Finding Your Path
The Customer Service Conundrum
By Lorne Polger, Senior Managing Director
The Covid-19 epidemic has been hard on all of us. In our personal lives, we have faced extreme challenges relating to working from home, home schooling of our kids, increased social isolation, and unfortunately in some cases, illness, and death. In business, we have faced unforeseen and extraordinary challenges. Supply chain disruptions, employee shortages, safety challenges, ever changing rules and mandates. One of the victims? The customer service experience.
During the pandemic, I was involved in three situations where a vendor committed such an egregious act that they “lost a customer for life.” There are lessons to be learned in each case.
Audi experience. In the summer of 2020, I was helping my daughter shop for a used car. In typical fashion for her, she had thoroughly researched the models, costs, and reviews, and had narrowed the field down to a couple of cars in a few selected colors. Given the dramatic shortage of used vehicles, this was no small feat (she must have picked this talent up from her dad, a notorious car buying-aholic!).
Low and behold, she found exactly what she was looking for. A low mileage Audi SUV in the perfect color combination! She spoke with the salesman a couple of times on the phone and then brought me in on the third call to close the deal. We agreed on a price and then discussed the logistics. The dealer was in the L.A. area (Audi of Ontario), my daughter was in Colorado, and I was in San Diego, so we had to figure out how to transact virtually, a new normal during the pandemic.
The dealer said they couldn’t deliver the car to me in San Diego. The explanation did not make a lot of sense, but okay. When it came time to discuss the financing (I was fronting the money for my daughter until she could line up a loan), they also said they couldn’t take a check from me. The explanation did not make sense; I had previously purchased many cars, including Audis, with a check, but okay. We ended up agreeing that I would send them a wire transfer on a Tuesday, and pick up the car the following weekend. The money was sent as agreed. My daughter was excited!
On Thursday, I received a call from the dealer telling me they sold the car to someone else that day. I was flabbergasted. I told them that I had wired them the funds, which they had received the day before. No apologies from them. When I questioned the general manager, he proceeded to insult me, and worse, refused to wire back the funds or pay for my wire transfer fees, saying they had a policy against that! As a three-time prior Audi owner and fan of the brand, I was outraged. So, I went into CEO mode and tried to make this a learning lesson for all involved.
I called Audi of America and spoke to a customer service representative. I relayed the story to them. The gentleman apologized and said they would delve deeply into the issue and get right back to me. Thankfully, I did not hold my breath, as I’m still waiting for the call back. Or at least an email. Or perhaps a telegram? Nothing. Crickets. Lost a customer for life. Audi sold 186,000 cars in the U.S. in 2020. You would think they would know better.
Delta Airlines experience. Recently, I booked a cross country flight. I’m a value investor and generally fly coach. However, given the long flight, the fact that I knew I was going to get a lot of work done on the flight, and a relatively small price difference between the classes, I decided to spend a few extra bucks, splurge, and fly first class. Yessiree, champagne and caviar for me aboard my Boeing! Okay, maybe Diet Coke and pretzels, but still, sufficient leg and elbow room so that I could comfortably get some work done.
Low and behold, the afternoon before the flight, I received a text from Delta letting me know that there was a problem due to an aircraft change and I would be flying in coach instead. Middle seat. Five-hour flight. Okay, stuff happens, not the end of the world. But, what about the extra dollars I had dished out for first? The text message said nothing. I then went online to the Delta customer service portal. Nothing. As completely empty as you can get on the subject.
Okay, next up, the dreaded 1-800 number. In the “you can’t make this up department”, I was put on hold for 1 hour and 44 minutes. A new world record! Yippee!! When Theresa finally answered the line (with static, no less), she politely informed me there was nothing she would be able to do for me but thank you for flying Delta Airlines! I very politely asked that she speak to her supervisor about the matter. Another 20 minutes later, Theresa got back to me. “Good news, Mr. Polger. You will be able to process a refund for the fare difference after you complete your travel. You will just need to call this other 1-800 number and they will help you.” I could not make this up if I tried. Lost a customer for life. Delta had $47 billion in revenue in 2019. You would think they would know better.
