Let’s pretend you are a company that provides services to people. Let’s also pretend it’s cell phone services. You’ve got 3 different talk plans for your services. The bottom line one is 450 minutes a month for $35 a month, the next level is 900 minutes for $48 a month and a third level is $70 a month and has no limits at all.
Now that we have that all settled, Company A, let’s also say you have several fictional competitors, Company V, Company S and Company T and, although they all pick different numbers of minutes for their price breaks, they all run basically the same. OK. We’re all set for the customer service part of this.
Suppose one of your good customers has been with your service for years and years, always faithful and they have the lowest level of service. Suddenly one month their talk time makes a big jump. Where they always had 1,500 extra minutes left to roll over month after month, and they’re paying you for minutes they never use, suddenly those minutes are gone, used up. And that calling rate continues for the next month. Now, even though this is out of their normal patterns, which of the following is better customer service? (Yes, it’s a test. I didn’t tell you ahead of time. My bad. Live with it.)
- You count up their minutes over their basic plan and charge them at $.45 a minute for every one of those minutes because you get extra profits this month from them. They screwed up for some reason and you don’t care why, it’s too much fun to rake that money in. You send them a bill that’s five times what they normally pay, over $300.
- You move them to the unlimited calls plan and send them a message letting them know you noticed they’d burned through all their stored up minutes and then some. You didn’t know what was going on, but you thought that the customer might not have realized what had happened. Just in case they didn’t know, you’d moved them automatically to the $70 plan instead of charging them hundreds of dollars. You tell the customer that if they’d like to be moved back to the lower plan, just call customer service and they’ll help you. Their bill is $70.
Obviously option two is much nicer to the customer and number one holds to the letter of the contract you have with the customer (although that contract has expired). So, which one did you pick? Option A gives you roughly $250 of profit now. Damn the torpedoes sort of attitude. Option two is the nice guy attitude. You’ve been a good customer and we’d like to return the favor. We could have stuck you, but we’re in this to keep your business.
You picked option one, Company A. What it also gets you is a pissed off customer. What will they do? Well, they currently have two cell phones, a home phone, and internet services through you. They’re paying you somewhere North of $100 a month for various & sundry services and they have for decades. However, because they are no longer under their contract, they’re about to drop your ass. I’d tell you where to stick all that profit you just made, but you probably already gave it to your CEO.