Street Smarts

Don't blame employees for bad customer service. In most cases, it's the employer who's at fault

It's no secret that there's an epidemic of bad customer service going around. Some people, I know, blame it on changes in the workforce. They may be a factor, but I think the major fault lies elsewhere. In most cases, after all, it's not the employee who creates the problem. It's the employer. How? Usually by establishing a bad rule.

Here's an example from my wife's uncle Arnold, who lives in upstate New York. He called recently to tell me about an experience he'd had when he took his car to be repaired at one of the dealerships in town. This was the second time he'd brought it in for the same problem. When he returned to get the car, he was told the bill came to a couple hundred dollars. "Fine," he said, "but I want to take the car for a test-drive, just to make sure the problem is really fixed."

"OK, but you have to pay first," said the guy at the service desk. "We aren't allowed to let any car leave here until the bill has been paid."

Now, Arnold is not a stranger to these people. He's been doing business with them for 40 years. He used to be the head of administration at the local hospital. In that capacity, he'd purchased five or six cars a year from the dealership, which had even assigned a salesman to his account. In addition, Arnold had bought a new car for himself every four or five years. So we're talking about a million-dollar customer.

And the guy at the service desk knew exactly who he was. Arnold was incredulous. "Wait a minute," he said. "Are you really telling me that I can't drive my car out of here because you don't trust me to pay a minor repair bill?"

"I'm sorry, sir," the guy said. "Those are the rules, and we can't change them."

Arnold went home and called the owner of the dealership. He said, "Jim, what's going on here? This is ridiculous." The owner apologized and told him not to worry. He'd take care of it. He'd personally bring the car over. Arnold could drive it for a day or two and pay the bill when he was satisfied.

So what had the owner accomplished with his rule? He'd aggravated a good customer. He'd made an employee look like a fool. And he'd caused himself embarrassment and inconvenience.

I can sympathize. I've done it myself.

I understand why companies have rules. You get to a certain size, and you suddenly realize that you need them. Employees have to know where the boundaries lie--how they're supposed to conduct themselves, what's going to get them into trouble and what isn't. Some rules you establish for survival's sake, to avoid mistakes that might put you out of business. Others you have because you want to maintain certain standards. Still others you decide you need after you get whacked on the head. Then there are those you institute because you think you've discovered a terrific new way to boost your sales or streamline your management system or cut your costs--whatever.

Behind every rule there's almost always a good reason, or at least a good intention. At the time you establish them, the rules appear to make all the sense in the world. And yet, if you're not careful, you run a high risk of creating rules that will hurt your business. What happens is that you take away your employees' ability to use common sense in responding to the reasonable requests of customers.

In my archive-retrieval business, for example, customers often ask to have boxes delivered to their offices. We charge a regular fee for the delivery and an additional fee when the boxes have to be delivered in a rush. As in any business, customers sometimes call up afterward to dispute the charges. A couple of our customer-service representatives were giving in too easily, and so I established a rule: no credits could be issued without the approval of someone in management.

The rule came back to haunt us whenever a dispute arose in which we were truly at fault. Say a customer placed a rush order and, for some reason, the box didn't arrive on time. The customer would call up, irate, refusing to pay for the delivery. The customer-service rep would say, "I'm sorry. We made the delivery, and you have to pay for it."

"But it came too late to do us any good," the customer would say. "We're not paying."

"Well, you'll have to speak to a manager," the rep would say.

The manager, of course, would waive the charge after hearing the story, but the customer would still be angry. First, because the delivery was late. Second, because we would have charged for it anyway if no one had complained. Third, because it took a call to a manager to get the charge waived.

So the customer goes away thinking, "That damn service stinks." And the next thing we know, the account is in jeopardy because the person responsible for the contract has heard that we charge even when we don't deliver on time.

By the time I realized what was happening, my rule had already done some damage. Needless to say, I got rid of it. Now our customer-service reps are allowed to decide for themselves whether or not to issue a credit. At times when we're at fault, I hope they do. Will some reps make bad decisions? Probably, but then we'll just have to train them to do better.

In retrospect, it's obvious I made a mistake by establishing a rule just because a couple of employees were loose with credit. The right response would have been to put in the time and effort required to get them up to speed.

And that's really the point. We tend to make bad rules not when we're attacking problems but when we're avoiding them. We fall into the trap of looking for shortcuts and easy answers. So one bad customer drives off without paying his bill, and we put restrictions on all our good customers. Or one employee uses poor judgment in issuing credit, and we tie the hands of all those whose judgment is perfectly sound.

The result is bad customer service. Our employees take the rap, but we're the ones to blame. If we're lucky, we find out about the problem and eliminate the rule before too much harm has been done.

I get upset with myself when that happens, but at least I can minimize the damage. What worries me are the bad rules that I've set and don't know about yet.

Norm Brodsky is a veteran entrepreneur whose six businesses include a former Inc. 100 company and a three-time Inc . 500 company. Readers are encouraged to send him questions he can address in future columns.
This column was coauthored by Bo Burlingham.