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Cape Town - In a world where customers are becoming ever more demanding even while competitive rivalry heats up, companies simply cannot afford to be seen as bullying and abusing their customers – even when customers are wrong.
This is the advice from Leadership LaunchPad founder Aki Kalliatakis after Cell C and FNB found themselves on the wrong side of consumer activists.
READ: Why Cell C got it all wrong
READ: FNB responds to anti-brand customer
“When the knowledge of what happens becomes public, millions of emotional customers resent the perceived bullying of the powerless Davids by the powerful Goliaths, and will always root for the customers that they have so much in common with,” he told Fin24.
“The worst is that companies pay a high price for this,” he said. “Not only do they get a whole lot of really poor publicity and negative word of mouth, but they lose the current and future business of customers who are determined to fight back.
“Their marketing and sales efforts are treated with disdain and cynicism, not only by current customers, but also future customers who may have considered doing business with the firm.”
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“The company then needs to offer increasingly better offers and dramatically lower prices to attract lost customers and retain those that are there,” he said. “Customers seem to be sabotaging, damaging and threatening to sue the business around every corner.”
“Staff are abused, morale and motivation take a dive, and the job of managing your team becomes ever more difficult,” he said. “These businesses become very vulnerable to competitors making seemingly better offers – especially in service experiences. And, of course, it costs a lot of money to investigate what went wrong and offer the customer’s compensation.”
“This is enormously expensive. In one famous American case study, an irate customer, Dave Carroll, from the band Sons of Maxwell, wrote and published a song ‘United Breaks Guitars’, after a negative experience with the airline.”
“Apart from the media frenzy and the fact that more than 16 million people watched his music video on YouTube, the company’s share price dropped and, almost overnight, the market capitalisation dropped by $180m,” he said. “It has never recovered.”
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“So what can a business do to avoid these disasters? There are probably five critical and immediate responses that need to happen to separate the irate customer from their audience.”
They are:
- A sense of urgency is essential: the sooner we get the customer calm and rational, the sooner we can start to solve the problem.
- Show care and empathy. This is not the time for egos the size of Mount Everest. Humbling oneself needs to be easy – something that driven and ambitious executives find impossible.
- Customers also want to hear that the company understands the rippling effects to them. Show that you understand the implications of this in their lives.
- Apologise, and thank the customer for giving your business a chance to sort it out.
- You cannot not solve the problem. Many businesses are reluctant to sort out the customer’s issue because it will be “expensive.” The Cell C short-sighted response is thousands times more expensive.
Watch:
- Fin24
