The Golden Mean

Who love too much, hate in the like extreme,
And both the golden mean alike condemn.
- Alexander Pope, in The Odyssey of Homer

Although I am a customer service radical, I do not believe in such platitudes as the “customer is always right”. The customer can be wrong, or worse, insane. So I do not believe that you should always give them what they want. A revolution based on such unrealistic claptrap sows the seeds of its own destruction. You will not be able to stay in business if you give away the store.

Many companies that are renowned for customer service - such as Disney, Nordstrom, and Ritz-Carlton - can afford to do almost anything to appease their customers, even when they’re wrong. That’s because their margins are so high. You cannot afford to be so liberal when you’re competing in a low-margin industry.

And a lot also depends on the cost of the accommodation. It’s easy enough to give away a free day pass, or a free pair of shoes, or a free night’s stay. Not so easy to give a plasma TV away.

Too often I have seen companies swing from one extreme to the other. For example, they’ll start with a liberal “Satisfaction Guaranteed” return policy. They eventually notice that returns are hurting their sales, and that mountains of rejects are piling up on their floors. They panic and swing the other way. No returns past 14 days. 15% restock on open-box product. Eventually they notice that their customers abandoned them for the store next door, and that their employee turnover went through the roof because people just couldn’t take getting screamed at anymore. And back they swing again.

The right thing to do is, of course, somewhere in the middle. If you’re a low-margin business, you must have policies that are competitive – not much better or worse than your competition. Then you must give your people the power and the training to bend the rules. Here’s the principle: The policies are there to protect the company from bad customers. Your people are there to protect good customers from the policies.

Such a balanced approach requires that you hire people with experience and judgment. If you can’t afford to hire such people into front-line positions, you must define specific guidelines within which your people can play. If you think that hiring the right people and training them is just too much trouble and expense, enjoy the swing.

Comments

[Ben]

This is the backbone to the principle I use... We've got that min wage person manning Customer Service. After every resolved issue at Customer Service, I do some coaching and let my staff know why I made the decision and the potential benefits of the decision.