Last Impressions, Lost Customers
A. Blanton Godfrey
Not long ago, several friends
and I discussed some of the dumb things companies do to
lose customers. We cited a hotel with lousy showers as a
sure way to leave a negative impression because customers
so often shower in the morning, pay their bills and leave--usually
never to return. Bad coffee is another culprit. Many pleasant
evenings and good meals are ruined when the coffee comes.
In such cases, customers literally leave the restaurant
with a bad taste in their mouths. We all agreed, however,
that billing errors win hands down.
The bill is almost always the last memory of the service
event or goods purchased. An error often causes dissatisfaction,
frustration and loss of the customer. Perhaps the worst
part of billing errors is trying to get them corrected.
The process seems intentionally designed so that correcting
the problem is difficult or even impossible. We end up suspecting
the company’s strategy is to harass the customer to
the point where he or she writes off the loss of time and
In the intensely competitive cellular phone business,
customer turnover is the biggest problem facing providers.
Each tries to lure other companies’ customers away
with increasingly attractive offers. Although they spend
fortunes in advertising and promotions, they’re all
apparently bent on driving as many customers away with absolutely
ridiculous billing procedures. A recent New York Times article
described customers’ frustration with complicated
bills that were 20 to 30 percent higher than the advertised
“flat-rate plan.” The companies’ excuse
was that because everyone else in the business engaged in
misleading ads, they had to as well in order to remain competitive.
Recently, I gave up on Cingular, my wife’s cell
phone service provider, after nearly two years of billing
errors. Earlier we’d moved out of state and transferred
her account. For months, we received bills detailing overdue
amounts, late charges and even reconnect fees. Then we’d
receive a refund check from the original account. Eventually
we determined that Cingular was depositing the checks into
the old account, billing us for late charges on the new
account and then, several months later, refunding the money
deposited in the closed account. Trying to get this corrected
was a nightmare.
Finally, I thought the simple solution was to cancel the
service and start over with another provider. Was I naïve.
Canceling cell phone service is a special nightmare unto
itself. Because contacting the company via telephone is
a task only for those with lots of time, I decided to write
a careful letter canceling the service. In the meantime,
I’d found another (by this time outdated) refund check
aging in a drawer; foolishly, I included it along with the
letter. Even more foolishly, I mailed both in the envelope
in which I’d enclosed payment for the last bill.
I learned many lessons: Never ask a service provider more
than one question at a time. Never include a letter in the
envelope with the bill. Never return a check.
We subscribed to a different cell phone service and stopped
using Cingular. Several months went by, and then we received
another bill from them. Then another. Finally I called to
find out why the company hadn’t stopped the service.
The service representative was quite polite but explained
that it was all my fault. I should never have included a
letter in the bill, which goes to an office several states
away from the customer service headquarters. Instead, I
should have called or written to the address on the stub
of my bill. I had the bill in front of me and asked where
the address was. After several minutes, she admitted it
wasn’t anywhere on the bill. Perhaps the correct address
was printed somewhere on the avalanche of literature they’d
sent when we’d started service.
The next catch was that customers could only stop service
on certain days of the billing cycle. The service representative
explained that I owed for service up to that date. At this
point, even though by my calculations the company owed me
about $70, I simply wanted everything to be over. I told
them that if they’d just stop service, they could
keep the money.
But no, it wasn’t over. The service rep kept me
on the line for another 10 minutes while she calculated
the final bill, verified my address and then explained that
it might take several months for me to get my refund. It
would be an interesting exercise to calculate the total
cost in time and labor to the company that were required
to straighten out this mess. And in the end, they lost their
How many times does this happen every day? Most companies
have incredibly poor processes for dealing with customers
and correcting problems. They spend the valuable time of
both their people and their customers, only to lose their
business in the long run. This problem is one of those “hidden
gold mines” that could be lucratively addressed through
A. Blanton Godfrey Ph.D., is the co-editor of Juran’s
Quality Handbook, Fifth Edition (McGraw-Hill, 2003), and
co-author of, Modern Methods for Quality Control and Improvement,
Second Edition (John Wiley & Sons, 2001).