How to Lose Customers
It's easy. Just convince them that they're getting a lousy deal.
Published July 2005
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COMMENT ON THIS ARTICLEI have a little game I like to play. I keep track of the number of episodes of bad customer service I hear about, or experience, over a six-month period and use that as a rough gauge of the general level of customer service in my part of the world. Lately, I'm glad to say, I've been hearing fewer horror stories than I used to, but I'm still struck by the number of service providers who seem to believe that a customer exists only to help them maintain a comfortable lifestyle.
Take the dentist I went to when I needed to have my teeth capped a while ago. His office -- on Park Avenue in Manhattan -- was one of the most spectacular I've ever seen. The bathroom was all shiny black marble and chrome. On my initial visit, I was given my own "personal hygiene space," where I could keep my special toothbrush in a little locker with a key. The doctor did a thorough examination and took X-rays of my mouth from every angle. He then had me return a few weeks later to hear how he intended to proceed. He had an elaborate presentation planned. As I sat in his office, he started to explain to me in great detail what he was going to do, and why, and how. I interrupted him. "Okay," I said. "I believe you. What's this going to cost?"
"The total?" he said. "About $45,000."
I was floored. "Well, Doc," I said, "I was given a list of the four best dentists in the city, and you were right at the top, but that price is unbelievable."
"Do you mind showing me the list?" he asked. I gave it to him. He smiled as he looked it over. "This one was my student," he said. "And this one used to work for me. I trained him myself."
"Is he any good?" I asked.
"Yes, he's very good, but he's in Rockville Center, on Long Island," he said. "You could probably get your teeth done there for less, but you wouldn't get all this." He motioned around the office.
I got out of my chair and said, "Thanks a lot, Doc."
"Where are you going?" he asked.
"I'm going out to the guy on Long Island and see what he charges," I said. "But I've got to say one thing. This is a bad sales pitch you have." And I walked out.
No one else has ever asked me to pay for a Park Avenue office, but I've had similar encounters with other service providers -- especially interior decorators, who, as a group, seem to have perfected the art of making customers feel as though they're being taken advantage of. Then, a few months ago, a new decorator I hired showed me how one business's blunders can be another's opportunity. The lesson: You can gain a competitive advantage if you simply stop doing the things other companies do that annoy their customers.
My wife, Elaine, and I have considerable experience with interior decorators. We've used several over the years, and whenever Elaine tells me we have to hire another, I get chills. I know that by the time the job is finished, I won't be on speaking terms with the person. Given the conventions of the industry, that's pretty much inevitable. Typically, decorators earn their money by adding a commission -- usually between 20% and 40% -- to everything you purchase. They thus have a powerful incentive to have you spend as much money as possible.
Decorators insist that you use their painters and wallpaper hangers, and that you buy from their show rooms. The price you're quoted on any item or service includes the commission, and you can't negotiate it down. The decorator won't even let you talk to the people who are doing the work or selling the product. "The price is the price," you're told over and over. Whenever you suggest that a vendor may be charging too much, the decorator says, "Oh, but he's the best." The vendors, for their part, know that you're a captive market and tend to charge accordingly. Inevitably, you wind up feeling that you're being forced to pay through the nose.
Unfortunately, that kind of thinking is not limited to the interior decoration business. I see it all the time, especially when dealing with my suppliers and occasionally in observing my competitors. If they know you're locked in as a customer, they start taking you for granted. Even in my company, that's a danger. The only way we avoid it is by making an open and firm commitment that we will treat all of our customers the same way we treated them when we were trying to land their business in the first place.
At my company, we make a firm commitment to treat customers the same way we treated them when we were trying to land their business.
But it appeared to me that, among people who do interior decorating, the habit of taking customers for granted had been institutionalized, and I assumed I was in for another such experience when we hired a decorator for a new apartment we'd bought in Florida last year. Her name was Rosalie Modansky. She wasted no time letting us know that she didn't work like other decorators. Once we'd agreed on a budget, she explained that she charged a flat fee for her services. "I'll guide you in the buying," she said. "I'll take you places and show you things. But you can pick out anything you want from anywhere you want. It doesn't matter to me. I don't make money on what you spend."
