No company wants to fail their customers, but at some point it’s going to happen. You’re going to mess up, or bad luck will mess you up, or a supplier will mess you up in the eyes of your customer. So, no matter how superb your product or service is, eventually you’ll need to find an answer to the following question: How should you compensate a customer for a service or product failure? The answer? It depends. Customers have diverse expectations, values and preferences, so anyone working with disgruntled customers needs to be given enormous discretion to find creative and successful solutions.
Still: There are principles that almost always apply:
- Most customers understand that things can and will go wrong. What they don't understand, accept, or find interesting are excuses. For example, they don’t care about your org chart. When you explain to them that a problem originated in a different department or from an external supplier, what they hear is “blah blah blah blah”; it’s of absolutely no interest to them.
- Don’t panic. There’s always an upside, In fact, in many cases, customers’ sense of trust and camaraderie with your business increases after a problem is successfully resolved, compared to if you had never had the problem in the first place. This make sense, since you now have a shared experience: You have solved something by working closely together.
- In your solution, don’t strive for ‘‘fairness’’ or ‘‘justice.’’ Solving an issue with a customer isn't about fairness or justice. It's about making them feel that they’ve been treated especially well and preserving a customer’s warm feelings for a company.
- Learn from customer issues, but don’t use them as an opportunity to discipline or train your staff in front of your customer. This may sound obvious, but it happens quite often. Watch out for this flaw, especially when you’re under stress.
- To inspire you to be more generous with aggrieved customers, don’t only consider direct “lifetime customer value” (the potential amount a customer might spend with your company). Consider as well their “lifetime network value”: the amount of digitally-enhanced goodwill the customer may spread for you. When you consider both of these calculations, a loyal customer is likely worth a small fortune to your company, both for their future direct purchases and for the value of their recommendations online and off. This is well worth keeping in mind if you ever feel that temptation to be stingy with a customer and, say, refuse to comp them on that overnight shipping bill after you missed a delivery date.
- Don’t imagine you’re doing something special for a customer by making things how they should have been in the first place. Time cannot be given back—it’s gone. The chance to get it right the first time? It’s gone. So re-creating how things should have been is just a first step. You need to then give the customer something extra. If you aren’t sure which ‘‘extra’’ to offer a particular customer, just make it clear you want to offer something. If the customer doesn’t like red lollipops or doesn’t eat sugar, she’ll let you know. Then you can decide together on a different treat.
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