Posts Tagged ‘following the rules’

Warranty or the Customer? Who wins? It had better be the Customer

January 12, 2011

My friend Bart just spent some time in warrantee hell. His Dell laptop battery died after 12-and-a-half months on a 12-month warranty. As you can imagine, Dell refused to replace the battery because the warrantee was only 12 months. And rules are rules.

Bart is a sales rep for a medical practice software company. He uses a particular IT vendor for his own computer equipment and refers his clients to the same vendor for theirs.  Bart estimates that in the past year, he referred about $500,000 worth of Dell business to this vendor.

When Bart didn’t get anywhere with trying to get Dell to replace the battery (a battery which replaced another one which died after 16 months), he went to Chris, the IT vendor. He figured perhaps they would be more willing to push the rules for him, since he does quite a bit of business with them each year. No such luck. So Bart decided that Dell didn’t deserve his loyalty anymore. He called Chris again and had the following conversation:

Bart:      Chris, do you still sell, support and install HP servers and equipment?

Chris:     Yep.

Bart:       I would like you to quote HP equipment instead of Dell on all future deals I bring.

Chris:     Really? Over a battery?

Bart:      Yes. It’s not the battery; it’s the principle. I vote with my wallet. Please understand I am not mad at you. Feel free to share my emails with your Dell rep as well so he understands.

Chris:     I will share it with him now.

 

15 minutes pass and Bart gets an email from Chris.

 

Chris:     Your new battery will ship to us and you should have it by Friday or early next week. Oh, he asked me to ask you to please bring my next deal to Dell.

 

Amazing how that works.

Should Bart have expected that Dell would honor the warranty even though it had expired? My feeling is “yes,” and not just because he referenced over $500,000 worth of business to them each year. It should be “yes” even if he bought one or two pieces of equipment every few years, as I do. Why? Because it’s the right thing to do.

It’s the right thing to do because life doesn’t happen by the calendar or the clock. Cars break down, batteries die, and stuff happens. The warranty period is really just an arbitrary number. When Dell (or any other company) warranties a battery for 12 months, it’s not saying that they expect the battery to last for 12 months and that everything else is gravy. It’s a way to say that the battery shouldn’t break down in the first 12 months. It could be 13 months or 15 months. But most companies tend to use years for a warranty period. It’s easy.

I think this is a case of it being a blue rule. I’ve mentioned in a previous blog that there are two types of rules: Red rules and Blue rules. Red rules can’t be broken under any circumstance. They usually deal with health, safety, legal, ethics, and BIG financial. Blue rules can be bent for the customer. This is a blue rule. I don’t know the figures, but I’m sure there aren’t that many laptop batteries that die between 12 and 13 months. Allowing the occasional customer to stretch the warranty to 12 ½ months isn’t going to result in a BIG financial hit for Dell or any major computer company. Never mind that losing Bart would also mean losing a half-a-million dollars in business per year.

TD Bank (formerly Commerce Bank) opens its offices at 7:30 AM and closes at 8 PM, which is already a larger spread than most banks. But if you arrive at 7:20 AM or 8:10 PM, they’ll let you in – they just don’t advertise it. We’ve all had the frustrating experience of arriving at a store two minutes after closing and not being able to make a quick purchase.

Why does TD Bank do this when other banks don’t? It’s because they decided that their customers, big or small, were worth an extra 20 minutes a day of service. It’s because it knows that nothing always works the way we want it to work. And people sometimes show up a couple of minutes late.

If you owned a restaurant, would you refuse to accept a coupon and sacrifice a customer because it expired the day before? It would be a pretty stupid thing to do. It’s the same with warranties.

Don’t let your rules get in the way or customer experience. You’ll lose more than you know.

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You don’t have to say “NO!”

October 8, 2009

Nothing bugs me more than watching an employee make a customer angrier than he has to be. Why would they do this?

Customers are often talking to you in a state of increased agitation. They’re upset and they want satisfaction, but so often, if we find we can’t do what the customer wants us to do, we say the word guaranteed to increase the agitation: NO!

Even when the answer is no, we need to make sure that “no” is the only answer we can give before we say it. We may not be able to do what they want us to do, but often, something other than what they’re asking for will do. But we can’t find out unless we ask some questions.

For instance, I was working with the employees of an institution of higher learning. In the class were people who worked in virtually every department at the college: registrar, bursar, counseling, guidance, writing center, library, financial aid, office of the dean of students, etc. I asked them if there were times they have to say no to a student. An employee of the financial aid office said, “When a student has gotten all of the financial aid available to him from the school and wants more, whether in straight assistance or loans.”

