Do You Make Your Customers Hate You?

Do You Make Your Customers Hate You?

Policies that turn them off will damage your business.

There are many lists that companies aspire to be named to, such as “100 Best Companies to Work For,” “Best Stocks,” or “The World’s Most Powerful Brands.” But one list I’d bet you don’t want to be on is MSN Money’s “Customer Service Hall of Shame.” In 2012, half of the companies on the list were banks and/or credit card companies, and almost one-third were cable companies. Generally, these are industries that tend to enjoy an effective monopoly with little competition—and with reputations for customers who love to hate them.

It doesn’t take a rocket scientist to realize that where there’s little competition, companies don’t work as hard to please their customers. Also, these are industries that generally have customer contracts with rules and penalties that can be harmful to their customer relationships.

At the top of 2012’s list was Bank of America, largely due to its recent decision to charge customers $5 per month to use their debit card. Bank of America said it was charging customers the new fee to recoup increased costs because of federal regulations capping other fees (at the same time the bank reported an annual profit of nearly $1.5 billion). Customers were outraged, and the bank scrapped the plan, but the damage was done. With one little fee, Bank of America led its customers to believe that it cared more about its profits and its shareholders than it did about its customers.

Other examples on 2012’s list are cable companies that keep their customers waiting for hours for a technician to show up for a service appointment, satellite television providers more interested in upselling new products than providing quality service, and credit card companies with confusing and/or erroneous fees. And I’d like to add one of my own annoyances: Flight attendants who wake you up with their voices blaring over the intercom during a quiet moment on a late evening flight to sell their airline’s credit card. Arrrrggghhh!

In all of these examples, the common denominator is that the companies are focused on themselves, rather than putting customers first. I know this seems like going back to Business 101, but we all need a reminder now and then about how to recognize when you are becoming too internally focused and how to put customers back in the driver’s seat. As author and management consultant Peter Drucker famously said, “The purpose of business is to create a customer.”

Warning Signs

To determine whether you have policies, rules, or processes that harm your relationships with customers, ask yourself:

Do we charge fees or have rules that unintentionally penalize our best customers?

For instance, I’m pretty sure that Bank of America’s debit card fee was not intended to anger customers, but when it was put into practice the bank was effectively penalizing people for being its customer. Another illustration is airlines charging baggage fees, which baffles me—aren’t you effectively penalizing customers for using your airline? (By the way, Southwest Airlines, which allows two pieces of checked baggage for free, received high marks for customer service in the MSN Money survey.)

When a customer breaks our rules, do we become more profitable?

Cell phone companies are well-known for this. Although the intention of cell phone contracts is to provide various pricing options, the unintended consequence is that when customers use more minutes than their plan allows, they are penalized with higher charges. These policies just make customers resent their cell phone provider.

Do we have confusing policies?

Someone I know recently tried to return a camera given as a Christmas gift, only to discover that the retailer wanted to charge him a 15 percent restocking fee. This policy was not explained to the gift-giver. As a result, the retailer ended up with a confused and unhappy customer.

Do we rely on contractual language to keep our customers from defecting? Many service companies understandably rely on contracts, but occasionally the fine print in these contracts makes customers feel trapped and resentful. What happened to the idea of making customers happy so that they want to stay of their own accord?

Make Customers Job One

If you recognize yourself in any of these examples, your company is vulnerable. It is too easy to be the object of instant backlash via social media to ignore this weakness, so take these steps to reduce your risks:

Start at the top:

A priority on good customer service must come from the top. Companies with high rankings in the MSN Money survey are those with CEOs who make serving customers their personal mission. These executives allocate budget to areas affecting customer relationships, hire people with a knack for pleasing customers, and “walk the walk” by involving themselves in solving customer service issues.

Make excellent customer service a constant effort:

Companies known for superior customer service are constantly innovating at it. In other words, don’t rest on your laurels for a job well done in the past.

Keep your employees happy:

My experience is that it’s a self-fulfilling cycle: When employees love their jobs, they enjoy serving the company’s customers, and when customers are happy and fulfilled, employees have job satisfaction.

One of my favorite authors, Clayton Christensen, said in The Innovator’s Dilemma: “While resources tend to be flexible and can be used in a variety of situations, processes and values are by their very nature inflexible.” So don’t be one of those inflexible companies that make your customers hate you!

Mark W. Sheffert, chairman and CEO of Manchester Companies, Inc., provides investment banking and corporate renewal/performance advisory services. Contact him at mark@manchestercompanies.com.

Related Stories