Treating customers well pays off better than any marketing strategy


December 10, 1990|By Adriane B. Miller | Adriane B. Miller,Special to The Sun

At breakfast one morning, a man opened a new box of a well-known cereal, and, as he poured it, found a large bug nestled among the raisins and flakes. He wrote an indignant letter to the cereal company.

An apologetic letter arrived a few days later, signed by a corporate vice president. The letter assured him that the company would research the cause of the problem and make certain such a thing never happened again.

The letter itself may have soothed the man's temper. Unfortunately, attached to it was an interoffice memo with the handwritten note: "George, send this crank the 'bug letter.' "

Management consultants Karl Albrecht and Ron Zemke describe the incident in their book, "Service America," as a "dull moment" in customer service. The cereal company's first sin, they say, was letting a customer discover its internal packaging problems. Then, because even the vice president didn't show a real interest in the customer's complaint, the company botched its attempt at a fix and made the situation even worse.

But an angry customer doesn't always signal the end to a good relationship. Companies that upset customers actually have a very good chance of recovering those customers -- and even making them more loyal than before.

About 95 percent of customers who have had a problem with a company will do business with it again if they feel their complaint was resolved quickly, according to Technical Assistance Research Programs Inc. of Washington, D.C. They will tell, on average, five people about the good treatment they received.

In a fiercely competitive business environment, a well-defined service strategy, including a system to recapture angry customers, is as important as any marketing tool. And treating customers well is common sense -- a disgruntled customer won't hesitate to spread the word about bad service.

Apparently companies are taking notice. Membership in the Society of Consumer Affairs Professionals in Business has grown from 600 to 1,400 companies in the past three years, says executive director Lou Garcia.

The first -- and toughest -- issue for any company is identifying dissatisfied customers.

For every complaint the average company receives, it has 26 more customers with problems, according to Technical Assistance Research. And six of those problems could be considered "serious."

"Only about four percent of angry customers will tell you they are mad," says Kristin Anderson. She is project coordinator with Performance Research Associates, a Minneapolis-based management consulting firm specializing in customer service.

She adds, "But if you can get one to say they are mad as hell, the person at the front counter can express regret. Whether or not the situation is resolved to the customer's complete satisfaction, there's a good chance you'll regain them as a customer."

L A botched corporate response can trigger many more problems.

"If an angry customer complains and gets more bad service from the front counter, the likelihood of retaining that customer is lessened," Ms. Anderson says. "And if you don't leave that customer mollified or pacified, they'll go out and tell 20 or 30 others."

Most dissatisfied customers tell nine or 10 other people about their problem, according to Technical Assistance Research. And many -- about 13 percent of all dissatisfied customers -- tell more than 20 people about the problem.

That many people saying bad things about a company can undo even the best marketing and promotion efforts.

Often all blame for poor customer service is placed on front-line employees -- those who have direct contact with customers -- and none falls to management.

"It's real tempting to throw more training at employees as a solution," says Ms. Anderson. "But if creating good service is to ,, be a long-term goal, you need to fix the right problem. Often, it's not employees who don't know how to smile and be friendly. It may be a problem where the front-line people are busy protecting the company from its customers."

The fault for that line of thinking, she says, lies with company management.

Many companies train front-line employees to forget common-sense customer service, and focus instead on pleasing management. Such companies, says Ms. Anderson, lose the edge to win and keep customers.

"When you're told your performance will be evaluated on your technical skills, how you balance out your cash register, with no mention of whether people are happy to do business with you, then . . . employees believe pleasing the boss with paperwork is more important than pleasing the customer," she says.

Some corporations actually foster a negative attitude toward customers, says Susan Hale Whitmore, customer service and consumer affairs consultant of Inside-Out Productions in Laurel. She heads the Baltimore-area chapter of the International Customer Service Association.

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