Robert’s Rant – Profits before People (#FAIL) is a Formula for Disaster!!
I recently was extended the privilege to be interviewed by Jerry Ashton on PWRN Internet Radio (listen to it here: http://bit.ly/rshdn1 and this experience moved me to elaborate further on one of the core topics of discussion and a major reason for our existence: Customer (dis)Service.)
Whether an employee is charged with the responsibility of collecting a past-due debt or simply to listen while a consumer complains about their problem, one must never forget that the ‘customer’ must, at all times and in all cases, be valued and treated with respect.
Unfortunately this critical aspect of doing business has become a lost art in the 21st century. Big business will invest small fortunes in the creation and the promotion of a product and then spend a mere fraction of that outlay on the resources required to service what they sell. This has become the ‘new’ normal and consumers are frustrated and mad as hell at this behavior.
And, you can understand – if not forgive – the reasoning behind this.
Any financial analyst worth their weight will endorse the prevailing logic that Customer Service is to be considered as an expense item on the balance sheet; which basically requires Out-Go and therefore minimizes In-Come, period.
Clearly these forecasters have their heads where the sun doesn’t shine; and let me tell you why.
Using an oversimplified mathematical model where one invests 10% of sales on advertising & promotion; winning a customer still costs a dime on the dollar. (The ‘smart’ money knows the real cost is quite higher, but for the sake of argument let’s use this number.) Let’s say that 100 customers buy whatever it is being sold at $1.00 per item. This equals $100 in ‘greenbacks’ and $90 bucks gross profit.
Then after a month goes by, 5 of those (100) customers call in with a problem. These people get shuffled around by the ‘system’ and days or weeks later their complaint never actually gets addressed or resolved. The company is not concerned because collateral damage had already been factored into the profit equation.
But herein lies the real rub; those 5 unhappy customers have now become 5 very angry consumers who have shared their frustration via phone or at work with 25+ personal connections.
In today’s reality, many irritated customers never get remedied no matter who they tell or what they say. Moreover, a certain percentage will continue to patronize those brands that dismiss their complaints. This is just the way it is. However this can be a tricky game of ‘Russian Roulette’ when one of those angry customers turns out to be someone with a great reach of influence! Such as, a Groubal member.
Thanks to the amplification of Social Media, think about what might happen if one marginalized customer told 1,000+ people about their problem? That “mouse squeak” has now become a Lion’s thunderous roar. That product’s rave reviews are now overshadowed by a storm of (negative) public opinion.
The moral of the story is simply this; businesses today must take every customer complaint seriously and treat EVERY customer as if they represented a thousand others. Why? Because this is smart business! And, those “thousand others” have the Groubal megaphone at the ready.