Two More Clueless Companies Pour New Customers Into a Bottomless Bucket

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How many times have all of us chanted, “You have to secure your base before adding new customers”? You’re sick of hearing (and saying) it, right? After all, what could be more obvious? Well, we’d better keep chanting, based on the behavior of two more clueless companies. Some outfits—a whole lot, actually—still cling to the concept that customers will stay however they’re treated. “Hey, we’ve got the relationship. Too much trouble for them to switch. And we’ll even throw a few exit barriers in their way.”

Hey, how many business failures will it take to persuade these yo-yos to give it up? An infinite number, perhaps, because the predictability of mistreated customers pouring out the bottom of the bucket faster than new customers can be acquired was established years ago. So long ago that we have to classify these un-persuaded, un-repentant companies as “learning disabled.”



Recently, I’ve been posting about several visible flameouts or near flameouts resulting from customer abuse—including CompUSA (now gone), Circuit City (almost gone) and Sprint (going). But I’ve been telling these tales at a macro level, and it’s time to drill down to the specific, customer-abusive policies that so often start these downward spirals. Here are two “winners.”

Checking out of Crowne Plaza—for good!

For years, I’ve stayed in Crowne Plaza hotels for business travel because they strike a happy medium between my comfort and client expense costs. And I’ve been a Priority Club member forever. So when a client asked me to use a Marriott that was full, I took the opportunity to book a nearby Crowne Plaza online. To my regret.

As clients are wont to do, this one postponed the meeting to a date to be determined (which turned out to be the original date). So I needed to cancel my reservation. Not liking to change reservations online for all the “accidents” that occur, I called reservations at the local hotel. But guess what? Unbeknownst to me, I’d booked a guaranteed reservation—as in “you own it, sucker.” But how did that happen, we never book guaranteed hotel reservations or flights or anything else travel-related. Well, I went back on the site to see what happened, and indeed, I had missed several sections of small type text that explained the policy. But, never having experienced a hotel chain making all online reservations non-refundable, I wasn’t reading much except to understand I was authorizing a charge to my card. I was just doing the normal, “get in, get it done, get out, on to the airline or car rental company or what-have-you.

At first, I was just going to eat the reservation. But then, the cunningness of spreading out the non-refundable message instead of providing a clear, unmistakable and unmissable alert started bugging me, so I called the Crowne Plaza contact center. The first-level agent just recited to me the text I’d glossed over. So I asked for her supervisor, and this is where the worm started turning. The supervisor almost immediately commiserated with me, saying lots of customers were calling with the same problem, but her hands were tied. No exceptions.

So then I asked her for the appropriate manager at the parent, InterContinental Hotels. One manager said she couldn’t help, so I asked for her manager. After a bit of phone tag, we finally connected. I asked her how InterContinental could countenance an ongoing issue that was snaring lots of customers, rather than fixing an obvious deficiency on the site. So this “however many levels up” manager started reading a script addressing the problem. I immediately understood that not only were lots of customers complaining, but so many customers were so ticked that they too were making it up to this level, requiring her to have a prepared statement to read.



For the grand total of $140, InterContinental sacrificed a customer relationship that it will cost far more than the disputed amount to replace—not to mention undoubtedly sacrificing so many other customer ties. At Hilton or Marriott, customer service management would not turn a deaf ear and blind eye to such an issue. But then again, InterContinental ain’t Hilton or Marriott.
In today’s marketplace, it doesn’t take too many $140 “savings” of this ilk to start the blog press rolling. And let’s not forget viral de-marketing. But hey, why should we worry about it. We have other places to stay.

X’ing out Xerox

This incident happened several years ago, but it’s top-of-mind right now because we’re getting ready to replace a Xerox color laser that does everything but stand on its head and spit nickels. When we bought this thing, we declined the annual service contract, which cost, as I recall, about 40% of the replacement cost. But a couple of years after we bought it, we tried to replace one of the high-buck, fixed duty-cycle parts. We bought the genuine part online from Xerox, but when we installed it, the unit gave us a cardiac arrest error message. So we called Xerox to arrange a pay-per-incident service call. Couldn’t be too bad, could it?

Yeah, right. In a day or two, some third-party service tech showed up to fix it. He knew before opening the machine what was wrong. He explained that the part is so poorly designed that if you don’t perfectly align it before snapping it into place, something or other bends, rendering the machine inoperable. A very common occurrence, he said. So does Xerox take any responsibility for it? No way. Just like customers pay Microsoft tech support to overcome known Windows bugs, it’s the customer’s problem. But at least the printer was up and running again.

Then we got the bill for less than a half-hour’s work. Around $500. All labor. Guess you’d call that “the Xerox mark-up.” From our own work with a client providing multi-line field service, we knew the tech support company wasn’t collecting more than $125 to $150. But it wasn’t the money. It was the principle. Here’s Xerox punishing customers that don’t contract for annual service. Only to get the boomerang right back in its face.



Guess what brand of printer we’re about to buy? Can you spell “HP?” Or, the better question is, can Xerox spell “HP?” I suspect not. Companies with policies like these aren’t that bright.

3 COMMENTS

  1. Your two “micro” points are perfect examples. Businesses simply CANNOT play the “caveat emptor” game indefinitely without suffering the consequences. Your two example companies just lost thousands over thousands of dollars of lifetime customer value because they preferred to say “Up yours, buddy” rather than integrate a satisfactory customer experience into their products.

    -Steve
    InsideSales.com

    See the MIT research study that demonstrates the value of Web leads decreases 1000 percent in the first 24 hours.

  2. Steve, as you point out getting some companies to listen to customers is a painful experience. In the good old days I just wrote to the company Chairman and that always resolved the problem. Not anymore. The Chairman gets so much customer mail that its often passed to other people to handle it. So on top of the web based communication vehicles another route is needed. One answer is to write to the principle shareholders and make them aware of how much damange is being done to their investment. Be interesting to hear if anyone has experience of doing this.

    Malcolm Wicks
    http://www.simpleplans.co.uk

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