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Opportunity has a name. It’s Karen.

There are two ways to see a customer with a problem. How you see that customer will ultimately determine the success of your business. In the over 30 years I have been observing customer service, I have noticed a trend—businesses that see customers who have a problem, as a problem almost always fail. Conversely businesses who see customers with a problem as a golden opportunity almost always succeed.

When I was in high school, I worked at Starbucks one summer. As a young barista, I was taught to “Develop enthusiastically satisfied customers all of the time”—that meant, that when a customer had a problem, I was empowered to not just make it right, but to go above and beyond to make sure that they were not only satisfied with the solution I provided, but that they were ecstatic. One morning at the store there was a coffee keg delivered cold. The customer was a regular, and she was the executive assistant to the CEO of a prominent corporation that was based three blocks away. She came in several times a day with coffee orders and all of us knew her by name. She had ordered a 100 cup coffee service for this extremely important meeting, but due to a problem the heating element in one of our brewers, the coffee came out luke-warm. The meeting had a 7am start, and there was bad coffee. When she called you could hear the panic in her voice. We offered not just to refund the coffee, but to make whatever drinks everyone in that meeting wanted, and we would deliver them to the office free of charge. We made 43 specialty coffee drinks, and 9 drip coffees… and we made our customer a hero to her team.

Over the summer that I worked at that store, I heard that customer retell that story at least a dozen times. She would introduce me and my colleague as “the guys that saved the day”. If I heard her tell that story a dozen times, I bet she actually told that story hundreds of other times when I wasn’t around. What started off as our mistake may have cost the company a couple of hundred dollars to make right… but that investment in that customer has probably returned tens or hundreds of thousands of dollars in profit over the past thirty years. They saw that moment of panic for the customer as a moment of opportunity to create a customer for life in the woman with a problem. Our store was both trained and empowered when she called with a problem, not to try to find a way of blaming her, but to immediately go far above expectation to not only solve her problem, but to solve it in such a way that the outcome was better than if the problem had never happened to begin with.

Starbucks went public that June, and the rise of their stock price was so rapid, by December the stock had split. 28 years later there have been thousands of articles and several books about Starbucks success.

Not all companies see customer service that way. I recently had a problem with AT&T Wireless. I was getting too many work calls on my personal cell phone, and wanted to be able to build some work life balance. I went into a corporate AT&T store and bought, like I always do, the latest iPhone, with the most memory. They set up the phone for me while I waited, but I noticed while I was leaving that I couldn’t record a greeting on the visual voicemail. Something seemed wrong, but the clerk assured me that it would be working “in a few hours”, to just be patient. It wasn’t. I went back to the store. No one could figure it out. I was directed to call customer care (which always involved at least 60 minutes on hold). Customer care had me try a couple of dozen different solutions over the course of the next 18 months. Literally 18 months. For 18 months I couldn’t use the phone, because the whole purpose for having the phone was to have a voicemail for work calls that wouldn’t disturb me while I spent time with my family and friends in the evening and on weekends. 

Finally a specialist from Apple took on my case and found that the voicemail had been set up incorrectly, and he needed to destroy my account and rebuild it from scratch. He had never seen such an insane situation, and offered to put in for a credit equal to the 18 months of service, and the depreciation on the value of my phone, all told $2800. I didn’t ask. They offered. It wouldn’t pay for the literally hundreds of hours I had spent trying to get the problem solved, but I appreciated that they were at least willing to eat the cost of the service I had paid for but was unable to use. Two months passed and I didn’t see the credit come through to my account. I called to ask about it. (Another hour on hold) When I finally got through, the customer service rep said “Oh, yeah, they denied it. Wow that’s ridiculous. That rep that put the request in, wow, they were stupid. They should have known that that would never have gotten approved. Nobody approves a number like that.

