The cost of a dissatisfied customer – part 2

apple logoSince writing the original post, I’ve been inundated with stories from friends and colleagues who have been on the receiving end of short sighted decisions related to customer service. Decisions that have adversely impacted loyalty to brands and companies and have deprived these organisations of future sales and related profit, in addition to a heap of negative word of mouth. One particularly good example came in a friend’s experience with Apple and I personally don’t tend to hear much negative press around their customer experience. I think however the brand creates a bipolar effect with customers – like marmite – you either love it or hate it. Anyway the story goes like this..

The screen on a new iphone belonging to my friend cracked, allegedly in a pocket of a jacket and not as the result of being dropped or mistreated. So the phone and owner went to an Apple store to request replacement screen, hopefully free of charge given the ‘accidental’ nature of the break. Clearly, the store staff were having none of it, and stated that ‘screens don’t crack on their own’ – which interestingly one could argue implies my friend was lying and behaving in a deceitful manner to defraud Apple! They of course offered to repair the iphone screen though at a cost of £60.

After much protest, she left without the screen being replaced (or part compensation offer from Apple) and got the screen replaced elsewhere.

Now to see it from Apple’s perspective, it could be argued that if they gave a free repair to one person, then they would have to give it to everyone and that would cost them a significant amount of money and so products would be more expensive etc etc. Another argument to not giving things away for free is that a small minority of customers are, in reality out to take advantage, especially of large organisations (insurance companies are good evidence of this) but I think companies sometimes use this as a convenient excuse.

Alternatively they could offer everyone, one free repair but all other repairs are paid for. However on this occasion they chose to do nothing. Now here’s the impact of the £60 decision.

My friend, unbeknownst to Apple, was also in the market for two Macs and a tablet over the following weeks which equated to about £1,900. Can you guess what she did? Exactly right – the money was spent elsewhere first off and not on Apple products. Then she started telling friends and family about the whole incident (including me) and you know how the rest goes. I’m not saying Apple were wrong, but there’s always more than one area that’s impacted by a decision like this. There’s bottom line finance, future opportunity profit, service experience and brand reputation and it’s all these elements that should be taken into account when decisions are made.


NRAM – ‘not right about much’…

Many years ago, I took out a Northern Rock mortgage, probably at the time when the company was at the height of it’s success and a good few years prior to it’s bail out by the Bank of England in 2007.There’s a brief history of events here if you want a reminder and I’m sure you remember the televisions images of the many people queuing outside branches to withdraw their money, worried by the thought of losing some or all of their savings.

NRAM (Northern Rock Asset Management) was created after the company was restructured in 2010 and remains in public ownership and managed by the Government. Northern Rock plc was sold to Virgin Money in 2012.

The mortgage itself is now long gone so I was quite surprised when I got a letter from NRAM yesterday. What surprised me more as I read down the letter was the fact that there was with a cheque attached to the bottom with the princely sum of £76.62 exactly! Don’t get me wrong, I wish these sort of surprises would happen more often! Interestingly the opening line on the letter read ‘NRAM is committed to providing our current and previous customers with a great level of service ‘ – sounds like a line you’re fed before being told something’s gone wrong – or am I just a cynic? but then we got to the point. The apparent reason for the refund was a result of an administrative error when the account was originally set up. However the letter omitted to explain what the exact error was so naturally I was curious to understand more and to know whether this was the extent of the issue or not. In addition to this, the cheque was made out in joint names, understandably given I was married at the time but I was unsure whether I could now cash the cheque in it’s current form. So I called the ‘UK based call centre’ to ask them a couple of questions – what was the error and how do I cash the cheque. The girl I spoke to was very polite however her first response was ‘we’ve had no communication about any of this and so I can’t tell you anything.’ She then went on to add that I should get a letter shortly explaining everything. ‘but shouldn’t that be the other way round?’ I responded. ‘I quite understand’ she said ‘but I can’t do anything about it!’ ‘But if you’ve sent loads of cheques out without any explanation, then surely loads of people are going to call you with questions which you can’t answer because you’ve not had any communication? And so isn’t that a waste of everyone’s time and money?’ Again, she replied, ‘ I quite understand but there’s nothing I can do but I’m more than happy to pass on your feedback’. ‘No don’t worry I said’ and then to add to the debarcle, it transpires that in order to get the money, I’ve got to return the cheque and ask for a re issue!

This is business basics surely isn’t it? We’re not even into the realms of delivering great customer experience yet not to mention wowing the customer. It’s what Tom Peter’s would call ‘sticking to the knitting – being great at the core business and getting process steps in the right order, whether they be short term ones like this around a refund project, or the day to day core operational processes that service delivery is built on. Get a step in the wrong place or out of order and everybody looses. Customer effort increases as do levels of frustration for both customers and employees and overall levels of dissatisfaction. In the cold light of day, this is borderline madness whether a genuine mistake or an ill thought out and mismanaged project – the impact is the same.


A quick look at the NRAM website uncovered this gem of a statement ‘We are making a positive impact on the lives of our customers, whilst maximising value for the UK taxpaying public’ Really?? and this one … ‘Government owned. Mortgages in expert hands’. So where’s the value in having to field a number of excessive telephone calls, hundreds, or even maybe thousands because letters went out in the wrong order?? The girl I spoke to sounded frustrated and it was only 9.30am. I reckon she was in for a long day….

Everybody loves a queue..

queueI’m not a fan of shopping at the best of times, so when I have to do it, I want to be in, out and done with military precision so I can spend time doing something far more favorable. On this particular weekend visit to this national pet store chain, we only wanted one thing so my perception was that this shouldn’t be too onerous or time consuming. However, this  particular branch has previous form for crimes against the customer – notably a distinct lack of till operators which result from personal experience in unnecessary queues. Maybe I’m biased but it’s not rocket science is it? – give customers what they want, quickly, efficiently and without wasting their time or money and then let them get on their way. Excessive queuing contradicts this law of customer experience and ignores the impact of the cognitive ‘recency bias’ (the tendency to weigh recent events more than earlier events). Out of the last 3 times I’ve been to the store, the situation has been exactly the same. One lone person manning the tills, who becomes increasing uneasy at the growing queue of customers. On this visit, they even rang their ‘I need some help’ bell twice and still no one came. It’s frustrating for everyone concerned so why allow it to happen? Interestingly, on the company’s website, the banner strap line says ‘where pets come first’. I’m sure they do, but pets have owners, and it’s the owners that spend the money isn’t it?  Think I’ll wait in the car next time..


The cost of a dissatisfied customer

Here’s the link to a recent article I wrote that featured in the June edition of Customer Experience Magazine. 

The article talks about the cost of customer dissatisfaction and the quandary organisations face between short term actions today and the immediate impact on the bottom line, versus the longer term pay off and benefits of having loyal customers which result in increased sales, positive word of mouth and improved financial results. The issue in part, is that you can’t bank loyalty now, you have to invest in it for the future and that’s a difficult discussion to have if people aren’t willing to take the long term perspective. What do you think?