Win Me Now or Lose Me Forever: What Happens When Companies Let Service Fail

You’re a big company, I’m your customer, and you have a choice: You can either keep me as a loyal customer singing your praises to anyone who will listen or read, or you can make me hate you.

It seems easy, but there’s a trick – it’ll cost you $600 to win me over. Yes, that’s it. $600 buys my love, my brand loyalty, and possibly a hefty percentage of my friends and network. But, it is $600 after all.

What do you choose?

To people in sales or marketing, this should seem like a no-brainer. But, somehow it trips up big companies all over the world time and time again. Is the customer always right? Or, is your market share big enough to steamroll a single dissatisfied voice?

Seth Godin recently wrote that simple acknowledgement is the first step to customer satisfaction. If you can follow that up with cooperation and a resolution to your customer’s problem, then you score a major win for your brand and your bottom line.

Let’s look at a few examples.

Air France

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My friend Chris had a gloriously memorable experience when he visited Paris last year. The world’s best museums, crepe-filled side streets, charmingly rude locals, and beautiful women everywhere… these were his glowing impressions of the City of Light. Everything was great until he had to take the RER commuter train to Charles De Gaulle International Airport. Confusing metro stations, attendants that didn’t speak English, and broken change machines collided and Chris missed his flight. A grown man near tears, he explained his story to the Air France front desk lady and here is what she said:

“We’re very happy you enjoyed your stay in Paris, and we wouldn’t want you to leave here with a bad impression of France. I’ll find you an alternate route that leaves today… no charge to you.”

To this day he remembers this experience, tells the story to his friends whenever ‘France,’ ‘Paris,’ ‘travel,’ or ‘airlines’ come up in conversation, and is a smiling, walking spokesperson for Air France and French tourism.

Customer retention cost: $600-$1000

Apple

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I got an iPhone last fall and have nurtured a tumultuous love-hate relationship with it ever since. About three months ago, its software crashed and needed intervention from Apple tech support. My guy was courteous, solved my problem, and then reminded me that my phone was still under warranty and could be replaced by Apple if the crash happened again. A month or two later, it did, and I made myself an in-person appointment at my local Apple store. When I went for the appointment, my new tech support guy couldn’t reproduce my problem… thus invalidating my complaint. However, here is what he said:

“It looks like your phone is ok, but since we already set the expectation that we’d replace your phone, we’ll go ahead and set you up with a new one today.”

He was wearing a t-shirt that said “Not all heroes wear capes,” and I thought I maybe saw a halo floating around his head. The Apple-Susan relationship is now 100% love-love, and I’ve since told all my friends.

Customer retention cost: $400

GES

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GES is a multinational exhibition logistics and management corporation.

I recently helped a 10-person startup exhibit at its first industry conference, and we brought in a pinball machine. Apparently, GES has a clause in its contract that says no one but a GES employee may wheel things from the loading dock to the booths. Carry by hand, yes. Wheel, no. The charge for wheeling a pinball machine (weighing in at 250 lbs) 200 feet from the loading dock to the booths, was $650 – more than the entire cost of rental for the machine itself.

Since I didn’t receive the handbook that describes this clause, I was irate at this nasty surprise at the end of a long conference. I pleaded with the sales manager, knowing that $650 would be a big hit for a small company, talking about customer satisfaction and retention. Here is what she said:

“The rules are the rules. It’s right there in the handbook, and if you didn’t see it, that’s not our problem. You wheeled, you didn’t carry. There is a fee associated with that.”

Wow. My reaction? Still simmering… and I’m now writing this blog post.

Customer retention cost: $650

What’s a corporation to do

All of these companies have two things in common –

1) They’re big corporations with multi-million or multi-billion dollar annual revenues.
2) They all have the potential to extract multiple decades of customer patronage from me and from my growing network.

Folks, it’s only a few hundred bucks. If your company can afford to spend tens of thousands on marketing collateral, why not invest a fraction of that in word-of-mouth marketing to achieve a lifetime of returns?

If you think your customers are expensive – too expensive, perhaps, for you to want or need them as a customers – then you should either plan on monopolizing the market so you don’t have to compete, or you should close shop. If your customers love you, they will come to your parties. They will wear your t-shirts. They will watch your commercials – voluntarily and repeatedly – on YouTube. They will buy your products even when they’re neither the cheapest nor the best.