I clarified that the student had taken out student loans and received some minor scholarships but there was still a good amount left on his tuition and fees. Then I asked a non-question question, “So, by taking out all of those loans and receiving those scholarships, he had exhausted what the college could do for him.”

“Correct,” she said, with all the certainty of a woman who had been asked if the sky was blue on a clear day. “What does the student want?” I asked.

The class participants were puzzled. I heard the words, “More financial aid” from several people, but it was muted. So I asked again, “what does the student want?”

A brave soul called out, “More financial aid!” So I asked, “How can we help him get more financial aid?” They looked at me like I had four heads. I repeated the question.

A woman in the back of the room said sheepishly, “By telling him about other scholarships and aid that may be available to him from other sources.” Yes, the school was not the only source of aid. There was a whole community out there to provide financial assistance.

“So what question or questions could we ask him to find out if he wants to go that route?”

They quickly volunteered such questions as, “Have you considered looking in other places for scholarship money?” “Do your parents belong to a union from which you may be able to get a scholarship?” “What service organizations do you or your parents belong to?” “Do you have a disability that might qualify you for more money?” and so on. It was amazing the amount of questions and possibilities that broke loose when they pulled away from the idea that the only thing they could do for this student was provide assistance directly from the college or traditional government loan sources.

You and your business have your own similar situations. If you think you have to say no, seek out ways to avoid doing so and find alternatives to what the customer requested.

I’m not saying you should never say no to a customer. There are times when no is the only answer. In those cases, we let the chips fall where they may. However, if this process can reduce the number of times you have to say no by even 40%, you will have less angry or upset customers and less need to deal with all the grief they bring you.

Customers have good intentions most of the time. They just want to get something done. They have a problem, they want you to solve it, and if you do, they’re happy. They can be like children and stomp around, especially when you tell them “no”. Like children, if they can’t have the toy they want, perhaps they’ll settle for a Tootsie Roll. In any case, the more you can find a way to make them the least bit happy, the better the customer will feel about you and your company, and the happier and calmer you will be.

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Are your rules benefiting the customer or you?

May 19, 2009

Does this make sense to you? My daughters were born three years and two days apart, one on January 28 and one on January 30. A local Italian restaurant has a birthday promotion. If you come in on your birthday, you get your meal free.

Now, because our daughters’ birthdays are on the 28th and the 30th, we usually go out to celebrate on the 29th. So we called the restaurant and asked if they would honor both birthdays on the 29th, considering we weren’t going to come in on both the 28th and the 30th. The manager, without missing a beat, said no.

His reasoning was simple: the promotion is for the day of the birthday and if you’re not there on your birthday you don’t get a free meal.  And, as I like to say, rules is rules. Whether I’m bringing in my four-person family , or if I’m bringing in a party of eight, I’m not getting those meals for free because it’s not either of their birthdays. If this makes sense to you, you’re not customer-centric and your customers will go to your competitor at the drop of a hat.

Yes, the restaurant manager was perfectly within his rights to not provide the meals for free. But that’s not the point. After he made his ruling, where do you think we DIDN’T go for our birthday dinner? And where do you think we DIDN’T go for my birthday or my wife’s birthday? Let’s add up the lost business. On my daughters’ birthdays, they would have provided two free meals and been paid for two meals. On my birthday, they would have provided one free meal and been paid for three. On my wife’s birthday, one free meal and three paid meals. So, three visits, four free meals and eight paid meals never happened. I also didn’t mention to other people about this terrific restaurant that has a free birthday policy. But rules is rules (yes, I know it’s “rules ARE rules”, but that’s also a rule).

There are two types of rules in business, red rules and blue rules. Red rules are those that cannot be broken under any circumstances ever. They usually have to do with safety, health, legal (if the government says you can’t do it, you can’t do it!), ethics, and BIG financial. Blue rules are … everything else. You can bend them if it means making the customer happy and it doesn’t cost the company an enormous amount of money. You know which rules in your business are red and which are blue. They’re usually pretty obvious.

Food is actually the smallest expense a restaurant has.  That’s why restaurants give away free meals in two-for-ones and for birthdays. This restaurant decided not to, and so lost a customer who would have visited several times this year … and next year too. With businesses (especially restaurants) closing left and right in this economy, can we afford to lose even one customer because of ridiculous rules?

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