I was recently asked my opinion about warranties, especially what’s the right thing to do when they expire. A tough one!
Then as often happens the next day we had to return a used scooter we had bought from a local store, out of warranty.
The store did not question our complaint with its ride, they were happy to give us our money back or a voucher, wonderful choice to offer. Because they were so great we decided to take the voucher and have now decided to buy an electric scooter.
What was the outcome of the store having a customer first policy – we are now spending 3 x as much as we originally spent.
My advice to retailers is have a long-term view, a loyal customer is worth so much more than an argument about a warranty.
Businesses can provide exceptional customer experiences when they put themselves in the world of the customer.
So, what happens when time runs out? When a product you have supplied just broke down after warranty has ended?
It’s always a tough one, products have a timeline and warranties last a certain period of time, but when it’s so close to the cut-off, as a business,
Do have a process in place or a service standard that addresses the customer experience? Or do you simply follow the warranty guidelines and decline your customers claim?
When companies don’t understand the difference between good and bad profits, growth suffers, and you lose customers, thus recurring revenue.
What Is Bad Profit?
Fred Reichheld in his book The Ultimate Question says,
Whenever the customer feels misled, mistreated, ignored, or coerced, profits from customers are bad. Bad profits come from unfair or misleading pricing. Bad profits are about extracting value from customers, not creating value
Bad profits are those profits that might increase revenue but at the expense of the customer experience and bad profit impacts the customers experience and therefore your customer loyalty.
Whereas a good profit gives value to your customers and a good profiting business has loyal customers and raving promoters.
Good profit benefits both the customer and the business. This occurs when a business creates value to the customer, and they keep coming back for more. These customers tell their friends and family to also do business with you. They become your promoters and create good profit for the company and create growth that is sustainable. To understand more on Good Profit vs Bad Profit, click here to read my blog.
When it comes to handling customer claims that fall into the ‘broken but just out of Warranty’ segment are you choosing Good Profit over Bad Profit? Are you going out of your way to remove all concerns and made it EASY for your customers to do business with you?
Are you getting into your customers world?
Are you looking at the needs of your customers and understanding that maybe what you are proposing may work for your company, but does it really work for your customers?
Have you given your employees permission to go above and beyond to deliver excellent customer service?
My point is that, sometimes situations or the needs of the customer might look difficult, but it simply comes down to what can we as business owners do to make it EASY to do business with us and leave them with a memorable customer experience.
Like, with my car for example, the cruise control works, and then it doesn’t work. And then it works, and then it doesn’t work. And every time I take it in for a service, I mention it and ask them to fix it. And every time without fail, when it’s in for its service the cruise control works.
The car is nearly out of warranty and the next service is not due prior to the warranty running out. Will they try and charge me to fix the cruise control? I would be really pissed if they do, simply because I’ve been reporting it for ages and requesting they fix it – whilst the car is in warranty.
I guess we will wait and see what they do.
If it’s a hassle for our customers we must be flexible and willing to adapt our service standards when required and within reason.
If you would like to have a chat with me about ‘Customer Loyalty Best Practice’ contact me I look forward to hearing from you.