Again on Residual Value of the Customer

Subjects: Lose a little in the short term, make big money in the long term
Principle: When you got a misunderstanding with your customer, be flexible, concede to gain good will and referrals

I was not sure what to blog today about and my mom come to the rescue with the perfect story about business myopia, obtuse mind and lack of big picture perception. Interested in hearing about the perfect customer relation screw up? Then read on…

My mom lives in a condominium with some 25 other families. As the sun shines on the balcony for long hours during the day, she decides to install shades to get some relief from the heat: she goes, together with another neighbor family, to a shade-shop that was referred by a friend (referrals!!!!). So far, so good: now let’s enter into the twilight zone of bizarre business behavior.

The owner show them several shades and they (my mom and the neighbor family) decide for a specific type: they then sign a contract for the installation. As the owner is with them all the time, they just get a glimpse on the contract (about 1,200 Euro or 1,500 USD of value), sign it (big error) and leave 100 Euro (130 USD) of deposit.

The day the installers show up, my mom realize they are installing a different kind of shade: right away, she calls the owner of the shop to clarify the misunderstanding. And here the trip to fantasy-land starts.

The owner, in this CIM (Critical Interaction Moment) asks (with rude manners) my mom read again the contract and make her realize that she signed to get exactly what the workers were installing. “But this is not what you showed us: we trusted you when signing the contract” “Sorry Madame, next time you should read what you sign”.

Sure, he is going to probably save some tens of Euro, refusing to concede to my mom…

But let’s see how much this Einstein of business is going to lose

• My mom and her neighbors will now do anything possible to void the contract

• They will never, ever consider any upgrade to the installation

• From this moment on, my mom + neighbors will do anything possible to make sure he does not get a single dollar out of any family in the building. As the building is new, potentially all 25 families need shades… they are all now unreachable by this Machiavelli of shades

What could have been an alternative, saner, outcome?

Well, how about this: the owner answers in a polite way, recognizes the error in the procedure, fix the issue and get all the goodwill in the world from my mom.

My mom tells everybody in the building about this incredible person and he gets lot of extra referrals. Everybody would have been happy, very happy.

Sometime it’s too difficult to be smart…

Kramerilio in Seoul, Korea