If you’re as disgusted as I used to be because your competitors are unfairly bad-mouthing you, slandering you, lying about you and generally making your life miserable, this column is for you.
There is now a strategy that works to counteract the negativity that comes from your competition when you flat rate and charge prices higher than theirs.
Some of these people are convinced that anyone who charges more than they do is violating some kind of self-imposed law of noble suffering. These same people feel it’s their responsibility to notify the world of these violations, as well as who are the transgressors.
When I started my residential services company in Dallas in 1976, there were only three of us. By 1985 we had expanded, the business had grown to approximately $3 million in annual sales and we were quite profitable.
Around that time I attended a seminar where I learned that satisfying the customer, even when he or she is wrong, is the proper way to go. I decided to implement the policy in the company. From then on, every customer complaint came directly to me.
Guaranteed Customer SatisfactionWe had an invoice for $50 that was several months past due. I called the customer and asked if there was any special reason why she hadn’t paid it yet. Her response shocked me. She said she was getting ready to report us to the Better Business Bureau because of a very minor problem that was completely unrelated to the work we had done. She was being totally unreasonable.
Before, I would have tried to explain to her what the differences were. We’d probably have gotten angry with each other and, after she continued to refuse to pay, I’d have sued her in Small Claims Court, won the $50 and lost the customer forever.
But this time I apologized for the inconvenience and offered to send another service technician to diagnose the situation at no charge. I told her that my job was to satisfy her, and since she was obviously not satisfied, we were going to do whatever was necessary to make her happy.
She was only home on the weekend, so I sent a man out on Saturday, even though I had to pay him overtime. I instructed Randy to not mention the invoice, and to call me directly from the house to let me know what he discovered.
As I suspected, the problem was totally unrelated to the repair that we had done. The new problem could be fixed immediately, so I instructed Randy to do so and to show the homeowner exactly what he did.
On Monday, Randy turned in a check for $50 from this client. He explained that the woman had handed him the check as he was leaving, with the comment, “I believe I owe you this.”
This was a wonderful and perfect first experience with this new policy. I called the woman several weeks later. She told me that the refrigerator was working perfectly and thanked me profusely for the way I handled the situation. She also commented that she was positive that I was going to have a very successful company.
Lessons LearnedCould there have been a better beginning for this new policy? This is what I learned in the process: 1) Not every unreasonable client is out to cheat you; and 2) when clients are emotional, they don’t realize how unreasonable they’re being.
At that point, reasoning with them is usually a complete waste of time. Once you assure them that your main goal is to satisfy them and that you’ll do whatever is necessary to accomplish that, they usually calm down right away.
When you follow that up with whatever action is necessary to give them what they want, it completely lets the air out of the emotion balloon.
If you eliminate the emotional cost to you and your people, the actual monetary cost is relatively small. Once the clients realize that you’re not trying to take advantage of them, they have an attack of good sense and realize that you’ve done something for them you weren’t obligated to do.
The costs are limited and the benefits are tremendous.
It was quite a while before I realized how much that simple change in policy profoundly affected the whole future of the company. Over the next 10 years, my company made a lot of changes and a lot of progress. We grew very rapidly. I got the opportunity to host a radio show on the No. 1 talk station in the area. It was so successful that, within a few years, our “little red trucks” became the most recognized of any service company in the Dallas area.
I sold my successful company to a consolidator in 1997. By that time we had grown to more than 100 employees with gross sales of just under $10 million annually. I believe very strongly that the decision to satisfy clients -- even when they were wrong -- was a major factor in our successful growth. Here’s why:
- 1. I would never have had the courage to go on the radio without knowing that I didn’t have to worry about a lot of disgruntled clients calling to complain. During the five years I was on the radio, only three people ever called to complain. Considering that we serviced more than 10,000 clients per year, that’s a phenomenal record. This was possible only because of our guaranteed satisfaction policy.
2. My competitors lost all their ammunition against my company. I realized my competition was judging me solely on the very limited snapshots they got from my disgruntled clients. My competitors were very willing to believe the worst, so they proceeded to share these horror stories with each other and with every client that would listen.
3. Your worst detractors become your biggest boosters. A happy client will tell maybe three people how good you are. An unhappy client can tell as many as 25 people about you.
At that point, they realize the truth: They know they didn’t deserve the consideration you gave them. Now the law of reciprocity kicks in. That’s the rule that says to most people, “I got something for nothing. I need to pay him back.”
How do you think they reciprocate? They do so by telling everyone that will listen how wonderful you are, how great your service is. They become your best public relations agents.
Let me leave you with one last bit of advice: When you implement this policy, make sure you monitor it yourself. I considered client satisfaction to be one of my most important responsibilities. I made sure that every client was treated the way that I felt was appropriate. Every client assistance form landed on my desk immediately. Either I took care of it myself or, if I assigned it, I made sure to discuss what possible solutions were available to us in order to make sure that the client was happy.
Once the issue was resolved with the client, I got a final report. Often I would call the client myself to make sure that the situation was really resolved to his or her satisfaction.
Later on, only after the policy was clear to every employee, did I start to empower the front-line people to make decisions that affected client satisfaction. But even then, I always looked at every complaint and resolution. It was the only way I could ensure the quality of the work that we were doing.
The most important job a CEO, an entrepreneur or manager has to do is make sure his or her clients are taken care of properly. If you do that, your future is unlimited and I look forward to seeing you at the top.