Handling Problems - Aggrieved or Relieved?
Customer Experience and Art of Selling | 9:50 pm Sunday, Jun 24 2007 |
Recently we had a situation where a printing order delivered direct from our supplier to our client arrived in terrible condition.
Our client, most unhappy with the printing, dropped in the two boxes of newsletters and we could clearly see how the printing had gone wrong: lots of scuffing and smudgy ink. Out of 2,500 copies of the newsletter, we were only able to save about 800 copies — 1,700 needed re-printing. Our client wasn’t upset with us, by the way, because we are very upfront about using trade services, and don’t pretend to supply something ourselves when it comes via a supplier).
I called the printer, and they agreed to reprint the newsletters required. They were adamant the job left them all okay (we didn’t dispute that), but that the problems must have occurred in transit. I can only guess that technically, cold winter weather can cause problems, although it still seems rather poor to us, that either the packaging didn’t protect the contents, or how, technically, the problems only arose after leaving the factory. (The boxes weren’t damaged in any way.)
Whilst the goods were sent road freight, we used a different company (TNT, who we find excellent) than the printer would normally use, because of an extremely bad experience earlier this year with the printer’s choice of freight companies (in that experience, goods sat unaccounted for in Melbourne for 5 days and missed a very critical deadline, and the freight company refused to do anything about it. At that point we vowed not to give the freight company any more business and instructed our printer they weren’t to be used in future).
Back to this recent job.
We then got a phone call, later in the afternoon, from the printer, saying that, as we hadn’t used their allocated freight company, but our own alternative choice — they weren’t accepting any responsibility for the problem, and we should bear the full cost of the reprint. Even several days later, I still cannot see how this ends up being OUR problem — as the goods were sent from the printer to the client and arrived in terrible condition. How could a choice of freight company make a difference, as they both would have driven the same road route on virtually the same schedule?
I was somewhat aggrieved by this stance. We’ve given this print supplier more than $49,000 in work in the last 12 months, and had thought they had an excellent can-do attitude. Now, here they were baulking at a reprint that would probably cost them no more than $150 to $200 — what were they risking?
What was our “Lifetime Customer Value” to them?
On our average supplier relationships, you could easily expect us to be a customer for at least 5 years, if not 10 years or more. Our longest print relationship is 14 years and counting. Even if you halve that — and call it “7 years” as what we’re worth — that’s 7 x $49,000 (which we expect to grow to at least double that amount over the next 18 months).
Conservatively, the next 6 years are worth $294,000. That’s just from us — not even from referrals that we make. And here that relationship was at risk for a mere $150 or thereabouts.
Would you risk $294,000 in future business on a $150 decision?
I wouldn’t.
For our own clients, sometimes they make mistakes when ordering particular products we offer. In this case, it’s personalised honeymoon registry invitations for our travel shops. Occasionally, the shops gives us the wrong spelling of a name (they’ve supplied the names, approved our proof, and we’ve printed and despatched the goods. Our client’s honeymoon customer then sees the invites and points out the error).
In that case, our client knows they’ve made the mistake. They call us to order again, knowing they have to pay again, and even letting us know they’re sorry for the mixup and waste of time.
They expect us to bill them for it. But we don’t!
In fact, we generally reprint and send the goods again for free, even when we don’t have to.
How good — relieved — does that make our client feel?
They don’t have to wear the cost themselves, and they can even let their own clients know that replacement invites are being sent for free.
We operate ABOVE their expectation. They expect us to bill them again, and know that we can. But when we don’t do what they expect, we go one level better.
They love us! We get thank you emails and calls, our clients appreciate our attitude.
I’m not silly. I appreciate their business and I know what it’s worth. I know their Lifetime Customer Value to me. I would be crazy to risk that relationship and future business — even when we haven’t done anything wrong. Our clients are our advocates, and bring us in new business. We get word-of-mouth referrals multiple times every month.
So I’d never be as silly as our print supplier in making that kind of decision to aggravate my client. In the printer’s case, the decision is BELOW what we expect. That’s not conducive to future transactions, especially in a competitive marketplace (actually, for the particular product we’ll reprint free, we don’t really have a competitor, but we still ACT like we do).
For our printer, we politely pointed out to them our value — not future value, but just the past year. We also pointed out why, because of past very bad experiences, we don’t use their freight company. In the end, after our lengthy letter, they agreed to do the reprint for free, and recognised our valuable relationship.
We then agreed to pay air freight so our client had replacement goods within 2 business days of asking for the reprint. Our client gets the replacment goods days quicker than expected… again, we know what our client is worth to us and do MORE than asked to make sure they’re happy with how we’ve helped fix a mistake they know is not our fault. Our client is not dissatisfied at all, and appreciates our efforts to rectify the problem and advocate on their behalf.
Do you operate ABOVE or BELOW your client’s expectations? Are they aggrieved or relieved by your decisions? Do you know what your customers are worth to you, in terms of the value of their business over the average life of your customer? Do you act in a way that your customers become your advocates?
Can you afford to do it any other way?