Reefer Madness: Customer Experience Perils Using Third Parties


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Almost every company relies on third parties to complete their product or service offerings, usually using their brand name but sometimes the third party is strong enough to retain its own identity. You see companies like Amazon, BestBuy, Costco, DIRECTV, Federal Express, and Microsoft using third parties for a range of customer service, tech support, delivery, install, repair, and other solutions.

Most of these third-party relationships resemble so closely the main company that you cannot tell the difference. However, in some glaring cases it becomes all too clear how customer experience and even brand value can be damaged with the third party deviates from standards or operating procedures.

I’ll share a recent bad case with you, and then provide some tips when using third party partners.

Reefer Madness

When my wife and I recently returned from a weekend getaway we discovered that our refrigerator had died. We saved as much as we could manage to fit into our Yeti cooler and remembered our friends’ positive experiences with a big box retailer’s private label refrigerator model, and so I dashed down to their Seattle store before their 3pm cut off to place my order for next day delivery. Had to be in person, not via a call center rep, annoying but not the core of our bad experience that follows; still I’ll give this “Strike 1”.

I rearranged my schedule to be home between 8-noon the next day, but got a call shortly after 8am from the third party shipper with some sad story about one of the delivery truck’s gate breaking, so would it be convenient if they came instead between 5-9pm? In short, no! But I had little choice. Strike 2.

Fortunately the truck rolled up around 4:30pm, but when I met the driver and second guy they told me that they didn’t have a dolly so they would have to leave it in the driveway. What?! Instead, I pitched in and the three of us carried it to the kitchen. Strike 3.

I also helped them to carry the dead frig back to their truck, but they told me that they weren’t contracted to unpack the new unit nor roll it into place, so there it sat in the middle of my kitchen. Strike 4.

After my wife returned from work we unwrapped the new refrigerator but were puzzled that it was bolted to a pallet, with no visible way to remove it. Strike 5.

Plus, the retailer delivered the wrong model, one with French doors instead of side-by-side; confusingly, both units shared the same “name”. Not germane to this the bad experience since it was the retailer’s mistake, but still Strike 6.

Still, with our Yeti losing some of its cooling power we plugged in the new frig in the middle of the kitchen, with its long cord, and after it started getting cold moved the remaining items to their new home. Tried calling the store but they only allow contact with the central customer service center that was not able to help me; it’s not the same as talking with the person who sold me the refrigerator in the store. Strike 7.

A few days later, with no help coming from the store, I asked my good friend and mechanical whiz Harvey Trager to help me get the frig off the pallet, but even he couldn’t find a way to do it. Strike 8.

Later I returned to the store to wrestle with their home delivery staff, bringing pictures of the reefer on the pallet, and they were shocked — “Never seen this happen” … “Didn’t the delivery guys take it off?” Well no, they would have left it in the driveway! The retailer stepped up and soon sent a different third-party delivery team to my home to unbolt it from the pallet, and now it’s working just fine. In fact, this delivery team was also shocked to see it left attached to the pallet, clearly indicating that it wasn’t standard operating procedures (SOPs).

What Went Wrong and Right

Let me tick off all of the problems through the lens of my two books on customer service and customer experience1,2, the majority due to a third party that let down the retailer and exacerbated its own challenges, offset somewhat by some good moves:

X – Eliminate dumb contacts1 = Several unnecessary contacts that were “irritating”.

X — Deliver great service experiences1 = ‘Nuf said!

X — You make it easy for me to buy from you2 ,3 = Ordered in store, only, but service via call center, only, until I had to return to the store.

X – You allow me use your product or service without contacting you2,3 = 7 or 8 contacts so clearly not “one and done”.

X – You don’t make me have to navigate your organization2,3 = See again the store vs. contact center.

X – You get it right for me the first time2,3 = Several big misses here.

X – You make sure your partners value me as you do2,4 = The perils using third-parties!

X – When you fail me you do more than just fix it2,5 = The retailer did credit me the delivery charge, and arrange for another team to remove the frig from the pallet, but nothing more.

+ = Be proactive1 = When the first delivery service warned me that they would be late (but an “X” for missing their initial promise).

+ = You listen to me and act on what I say2,4 = At least the retailer trusted my version of events, a photo helping a lot.

