One of the most common and emotionally fraught questions I encounter is this: "How should I compensate a customer for a service or product failure?"
No matter how superb your product or service is, everyone in business eventually needs to find the answer to this question. And the answer to the question is this: It depends. Customers have diverse values and preferences, varying even from day to day as well as from customer to customer—so your employees working with disgruntled customers need to be given enormous discretion.
Still: There are principles that almost always apply:
- Most customers understand that things can and will go wrong. What they don't understand, accept, or find interesting are excuses. For example, they don’t care about your org chart: Your mentioning that a problem originated in a different department is of no interest to them.
- Don’t panic. With most customers and in most situations, customers’ sense of trust and camaraderie increases after a problem is successfully resolved, compared to if you had never had the problem in the first place. This make sense, since you now have a shared experience: You have solved something by working closely together.
- Avoid assuming you know what solution a customer wants or ‘‘should’’ want. Ask. And if a customer makes a request that sounds extreme or absurd, don’t rush to dismiss it. Even if it seems on its face impossible, there may be a creative way to make the requested solution, or something a lot like it, happen.
- Don’t strive for ‘‘fairness’’ or ‘‘justice.’’ Creating, or preserving, a customer’s warm feelings for a company isn't about fairness or justice. It's about being treated especially well.
- Learn from customer issues, but don’t use them as an opportunity to discipline or train your staff in front of your customer. This may sound obvious, but it happens quite often. Watch out for this flaw, especially when you’re under stress.
- Don’t imagine you’re doing something special for a customer by making things how they should have been in the first place. Time cannot be given back—it’s gone. The chance to get it right the first time? It’s gone. So re-creating how things should have been is just a first step. You need to then give the customer something extra. If you aren’t sure which ‘‘extra’’ to offer a particular customer, just make it clear you want to offer something. If the customer doesn’t like red lollipops or doesn’t eat sugar, she’ll let you know. Then you can decide together on a different treat.
- …And always, always, keep an eye on the lifetime value–directly and as a vocal supporter–of having a loyal, engaged customer. A loyal customer is likely worth a small fortune to your company when considered over a decade or two of regular purchases, not to mention that customer's "network value"–the value of her or his recommendations online and off.
Perhaps in your business this number is a few thousand dollars, or perhaps it's hundreds of thousands. It's well worth figuring out that number and keeping it in mind if you ever feel that temptation to quarrel with a customer over, say, an overnight shipping bill.