My wife and I recently received a beautiful cake plate as a wedding present. It arrived with little notoriety or fanfare besides one small issue: It was broken. So we did what any newlywed couple would do — we trotted off to exchange the plate for a new one.
When we arrived at the store, however, the owner refused, sharply saying we could buy a new one at a reduced rate. Needless to say, we were appalled. Not only did the owner want us to pay to replace the broken gift, she stopped just short of accusing us of breaking it ourselves.
Not one to take no for an answer, I eventually cut a deal to exchange the plate for a new one at one quarter the original price. Total cost: $13.50. I did it not because I thought the deal was fair, but because my wife loved the plate and the gift givers were close family friends.
The experience, though, left a sour taste in my mouth about the store’s customer service policies. Rather than take responsibility that the plate could have broken due to poor packaging (it was thinly wrapped by the owner herself, in two pieces of tissue paper inside a box), the owner instead cared more about how much the replacement would cost her.
In the following weeks, I mentioned the incident to several friends who own small businesses. Their responses were pretty much the same: In an age in which price is no longer a driving factor because consumers have a wide choice of where to spend their dollars, why would a small business owner risk alienating a customer over a meager amount of money instead of simply satisfying his needs and creating a positive experience, which could lead to future business?
This issue of positive customer experiences is one that’s moved to the forefront of many business owners’ agendas. Execs such as Robert Mahoney, CEO of Diebold Inc., and Tom Murdough, CEO of Step2 Co., stress the value of listening to — and satisfying — customers. It’s a practice, they say, upon which no dollar amount can be placed.
That’s because a small up front cost has the potential to lead to exponential financial returns. On the flip side, failing to recognize this relationship could cost your company more in the long run.
When you read Associate Editor Jim Vickers’ story on James Gilmore in this month’s issue, you’ll learn that the next evolution of business has nothing to do with price. Gilmore asserts that if you provide customers with a satisfying experience, they will not only return to your company and spend additional money, they’ll thirst for more. He points to businesses such as Johnny Rockets and Starbucks to support his theories about this so-called “emerging experience economy.”
As for my wife and I, the incident caused us to make similar decisions. Not only has this particular business owner lost any future revenue from us, but I’ve shared my dissatisfaction with others, who will have our experience to think about when they decide where to spend their own dollars.
Dustin Klein ([email protected]) is editor of SBN.