Tuesday, August 4, 2009

The Customer's Voice

Before the advent of the Internet, unhappy consumers would tell their family, friends, and neighbors about their ordeal. The Internet has given consumers a publishing platform that empowers them to tell the world about how they perceive they were treated. Of course, that doesn't mean the world will listen.

Furnace Slam

Slam sites are hardly news. This site has been up since 1997, detailing a consumer's problems with a furnace installation. Is the customer right? Who knows? But reviewing the timeline on the website, it appears that early action might have solved the problem.

Right or wrong, the consumer undoubtedly cost the manufacturer far more than the cost of resolving the problem early. The cost is in lost sales and management time as the consumer got CEOs involved, members of the Board of Directors involved, and even a U.S. Senator involved.

I'm sure the manufacturer's personnel were convinced they were right. If so, they were so right they were wrong and ended up participating in a situation where everyone lost.

Going Viral

Over the last decade, the risk to companies has increased. The ease of shooting and posting video on YouTube and other video sites, in combination with social media, has created the potential for consumer complaints to go viral.

From the window of the plane, musician Dave Carroll witnessed United Airlines baggage handlers slinging the band's guitars. His $3500 Taylor was "severely damaged." Unable to get resolution from the airline (read the full story), Carroll promised to record three songs about United, put them on YouTube, and run a poll.

Here's United Breaks Guitars...

The video has gone viral with more than 4.5 million views in the first month. Yikes!

So United responds (finally), prompting Dave Carroll to record a brief statement...

Did Dave Carroll refuse restitution? It appears so. It turns out he no longer wants anything from United because his video, prepared to hurt United, has done wonders to help his career.

It's similar to the furnace consumer above. Had the manufacturer made their late offer early, the whole thing might have gone away. Had United handled Carroll's damage claim early, 4.5 million people wouldn't have viewed a video on United's propensity to damage luggage and respond with indifference.

Act Early

Acting fast is key. Don't put consumers through an ordeal where the consumer gets his back up and refuses an offer he might have gratefully accepted initially. The longer you delay, the more management time the resolution costs, and the more the entire incident ultimately costs.

And if the customer is wrong? Unless it's an extreme case, it doesn't matter (and even then, it might not matter). Justice is the right thing for your business, which may feel wrong personally.

Create a customer satisfaction account equal to 0.5% to 1.0% of your pricing (raise your prices to cover it and profit from it). When there's a problem, tap into this account. The money's already been accounted and set aside. Use it to make problems go away fast and for less expense.

(c) 2009 Matt Michel

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