By Danielle O’Rourke – August 4, 2017

 

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And now to the newsletter…


Topic of the Week: Customer Disservice

Let’s talk about a situation that happened to “my friend” last week with a certain ride sharing app. Let’s call this app “Shmuber” to maintain anonymity and avoid a defamation lawsuit.

Here’s what happened: My friend was charged an extra fee. My friend disputed the fee. Shmuber’s support team politely rejected my friend’s request three separate times.  My friend deleted their app and downloaded Shmuber’s competitor.

Did my friend deserve the fee? Debatable. Was my friend rational in deleting Shmuber over the fee? Probably not.  Neither of those matter. Here’s what does.

The fee in question represented less than 2% of her spend in a year with Shmuber. Because the customer support team was following bad policy, they lost the company a loyal customer and many multiples of the fee in future revenue.

There are three underlying lesson’s we can all learn from this situation:

1)      Every time you tell a customer “no,” you risk the customer getting mad at you, no matter how politely your customer service people deliver the news.

2)      Never assume your customers make rational decisions when they are mad at you.

3)      Every business needs to empower their customer service team to answer the following question: Should I give this customer what they want or tell them to take a flying leap?

Here’s the way I answer this question:

First, calculate the lifetime value of the customer.  Next, subtract the following two numbers:

1)    The cost of appeasing the customer

2)    The estimated incremental profits you could earn by dedicating your resources to another customer.

Finally, add back an estimate of the potential lost profits you may incur from the customer running her big mouth to everyone she knows about her bad experience.

If the number you come out with is positive, you give the customer what she wants.  If it is negative, you politely tell her to take a flying leap.

FYI – My friend’s referral code for Lyft is: DANIELLE29523

Have a nice weekend everyone!


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