Restaurant experience. I started feeling comfortable dining in restaurants again by this spring, after I was fully vaccinated. This summer, my girlfriend and I dined with some friends in Denver. We decided on Del Frisco’s in Cherry Creek, a nice, upper-end chain that was purchased by the behemoth entertainment conglomerate, Landry’s, Inc. in 2019.
We were seated at our table as soon as we arrived. Great! After 20 minutes, no one had come by. And no menus had been provided. After waiving down (okay, by that time it was almost a tackle) a third person (“your waiter, Bob will be right with you…”), Bob finally came by to take our drink orders and even provided us with menus (there were no ubiquitous, scannable QR menus on the table). Okay, progress!
Another 30 minutes, and still no drinks. And no opportunity to order food. And it got worse from there. When the food was finally served (a little like waiting for Godot), they forgot my girlfriend’s meal and our side dishes. Literally we had our food for 20 minutes and she was still waiting. Good ‘ole Bob had disappeared. So, I took control of the situation. Went to talk to a manager. I assumed they were simply understaffed and overwhelmed. Not so, according to the manager! She said they were fully staffed, and everything was being handled properly! They eventually brought my girlfriend an undercooked piece of salmon in a to-go box, and instead of comping our meal or even offering dessert, they took the salmon off the bill. Lost a customer for life. Landry’s had $5 billion in revenue in 2019. You would think they would know better.
What were the common themes among these three incidents? A general hubris about the lack of importance of the customer. A lack of understanding that the cost to acquire a customer is high, while the relative cost to keep them happy is relatively low. A lack of training; owners not training managers, and managers not training staff. And most importantly, a failure to empower employees to make decisions that provide a satisfactory experience for the customer.
While none of these examples involve Pathfinder’s operations, I think about them in the context of our business. As a company, what can we do better to enhance our customer service experience?
Who are our customers? Well, we have several. First, our tenants, or as my friend Dick Michaux taught me a few years ago, our guests. Dick was the founder and CEO of Avalon Bay, one of the largest apartment REITs in the country. When Dick speaks, I listen. Have we empowered our property managers to make sure that our guests are satisfied living at our properties? Have we made it easy for them to pay their rent, to communicate with property staff, to have their repair orders addressed quickly and efficiently? Have we made the leasing application process seamless for them? Have we helped to create community at our properties? Are we listening to our guests’ recommendations? What else can we be doing that we haven’t thought of? And as a company, have we empowered our asset managers to provide the on-site property staff with the tools that they need to successfully navigate these issues?
Second, our investors. Are we delivering on our promises? Are we communicating clearly, thoughtfully, and transparently with them? Are we listening and responding to their questions and suggestions? How can we do better?
Third, our circle of business associates. This includes other owners that we transact with, our vendors, brokers, and service professionals. Are we following through on our promises? Are we responding to their requests in a timely and thorough manner? Do we return phone calls and emails promptly? What else can we proactively be doing to ensure their experiences with us are best in class?
Fourth, our staff. Have we empowered them to make the experience for those that they interact with a positive and professional one? In today’s hybrid office environment, have we given them the necessary tools to be successful?
It’s a challenging time in business. Talent shortages and supply chain disruptions will likely persist. From my perspective, now is the time to double down on empowering teams to enhance the customer service experience. It’s an awful time to rest on laurels and be complacent. And you know, after living through the nightmare of the last 18 months, we all deserve to be treated well!
Lorne Polger is Senior Managing Director of Pathfinder Partners. Prior to co-founding Pathfinder in 2006, Lorne was a partner with a leading San Diego law firm, where he headed the Real Estate, Land Use and Environmental Law group. Reach him at firstname.lastname@example.org.
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