Stopped by our local East Side Mario’s for dinner the other night. It was a nice night and since it was mid-week the restaurant wasn’t too busy, so we decided to sit on the patio. However, when we asked the hostess to be seated outside we were told that it would be 15 – 20 minutes before we could be seated. However, we could be seated immediately if we wanted to sit inside.

When I asked why we couldn’t be seated outside immediately — since approximately 50% of the tables were open — we were told that there wasn’t enough staff scheduled on the patio to serve more tables.

My Perspective: If there were enough staff in the restaurant to serve the total number of customers — then why couldn’t they simply reallocate some of the inside staff to serve outside on the patio?

It was such a nice night outside that people wanted to enjoy the evening. In fact people were waiting for tables — while servers inside stood around since their tables weren’t full.

My guess is that staff had been scheduled to stations in advance and that no one either had the authority or the initiative to adjust the staffing arrangement to address the customer desire as a result of the weather. Seemed kind of a no-brainer to the customer — but if the management hasn’t built in this type of flexibility then they will often be faced with disgruntled customers who can’t understand why there are silly rules preventing them from achieving their desired outcomes.

Is there any rules in  your business that seem silly to the customer — even though they make sense to you?

Have a look at your processes through the eyes of the customer and see if you see any areas for adjustment that can increase your opportunity to delight your customers. If you can’t see any holes — ask someone who doesn’t work in the business to have a look. They might see something you miss because they see things through fresh eyes.

Last week, Audi Canada lost a customer.

The customer currently has a 2009 A3 and 2007 A4 in their garage and was considering a Q5 for their next new vehicle. They also lost the brother-in-law of that customer who drives a Q7.

Plus there is all of the friends and family that will hear the story that I am about to tell you.

It seems that Audi decided that saving $1,000 — the cost to repair a leather driver seat in a 4 year old A4 — is a better financial decision that investing in the good will to stand behind their product and keep a customer loyal.

Back in 2007, when this customer was considering a new vehicle, the decision was between BMW, Lexus and Audi. The customer had been driving BMW’s since the 80′s and still had a 1990 BMW 325 convertible — which he loved to drive. But it was time for a new car for his wife. The final decision came down to the BMW, which they had a great family history with and the Audi A4.

One of the key tipping points for the Audi was the leather seats — you see BMW had started to use leatherette in the lower end models. The costs of similar vehicles were very close, but the leather seats just stuck in their minds as “going cheap”. In the end they liked the sales rep and they purchased the Audi.

They told all their family and friends about the experience with Audi and the brother-in-law also purchased a Audi Q7 when they replaced their Lincoln Navigator.

Fast forward to 2009, and the original customer needed another new vehicle. Since the sales rep was very good and the A4 was running beautifully, they decided to get an A3. There was no shopping around this time — since they now had an established relationship with Audi and the local dealership/sales rep. They were more than “satisfied”–  they were now “loyal”.

However, this past week, the wife — who was the main driver of the A4 — noticed a crack in the “leather” of the driver’s seat. The dealership was approached about this issue and they agreed that a crack of this nature was unacceptable and agreed to ask Audi Canada for some assistance although the car was no longer under warranty. After all, they were good customers who already had 2 Audi vehicles and had been bringing all their service work to the dealership (which is where the dollars are made in the car industry).

Much to their surprise, Audi Canada refused any assistance. The car was out of warranty — “too bad so sad”.

However, in an effort to salvage the deteriorating situation, the dealership offered to absorb the cost of the labour ($480) if the customer would pay the cost for the new seat cover from Audi Canada ($580). The dealership also advised the customer that if they called Audi Canada directly and complained that Audi Canada may back down and pay part or all of the claim — because the customer refused to go away.

My Perspective: Audi Canada needs to re-think their customer service policy.

They are throwing away hundreds of thousands of dollars of sales to save thousands of dollars. Their cost benefit analysis is broken.

They have turned a loyal advocate into a vocal critic who is now telling everyone who will listen to not buy Audi’s because they have cheap leather seats and refuse to stand behind poor workmanship in their vehicles.

How much smarter to look after this customer and then ask for a recommendation.

Are you looking at the short term value of a transaction against the long term value of a customer?

Do you know the long term value of a customer? What about their value as an ambassador of your organization based on the number of people they influence who might use your product or service based on their recommendation?

If you are not clear on the number, make sure you think then through. Then make sure you are making decisions for the long term vs. simply the short term.

Postscript: That customer in this story was me and will now be shared with thousands of people as a great story to illustrate my message of building long-term, profitable relationships with customers when I speak at conventions and conference across North America. Hopefully I will see you at one soon

Recently I had the occasion to visit my local Best Buy. While I was there for one purpose I decided to have a look at some of the new tablets. A very helpful young man came and provided me with excellent information about the various features and benefits to the different offerings. I wasn’t interested in purchasing that day, so I thanked him and went on my way with my other purchases.

