment, if a customer is not satisfied what do you do?
Some companies have a policy of providing immediate discounts to any customer that calls in with a complaint. While others offer a free service or product to ‘take care’ of the customer.
My question to all companies with these policies is simple: have you measured the effectiveness of the freebies and discounts? My guess would be no, you have not. Otherwise you would see that in some instances, the customer went elsewhere for that product or service. And in other instances, the customer returned a few months later expecting the same freebie or discount.
Evergreen policies are lifetime warranties or guarantees either implied or stated upon purchase of a product or service.
For instance, a company purchases piece of equipment that has a warranty of one year on parts and labor whether or not a service agreement is purchased. A service call is placed at the 9 month mark, and new parts need to be ordered. The one year warranty on the new parts starts at the time of replacement, and because the customer argues the warranty issue with the service manager after the next service call, the manager extends the warranty on all parts and service for another year.
This happens again in 10 months, then again in 11 months, then again in 10 months – it appears that the customer has caught on to the system. Place a service call that includes replacement of a part and extend the warranty to infinity. Saves the customer hundreds of dollars, costs the companies the same hundreds of dollars. Satisfied customer, yes. Company losing money, not a good outcome.
So again I ask, how many of these companies that react to a customer complaint measure the costs of that reaction?
Now for the second question. What about the customers’ wants and needs?
When a customer calls the customer service or service department to complain, and the reaction is to immediately offer a free item or discount the customer’s invoice, then that puts the customer in a position of not being heard.
So, I say to these companies and you customer service representatives – don’t react to the customer, respond.
Engage the customer in a conversation about the problem. Encourage the customer to tell you what it is they want from you and the company. Assure the customer that you have a stake in the outcome of the issue, that you will work with them to resolve the issue. Then, once the conversation is over, begin the process of taking care of the customer’s needs.
This is assuming that the company has a process in place that encourages the service person to engage the customer. If the company does not have a process in place, now is a good time to develop one. How? Begin by talking to your customers, your service reps, and your service managers.
