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IT Innovation | July 8, 2014

Investing in Relationships Can Help Foster Great Customer Experiences

By: Stephanie Spada

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We buy homeowner’s insurance, but hope we never need it.

Sometimes we fork over extra money for a product warranty, just in
case.

There are a lot of examples of how we try to guard against future
problems and invest in insurance or try to fill our “goodwill” pots so we have
something to draw from in the future.

The same thinking can and should apply to investing in customer relationships. When we go the extra mile to help a customer
out of a rough patch (even when we might not be the cause of the issue), we
make a deposit of goodwill that will almost certainly be needed in the
future. Why? Because, we are human, our business is
complex, and despite our best efforts, we are likely to cause unintended grief
for that customer at some point in time.

A thin line separates success and failure when it comes customer
experience. Time and time again, we see that a single moment or encounter can
change the long-term course of a business relationship, for better or worse. In
such an instance, the goodwill created can make the difference between a solid
relationship and a severed one. It’s an investment with a very high rate of
return – especially for top accounts.

There are great examples of companies in all industries that have invested
in the extra mile and their investments paid off exponentially. Last year I
read about one company that went above and beyond for a consumer:

“Recently, our three-year-old Cuisinart coffee maker started making
noises akin to a strangled parrot, and then ended its life with a theatrical
puff of smoke, like a magician’s finale. When contacted about this, Cuisinart —
which is owned by the Conair Corporation — immediately shipped us a newer and
better machine, even though ours was long out of warranty. The company also
provided a box to ship the old one back, presumably for an autopsy.

The whole
process took less than five days. Well done, Conair. You have a customer for
life.”

New
York Times, April 28, 2013, “When Companies Get It Right”

“You have a customer for life.” That’s what every company wants to
hear. Not only did Conair engender great loyalty, the anecdote was printed in a
newspaper with more than 1.2 million daily readers and lives on via the Web.

Good news like the story above doesn't travel fast.  Sometimes it never travels.  But bad news certainly does.  And with more than 4.5 billion social users connected on Facebook, Twitter, YouTube, and other networks and almost 170 million smartphone subscribers in the U.S., a company's failures can become widely known in a matter of hours.

As such, good intentions are not good enough. Taking action aggressively
is essential when it comes to proactive customer service. Sometimes you just
have to jump, without a clue about how and where you’ll land.

We experienced exactly this very recently at Oracle. A pharmaceutical
manufacturer that has a sizeable Oracle Database environment was experiencing
an issue in its global information system (GIS) that was, in essence, paralyzing
its supply chain and shipment of products. Signs were pointing to a database
corruption issue, so the customer called Oracle Support, which took the leap,
with two possible solutions – both of which were complicated endeavors.

Oracle garnered the global resources needed for immediate action −
staying online with the customer throughout the night while skilled development
teams worked behind the scenes and around the globe and clock to develop and
deliver a solution in hours. Once the system became operational, Oracle Support
continued to analyze the root problem, and determined that the issue first
began to reveal its self a few days earlier following a disaster recovery
exercise and update of an unrelated non-Oracle system. While the problem
ultimately emanated from a different system, Oracle sprinted the extra mile to
help the get customer up and running as quickly as possible and then helped to determine
the root cause. Our efforts didn’t go unnoticed or unrecognized. The customer team,
including the CIO, was extremely grateful. There was little question that we
needed to jump when the customer called. But we could have shut down our
efforts as soon as it was becoming clear that the issue was not ours. We saw it
to the end, demonstrating commitment to the customer’s business and the spirit
of partnership. The customer’s supply chain restarted and goodwill was
generated.

The well-known “service paradox theory” purports that customers will
come back even after they have experienced a problem with a company, provided
the company takes appropriate action – makes amends with an apology, provides a
refund, or takes some steps to acknowledge and rectify a service issue.
Forrester found in a 2010 study that 81% of consumers who encountered problems
but got great service recovery were very likely to continue doing business with
the company in question.

The short- and long-term value of building a reserve of goodwill that can be tapped in the event that it is needed.  In essence, goodwill becomes the currency for future opportunity, affording a chance to address and fully resolve an issue and, ultimately, strengthen a customer relationship.  That's a very sound investment, indeed.


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