The moral of this story? Be very, very careful selecting and managing your third-party partners … Get it right the first time … When you fail me you do more than just fix it!

How to Manage Third-Party Providers

How should you manage third party providers, whether they are outsourcers in San Jose, Costa Rica or home repair firms in San Jose, California?

1. Select a third party partner is very much like entering into a long-term personal relationship, commercially speaking meaning that they need to be virtually identical to your brand promise and culture.

2. Have a very clear set of SOPs, KPIs, and VOC collection/action plans in your service agreements and contracts.

3. Apply constant vigilance to monitor third parties’ performance using customer feedback and their social commentary, constantly searching for best practice.

4. Share among your third party partners their relative performance. There’s nothing like healthy competition! Many companies that I know practice the “champion/challenger” model with the champion managing core business and the challenger supporting a smaller percentage, both with incentives and penalties that might switch their roles.

5. Like the English Premier League you should lop off the lowest performers at least once a year, and follow contractual agreements to cancel for cause any egregious abrogation of SOPs. You might want to allow a “cure period” but in some cases, like my personal case, one mistake might suffice to cancel, or at least place on hold, the third party’s ability to work with you.

1. The Best Service is No Service: Liberating Your Customers From Customer Service, Keep Them Happy, and Control Costs (Wiley 2008). There are 7 Principles of Best Service:

  1. Eliminate dumb contacts
  2. Create engaging self-service
  3. Be proactive
  4. Make it easy to contact your company
  5. Own the actions across the company
  6. Listen and act
  7. Deliver great service experiences

2. Your Customer Rules! Delivering the Me2B Experiences That Today’s Customers Demand (Wiley 2015). Here are the 7 Customer Needs that lead to a winning Me2B culture, breaking down into 39 sub-needs:

  1. “You know me, you remember me”
  2. “You give me choices”
  3. “You make it easy for me”
  4. “You value me”
  5. “You trust me”
  6. “You surprise me with stuff that I can’t imagine”
  7. “You help me better, you help me do more”

3. Sub-need under “You make it easy for me”.

4. Sub-need under “You value me”.

5. Sub-need under “You surprise me with stuff that I can’t imagine”.

Bill Price

Bill Price is the President of Driva Solutions (a customer service and customer experience consultancy), an Advisor to Antuit, co-founded the LimeBridge Global Alliance, chairs the Global Operations Council, teaches at the University of Washington and Stanford MBA programs, and is the lead author of The Best Service is No Service and Your Customer Rules! Bill served as's first Global VP of Customer Service and held senior positions at MCI, ACP, and McKinsey. Bill graduated from Dartmouth (BA) and Stanford (MBA).


  1. Shame you dont have over there Bill – they have great overnight, order and fit service. Interestingly they bought out the delivery company I believe. We just had a great one with ordering a bed off a large retailer …..their partners don’t deliver upstairs so they left it in the lounge!!

  2. Peter — Thanks for the lead! Most companies get it right, it’s the “outliers” (of course) that create the friction.

  3. Your rules for managing third-party suppliers would apply, as well, for any aspect of the customer experience. Case in point: “Dell Hell”, when Dell found that their subpar outsourced customer service (mostly to India) was undermining their brand perception and customer loyalty level. In that instance, Dell was forced to bring customer service back inside (also bringing Michael Dell back to the helm). One side benefit of the challenge associated with resetting the customer experience is that Dell opened up online direct, interactive communication between company employees and customers. Your Me2B rules. then, also work for the service portion of customer experience.

  4. Part of managing third-party providers involves risk analysis. It belongs somewhere around item #1 on your list. (Expectedly, I’d emphasize it before and after, since my company provides risk management services.)

    Had “BigBox” performed scenario testing on their cobbled collection of insourcing and outsourcing, they would have discovered more than a few of the failure points that you uncovered for them as a customer. The process for exposing risks is not unlike quality testing for a software application: Identify common scenarios, stress-test the system for funky stuff that happens along the way, and fix the choke points. Repeat until the proper service level has been assured.

  5. Couldn’t agree more with Michael and with Andy. Outsourcing companies often suffer 125% agent attrition per year, so scenario testing can help pinpoint failure points with them and with other 3rd-party partners. Key of course is whether the relationship, governance, and contracting truly supports a “partnership” instead of an arms-length (or even less direct) “vendor” situation.


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