How to Lose Customers in One Easy Lesson

Today I was talking to my oldest friend in the world, Lori, bemoaning the state of customer service these days.

Why? Because both Customer Service Representatives and their Supervisors are liars.

Who were we talking about in particular? For me it was Kohl's and the Daily Journal. For Lori it was Chico's. For both of us, it decided us that we weren't going to bring our business back to those organizations.

Where did these problems take place? Ah. Now that's a very important part of this story. The problems all took place online and on the phone.

What happened? Without boring you with all the details, what it came down to in all cases was that we:

  1. Made a purchase - both in person and online - with which we subsequently had a problem
  2. Used the various organizations' online and telephone customer service solutions - from "Live Chat" to live people
  3. Eventually spoke with a Supervisor because the Customer Service Reps were unable - or unwilling - to solve the problem for us
  4. Got a promise from the Supervisor that the problem would be solved to our satisfaction
  5. Nothing happened - whether the Supervisor made note of the conversation or not.
What makes these experiences even more ridiculous is that each purchase that Lori and I were discussing was under $100. If the companies involved had a brain cell working, they'd simply empower their Customer Service Reps to be able to solve the problem on first contact for up to that amount.

Why don't they? Because their management is scared. They don't trust their employees - which means, in fact, they don't trust their hiring processes, their training or their managers to supervise.

It's not about the employees. It's about the management systems.

And from a competitive perspective, as a result of those policies and practices, they're actively reducing profitability, shareholder value and market position.

The truly fascinating part - and the one their management would never admit - is that they believe they exist in a vacuum. That they're the only place that a customer would want to go to find whatever it is they offer. That customers have no other choices.

Not only is that thinking wrong, it's short-sighted and, frankly, stupid.

But, based on the way they treat their customers, they don't seem to be worried that their policies leading to customer frustration and dissatisfaction have no impact on their bottom line.

So, when you see that you're losing customers, take a quick look at your customer service policies and practices - because it's a good bet that that's where you're losing them. In the customer experience.

And, as you can see from Lori's and my experience, no matter how long-standing a customer we may have been, it only takes once - and we're not coming back. 

It's What's In Back That Counts

There's a lot of talk about infrastructure these days.  Whether it's roads and bridges or teachers, firefighters and police - it's all about what's done behind the day-to-day life of most citizens.  It's the stuff we see but don't really notice...until either it's not there or it doesn't work.

Then it's a problem.

It's the same in your organization - only in your case those problems are occurring every day for all your employees. They've just learned to work around them.

That's because the infrastructure they're dealing with is everything from your...
  • organization's structure - which defines communication and information flow...
to your
  • policies and procedures - which directly impact efficiency and effectiveness...
to your
  • training and development - which is, ultimately, what your customers interact with every day...

and that's just hitting the high points.

When you think infrastructure, think about all the decisions you make and have made for your business that no one outside sees directly but everyone in the organization knows are there.

The good news is, when you focus on the infrastructure it becomes easy to figure out and change all those things that weren't working the way you want...because, predictably, the infrastructure became invisible to you, too.

The more you focus on the seemingly invisible, the more quickly and visibly you'll see the positive results in productivity and morale, customer satisfaction, innovation and profitability.

From Training to Profits

When Marc Andreessen and Ben Horowitz teamed up to form the venture firm a16z, they gave everyone a bonus:  A blog.

Andreessen (the as good as child prodigy who created Netscape - then in his adolescence, LoudCloud...and he's still a baby) started up a blog that was a good read and fun.  It's called  Then he took a break.

When he came back again, there was a completely different strategy for that blog.  It was an entree to the blog of his partner, Ben Horowitz (another of those Netscape/LoudCloud prodigies).  That eponymous blog (ben's blog) is a different story altogether.

For whatever reason, Horowitz decided, along with being a venture capitalist, that he was going to become a teacher - and a great one he is.

Every one of his posts has valuable information on everything from strategy to structure to pitching your plan to anything you could possibly imagine (and far more) if you're entering into the world of entrepreneurialism.

But, whether he knows it or not, almost every single post of his applies just as much in one way or another to every size organization in every industry across sectors.  Countries, too.

This time, he takes on training - why it's important and how to ensure your training programs translate to profits.  Even though he's talking start-ups, his points apply to every training program to be considered.

For my part, and as you well know if you've read my writings over the years, the points that I agree with most are upfront in his piece:

  • Training provided by outside vendors/external consultants is, more often than not, underwhelming
  • This is because, at least in part, these external providers don't know - nor do they make the real effort to know - your organization and
  • The more that management is directly involved in the training program - the so-called "cascade" system - the greater the application, speed, ROI and profitability of the training provided.
Unless you get smart - really smart - about your training programs, you're wasting your employees' time and lots of money.  You're also killing morale, which means you're working from a deficit position when you bring in the next training program - no matter how good it is.  Your people will expect the worst - again.

So be smart and be directed.  Most important, be involved.  You'll see the benefits immediately.

Just like Ben says.

For more information about how executives and managers can drive training to profits in your organization, check out The Executive Field Guides.