How to Turn Loyal Customers into Enemies
It costs 4 to 10 times more to win over a new customer than it does to keep an existing one. More importantly, returning customers tend to spend more freely and more often.
So, why would any company invest valuable resources to turn a loyal customer into an enemy?
This case study is based on my experience with a well-known leading carpet retailer.
I was refurbishing and new carpet was high on the agenda. Rather than run the gauntlet of carpet salesmen I returned to the national retailer I had purchased the existing carpet from 10 years ago. They did a great job back then and had grown even bigger since, so it seemed the right thing to do. The salesman came for the measure and quote and brought a range of samples with him. I gave him 3 criteria - colour, texture, and durability and followed his advice; choosing the carpet he recommended. But when I didn’t hear back after 2 weeks, I called the Store and was told he had left the Company and his notes made no sense, so it had to be done again.
I gave the second salesman the same criteria and again I agreed to purchase the carpet he specifically recommended. Two days ahead of the installation date I received a call to confirm the details and remind me to remove the contents from every room other than the list of agreed furniture to be moved by the installers.
I don’t know when you last moved house or emptied a home office of its entire contents but it’s not a job for the faint hearted. Even with help from a friend, it took us to the early hours of the morning. When it was done, you didn’t dare open a cupboard door for fear of losing your life in the avalanche that was sure to follow and as for using the bathrooms, forget it - they were packed ceiling high.
You can imagine my joy at 8am on Saturday morning when the first installer added 3 rolls of new carpet to the obstacle course on my dining room floor and said ‘I can’t do this job today mate! They never said there was furniture to move. This is a two-man job not one – you’ll have to call the office and arrange another day.’
I left my home to stay with family, returning 4 days later for the rescheduled installation. By late afternoon, the carpet was in, furniture in place and new curtains and blind installed - I could not have been happier. Despite the poor start and a few examples of poor workmanship I become a proud ambassador for their brand. The carpet was featured in photographs and heavily promoted in conversation with visitors and everyone who took the tour.
But after 14 weeks of bliss I noticed the carpet was becoming unusually dull, flattening and matting in places. I couldn’t see any pattern to suggest a common cause or explanation. The previous carpet had lasted 10 years without any such sign of deterioration. So, I took photographs and emailed them to the Store. After two weeks without acknowledgement or reply, I emailed the State Office and received a reply the same day to arrange an inspection.
In the meantime, someone from the Store called. A person who had never set foot in my home then proceeded to tell me the carpet was dirty and the problem most likely caused by oily feet. It’s important to note - I have a Miele vacuum that is so powerful it has suction control to prevent it from sticking to surfaces plus I have a ‘shoe’s off policy’ and as it was the middle of winter, I and everyone else wore socks.
The Operations Manager who performed the inspection told me ‘flattening and matting’ was normal. But given I live alone, and it had occurred within 14 weeks - he agreed the case was highly unusual. He went on to suggest professional carpet cleaning but made no offer to help arrange it. There was obviously something wrong and logic would suggest that professional carpet cleaning wasn’t going to fix the problem. So, before he left, I asked for the carpet to be removed and replaced with one of better quality and if this was more expensive as I suspected then I said was willing to discuss the price.
The letter I received post-inspection left me speechless. My concern about the ‘condition of the carpet’ had been changed to concern about ‘excessive wear’ – which according to the letter’s author – was ‘normal and to be expected’. However, the problem areas he listed didn’t apply to my situation and to top that off he described the perimeter of my bed as a ‘high traffic zone’. There was no ‘we’re sorry to learn of your disappointed’. Instead I was given advice on how frequently I should vacuum, and the letter was signed off with ‘we assure you of our best attention at all times’.
When I replied to say this was unacceptable, they responded with - ‘Unfortunately the manufactures set the warranty for their product and not our Company. We simply just inspect and report back through these channels.’
From my experience, it takes 3 things to resolve a consumer complaint - RESPECT, COMMON SENSE and COMMERCIAL AWARENESS. I was afforded none of these. Instead I was forced to take them to the NSW Civil and Administrative Tribunal (NCAT).
In preparing for the tribunal hearing I discovered the ‘Carpet Institute of Australia’ and the 6-star carpet grading scheme it developed. Recognised across the world, the scheme aims to ensure consumers make informed decisions and avoid costly mistakes and disputes. Under the scheme, carpets are independently tested by accredited laboratories, assessed by a panel of experts, and then rated according to suitability in commercial and residential installations.
Despite being a member of the Institute, my requests for the grading information went unanswered by the retailer. When it was finally provided it was due to a summons and even then, it was found to be false and misleading.
At the first hearing, when asked to explain why they failed to respond to my emails the retailer claimed they were offensive and that my complaint was vexatious. But when pressed to expand on this they were unable to do so. Then when I left the room their representative gave me a 35-page photocopied document that appeared to be the warranty details and care and maintenance information for the carpet. It was handed to me without any explanation other than the suggestion that I read the passages highlight with a yellow marker. It was now 7 months after installation and the first time anything of its kind had been provided.
Then after first stating that the carpet appearance was normal and expected, they changed tact and accused me of failing to follow the maintenance guidelines.
The retailer then demanded I provide a report on the carpet prepared by an independent expert. This took 3 months to arrange. It was during this time that I found evidence that the carpet grading information given to the tribunal was false. The report by the independent expert was scathing and the retailer was subsequently ordered to remove the carpet and replace it for one of my choosing and to pay all costs.
To this day I cannot for the life of me understand why a company would behave this way? Is this a reflection of the Company culture or is it just a case of bad management and a lack of reporting?