Listen, be empathetic, be consistent, and respond to customer desperation (not just whim). You may lose the fight, but you’ll win the customer.

7 Comments on “Win Me Now or Lose Me Forever: What Happens When Companies Let Service Fail”

  1. The funny thing is that I’ve run many campaigns at a cost of over $5 per customer. Perhaps it’s just easier to literally give someone $5 and buy their loyalty, and to your point, a few hundred bucks is a drop in the bucket for a billion dollar company.

    But for some companies the economics don’t favor special attention. Credit card companies? Cable companies? The business is mature. It’s just easier to make it as difficult as possible to get special favors, continue that expectation with customers, and bleed the business dry for shareholders. Even Warren Buffet favors it if the prospect of growing profitability is limited.

  2. Susan-
    I enjoyed your post very much. What I wanted to add is that companies are very inconsistent in their “customer appreciation” tactics.
    Imagine this situation; after becoming a company’s loyal customer you purchase another product from them and after a couple of weeks something breaks. Hoping that history will repeat itself you go to customer service to explain your situation, which is just as compelling as the first time around….but this time you are told no, no matter what, “that’s the policy…” and you have to pay fee X. Personally, I would feel let down and upset – and would think twice about buying from them in the future. Businesses should pick a retention strategy and stick with it.
    Specifically, Apple. Until recently, I have been a big fan of the company, their approach, their uniqueness – have an Iphone, had an Ipod Nano, etc. I recruited a family member to get an Iphone (who decided to splurge on the 3GS.) Everything was great for a month until my sister’s still new 3GS was stolen out of her backpack on her last day of traveling in Europe.
    Apple will not allow a replacement for the original price (never mind for free.) No matter what she ultimately chooses, she will lose decent amounts of money. She can either replace her phone for $599 or end the contract and pay an early termination fee.
    Yes, I understand that Apple is in a tough battle against hackers jail breaking, unlocking, and illegally selling the phones. However this doesn’t warrant the assumption that everyone is a liar and thief. As a result, the customer leaves even more upset than when they came in: 1) great phone stolen; 2) $200 paid for phone lost; 3) Will inevitably have to pay more money in the near future for new phone or contract terminations; 4) to top it all off- accused of being a liar with no sympathy for the situation.
    That’s a stark contrast to the positive experience you wrote about in your post, and yet they are both absolutely true.
    While I admittedly had to complain about the issue, the reason for my post is to suggest that companies who can’t seem to choose between “The customer is always right” and “Rules are rules” strategies risk loosing far more loyal fans than the latter.

    Thanks again and looking forward to your future posts.

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  4. Hi Susan,

    I agree with this principle you describe. Sometimes even when a problem is not of my making the fact I listen to the client, acknowledge the problem, then offer a solution or choice of solutions, shows them the respect they need.
    People like to be understood and someone to care. This principle works for small businesses too, not only mega corps.

  5. Kerry – Great point, I think it’s especially important for small businesses and freelancers (where your individual clients are your ‘customers’).

    Liza – Thanks for pointing that out — it’s not just about service and acknowledgment (as I suggested in this post), but also about consistency and following through with expectations that you’ve set elsewhere, with other customers. When you’re a brand as widely familiar as Apple, it’s a given that your customers will develop expectations based on others’ experiences that they’ve observed (or heard about).

    Matt – I’m not so sure about mature companies not having to heed this principle. While it’s only my personal experience, I’ve observed quite a bit of flexibility and ‘special treatment’ from companies like AT&T, credit card companies, and even big banks. Their businesses are mature, to be sure, but they are still paying out millions of dollars a year in customer acquisition and retention costs. Regardless, the point to which you allude is a very valid one – it’s possible that these acquisition costs are nothing compared to the profit margins they retain by refusing to bestow special services to customers.

  6. An absolutely brilliant way to keep the peace….and customers.

    Our world is moving at an alarming pace….and it seems the only solution is to catch up to it–is by offering over-the-top service. But if the person at the top of the business doesn’t have this mindset—it’s doomed for failure.

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