When I went to pay, I asked if I could provide a positive comment about one of the staff who had been so helpful.

The answer was that in order to provide feedback — either positive of negative — I needed to visit their website. When I explained that I wasn’t interested in filling out a survey — I simply wanted to pass on a compliment to a manager for a job well done by a staff member — I was told they were not set up to receive comments at the store level. Of course, I could have requested that I speak with a manager or a supervisor, but it wasn’t worth my trouble.

My Perspective: It would appear that Best Buy isn’t really interested in hearing feedback.

Sure, they have a form on a website where they can track comments, but how many people never take the time to go to a website. How many times have you gone to the website on a receipt to provide comments? Too many people see this as a barrier and an inconvenience.

However, you can be sure that many people who won’t make the time to provide feedback through a website are very quick to share their experience with friends — particularly if it is a negative experience. But the organization will never hear their comments — or have the opportunity to benefit from that feedback.

So if you really want feedback, make sure it is easy to provide for the customer — not just set up so it is easy to track by the company.

This system was set up thinking about the organization — not the customer.

Review your process for soliciting feedback and ask whether it is serving the customer — or just more convenient for you.

I was recently alerted to this communications from Zappos Canada. As many of you know, Zappos is often referred to as a gold standard in customer experience and this is one of the reasons why.

Hey, everyone. While we often have fun things to talk about in this space, we sometimes have less pleasant topics to share.

We have made the difficult decision to shut down the canada.zappos.com site and stop shipping to Canada. One of our core values is to “deliver WOW through service”. That means the best selection of brands and products that can meet just about every individual’s needs as well as fast, free shipping and free returns, all at competitive pricing. Our Canadian customers know that we have not lived up to these service levels.

Product selection on canada.zappos.com is limited due to distribution agreements with the brands we sell in the United States. In addition, we have struggled with general uncertainty and unpredictability of delivering orders to our Canadian customers given customs and other logistics constraints.

We would like to thank our loyal Canadian customers and are sorry that we will not be able to serve you in the same way. Beginning April 1, 2011, we will no longer ship orders from canada.zappos.com. Some of you may have electronic certificates with open balances. If that is the case, please be sure to redeem them prior to April 1, 2011. Of course, as always, we will still be accepting your orders placed from Canada and shipping to US addresses on www.zappos.com. Customers can always reach us 24/7 by calling 1-800-927-7671 or emailing cs@zappos.com.

Thank you for reading this. While you may not like our decision, we hope you understand the reasons.

Chris Nielsen
CFO, COO
Zappos.com, Inc.

My Perspective: Zappos has clearly established a very high standard for their  customer experience. They decided that because they cannot achieve this standard in Canada they must change their operating procedure to ensure the integrity of their brand promise is not compromised.

They are still willing to provide service to their Canadian customers — but now they will be served as international customers, according to international standards.

They explained their reasoning clearly and without apology — making sure that it was understood that it was their service promise to “deliver WOW through service” that was potentially being compromised — which they weren’t prepared to do.

Based on a survey of 1 — the person who informed me of this change — their service was historically very good (good selection, shipping in 2-3 days) and they were more than happy with that service level. However, they were even more impressed that Zappos took the position they did. They plan to still shop at Zappos.com (with more selection and maybe longer shipping) and are fine with the international standards.

As a result of the way Zappos handled this transition, customer loyalty was increased — even while the service level was decreased.

Zappos remained true to their core values. Honesty. Commitment to core values. Key building blocks in building strong loyal customer relationships.

Bravo Zappos. You “delivered a WOW through service” even in this circumstance.

Customers expect a certain level of service at all times and are naturally happy when they receive it and can easily become disgruntled when they don’t.

Take the example of a customer returning to their local hardware store because a doorbell they had purchased had stopped working — probably just after the warranty expired

The customer went to purchase a new doorbell but also took the old one and the original receipt along to see if there was any chance of getting a replacement. After all, it hadn’t been that long since they had purchased the doorbell.

The customer explained the situation in the store — although they recognized that the sales rep probably wouldn’t be able to do anything about the broken doorbell.

However, the sales rep recognized the customer was a regular and got a replacement, issued a replacement receipt but declined to take any money from the surprised, yet grateful customer.

My Perspective: That team member wisely displayed initiative in allowing the rules to be bent a little for a loyal customer. They recognized the long term value of a loyal customer against the cost of the replacement doorbell.

It’s essential that your team has the flexibility to display such initiative on occasions when it’s appropriate. It creates delighted customers and the loyalty is priceless.

As a bonus, the customer wrote a letter to the manager complimenting the sales rep on the excellent service and attitude. Any manager that receives a complimentary letter like that knows their staff is putting the customer’s interests first.

For the small cost of a doorbell, they generated positive word of mouth advertising and inspired greater customer loyalty.