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July 31, 2008

As if to make my point for me about the differences in customer service between the US and Japan that I made in my recent journal entry, a query appeared on the On Your Side community page.

David wrote that he’d purchased a new Mitsubishi widescreen TV from Circuit City.  When he opened up the box at home it, the front of the set appeared damaged.  The short version of David’s long ordeal is that when he took the set back to the store to have them look at it… and hopefully provide him with an undamaged set… he was all but ignored. They refused to acknowledge they had provided him with a damaged unit.

David appealed to the store, the company, the manufacturer… and to “On Your Side.”  I’d be very happy to say that we’d been able to straighten this out for him. Alas not.  However, he was taken care of. Not by the American retailer, but by the Japanese manufacturer, the party least responsible for a set broken during shipping or delivery.

Why would a manufacturer decide to fix David’s set free-of-charge even though they clearly had no liability for the damage? The maker of the set wasn’t even a factor in David’s complaint.  There is only one possible answer, Mitsubishi acted in the name of good customer service and long-term reputation building.

While Circuit City’s store manager may have been concerned about his quarterly bottom-line, someone at the factory decided that one unhappy customer wasn’t worth damaging their reputation. 

I receive hundreds of complaints every month regarding domestic retailers and service providers that hard-ball customers over relatively small amounts of money, totally oblivious to the long-term consequences of creating activist adversaries.  Populist capitalist Dale Carnegie wrote the equation more than eighty years ago that every dissatisfied customer is going to tell his story at least ten times. My experience with Japanese retailers is that they realize that it’s better for the bottom line to take care of the customer than to suffer their enmity. The question is then, why aren’t American companies seeing this same equation?

The answer is that we are looking short-term. The Circuit City store manager is worried about this month’s figures—not next year’s. (He might not even be with the company by that time.)  This is a disservice to the company and to its owners, the stockholders, who will suffer the consequences of this management myopia a few fiscal quarters down the pike.

American companies also have the irrational belief that if they make an exception for one customer that every other customer will be banging on the doors for the same deal. Hey, I’ve got news for you. If you’ve got so many unhappy customers that you have to worry about them bolting because you treated one guy fairly… you’ve got much bigger problems on your hands!  The myth of the legions of customers waiting to return items is absurd. When we buy something, each of us hopes we’ve made a wise decision.  We aren’t looking to turn around the next day and return the item. Unless, of course, the item isn’t what was promised or doesn’t work properly. In that case, we’re due a replacement or refund, regardless of any precedent.

How do we get off this merry-go-round of poor customer service and short term management?  I’ll deal with that in a later post.

(NOTE: In the interest of fair disclosure, I gave Circuit City high marks for customer service in my book, “UNSCREWED: The Consumer’s Guide to Getting What You Paid For.” Which just goes to show, even good companies can go wrong.)