This post is the ninth in a series that will identify 10 different obstacles that have emerged from my analysis of customer satisfaction data. Maybe you will have encountered one or more of these obstacles in your own business? The ninth obstacle is deception.

Deception encompasses everything from the fine print used to mask hidden fees and other undesirable terms and conditions, to bait-and-switch marketing tactics that entice consumers with an attractive offer before substituting a costlier product or service.

Just last night, I stopped by my local King Soopers supermarket to pick up some essentials. Over the store intercom, I heard a woman’s voice:

“Attention shoppers: We will be giving away free merchandise at the red and black counter near Customer Service at the front of the store. This is the last announcement you will here. If you want free merchandise, please go right now to the red and black counter near Customer Service at the front of the store!”

Free merchandise? It sounded too good to be true. I’d been shopping at this particular King Soopers for more than 10 years and, with the exception of an occasional in-store taste sampling, had never heard of a promotion like this before. Intrigued, I made my way to the front of the store.

By the time I arrived, a small crowd had gathered in front of the red and black counter to receive free merchandise as instructed by the announcement.

Just then, a woman emerged from behind the counter and asked the crowd to squeeze in close so more people could fit around her booth. The woman was very animated. She held up an apple, asking the crowd to shout “Apple!” as she positioned the fruit to be sliced, diced, and pureed with her amazing food processor—for only $29.95!

A minute into her spiel it was evident that, in order to receive a free set of steak knives, you had to subject yourself to a protracted product demonstration replete with awkward humor and contrived attempts to involve the audience.

About this time, customers began to reconsider the sensational offer and resumed their shopping. I didn’t take a poll but I bet many of those customers felt duped by the original intercom announcement promising free merchandise.

In King Soopers’ defense, although it sells groceries, it is largely a marketing company that competes for the attention (and spending) of consumers in a noisy and competitive marketplace. Sometimes, it may seem necessary to make an outrageous claim simply to command the fleeting attention of prospective customers. And if some consumers feel duped, well, that’s just business…

But then there are companies like L.L.Bean. Although L.L.Bean is a retail company specializing in clothing and outdoor recreation equipment, it too is largely a marketing company with a significant mail-order, online, and retail presence around the world.

For those who are unfamiliar with L.L.Bean, it ranks among the top retailers in the world in customer satisfaction. And it’s the type of company that one would never associate with deceptive marketing practices. Instead, L.L.Bean relies on the honesty of its people and the integrity of its products.

If a representative says a product will arrive within two days, then you can take that delivery date to the bank. If the catalogue claims that all products are guaranteed to give 100% satisfaction in every way, you can count on it. There’s no need to look for a disclaimer or fine print that shields L.L.Bean from responsibility.

Unless you’re a magician, deception is bad for business. Commit to honesty, openness, and candor in all your customer dealings.

Gimmicks are fine—just not at the expense of customers’ trust. Besides, your customers probably have all the steak knives they really need.

I welcome all questions, comments, bouquets and brickbats.

This post is the sixth in a series that will identify 10 different obstacles that have emerged from my analysis of customer satisfaction data. Maybe you will have encountered one or more of these obstacles in your own business? The sixth obstacle is a low-trust service culture.

A low-trust service culture is evidenced by disempowered frontline employees, restrictive policies (especially warranties and returns), and overt skepticism in employees’ approach to problem resolution.

In the fall of 2004 I purchased a to-go order of lasagna from Armando’s, a local Italian restaurant. At home, after eating about one-third of the entrée, I discovered a dead fly in the pasta sauce and quickly lost my appetite. I sealed the remaining lasagna (including the dead fly) in a Ziploc bag and placed it in the refrigerator with plans to return it to the restaurant for a refund.

Within a day or two I stopped by Armando’s with the bag of partially eaten lasagna, shared my story with the employee manning the register, and requested a refund. Instead of demonstrating empathy, the employee suggested that it was not possible for the fly to have originated there, claiming, “We don’t have flies in our kitchen.”

Oh, really?

The implication was that if the fly had not come from his kitchen, then it must have come from mine. Or perhaps I had deliberately planted the fly in order to recoup the $9 cost of the lasagna—although I’d only eaten a portion of it. While he reluctantly agreed to the refund, it was quite obvious that he didn’t trust me or appreciate my feedback.

As I stood at the counter, instead of issuing my refund, the employee accepted another customer’s order, processed the transaction at the register, and then walked over to the oven, removed a pizza, sliced and boxed it, and delivered it to another waiting customer. Only then did he begrudgingly process my refund. It’s as though he was trying to punish me in some perverse way by making me wait a few extra minutes to receive my cash.

