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Don’t lose your customers

I was talking to a business associate this morning and eventually we diverged into customer service. His wife had recently been in an automobile accident and he was extremely frustrated with the process that his insurance company was taking him through to pay for his car and medical claims. The accident was not his wife’s fault which complicated things because his insurance was not liable for most of the damage. He had not spoken to the other insurance company. No one had explained to him the process he needed to go through and/or how to get a vast amount of details sorted out. He felt that no one was looking out for his interests.

Here is a customer in need of help but no one was stepping up to help him.

It seems to me that some organizations just don’t get it. A dissatisfied customer will tell 10 of their friends how unhappy they are. Those 10 individuals may not use the company’s product(s) and may tell others not to use them. Right or wrong the company that is perceived to be at fault will need to spend a good deal of money to replace those potential customers with new ones. Much heartache could have been avoided if the organization had a plan in place that empowered their employees to make it right. The now satisfied customer may tell 5 of their friends how customer friendly the company is. The empowered employee will be satisfied knowing he or she helped a customer. Tomorrow the cycle may repeat itself.

The following article came across my desk today. John Tschohl does a nice job of suggesting actions that may turn a customer losing situation into one that will show your customers how much you care. His suggestion to act quickly, take responsibility, be empowered and compensate the affected customer may turn a one time customer into a lifelong one.

When airlines had customer service
I remember many years ago I was taking a flight on Republic Airlines from Chicago to Minneapolis on December 23rd. When I got to O’Hare I realized it was a mess. There was an ice storm in the upper Midwest and many of the flights into that area were cancelled or postponed. Our flight was supposed to leave at 7:00 PM. Around 9:00 PM the agent said that our flight was cancelled due to ice but anyone that wanted to could ride a bus up to Minneapolis. Many of us got on the bus which left at 9:30 PM. It took a while, there was a lot of ice on the road but at around 6:00 AM the bus pulled into the terminal at Twin Cities Airport. I made it home for Christmas. I thought that was the end of the story. About two weeks later I got a check in the mail from Republic for the entire cost of the trip. I didn’t ask for it – it just showed up with a note apologizing for the delay.

Well I was hooked. Whenever I could I flew Republic. I told my friends this story and I’m sure some of them flew Republic. Everything changed when Northwest bought Republic, customer service went downhill and the airline lost my loyalty.

I think my ticket to Minneapolis was $150. I don’t know how much renting the bus cost them that icy night. All I know is that over the next 10 years I probably gave them thousands of dollars in business.

Now if only there was an airline with that type of customer service today. My friend’s insurance company doesn’t need to buy him a new car but could they provide an advocate to help him through the process. I think so.

Empower your people & give them the resources to make life a bit easier for your customers. The payoff is big.

Until next time – all the best!


What to do when you’ve made a mistake.
By John Tschohl
Tuesday, 9th October 2007


You arrive at the restaurant 10 minutes before your 7 o’clock reservation and forty-five minutes later, you are finally seated.

The maitre de doesn’t offer an apology, and you are upset. Do you have a right to be? Absolutely. Will you return to that restaurant? Probably not.

Scenarios such as this occur at businesses every day and more often than not leave owners and executives wondering why their repeat business is taking a nosedive.

Instead of taking a good hard look at the reasons those customers are defecting, they invest hundreds of thousands of dollars in advertising to attract new customers—customers who also will defect when they experience poor customer service. And the cycle continues.

John Tschohl, in his book Loyal for Life: How to Take Unhappy Customers from Hell to Heaven in 60 Seconds or Less, takes readers through a step-by-step process in service recovery.

“No matter how good a company or organization is in providing customer service, it’s almost a given that at one time or another they will make a mistake,” Tschohl says.

“How they handle those mistakes is what separates them from the rest of the pack and keeps customers loyal for life.” Service recovery, Tschohl says, “is putting a smile on a customer’s face after you’ve screwed up.

It’s solving a customer’s problem or complaint and sending her out the door feeling as if she’s just done business with the greatest company on earth. And it’s doing so in 60 seconds or less.”

Tschohl, who has been preaching the gospel of customer service for 346 years to organizations throughout the world, has developed four techniques for providing quality service recovery:

1. Act Quickly. “You must acknowledge the mistake immediately,” Tschohl says. “The employee at the point of contact is the person in the best position to successfully implement service recovery. When problems and mistakes are moved up the chain of command, they not only cost the organization more in time and money to deal with it the time delay increases the customer’s level of frustration and anger.”

2. Take responsibility. “No matter who is at fault, you must own the mistake and sincerely apologize,” Tschohl says. “Don’t place the blame on someone else; the customer doesn’t care whose fault it was, he merely wants it rectified. It’s also important to thank the customer for pointing out the problem and for giving you the opportunity to correct it.”

3. Be empowered. “Employees are not making empowered decisions because they’re afraid they’re going to be reprimanded, fired, or have to pay for whatever they give the customer,” Tschohl says. “But empowerment is the backbone of service recovery and organizations that truly want to serve the customers and retain their business must not only allow, but insist, that employees bend and break the rules in order to keep those customers coming back.”

4. Compensate. “You must give the customer something of value, something that will impress the customer and give her the feeling that you really do value her business,” Tschohl says. “Every company has something that doesn’t cost a lot but has value in the eyes of the customer.

An airline can upgrade a passenger to first class. A ski resort can give a free lift ticket. A computer repair store can extend the customer’s warranty by a year.” Service recovery, Tschohl says, can have a major impact on an organization’s bottom line. It can reduce the need for expensive advertising, replacing much of it with word-of-mouth advertising as customers tell their family, friends, and coworkers about the exceptional service they received from you. “Service recovery puts the ‘wow!’ in service and generates word-of-mouth advertising you couldn’t buy if you wanted to,” Tschohl says.

So what should that maitre de have done when you were seated 30 minutes after your reservation time? “He should have apologized and offered you something that had value,” Tschohl says. “That could be a round of drinks or a free dessert, which would have cost the restaurant a few dollars but carries a perceived value of $20 to $25. The magic in service recovery occurs when a frontline employee solves a customer’s problem and does so in 60 seconds or less.

Acting quickly, taking responsibility, making an empowered decision, and compensating the customer will result in customer loyalty that will increase your sales and profits and help to ensure your success in an increasingly competitive world.”

John Tschohl is an international service strategist and speaker. Described by Time and Entrepreneur magazines as a customer service guru, he has written several books on customer service, including Loyal for Life, e-Service, The Customer is Boss, Achieving Excellence Through Customer Service, and Ca$hing In: Make More Money, Get a Promotion, Love Your Job. John also has developed more than 26 customer service training programs that have been distributed and presented throughout the world. His bimonthly strategic newsletter is available online at no charge.

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