Good for the Customer vs Good for the Business

I’ve been running into more and more crazy corporate policies that might help the business in some fashion, but do nothing for the customer. In fact, a lot of these policies are downright bad for the customer and yet they still exist.

My personal theory is that if a policy is “Good for the Business” but “Bad for the Customer”, it isn’t actually good for the business at all! Read on!

*When I wrote this today I saw Kevin was getting ready to post and I was going to hold off until tomorrow. As it turns out we’re talking about the same basic topic (great minds think alike!) So I’m going to post it today anyhow as a complimentary piece!

Here is an example of the sort of corporate crazy making I’m talking about:

My daughter got a little pink hat for her first birthday. Now my daughter has a rather large head (hopefully to hold a giant, super intelligent brain!) Anyhow, the hat didn’t fit so I took it back to this store in the mall that I’d never been to before. It’s a two dollar sale hat and I just wanted the cash, but the store insists on giving me a store credit.

Now I don’t frequent this store and don’t plan to frequent this store in the future. A $2.00 gift card for this place is not going to do me any good at all. I explain this as politely as possible to which the clerk says “It’s the policy.” I ask who can override this policy and they give me a 1-800 number that they say I can call when I get home to get permission to return the $2.00 hat for cash…because heaven knows that when I come back tomorrow and say “Joe at customer service in Utah said I can return this for cash.” the clerk won’t have any problem with this at all! In the end I got my $2.00 cash and while it was a battle, I felt it a point of honor to see this through!

The question I have though is “who did this policy benefit?” Perhaps the policy is in place out of a fear of shoplifters? Or maybe they are trying to retain purchasers? So that if I buy something there they keep the money no matter what, only exchanging for store credit to buy something different? Or maybe they think I paid with a stolen credit card and now I’m trying to cash-in and they’ll have to pay for it twice!

In fact, the only thing the policy did was convince me that I would never shop there again. Unless you’ve got a monopoly in your market, the permanent loss of a customer and the loss of all future business from that customer is far greater than any possible savings the policy is meant to provide. Not to mention the fact that I’ve never said a good thing about this store to anyone I know, further eroding their customer base.

A policy like this one probably looks great on a ledger sheet or in a staff meeting, but the reality is that it fails in every way. Not only do you lose money, but your staff end up hating the policy and thus the job, because they are the ones that end up dealing with the frustrated customers.

The best policies are ones that support top quality customer service, respect for your customers, and realize that a kindness to a customer today means larger profits down the road. Maybe someday corporate America will finally remember this.

UPDATE: Something I had to add was a link to a Customer Service horror story by David Berlind of ZDNet.com. It is a perfect example of a policy that I assume is meant to save the customer money, when in fact all it does is drive customers away.

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About Marc

I'm the product manager here at Ilium Software. My responsibilities include designing how our software works, overseeing the development, and coordinating testing.

One thought on “Good for the Customer vs Good for the Business

  1. Joe

    “The best policies are ones that support top quality customer service, respect for your customers, and realize that a kindness to a customer today means larger profits down the road.”

    You hit the nail right on the head! Unfortunately, corporate-level customer service has dramatically declined over the years as businesses tend to gravitate towards the short-term (i.e., what will this Q’s sales figures be?) rather than the long-term view. While such an approach can be benefical in the short run (lower costs equating to higher profits), it also negates the need to maintain and _build_ the customer base via higher satisfaction levels.

    A great example of a corporate business that seems to get this concept is Staples online and phone ordering (generally speaking). Any problems, they simply credit your account or arrange for a free exchange.

    Of course, another excellent example of customer service is Illium – seriously. You guys (and gals) get it, too. And for that, you have a committed cadre of customers. :-)

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