I tried to explain the situation, and they said that no one in the company would be authorized to give a credit that large, that he could offer me $5/mo towards my bill for the next 18 months. Five dollars?! I wanted to tell him where he could shove that five dollars, but instead I said “surely someone could authorize more than that. I had a line I was paying for that didn’t work for a year and a half!” He said, “No there’s no-one. I’m the highest tier of customer care. I’m a manager in the customer retention department. Sorry, but this is all I’d be authorized do.” Wow…

I had been an AT&T customer for over 20 years, I started with Cingular, and always had the best plan and the best phone. I auto-debit my bill, always paid on time, upgraded my phones as early as I could, and always re-upped my plan—I’m the kind of customer every company dreams of. Over the years I had forgiven a lot, but 18 months of a phone that didn’t work, broken promises, and then adding insult to injury? Nope. I was done. I asked friends who had switched who had the best service. Everyone said T-Mobile was exceptional, so we switched. The experience was worlds different than AT&T. We worked with the manager of the T-Mobile store, and guess what? He was ACTUALLY EMPOWERED TO HELP. We have a corporate account, and though they didn’t offer the highest-end iPhone, he worked it out with his corporate team to get us the exact phones we wanted. When I have had questions about our service, and have needed to adjust our plans—I just call him. Since switching, I have recommended T-Mobile to at least 20 of my friends who have also left AT&T.

Over the past five years AT&T’s stock has lost 1/2 it’s value, conversely T-Mobile has tripled in value.

With smaller businesses I have have seen the same rules apply. A few months ago I tripped and damaged a very expensive pair of Christian Louboutin sneakers a client had bought for me as a thank you gift. When I fell, I knew the sneakers had gotten banged up and I didn’t even want to look. The sneakers are gold leather with shiny gold spikes and pony hair dyed in a cheetah print. They are over the top, and I knew my client had paid almost $1300 for them at Bergdorf Goodman in New York.

When I looked down I saw three spikes had broken off. I was devastated. I called Bergdorf Goodman to see if they could recommend a place to get them repaired. After about a half hour going through a very confusing voice menu, and then being on hold, I spoke to an employee in their shoe department who told me, “we don’t do repairs.” I said “oh, I wasn’t expecting you to repair the shoes, I was just looking for a recommendation.” He said “Yeah, I don’t know, we don’t do repairs.” I asked if he could maybe ask someone else in the department to see if maybe they knew. He replied, “Ya, no, I’m the only one around.”

Then I thought I’d see if I could find a number for the Christian Louboutin offices in Paris. To my surprise, they had North American offices in New York. It was 2:30 Pacific Time, 5:30 in New York, but I figured I’d try, at least I might be able to leave a message. I called and a wonderful woman named Eleni answered. She asked how she could help me, and I told her what happened. I told her about the fall and the damage to the shoes and asked if she could possibly help me getting the damaged spikes replaced. When I finished she said “Oh my gosh. I am so sorry. I can imagine how you felt, my stomach would have just dropped and I would have probably just started crying. I’m so sorry that happened to you.”

I immediately felt better. She asked me to take a couple of pictures of the shoes and the damage and just text them to her, so she’d get the pictures while we were on the phone. I did. Then she asked for my address and phone number, and told me she’d check if they had any of those spikes in stock. We got off the phone around 6pm New York time, and I figured she’d call me back to get my credit card info maybe the next day, as it was getting late on the east coast.

The next morning I went to go get coffee for my wife. I got back home at 7:45am. As I was getting out of the car, a UPS truck pulled up with a package for me. It was from Christian Louboutin! Eleni had sent my replacement spikes free of charge, via UPS Earliest AM. 

Inside there was a note, again telling me how sorry she was that this had happened, with a small branded pouch, and not three, but 15 gold spikes, should I ever have need in the future. There wasn’t a bill, just a note. I couldn’t believe it. Eleni had met me in a moment of need, when I was embarrassed, when I was regretful, and she turned it around. I replaced the spikes, and my prized sneakers looked like new again. I realized that because of Eleni, I actually appreciated my sneakers MORE than if they had never gotten damaged to begin with. And not only that, but my relationship with the company had become personal… I thought “Maybe I should buy my wife a sexy little pair of red-bottomed heels.”

When a customer is having a problem, it’s a company’s best opportunity to win them as a customer for life. Instead of thinking of them as a “Karen”, as a problem for you, Think of the life-time value of the relationship. When a customer reaches out, it’s because they need help. Instead of looking at them as an inconvenience, realize that it’s an honor, that they are inviting you into a vulnerable place in their lives, and there is an opportunity for you to be a hero to them. For many companies, customer acquisition costs number several hundred dollars per customer, and even with that output there is no guarantee, and no opportunity to really personally engage one-on-one. Customer service issues are the greatest opportunity you have as a business to win a customer for life, and most of the time the cost is far less than average customer acquisition costs, but the money is much better spent.

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