Poor Customer Service Leads to Poor Repeat Sales

Michael Beauchemin —  August 13, 2013

Have you ever purchase an extended warranty and were thankful you did?  The company you purchased it from was responsive and took care of the issue immediately with a minimal amount of inconvenience to you.  Here is my experience with two different companies and two vastly different outcomes. throw out

While my experiences with one company – Square Trade has been outstanding, my experience with the other – Lowe’s Home Improvement Center has been at the opposite end of the spectrum.

As a business owner if you make a commitment to a customer for an extended service plan or commit to provide them services, you better deliver. If your delivery of services or product performance is underwhelming or you have a total disregard for your customers, be assured, you will loose not only your current customer but other prospective clients through negative on-line reviews, negative comments on social sharing sites or through blog posts such as this and in general word of mouth.  Customers today have more opportunities and avenues to share there experience globally in a matter of minutes.

How to Discourage a Current Customer from Buying From You in the Future

A year and half ago, I purchased a new lawn tractor from Lowe’s Home Improvement Center here in Matthews, NC.  I also purchased an extended warranty with 24/7 hour support.  Late last summer and through the first part of this summer, I started having gas saturating the air filter and pour out from a port just below the air filter causing the engine to flood and stall out.

Okay, no problem, I just give Lowe’s Home Improvement Center a call, have them pick up the lawn tractor, take it to a repair center and take care of the issue. Simple, right?  No, not so simple. Rather than detail out all of the phone calls and wasted time here are few highlights:

  • I had to wait for over a week for the first scheduled pickup date available
  • I had to take off a day of work for the scheduled pick-up
  • Thier vendor Altaquip cancelled the scheduled pickup but didn’t bother contacting me and let me know they would have to reschedule
  • I could never reach the manager at the contracted repair center, Altaquip
  • I could not get a return phone call from their contracted repair center, Altaquip
  • To this day I still have not heard from them
  • Last week, Lowe’s Home Improvement Center (after being on-hold for over an hour), recognized my frustration and arranged for a store pickup, directly bypassing the contracted repair center.  Only one problem, the assistant manager at the Matthews, NC store never bothered calling to arrange the pickup.  Did I mention, that Lowe’s repair center had me on hold for over an hour to make sure they would take care of the issue for me?
  • In total, to date I have wasted well over 12 hours between phone calls to the, their vendor and taking a day off from work to have the mower picked up.  Yet, the issue is still not resolved and will require at least one more phone call.

I, like many other customers who pay a premium to purchase an extended warranty, expect to be treated as a valued customer. It is sorely disappointing and frustrating for customers when the experience falls so far below expectations and what was committed to.

As a result, given a choice between Lowe’s Home Improvement Center and another store that sells similar products, I will choose the alternative.  Your customers will be no different if your underwhelm or frustrate them with your service or product performance they will quickly abandon you in favor of your competition.

I have a multiple properties and easily spend on average $5,000 per year at home improvement stores.  Over the next 10 year’s that’s over $50,000 in sales they will loose out on.  This is just my experience.  If they have 1,000 customers per year that share a similar experience and on average spend $2,500 per year, they will loose out on more than $2.5 million in revenue from customer dissatisfaction.  Of course this number could be significantly larger.

As a business owner can you afford to loose customers because you do not honor your commitments and at least meet their expectations.There is so much competition out there that if you don’t over deliver, customers will seek an alternate solution and switch to your competitors.

Contrast My Experience with Lowe’s Home Improvement Center to My Experience With Square Trade

Square Trade provides extended warranties on electronics. The extended warranties are typically 30% to 50% less expensive than if you bought them through a retail store.  If you look-up their reviews on Amazon or Google, and other review web sites they average between 4.7 and 4.9 stars out of 5.  Pretty high ratings given the thousands of reviews.

I have used them for four years now and have found them to be a great company.  My first experience with them was when I purchased an extended warranty and accidental plan for my son’s computer.  After having the computer for just one day a classmate spilled a can of soda on it.  I called up Square Trade and they had a check in the mail to me the next day for the full replacement cost of the computer.  Since then, they have sent me a check for a second computer that failed after six months and made extended warranty repairs three times on my last smart phone.

As you can tell, I have a significant amount of experience in dealing with Square Trade.  Never once have I ever had make a follow-up phone call to them on where a repair was or why they didn’t call me back. Each time, they had an opportunity to interact with me they delivered big time.

Here’s what Square Trade does that Lowe’s Repair Center has Failed Miserably At:

    1. I have never been on hold for more than a few minutes
    2. It has never taken more than one phone call to resolve an issue
    3. I receive emails with a status report about what is to be done and a schedule
    4. There is clear communication and followup emails, when the item is delivered to the repair center, when the repairs is completed and when the item is shipped back.
    5. I receive a follow-up inquiry making sure the issue was resolved to my satisfaction.

Because of the process and my experience with Square Trade, whenever I need an extended warranty on a an electronic item Square Trade is my “go to” company.  Rick Damron, Executive Vice President of Store Operations at Lowe’s Home Improvement, should look to Square Trade as a business model for managing extended warranty plans.

In Summary Make Good on Your Commitment or Risk Loosing Sales

Customers expect to be treated fairly and if you make a commitment or promises with regard to your services, product performance, follow-up services or extended warranties and fail to deliver, you will loose direct sales as well as any referral business.

On the other hand, if you exceed client expectations when they do have an issue and deal with them with the right attitude and solve their problems while minimizing their inconvenience you can enhance and solidify your customers’ loyalty to your business.  Let’s face, it problems happen, and it is how you treat you customers that will make or break your future sales.

Michael Beauchemin

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Certified Inbound Marketing Consultant committed to helping businesses grow sales through measurable, accountable marketing metrics.
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