After frequenting Armando’s at least monthly for nearly three years, I made a decision that day to never return. And I haven’t.

Since that time, I’ve had two more children and, as a family, we’ve instituted “Family Fun Fridays” which consist of a pizza dinner followed by a movie and popcorn. Due to work schedules and kids’ activities, we miss some Fridays but I estimate that we order about 68 pizzas a year (34 weeks x two pizzas) from competitors of Armando’s: Papa Murphy’s and Anthony’s.

Our average pizza bill is $20 or $680 per year. Since the fall of 2004, we’ve spent about $4,760 on pizzas. If I were to guess, I’d say that Papa Murphy’s has earned about 80% of that total ($3,808) and Anthony’s has received the balance ($952). While these are estimates, I can say with certainty that Armando’s share has been zero.

Armando’s has forfeited its share of $4,760 because an employee exhibited low-trust by questioning the legitimacy of a customer’s feedback and request for a $9 refund.

This is not a unique story. Everyone reading this post has a similar experience to share—perhaps many. The valuable lesson to be learned is this: Be intentional about fostering a high-trust service culture. This commitment should be reflected in the policies of a business and the behavior of its employees.

Will every customer be trustworthy? No. There are unscrupulous customers who will take advantage of liberal return policies and other gestures of high-trust.

But it’s a mistake to scrutinize the motives of 100% of your customers in order to identify the 3% who are trying to take advantage of you. Not only is it a poor use of time and energy, if you offend a customer in the process, it may cost you dearly.

Just look at what it’s costing Armando’s…

Remember the Aesop’s Fable, The Goose with the Golden Eggs?

A man and his wife had the good fortune to own a goose that laid a golden egg every day. Lucky though they were, they soon began to think they were not getting rich fast enough. Imagining the goose must be filled with gold inside, they decided to kill it to obtain all of the gold at once. However, upon cutting the goose open, they found its innards to be like that of any other goose.

The primary moral of this story that many companies would do well to acknowledge is that greed destroys the source of good. In the same way, by nickel and diming customers, many companies are damaging the relationships they have with loyal customers.

My favorite nickel and diming story comes from Bob Farrell, co-founder of Farrell’s Ice Cream Parlors. In his timeless book Give ‘em the Pickle, he shares a letter he received from a customer:

“Dear Mr. Farrell,
I’ve been coming to your restaurants for over three years. I always order a #2 hamburger and a chocolate shake. I always ask for an extra pickle and I always get one. Mind you, this has been going on once or twice a week for three years. I came into your restaurant the other day and I ordered my usual #2 hamburger and chocolate shake. I asked the young waitress for the extra pickle. She said, “Sir, I will sell you a side of pickles for $1.25.”
I told her, “No, I just want one extra slice of pickle. I always ask for it, and they always give it to me. Go ask your manager.” She went away and came back after speaking with the manager. The waitress looked me in the eye and said, “I’ll sell you a pickle for a nickel.”

Needless to say, the customer refused the offer, left the restaurant, and was instantly transformed from a promoter of Farrell’s Ice Cream Parlors, a loyal enthusiast who keeps dining at Farrell’s and urges others to do the same, to a detractor—an unhappy customer who doesn’t return, refuses to recommend Farrell’s, and shares his negative experience with others. In the pursuit of golden eggs, Farrell’s was killing the goose.

Here’s another truly outrageous example of nickel and diming customers:

Ryanair, the Irish discount airline, has taken nickeling and diming passengers to a whole new level. Last year, its CEO announced—with a straight face—that he was working with Boeing to install pay toilets in the airline’s 168 Boeing 737s.

It’s true. Passengers would be required to spend one British pound (about $1.50) to use the toilet. No word yet on options for those passengers who either don’t have cash or don’t have the proper change. I suppose they can cross their legs—assuming there’s sufficient legroom…

And, just today, The Consumerist reported that a class action lawsuit was filed against Hilton for allegedly charging hotel guests 75 cents for newspapers they did not request and believed were provided at no charge.

Any time making money becomes more important than properly serving customers, the business suffers. When the bottom line drives a company’s decisions relative to serving customers, it will begin cutting back on product and service quality in order to improve its near-term operating statement at the expense of long-term customer goodwill and loyalty—not to mention comfort.

