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How nickel-and-diming your customers can cost you

In this world of online ratings, word travels fast.

  • November 07, 2014
  • min read

Article

How nickel-and-diming your customers can cost you

This article originally appeared on LinkedIn.

The other day I heard two stories about customer service from my colleagues at Bain. The first one made me shake my head in dismay, but the second brought a smile to my face.

Story No. 1: Brian Andrews, a former vice-president at Intuit (a company founded on the principle of delighting customers), was flying to Singapore to deliver a speech at the Net Promoter System Loyalty Forum. Brian was flying business class, and had paid thousands of dollars for this long-haul ticket. Yet when the flight attendant offered him a meal, she told him there were no choices left, and that he could only get pasta (not his favorite). The attendant also told him she was deeply sorry and that she didn’t like the new policy. She explained that her airline had decided to stock exactly as many meals as there were passengers on a flight and that the mix was based on historical averages. If more people wanted beef or chicken than usual, then whoever was at the end of the line got short shrift. And it didn’t matter how much they had paid. She said that she and other flight attendants had complained to management about the approach.

Brian understood the problem and appreciated the attendant’s apology. But put yourself in his shoes—you spend all that money for a comfortable flight and you have no choice about what you get to eat? Worse, put yourself in the flight attendant’s shoes. She has probably had to explain to many valuable customers that—in effect—the company really didn’t much care about their comfort or convenience. It’s a difficult, embarrassing position for an employee to be in, and she actually encouraged Brian to complain. Brian shared this story with my colleague Rob Markey on the Net Promoter System podcast.

Story No. 2 is about the Oberoi hotel group, a luxury chain based in Delhi, India. One of the group’s hotel managers noticed that an American family was taking every free toiletry the housekeeping staff provided, twice a day. The manager’s first reaction was to gently suggest to the family that they probably had enough toiletries at that point. But the group’s chief operating officer, Vikram Oberoi, reminded him that the company’s policy was always to put the customer first. Couldn’t he find a better solution?

So the manager put together a basket of shampoos, soaps and oils from the hotel’s spa and wrote a note to the family, to be signed by the housekeeping staff. The note said, “We notice you like our toiletries and wanted to give you a supply you can take home and share with friends.” The family loved the gesture. Later they wrote that they greatly enjoyed the hotel and would recommend it to all their friends.

We’ve all experienced situations like that of Brian Andrews—a company creates a customer-unfriendly policy in hopes of saving a few bucks. And we’ve probably experienced situations like that of the Americans at the Oberoi—a company goes the extra mile to show that it cares. One approach leaves customers frustrated or disappointed, likely to gripe about the service they received. The other brings delight, word-of-mouth referrals and loyalty. Of course, it’s impossible for companies to meet every customer demand. Sometimes customers push too far, with requests that would be financially foolish to fulfill. But in the case of a few toiletries, the resulting goodwill was worth more than a few tiny bottles of shampoo.

In this world of online ratings, word travels fast. No amount of advertising can overcome customers’ stories of poor service. In contrast, who knows how far a happy customer’s account of a truly wonderful experience can travel?

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