Are Your Policies Leaving You At Risk Of A Reputation Disaster?

Explosion

Image: Andrew Kuznetsov via flickr

When running any business (online or not) you have to make hundreds of decisions on how you are going to deal with different situations, most of these decisions become your operating policies.

For example how will you deal with refunds, returns or lost orders?

Settling on a policy is pretty straightforward but I urge you to really think through the possible eventualities of your decisions or you could be heading for an online reputation disaster.

How One Insurance Company Got It Wrong

It’s true that people generally only talk or write about businesses if they have either had some kind of outstanding service or have been (in their minds) let down. Unfortunately it is the negative side of things which usually garners the most traction.

Take the example of Progressive Insurance in the US, somebody obviously decided that it was better to try and stop customer claims being paid out at all costs rather than honour their customers who had paid their premiums.

I’m sure this made perfect sense in terms of their overall bank balance, but it lead to a social media disaster when it came to light that they were paying the court costs of a driver who was involved in a car crash which killed one of their customer’s sisters.

This lead to a significant amount of people cancelling their insurance policies with Progressive out of both disgust and distrust.

The decision doesn’t look so smart now does it?

A Decision Which Could Spell Future Trouble

A few days ago I was looking through an online forum for business owners, somebody left a message indicating that they were considering a policy of not being liable for any lost items due to shipping outside of the EU.

The question was more to do with their legal position rather than anything else.

To me the guy asking the question is completely missing the major issue which would arise from this kind of policy.

The problem isn’t the threat of legal action from the customers, it is the damage that a handful of disgruntled customers could do to his businesses reputation.

Your Customers Are Your Business, Don’t Let Them Down

The mind-set of the business owner in the example above is completely focused on their own side of things, they are obviously struggling with some level of loss due to missing items outside of Europe.

Yes, this is a problem but they should be focused on resolving their delivery issues rather than putting themselves in a position whereby they could easily be letting down genuine customers.

If shipping can’t be resolved then they either have to swallow the occasional losses or, if this is not possible, withdraw their service to these countries.

If they went ahead with this decision then I as a customer could easily find myself paying money in good faith for a product which they fail to deliver, only then would I find out that they are not liable for shipping, how would this make you feel?

You should as a business owner should be looking to flip this negative issue into a positive.

Making A Bad Thing Good

How would I feel being the same customer who had paid for but never received an item to get a response along the lines of:

Hi,

Unfortunately the item you ordered seems to have been lost in shipping somewhere between us and you, please see our online tracking details here for your order to confirm this.

We are very sorry for the inconvenience of this and as such will dispatch another item immediately.

As a sign of good faith and our appreciation of your patience we would also like to offer you this free voucher which qualifies you for free delivery / money off / refer a friend voucher (delete as appropriate).

With best wishes

Do you think this would generate a different feeling inside me from the previous response? You Bet!

I think this is one of the lessons you learn as you go along.

With new startups the focus is often on not losing money and trying to eke out the most money from each customer as possible, but when you get to a certain stage you realise that having really happy customers is more important to your success than taking the occasional monetary hit here and there.

What do you think, do you agree with me on this one or not? Let me know below…

Comments

  1. A large portion of what is involved is simply common-sense coupled with a desire to provide the best possible service with every customer.

    Those businesses that don’t deal with lost parcels/deliveries like that radiate an “we don’t really care too much, we’ll make money anyway” attitude. Whether the country is in recession or not, that kind of approach has never and will never work. Bad news travels fast.

    Great article, great blog.

  2. Hi Paul,

    Thanks for the great comment!

    You’re right, the customer experience has to come first, after a few tough years in business it’s sometimes easy to forget this but there’s nothing like a great reputation to help with your sales and marketing efforts.

    Darren

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