If companies genuinely believe that there’s a valid relationship between customer satisfaction and financial results, why would they ever agree to nickel and dime customers to capture another half-percent when they could invest in and deliver exceptional customer service and reap double digit returns on every metric that matters: employee satisfaction, customer satisfaction, market share, revenue, profit, etc.?

The American Customer Satisfaction Index (ACSI) produces scores for the causes and consequences of customer satisfaction and their relationships to, among other things, financial results.

Claes Fornell, Professor of Business Administration at the University of Michigan’s Ross School of Business, oversees the data collection and analysis of the quarterly ACSI results.

According to Fornell, “A five percent improvement in customer satisfaction leads to an increase of over 35 percent of future operational cash flow.” That’s a lot of golden eggs!

He refers to customer satisfaction, or the goose’s health, as “the ultimate economic asset for business, because the sum of the value of all its customer relationships is also the true value of the company.”

If companies would channel the same energy and ingenuity into customer satisfaction that they use to identify and apply creative ways to nickel and dime customers, they would more than recover the revenues gained from these irritating practices.

Instead of nuisance fees, these companies should look for efficiencies and cost containment strategies that will have the least negative impact on customers. By searching for ways to add value rather than fees, they will be caring for the goose—customers—while earning plenty of golden eggs!

Yesterday I went to my local King Soopers to buy the last few ingredients for our Cinco de Mayo celebration. As I was awaiting check-out in the express lane, the customer ahead of me questioned the price of a loaf of Sara Lee white bread.

I’m not sure what he was charged at the register but he claimed that the sign on the shelf said it was $1.99.

The cashier brought the loaf of bread towards the Customer Service desk but the manager was not there. He returned to his register and asked a passing employee to check the price on the shelf, handing him the loaf of bread.

The annoyed customer, noticing the line forming behind him, interjected, “Look, don’t bother. Just take the loaf of bread off my bill.”

The cashier completed the transaction, apologized to the customer, and then began to ring up my purchases.

I asked him, “Why didn’t you just charge that customer $1.99 for the loaf of bread. Now he’s not going to be able to make a sandwich when he gets home.”

The young cashier smiled sheepishly and said, “I know. But only a manager can make that decision.”

“That’s too bad,” I said, “because that customer still needs a loaf of bread. He can buy it anywhere: Safeway, Albertsons, Target—what incentive does he have to buy it here?”

I’m not sure what King Soopers paid for that loaf of bread but you can bet it was less than $1.99. And even if they did lose money on that one item, they would make it up on the entire sale—not to mention the thousands of dollars they stand to make from that customer during his lifetime.

Don’t quibble with customers over nickels and dimes. Trust that they’re not out to get you. Concentrate on serving them well—even if that requires making a concession now and then. Provide exceptional customer service and the profits will follow.

Have you ever noticed the similarities between attracting a prospective customer and wooing a mate?

There are lots of similarities when you think about it. For example, before the relationship develops, there may be frequent but informal contact. In business, that may look like a weekly e-newsletter that over time (as trust is established) results in a client project. In a personal relationship, it may take the form of frequent encounters at the corner Starbucks.

As it blossoms, there is usually lots of attention and care given to the relationship. In business, this is evidenced by asking questions of understanding, attentive listening, clarifying expectations, and responding to needs. In a personal relationship, these behaviors also apply.

Another similarity is that after the honeymoon phase, personal attention and care tend to diminish. Clients tend to hear from you less often and may need to leave a second message before you respond. And your mate may long for the time when you looked dreamily across the table, a slight smile on your face, while hanging on her every word.

But today you have competing priorities and don’t feel that you can be as responsive as some customers and mates require. And for this reason, among others, not every story has a happy ending…

That said, there are actions you can take immediately whether serving a customer or someone with whom you have a bit more of a, shall we say, intimate relationship, that will keep their eyes from wandering to the “competition.”

Express genuine interest. With customers, this is accomplished by making eye contact, smiling, and adding enthusiasm to your voice. Also, asking questions about preferences and being responsive to needs signal genuine interest. Chances are, your significant other appreciates the same type of attention.

Offer sincere and specific compliments. Genuine compliments make everyone feel better about themselves. A compliment is verbal sunshine. Shine on.

Share unique knowledge. In a customer service setting, this means sharing knowledge that goes beyond job knowledge that is expected (e.g., hours of operation, return policy, etc.). Unique knowledge has character and substance. It is interesting, unique, and unexpected (e.g., the history of the location, privileged “insider” information, etc.). Similarly, personal relationships benefit by sharing insights and feelings that transcend the expected (e.g., “How was work?”) and demonstrate personal interest (e.g., “Tell me about your day.”).

