The Issue of Trust in Customer Service

Jerry (his real name) is an independent limo driver in the Reno/Tahoe area. Because of his work, he spends a lot of time in his car with a seatbelt on and his mobile phone holstered.  This tends to be hard on the phones, so Jerry spends extra to get the full warranty coverage available -- after all, this is a business tool.  Recently, on his second Sony Ericsson phone, Jerry began experiencing problems.  He called support at his carrier, and they listened to the symptoms. Then they told him to remove the back cover and clean the contacts of the SIM card and the battery, and then to restart the phone.  He hung up and did this; the problems persisted.  It is useful to note that Jerry used a slightly moistened cotton swab to clean the contacts (no information on how to clean was provided).

Jerry called back and told them "the fix was in" (couldn't resist a little Reno humor), but that it didn't work.  They had him open it up and describe the color of a little dot near the battery (a moisture detector to catch situations where consumers drop their cell phones in water).  He told them it was white, but with a little streak of pink on it.  They told him that his problem was not a warranty problem but a paid repair problem, since his phone had suffered water damage.  He reminded them that this streak of pink was from the cotton swabs when he followed their directions to clean the contacts.  You can imagine the series of escalations, arguments, pleadings, explanations and re-explanations that followed -- not to mention the hours spent on the phone by Jerry.

In the end Jerry was charged $115 for a new phone (skipping lots of details; you get the idea).  He disputed the charge, and continued paying his regular monthly contract fees while the dispute was handled.  On midnight of January 31st, without warning, his phone was cut off (while he was on a run with a customer).  Given that his business depends on his wireless phone, and given that no one else provides reasonable coverage in the mountainous area where Jerry does his business, he paid the $115 and the $38 reconnect fee, vowing to himself to move as soon as he could to ANYONE ELSE.  Happily for me, he had his mobile phone ready to go to synch up with me when I arrived, tired, at the Reno airport!

Let's stop for a moment and consider the economics of what just happened.  His carrier, by acting as it did (at least as perceived by Jerry), has put at risk a reliable current and profitable revenue stream averaging $1200 per year, with an overall past run rate of $12,000.  If they had served Jerry well, they could look forward to a reliable revenue stream of $1-3K per year indefinitely.  Plus, they invested at least 2 hours of people time on the phone with Jerry on this issue (Jerry's estimate); let's assume these are inexpensive agents and supervisors, and set this cost at $80, fully loaded (this is probably low).  Let's assume his carrier charges its loaded cost for the replacement phone, and let's assume the $38 reconnect fee is a profit-neutral item (a charitable assumption).  Then the net result of this is that his carrier invested $80 and forced Jerry to invest several hours of phone time (about 3 in an IVR, and 2 talking to people), in order to avoid taking a $115 charge for sending Jerry a new phone, no questions asked.  And in so doing it virtually guaranteed a reduction of several thousand dollars in future revenues AND got Jerry to advertise his story to others (fortunately including me).

Does this make sense?

Nobody would claim that it does.

So why did they do it?

Because of trust.  Large companies set up rules for contact center people to follow that are intended to guard against consumers' taking advantage.  They don't trust their customers.  Any of them.

Now, many consumers indeed do not deserve to be trusted.  If the customer is an unfortunate person who lives hand-to-mouth, actually knows where to find paycheck cashing stores, and churns cell phones as fast as they can, the suspicious approach would make sense.  But if the customer is a long-time, high-revenue, reliable and profitable customer, this DOES NOT MAKE SENSE.  Furthermore, it would be a simple matter to advise customers of the risk of warranty voiding when asking them to clean contacts -- proactively working WITH the customer to avoid putting them in a compromised situation.

I think this situation speaks for itself.  We all need to think carefully about how trust -- and lack of it -- is handled in our management of customer experiences.  The knee-jerk distrust exhibited in this case is HIGHLY UNPROFITABLE and should not be allowed by companies.  But it may be necessary to plan for trust by examining cases like these and thinking about how to establish conditions of mutual respect and trust.

I find it ironic that I wrote the last sentence, since I tend to be a quantitative analysis type, but the fact is that what always gets me going is when people do what they think is right even when it so clearly isn't -- if only people would step back and see the big picture!

Are you taking trust rules into account in your customer experience planning?

Comments

[tiffany]

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