May 12th, 2008 17:58 EST
Make a Mistake Every Once in a While
I have a good friend who is one of the best direct marketers in the United States. He started a catalog marketing firm several years ago " selling baby products to young families. He took his company public, exited the company and he now consults to a variety of other direct marketing firms and continues to be a very successful business person.
He and I were having lunch the other day at one of our favorite places, and in the course of our conversation, we talked about customer service issues that we`ve seen that are unsatisfactory. We both shared horror stories as we laughed at how much money companies were losing because they were pennywise and pound foolish in the ways that they dealt with their customers.
He told me that years before, when he ran his extremely successful company, that they performed an unscientific test. In the early days of his company, my friend and his partner used to fill every order by themselves. As the company grew and doubled year after year, they had to buy a very large warehouse and staff it with people who were far removed from the values that the entrepreneurial owners of the company possessed. As you would expect, errors were occasionally made with this new team of people.
For example, sometimes a customer would call and order something, but a different product would be shipped out. That is not so much of a problem, though. The problem really kicked in based on how the customer service department handled the constant concerns when the products finally arrived at the customers` locations. If the customer service department did a good job, it seemed that the relationship for those customers got better. If the customer service department did a poor job, it was clear and obvious that the relationship with that customer would get worse, and possibly the relationship would end entirely and the customer would go to a competitor.
So, my friend and his partner concocted a little study. Being experts in the direct marketing business, they felt that this study might have an impact on lots of direct marketing businesses across the country. What they did was to make an occasional error " deliberately. So if somebody ordered a car seat, they might send them a highchair instead. If somebody ordered a set of bottles, they might "accidentally" send them a box of blankets. The purpose of the test would be to find out how the error would impact the relationship that they had with their customers.
The customer service personal were instructed to immediately ship out the correct product on finding out that an error had been made. They were to send it out Federal Express and only after the person received their new product would the company expect to receive back the original product that was shipped to the customer. Just because the company had made a mistake was no reason to penalize the customer. It was penalty enough that they would have to go and drop the package off for shipment back to the company that made an error.
What these "accidents" proved was that the customers who received an error in the shipment, but who were treated with great privilege upon calling customer service, actually became much better customers. They quantified this number at 2:1. This means that by correcting an error, the company made twice as much money on that customer as compared to customers who they treated well in the first place.
Now, this is not a lesson designed to teach you to make errors as you run your business. The lesson is that great customer service, even when there is an error, can result in the magnifications and enhancement of a business relationship with your customers.
Remember, people find out who you really are and what you are really made of when the "chips are down." In other words, when you make an error and you "make good on it", customers see your true colors.
So, as you are working hard every day to build your company, or as you`re building your career, make sure that you spend a lot of energy teaching the people who handle customers for you and your company " because the customer is worth a lot of money to you now and in the long run. Even if you make an occasional error, it gives you an opportunity to strengthen the bond that you have with your customer.
About Joel G. Block, President of Growth-Logic, Inc.
Often dubbed a "Growth Architect" by his clients, Joel Block advises companies on explosive growth strategies by driving revenue and sales. Well known in the capital markets, Joel is a successful entrepreneur, speaker and advisor. To bring Joel into your company, please visit www.joelblock.com or www.growth-logic.com.
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