I’m taking the Guitar Repair and Building Program at my local technical college. During a discussion with an instructor, we touched on a misconception about customers’ expectations and dissatisfaction inclinations. Like a lot of small business people, my instructor was under the delusion that customers will naturally complain if they are disappointed with service or product quality. Many larger companies are equally happy to pretend that they are getting 100% “compliance” from dissatisfied customers. The fact is that most customers simply log their dissatisfaction and tell themselves they will remember to never buy that particular company’s product or service again, after receiving crap service or a defective product. Most companies are perfectly happy with that outcome. Sounds like a perfectly balanced system, right?
At the other end of this “system” is the wrong-headed conclusion most business people make about customer loyalty. I’ve heard more than a few executives claim that customers don’t shop out of loyalty any more. The problem isn’t with customers, it’s with businesses. Loyalty is not a one-way street: you have to give it to get it. Counter-intuitively, you have to work at giving it.
During my ten years with QSC Audio Products, we’d developed a pretty thorough system of handling customer complaints, tracking customer purchases, feeding back customer and product information to marketing, engineering, and manufacturing, and statistically analyzing our product warranty problems and costs. When I left that company, I’d been recruited by an MI conglomerate to turn their low end sound equipment division into something more resembling a competent manufacturer. During the initial talks, I’d been led to believe the company was considerably more substantial—organizationally and financially—than it actually was. So, that moment of employment was doomed from the beginning. If I wanted to fund a start-up with my own equipment I’d have started-up my own company.
Late in the 30 days I wasted in Indiana, I was asked by the company’s guitar division customer service manager to explain QSC’s quality management system. About 1/10th of the way into the discussion, he interrupted me to say, “That’s all way too complicated and expensive.” He went on to say that the company shipped product with a known 50% defect rate, based off of the internal random inspection data from a few years back (Since they quit inspections after a few months, product quality had probably gotten worse.). From a suspected 50% defect rate, about 1% of the company’s customers complained, expecting some sort of warranty response. If they stonewalled that first complaint, about 1% of the first 1% would come back for more abuse. No special inspection was done for warranty replacement instruments, so at least 50% of the replacements were also defective out-of-the-box. According to the manager, that 1%-of-1% routine applied to warranty replacement complaints. So, while at QSC we were aiming for 6-sigma (99.99966% defect-free, but often struggling with three-sigma performance; 99.73% defect-free), his company could boast an uninformed-by-reality 99.99235% non-warranty-claim rate without spending a dime on quality control and while shipping product that most customers would call “junk.” Between that and a conversation with the CEO regarding the discrepancy between the information in my offer letter and reality, I quit a couple of days later.
Those statistics are from large-quantity production. Small quantity (boutique) production and service businesses don’t have access to actual numbers and formal inspection procedures and if they rely on customer complaints for feedback they are committing business suicide. In fact, the only way a small business can get any kind of information about customer satisfaction is to hunt for it. When someone cares enough about the product or its performance to complain, a conscious customer service tech should take that complaint seriously and to heart. The 1% of your customer base who care enough about your product or their expectations to complain are rare and valuable. If you choose to ignore them, don’t complain when your customer base makes its buying decisions solely on price and delivery. You have informed them through your actions that you don’t give a shit about their expectations and the result is that they won’t care about you or your company’s survival.