How much should you spend to save a dollar?

By Rajesh Setty on Sun 05 Jul 2009, 5:46 PM - 6 Comments

First a quick note and some background information.

Note: I love RedBox and have nothing against them. I think they have a cool service. The example here is only to make a point. For those of you who don’t know about Redbox, you can rent the latest DVDs at the redbox terminal for $1 per night (here, free plug for them)

Personal Background: Before my entrepreneurial journey, I used to work for a CRM company where I implemented large customer support and self-service solutions in US and Europe. So I am very interested in how people handle customer service.

Background: A few weeks ago, I rented a movie from Redbox. That movie didn’t work and I called the customer service. The representative there (Eugene) was very nice and he promised to send a coupon code for a free rental. That was good. Last week when I tried to use it, the code didn’t work. That was bad. So I sent a reply to the customer service expressing my frustration. In a few minutes I got two replies from two different people

Reply #1 (from Diego) – Very Good

Thank you for your e-mail. We apologize for the inconvenience. To replace the invalid promo code, I have issued you a new promo code (below). . The code is good for a free one-night rental of any DVD of your choice. The code is valid for 45 days from today’s date. The code is:
XXXXXXX

Reply #2 (from No Name Customer Service Representative) – Bad

Thank you for your email. When did you try to use the code?

Why is the second reply bad?

There are several reasons:

1. You are trying to save a dollar and spending a few dollars in that process.

2. You are adding insult to injury to the customer. He is already frustrated that your systems are not working and by asking him to explain further you are escalating his frustration.

3. It shows that your systems are not strong enough to identity when this code was used.

4. It shows that the support responses are not coordinated as you are sending mixed messages to the customer.

5. By sending a no name reply, you are removing the human element. Am I talking to a person or a robot?

Every time someone tries to spend fifty bucks to save a dollar, it just baffles me

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Ram on July 6th, 2009

I Agree with you on all, though I think the 2nd bullet “… adding insult to injury…” is something to think about. I agree it adds frustration to the customer, and I also agree the 2nd reply appears to be impolite and could have asked differently, however, to the point of asking questions – I think if it is asked in a better way, it is required for customer service to ask questions and undersatnd the situation.

How else would a customer service be able to know what the issue is to provide a better service? If the 2nd CSRep had asked it differently I believe it would have been the following sequence:
1. Apology
2. explain the possibilities of coupon not working for you
3. ask, if any of these? or something else?
4. check if they have a way to track the coupon code usage on their systems
4. provide a replacement code and mention the expiry policy again
5. Apologize again to wrap up

In my opinion, although reply#1 satisfied the customer instantly in one line, but not doing the right thing from the customer service perspective. What if the replacement code didn’t work the customer again? Now, he is not aware of the previous issue either. Would customer be happy this time, he would either (a) pursue again with anger tone adding all his frustrations (b) give up on this and share with the world about the service.

just my opinion – I hope i politely commented here

Rajesh Setty on July 6th, 2009

You have a point there. One option is for them to take care of the customer and then ask for clarifying information. The worst thing that will happen to Redbox is that they would have lost $1 but they would have prevented someone from writing such a blog post.

The other way to fix this is to upgrade their systems so that they get an alert when redeem codes are rejected and proactively take care of it.

This problem would not have occurred in the first place if their systems were working in the first place

Best,
Rajesh

PS: Yes, you did politely comment and made your point. Thanks.

Leadercast on July 6th, 2009

Nice post Rajesh. I think that so many businesses can improve customer service and their businesses in result by having the mindset of serving the customer first, and making money second. Obviously, making money is a priority in a business. No businesses should be taken advantage of by anyone. At the same time, however, if a business aspires to serve its customers and is successful at this, they will make money.

Thanks for the post!

J. Gomez on July 8th, 2009

It’s all about right attitude.
That reminds me the famous story of both Audi and Lexus having customer complaints:
Audi focused on proving that customers’ asessment of the problem was wrong while
Lexus focused on customer care providing a replacement car on time.
I think it was Lexus who did the right thing.
Best

Utpal Vaishnav on July 24th, 2009

Fantastic post, Raj.

From this post, here is what a customer service should recognize:
- They do not have synchronized CRM system in place
- Their human resource department is taking their customer lightly – that’s why a customer support person is allowed to write an email without human touch.
- They do not have common systems in place which ensure 100% customer satisfaction
- They do not know Druker’s doctrine, “Only a customer can define purpose of the business”
- They don’t know what they are doing

Here are the lessons:
- Know exactly what you do or else you will get frustrated customers and a company which will be out of business soon.
- Understand that “Only a customer can define purpose of the business” or else ready to be bombarded by such blog posts.
- Invest in processes and systems that make your customer feel satisfied.
- Learn to reward complaining customers. They are the one (who indirectly) care for their business by drawing company’s attention to the complaint.
- Make implementing such changes a #1 priority.

Customer service is a matter of strategic steps that a company should take in order to climb the ladder of success.

Better Customer Service = Satisfied Customers
More Better Customer Service = More satisfied Customers
More Satisfied Customers = More word-of-mouth publicity
More word-of-mouth publicity=More Sales
More Sales=More Profit
More Profit=More Investment in Better Customer Service
More Investment in Better Customer Service = Delighted Customers
Delighted Customers=Repeat Sales
Repeat Sales=you’re in business process cycle for one more time
You’re in business process circle for one more time = you’re riding the horse called Success!

Cheers,
Utpal