For today’s post I thought I’d share an actual email conversation I had last week with a colleague who owns a video production company. It’s raw and real. Nothing has been added, deleted, or otherwise altered to make a point. Our conversation dealt with client service, justice, service recovery, and service level standards. Take from it what you will. Comment if you’d like to add to the conversation.
COLLEAGUE: Steve, Hope that you’re well.
Let’s say a service business blows a milestone delivery. In our example, we’d have blown the script delivery, which is early in a video production project.
What do you think the moral obligation of the provider is when they blow their contract on something that’s important, but potentially recoverable?
The reason that your work is striking is that Job Essence is a moral thing.
ME: Since a missed deadline involves time that, once expired, is unrecoverable, the best you can do is attempt to recover time that has yet to expire – which would be in a future stage of the project. In essence, there would be “no harm, no foul” in that the ultimate project timeframe would be honored.
Most reasonable customers can connect these dots. Problems arise when a missed deadline during an early project stage is treated as “no big deal” by the provider and the time is never recovered – and perhaps is even multiplied by additional delays during latter project stages, resulting in a delayed deliverable (and a disappointed customer).
I recently read about a financial institution that is challenged by customer dissatisfaction with the length of time it takes to process a mortgage loan. In most cases, given the due diligence involved, it takes closer to four weeks than two weeks to process these loans. It would be irresponsible for the lender to commit to closing loans within two weeks in order to lure customers and attract more loans – knowing that, in reality, it could take twice as long to close these types of loans.
Their solution was to create a visual aid that clearly outlines every stage of the loan approval process along with the steps required during each stage, the contact information for the department (and, in some cases, the person) involved, and the timeframe associated with each stage. Customers can see for themselves every step involved and how the entire 4-week process is apportioned. Because there are variable timeframes (e.g., 3-5 days) during each stage, the customer knows up front that, while it’s possible to close the loan inside of four weeks, it could very well take all four weeks given everything that must be completed (e.g., application, credit bureau reports, personal financial statements, home appraisal/inspection, loan settlement/title insurance, closing, etc.).
Now, even though the process and timeframe have not changed, customer satisfaction with the mortgage loan process has increased – simply because of the lender’s transparency regarding the process.
Hope this helps.
COLLEAGUE: It helps.
I am now advocating the following:
Any milestone missed by 1 second or more, (that’s the fault of the provider) is an enormous breach of integrity. This automatically entitles their customer to an immediate unsolicited offer of a refund.
Anything less is fraud.
ME: I think that sounds drastic. Most customers, especially for your type of service (video production), would rather have the video of their dreams than a refund check. Also, from the customer’s point of view, they now have the responsibility (aka: headache, hassle, time suck…) of locating a new provider – essentially, starting all over again from square one. This increases customer effort, which might be the real sin in this scenario.
My two cents…
COLLEAGUE: The gist here is that we’re OFFERING a refund. We’re not forcing it. A script:
“Hey, we really screwed up, and milestone X isn’t going to be done on time. We think it’ll be done at ______ time. This isn’t who we are, and I wanted to know if you’d like to go on with this project, or have a refund. Either way is fine with us.
If you choose a refund, it’ll be processed tomorrow.
If you would like us to continue with the project, we’ll do X to get on track, and we won’t miss another milestone.”
ME: Why don’t you add: “We weren’t all that jazzed about your project anyway” after “Either way is fine with us”? That’s how I felt while reading it.
COLLEAGUE: HA. Good call. The effort here is to make a grand gesture if it happens again. To be impeccable.
To acknowledge that it’s a VERY SERIOUS matter being one minute late on any milestone under any circumstances. And to make a sincere gesture.
So, I wanted to say “Hey, we’ve made a serious mistake. Any time we miss a milestone, that warrants a refund, and we’ll extend that offer. We won’t have it happen again and again.”
Most of the time, clients say “no worries,” but we must hold ourselves to higher standards than our clients do.
Both on the deliverable and the experience.
ME: If I told a client that I’d be late with a deliverable (like books or slides) and then, in order to hold myself to the highest standard, said, “I’ll understand if you want a refund,” she (most of my clients are women) might say, “What?” and would probably consider me to be quite naïve…
I’m working with a client now on developing service level standards for their entire organization. Early on in the project, one of the stakeholders posed the question, “What sort of concessions should we document and communicate to the customer in the event that we don’t perform to our standard?” My response: “None.”
I’m telling you that the great majority of customers (and every customer for our type of work if you choose them wisely) do not want their money back – and they don’t want a (service recovery/concession) check for, say, $100 if you miss a deadline during the production of their video. They want their video to be amazing! Their stated objective might be, for instance, to produce a book trailer. But their real desire is to sell a boatload of books, appear on best-seller lists, expand their platform, and create more demand for their offerings. (Oh, and make some money in the process.)
You will miss deadlines. Not on purpose, of course. Your client (assuming you really care – and I know you do) will “know your heart” and will adjust their expectations accordingly. That does not give you license to willfully abuse their expectations; it just means that when the inevitable hiccup occurs, they will extend grace.
Just this morning, my painter, Fernando, arrived 45 min. later than expected. I had a 7:00am webinar and was pressing to get the room ready for him to paint (moving items off shelves, pushing furniture to the center of the room, removing artwork from the walls…). Had I known he would arrive at 9:15am rather than 8:30am, I’d have had a lot more margin in my morning.
But here’s the deal: I’ve worked with Fernando before. He’s a reliable guy. He does great work for a fair price. One winter, his pipes froze and I loaned him a space heater. He has a young daughter that he takes to school in the morning. Today, he quoted me $250 for the room and then immediately faded to $200 because he remembered a referral I gave him two months ago. I told him, “Okay, $300. But not a penny more!” He was delighted – just as I’ll be with his deliverable in about seven hours.
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