Turn Goof-ups Into Gold

by Bill Collier

Every company makes mistakes from time to time.

The difference between companies is not whether they make mistakes. The difference lies in what a company does about it when it makes a mistake.
I’ll proclaim that each mistake is an opportunity if the mistake affected a customer.

Some companies have a culture of blame, assigning blame to anyone or anything other than themselves. If the error affected a customer, they might correct the outcome but act like they’re doing the customer a favor when they do it.

Other companies immediately spring into action to correct mistakes. They apologize. They might also offer the customer something extra to show they’re serious.

This is a culture of accountability: “Fix the problem to the customer’s satisfaction.” Words like “fault” and “blame” aren’t in their vocabulary.

Clearly, this is where you want to be. Many companies, maybe most, are there.
But I’m suggesting you kick it up a notch and turn costly mistakes into profitable occurrences.

Let’s say Bob’s Computer Repair gets a call from its main contact at Bigco Inc. reporting that Bob’s shipped Bigco’s repaired monitor but didn’t return the power cord.

Bob’s has a culture of accountability, so the rep apologizes, arranges to have it shipped right away and offers to credit the account to make up for the aggravation. So far, so good. Even though the rep did everything exactly right, most of Bob’s competitors would do the same, so it was good but not extraordinary.

What if Bob’s takes the time to fix the root cause of the error? Now the business begins to separate itself from its busy competitors who, as soon as the customer’s problem is resolved, get back to their hectic routine. This is the first way to profit – by driving repeat mistakes out of your business and enjoying the resultant productivity improvements.

But here’s one more step: Bring the customer back into the loop. What if someone from Bob’s contacted Bigco and it went something like this:
“Thank you for bringing your missing power cord to our attention. As a result of this situation, we reworked our procedures. Each product that arrives for service now gets a tag documenting all accessories. During shipping, the tag is matched against the accessories. Nobody should ever fail to get all their accessories back with their equipment.”

Almost nobody does this sort of thing. This level of dedication to quality, customer service and follow-through puts Bob’s in rare company and helps create strong, lifelong customer relationships. We all know the value of customers who are also raving fans.

Let’s recap:
1. Acknowledge the error and thank the customer for bringing it to your attention.
2. Immediately correct the problem and make sure the customer is happy. When appropriate, offer a concession.
3. Find and fix the root cause to prevent this error in the future.
4. Let the customer know about the improvement. Regain the customer’s confidence and strengthen the relationship.

We all make mistakes. You may as well profit from yours.

Bill Collier owns Collier Business Advisors LLC and is the St. Louis-area coach for The Great Game of Business. He works with organizations that want to improve financial results, engage their employees and create a winning culture. Bill can be reached at 314-221-8558, GGOBSTL.com or bill@collierbiz.com.