Wednesday, May 13, 2015

Bad Business Practices Alienate Customers and Provide a Fast Track to the Bottom of the Barrel

Most companies work very hard to acquire and retain customers.  It puzzles me when business practices perpetuate lack of trust and contribute to customer attrition.  There is one particular company that is notorious for such practices as noted by the Better Business Bureau, Consumer Reports and Consumer Affairs sites.  It’s hard to believe this company is more than a century old and continues to stay in business with their approach to sales and customers.  I won’t call them out by name, but I will call out their bad business practices to educate others. 

The Do NOT Do’ List:

  • Bait & Switch Sales:  If customers proactively seek out your service and spend time on the phone with your sales rep, have the decency to honor the agreed upon service package.
      • Customers agree to a monthly fee and set-up charges in advance.  They don’t want to be taken off guard when the person that comes into their home to do the installation ultimately provides paperwork for much more expensive services and equipment.  Bad practice.
  • Disguise sales people as “technicians”:  Once a customer agrees to a service package over the phone, they have expectations the technician they are about to allow into their home is there to actually do a successful installation. 
    • Hiding the fact the technician is actually a sales person on commission is misleading.  This type of technician is incompetent to complete the installation successfully because their primary goal and motivation is to upsell above and beyond what the customer had already signed up for.  This is where trust dissipates and customers feel duped. 
    • New customers believe they are buying into a monthly subscription package and suddenly they are presented with $4k-$5k of additional services and equipment.  The fact the ‘technician’ says the “investment in the home” is interest free for 4 months, does not help.  Customers can blatantly say no, but it’s not easy to do.  There is a hard sell from the technician. They use fear tactics to get you to move forward and sign on the dotted line. Bad practice.
  • Misconstrue installation timeframes.  It is very deceiving to tell new customers a 2-hour window is required for the technician to do the work, when the reality turns into double, triple or even quadruple the timeframe without any approval from the customer. 
    • I had a personal experience with the installation not being completed within the 2-hour timeframe. When I asked the “technician” for an ETA for when he would be done, he responded it would likely be another 2-3 hours.  I was shocked and inquired why he hadn’t clarified with me the total time it would take to complete the installation. He just shrugged his shoulders.  As a new customer I went from being annoyed to extremely frustrated.  Plus the service still wasn’t operating properly after 5 hours. Bad practice.
  • Have technicians leave before the system is fully functional.  It’s too easy for the technician to point fingers at your DSL or Cable provider to say the reason why the system isn’t functioning is due to “blocked ports” with your Internet service provider’s router.  Now the burden is placed on the customer to contact the Internet service provider to resolve the blocked port issue. 
    • Typically the customer simply needs to lower the security level of their firewall to open more ports.  You don’t need the help of your Internet service provider to do so; you just log into your account and change the security settings. 
    • The customer then calls back technical support to schedule another visit to finish the installation and low and behold – there isn’t another opening for a week or two (or longer).  The delay for the next appointment moves the customer outside the 72-hour cancellation window – and now the company has the customer hostage. Bad practice.

  • Provide a pile of paperwork in triplicate and have the technician say “initial here” and “sign here” as they quickly pass the papers in front of you.
    • This practice seals the deal on deception. The technician doesn’t want you to read what’s actually in the contract and fine print.  Unless you purposely tell them you would like to review the paperwork before signing, they expect you to simply follow their instructions to initial and sign. Customer beware! Don’t do it. 
    • You have no idea what you are agreeing to and how long of a contract you will be locked into.  Take the time, even if the technician doesn’t have the time, to review each piece of paper you have to put your signature and initials on. Otherwise, you will regret it.  The BBB, Consumer Reports and other agencies can’t help you if you signed your life away and didn’t try to cancel within the designated timeframe (typically 72 hours). Customers do not like to be coerced or embarrassed into blindly signing documents.  Bad practice.

  • Provide an “incentive” with a catch.  Watch out for the wolf in sheep’s clothing also known as the reward for you to become a new customer.  It’s not always exactly what it seems.
    • For example, a $100 Visa Gift card is frequently used by many service providers as a means to get you sign up today.  “Act now – and get this incentive.”  Read the fine print.  Typically it takes 4-8 weeks for you to receive it in the mail and that’s only if you follow the instructions completely. Any failure of requirements to receive the reward, forfeits the reward.  You need a copy of the original ‘reward certificate’, you need a copy of your service agreement, and typically you need a cashier’s check or money order for $4.95 (or more) to cover “shipping and handling” of your free gift card.  This seems ludicrous.
    • In addition, you need to send everything in by a specified date, or you also forfeit the gift card.  I don’t know about you, but long delays and jumping through hoops to submit materials is an inconvenient way to ‘reward’ customers for their business.
    • Companies realize that many new customers will not submit at all.  Those who do submit will likely misread the requirements and forfeit the free gift.  That’s money back in their pocket.  Bad practice.
  • Make it difficult to cancel the subscription.  Why not a simple click of a button on the company’s website to “cancel now”?  Why the hard copy paperwork that needs to be mailed or faxed by a certain date (typically within 72 hours)?  Now the burden is on the customer to see how the company will handle the submission of the Cancellation Notice and that their refund will actually happen.  Bad practice.
    • Complete your due diligence in this scenario.  If you choose to cancel by Fax, do so at a service center that will provide you with a transaction report confirming a successful transmission of your notice.  I personally went to FedEx/Kinko’s to use their coversheet, as well as their transaction report to verify the fax successfully transmitted.  Also, I kept the cash register receipt showing payment for the fax.  Evidence is key to prove the cancellation was submitted in a timely fashion.  A 3rd party Fax service is your best bet for proof of transmission. 
How can a company performing the above bad practices, turn things around?

  • Be Honest.  The only way for a customer to trust you, is if you earn it.  Stop the sleazy sales tactics and be open and transparent with your potential and existing customers. 
  • Build profitable and long-term relationships with your customers.  If you do this right, you won’t have to use sleazy sales tactics or trick your customers and hold them as hostages due to legalese in a mound of paperwork.  
  • Provide Incentives without a Catch.  The best way to delight a new customer is to kick-start the relationship with a reward that is easy to obtain.  Asking new customers to perform cartwheels and backflips to receive their incentive 1-2 months from now is not much of a reward.  If you surprise and delight your customers, you will have loyal customers.
  • Hire the right Call Center Staff.  Hire top-notch and motivated employees who want to provide peace of mind for customers by offering services with the right value proposition for them.  The key emphasis is “what is right for the customer” not what is right for the employee to sell based on commission rates.
  • Hire technical technicians not quasi-sales reps. The technicians are the first face-to-face experience your customer will have with your company. You want the best foot forward, the right image, and the ability to convey trust.  Provide training so the technicians can get in and out of the home in a timely fashion.  Also, have them communicate and obtain approval from the customer regarding that timeframe.  Ensure the system is up and running and walk the new customer through the system.  Provide empathy regarding the learning curve the customer will have to get used to the system.  Provide true customer service in the moment.  Everyone is happy in the end.
  • Allow customers to leave if they choose to.  It’s not the end of the world if a customer decides the service is no longer right for them. But if you did all of the above right, and they still want to leave, make the exit process painless.  Why?  Because if they had a good experience working with your company from start to finish, and the service was excellent, they can still be an advocate for your business and send you referrals.
The key to sustainability: loyal customers who share their experiences with others. 

Companies using bad business practices should also focus on Talent Acquisition: 
--Hire the right talent who will always represent the core values of the company.
--Train talent to do their job well.
--Reward talent for a job well done.






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