Attention Marketers: Access 30 Million IT Decision Makers with ECT News Network's INSTA-LEADS Click to Learn More!
Welcome Guest | Sign In
TechNewsWorld.com

When Customers Get the Shaft, Companies Are the Biggest Losers

When Customers Get the Shaft, Companies Are the Biggest Losers

Customers who are mistreated may feel burned because they've lost money or had an experience ruined, but companies that fail to right wrongs ultimately suffer a lot more. The loss of one customer can quickly be multiplied many times over. Customers remember, and they tell their stories, and companies that fail to deal fairly soon get the worst sort of publicity as a result.

Do you ever wonder why some companies flourish and grow while others struggle? Why you love doing business with some but not others? It all has to do with how they interact with customers. Customer care is crucial for long-term success.

My family has been going to the beach every summer for as long as I can remember. Hilton Head Island in South Carolina has become our favorite destination. We've stayed at many places on the island, but there are two big brand name hotels: the Sonesta Resort, formerly the Crown Plaza Hotel; and the Westin. Both are important to the island, and I want both to succeed. However, there was a big difference in the way we were treated at these two places.

Customers Have Long Memories

We visited several different resorts over the years, and the Sonesta became our favorite. Its staff always treated us very well. Whenever we needed anything, they were right there making sure our stay was perfect. The property itself is both gorgeous and peaceful. It recently got a fresh face, making it even better.

The Westin is a different story. Don't get me wrong -- I like Westin. I have stayed in many of the company's properties for business and pleasure over the years. Many of those properties are terrific, but when we stayed at the Westin's Hilton Head resort several years ago, we were very disappointed. Among other things, our room was not cleaned properly, and the staff did not correct the problem, despite our requests for help.

Bottom line, the Westin on Hilton Head may be OK now, but we may never know. We haven't been back. Several years have elapsed since our last stay because of the poor experience.

So who loses? Westin. We have been back to the island many times, but not to the Westin -- and when I'm asked for a recommendation, I always say the Sonesta is our favorite.

Businesses that care and that treat customers right will get repeat business. So why don't they all treat customers right? It's a no-brainer. Yet they don't.

Unhealthy Customer Relations

Like many, I join a health club every few years. I was a member of LA Fitness and was happy until a recent problem came up that was handled poorly from the customer point of view. My son wanted to join, so I signed him up as well. Then he was hired as a fitness counselor there, and he told me his membership would be free as long as he was a counselor. That's great, I thought -- save a few dollars.

Fast-forward several years. My son is not working there any longer; in fact, he canceled his membership and joined another club.

That's fine -- except recently I took a close look at my credit card bill and saw that LA Fitness was still charging me every month for his membership. I asked my son about it and he said he hasn't used the club since he canceled his membership years ago.

So I called LA Fitness to fix the problem and get a refund, but I was told there was no record of the cancellation request. The club would be happy to cancel the membership, but it could not offer me a refund, even though its records verified my son had not been in the club for at least two years. So with the proof in front of them, and in spite of my customer request, LA Fitness still did not do the right thing.

Bottom line -- the club had been charging my credit card every month for years, although my son was not even walking through the door. What it should have done was contact me to bring this to my attention. It didn't -- and when I found out, a call to its customer service department showed me LA Fitness did not care to correct the problem, either. So if the club doesn't care about me, then I don't care to give it my business any longer.

Sure, this cost me several thousand dollars, but who lost in the long term? LA Fitness, of course. I will not only not join again, but also not recommend it any longer. In fact, I just received a "We Want You Back" email. Doesn't sound like the marketing department and the customer care department talk to each other.

Keep It Simple

What about retail? This sector is full of very good and very bad customer service stories as well.

Costco is one of those warehouse clubs like Sam's Club and BJ's. First, let me admit that I have a love/hate relationship with Costco. I hate the idea of having to buy a gigantic box of anything. I hate waiting in long lines to check out. I hate not having bags to carry my stuff home. And I really hate the process of leaving the store, because I have to wait in a long line so an employee can search my cart to make sure I didn't steal something. I always complain to my wife. Why do so many customers put up with this? I must be missing something.

Perhaps it's because Costco does several things right as well. The stores are fun, the prices are good, and its return policy is excellent. Any time you need to return something, you can. Period. There's no 90-day limit. Costco would rather keep you happy -- aside from the proctology exam when you leave the store -- and keep you coming back. It works. Its growth is a direct result of this.

Certain catalog retailers, like LL Bean and Lands End, do a very good job as well. They respect the customer. They make it easy to shop and order. Order what you want and return anything for any reason at any time. Period. They make it easy to shop with them. They take away any impediments to the buying and returning process. These are companies customers love.

Customer Loyalty Pays

Can you see the point I am making with all these examples? The lessons to be learned are clear as day. Companies either makes customers fall in love with them, or they don't. It all depends on the way the company treats its customers.

Companies like Sonesta and LL Bean that do the right thing and treat their customers the right way -- with respect -- win in the long term. Companies like LA Fitness and the Westin on Hilton Head Island lose in customers' eyes.

Customers help spread the word either way -- one way or the other, for better or for worse. So isn't it better to do the right thing, and treat customers with respect, and get long-term benefits from that? Yes, the answer is obvious. Companies that don't -- well, you know who you are, and the ball is in your court.


E-Commerce Times columnist Jeff Kagan is a technology industry analyst and consultant who enjoys sharing his colorful perspectives on the changing industry he's been watching for 25 years. Email him at jeff@jeffKAGAN.com.


Facebook Twitter LinkedIn Google+ RSS