MARKETING STRATEGIES: How do you handle a problem or mistake?

I have often heard that our reputation in business is not based on how well we execute but on how we handle mistakes. Without doubt there is some truth in this saying. Recall all the experiences you have had with good restaurants, but the ones you remember best are the ones who went the extra mile when there was a mistake.

Example: Aluminum Sliding Doors

I decided to replace the front sliding doors on my apartment balcony. The original design had a fixed panel on each end and in the middle with a sliding door on each side of the fixed central panel. The new doors were six panels in all with a fixed panel on each end with two doors on each side opening from the centre. With the four sliding doors fully opened it “brought the outside into the living room”.

Due to body corporate rules, it was easier to work with the approved supplier than find an alternative and gain permission for the work. The supplier promptly sent over an estimator who measured the space and submitted a quotation which I accepted. The timescale was tight as I had other work being done before we moved in but they worked to the deadline and installed on time.

A crew of four turned up early one morning intending to compete the work in one day so the apartment would be secured by the end of the same day. A few hours into the installation, I noted that several of the door vertical frames were somewhat unfamiliar – they had a thin brush inserted into the frame – the sort of thing you find on the inside but I had never seen them on the outside. When I queried this, I was told this was the new design and that no other design was available. I pointed out that no other sliding doors in the apartment had this feature and that I wanted them to stop work and arrange for replacement parts to match the existing doors. They insisted that they were correct in what they were doing and would report my comments when they had finished the installation and secured the premises. They told me that their supervisor would contact me to respond to my request.

I rang the supervisor at the local branch and left a message requesting an urgent conference but did not hear anything from him. I then wrote an email detailing my objection and requesting that the frames be replaced. Several days later I received and email admitting a data entry error and an agreement to replace the doors, which they subsequently did several days later. However, the installers left such a dirty mess that it was a significant cleaning job.

When I received the invoice, I sent an email to the supervisor requesting a discount for the extra time and expense I had expended and the stress of having to convince them that they had installed the wrong product. I was told in a reply that “I had requested the change from their standard product at great expense to the supplier and that no discount would be given”. Basically, having been told that they made an error, I was now being told that it was my fault. I was also told that it was not their responsibility to clean up after the installation.

I thought this was worth a letter of complaint to their Managing Director. This is a private national family firm of some considerable size, even so, I received a phone call from the MD to say the issue would be investigated and they would get back to me. About two weeks later I received a phone call from a senior branch manager who wanted to know “What value did I put on my complaint?” I asked to discuss my issues to which he said “What issues?” I stated that these were set out in my letter to the MD. He didn’t have a copy of the letter nor was he familiar with its contents. He asked me to send him a copy – to which I replied that he should obtain it from his MD.

Two weeks later, I still had no response so I again wrote to the MD. This time I received a three page letter setting out the issues and giving their response but with contradictory information. The letter began by stating that, because the products were now of the required configuration and were installed and working correctly, they had now fully met my expectation.

WRONG. He could not have started off the letter in a worse manner.

The letter then proceeded to justify everything they had done to satisfy me. No apology was made for putting me through the stress on the day when they insisted they had the correct configuration or for telling me it was my fault. Basically it was a cover up. Naturally I replied by saying it was time that I met the MD and worked through all the issues associated with my appalling “customer experience”. Finally, I did get that meeting. The result was that the firm offered to fix any outstanding problems with the original installation and undertake a number of free maintenance jobs on other doors and windows in the apartment. A satisfactory outcome but a difficult journey.

This story demonstrates how little staff within a company appreciate the impact of every contact you have with their firm. Would I recommend the firm to anyone else? Most likely not. However, they do have very good designs and the product works very well, but could you get something similar from someone else? Would you wish this experience on anyone? I don’t think so.

Few firms expect to execute well 100% of the time. Whether a mistake or fault was the result of an accident, incompetence, intentional sabotage, poor or incomplete processes or simple oversight, situations will occur where the customer will be unhappy. How you handle the situation will certainly be reflected in what people say about you. Negative comments will in the end impact on your future sales.

There are some companies who will never admit a mistake no matter what the circumstances. Others will do everything they can to avoid admitting a mistake until confronted with overwhelming evidence. Some have an “I win/you lose” attitude which they apply to their external relationships but which often permeates through their internal staff relations.

While we need to be sensitive to opening the door to litigation, few companies can afford to neglect the impact of customer complaints, whatever the cause. In fact, many companies see complaint handling as a key feedback process which assists them to uncover process deficiencies and poor staff training.

Complaints which are not dealt with efficiently, with compassion, sensitivity and empathy for the impact on the customer are likely to escalate in impact, especially where the customer believes they have been unfairly treated. The aggrieved customer is likely to tell their friends of their treatment but may also post comments on social media sites. A small problem can turn into a raging inferno, all because of the lack of goodwill on the part of the vendor or an efficient system to handle the problem.

Without question, those situations where the customer is blamed for the error, the firm covers up their own mistakes or avoids dealing with the issue, are remembered and talked about far more than situations where a complaint was resolved quickly to the satisfaction of the customer.

Some customers are going to be difficult, unreasonable and irrational and some will use the mistake or fault to try to extract an unreasonable level of compensation. Even these situations need to be dealt with in a systematic manner which ensures that the firm can fully defend its position in the public arena. It needs to show that its handling of the matter was reasonable, its offer generous relative to the mistake and its processes fair to the parties involved.

We need to ensure we capture these situations quickly and have a process to deal with them efficiently. A problem left untreated only gets worse. Not all customers want or expect compensation for minor mistakes or accidents, but they do usually want a chance to be heard. In fact, the best way to deal with problems is often to allow that to happen in a sympathetic and efficient manner. An apology or an admission of a mistake or fault may be all that is required to satisfy the customer. Providing a facility or opportunity for customers to voice their issues is thus a fundamental part of the complaint handling process.

It is also important to deal with any problem as a matter of importance and not have it shuffled off to a junior staff member. When it becomes obvious to the customer that their complaint is being marginalised or trivialised, the size of the problem in the customer’s mind will become greater. The best firms allocate responsibility to a senior person and have an escalation process to ensure the complaint is dealt with in reasonable time. It is important that the person handling the complaint is given enough authority to deal with all but the most urgent issues.

Complaints should be resolved and then tracked, analyzed and processed to ensure the lessons for changes to products, services, processes and training are implemented.

Tom McKaskill is a successful global serial entrepreneur, educator and author who is a world acknowledged authority on exit strategies and the former Richard Pratt Professor of Entrepreneurship, Australian Graduate School of Entrepreneurship, Swinburne University of Technology, Melbourne, Australia. A series of free eBooks for entrepreneurs and angel and VC investors can be found at his site here.