Convey authentic enthusiasm. We all do this differently. Some are bubbly. Others are less animated but equally enthusiastic. It’s easy to detect whether at work or home. They move with purpose. The lights are on. They are engaged.

Use appropriate humor. The key word is appropriate. With customers you need to use discretion and keep it professional so as not to offend. In personal relationships, you have a bit more leeway. Either way, laughter is the shortest distance between two people.

Provide pleasant surprises. Have you ever received an unexpected upgrade on a flight, at a hotel, or when renting a car? How did it make you feel? It’s a positive feeling that can be replicated again and again with something as simple as a card, a bottle of water, or a single rose…

Deliver service heroics. This sort of action is rarely required of us. It’s the exception, not the rule. But when the situation requires it and we go “above and beyond” in order to wow our customer (e.g., meet an overnight deadline) or impress that someone special (e.g., breakfast in bed), it makes a lasting positive impression that reaffirms her importance and reinforces the relationship.

My hope for everyone reading this post is that you would find some truth in it. Reflect on the quality of your own personal customer service to those people who matter the most to you at work and at home.

Are you developing relationships by demonstrating the types of behaviors outlined above or are you communicating indifference by merely going through the motions?

Be intentional about applying these behaviors and I assure you that your most important customers—both professionally and personally—will appreciate you for it and, most importantly, will only have eyes for you.

I met with a colleague this morning who shared a great story to underscore the importance of reinforcing trust with customers. Trust is a two-way street: customers have to trust the companies with whom they do business and companies have to trust the customers they serve.

If customers don’t trust your company for some reason, you probably won’t know it because they don’t do business with you anyway. They are a part of that elusive pool of prospective customers you may be trying to reach through advertising and marketing efforts.

But what about the customers who do trust your company? Are you reciprocating by trusting them too? The easy answer is “Yes, of course we do!” But the harsh reality is that that’s not always the case.  Consider the following true story I heard from my colleague, Brian, this morning:

There is a regional coffee chain that competes with Starbucks. Like most chains that compete with Starbucks, they have their hands full. It is in their best interest to do everything possible to differentiate themselves from the coffee giant. One way this chain had been successful doing that was through a loyalty program involving those familiar punch cards. Customers received a punch on their loyalty card for each cup of coffee purchased. When the card was filled with punches, the customer’s next cup of coffee was free.

Brian had amassed a stack of these cards over time containing a sufficient number of punches entitling him to several complimentary cups of coffee. One morning, he remembered to pull out one of the completely filled punch cards to “pay” for his coffee.

As he passed the punch card to the employee behind the counter as payment, the employee said, “Sorry, we don’t accept those anymore.”

My colleague said, “Why not?”

The employee then said, “Someone stole our punch and passed off a lot of fraudulent punch cards for free cups of coffee, so we stopped honoring them.” The implication being that perhaps his loyalty cards had been fraudulently punched.

I asked Brian what happened next and he said that he paid for the coffee but has not been back since. I asked how long ago this took place and he said it was about two and a half  years ago.

Now, think about this. Here’s a loyal customer who had been buying enough cups of coffee to completely fill several loyalty punch cards who, one day two and a half years ago, decided to stop patronizing this company (at any of its locations) because one of its employees did not trust that his punch cards were authentic.

Let’s do a little math on what this breach of trust may have cost this chain of coffee shops. We’ll be conservative and assume that he paid on average $2.00 per cup of coffee only once per week and that I’m the only person he’s shared this negative experience with—though it’s safe to assume he has told this story to many others!

• $2.00 (per cup) x 50 cups (1 per week x 50 work weeks ) = $100 per year in lost sales
• $100 (annual lost sales) x 2.5 years (period of customer absence) = $250 in lost sales to date!

What would it have actually cost the company if he had TEN completed punch cards? Two dollars? Three dollars? Let’s say it was ten dollars! That short-sighted decision to question the legitimacy of Brian’s punch cards—and, by doing so, his trustworthiness—has cost this coffee chain a minimum of $240 and counting…

This is not an oversimplification. This is happening to some degree in every business that opened its doors to serve customers this morning! This company’s relationship with Brian, like all relationships, was based in large part on mutual trust. But this trust had been severed two and half years ago by a frontline employee who challenged the authenticity of Brian’s claim to a free cup of coffee.

Communication, like trust, is a two-way street. I’d love to receive your thoughts and opinions.