Policies Kill
The Client called with a problem. Your employee responded that your company policy does not allow him to give her what she wanted without paying for it. Six months later the Client informs you they are not renewing their services agreement with you. They chose another company. You are shocked. You did not realize there was a significant problem with the account.
Your employee did what they were taught to do, but not what we teach in Dave's Charm School. He followed your company policies, which gave him responsibility for the client experience but not the authority to do what it takes to meet or exceed their expectations. The result was a seed of discontent planted in the mind of your former Client.
John DiJulius wrote recently in his blog about the importance of having guidelines instead of policies. I agree. Policies can be very restrictive, while guidelines allow your employees to go the extra mile during Client interactions.
Learn from the pros: How much money can a Ritz Carlton or Nordstrom employee decide to refund, spend, or write-off to keep a customer happy? I mean any employee. It could be a sales person on the floor of Nordstrom's women's shoe department, or a guest associate working the registration desk of a Ritz Carlton. It's $2,000. Without asking anyone.
What is the average cost to the Ritz Carlton of this policy, or guideline, per refund, expense spent, or write-off? $25 on average. Twenty-five dollars! That's a bargain!
Too often we try to save $100 here and there, instead of focusing on doing whatever it takes to retain a profitable Client. There are some Clients we need to let go. I am not talking about those. We NEVER want to lose a good Client. But we are lying to ourselves when we try to penny-pinch our way through customer service.
The alternative is for leaders to develop a self-motivating work environment where employee responsibilities match their authority. You have to learn how to put aside the tyranny of urgency each week to focus on becoming a better leader and building your company.
LEARNING POINTS
- Have guidelines for serving Clients, not iron-clad policies. Those rigid policies kill Client and employee relationships, which is extremely costly.
- Even with guidelines, your leaders still need training. This Thursday we kick-off our third round of Certified LEADER training sessions. It lasts six months so new habits can be developed. Learn more and sign-up here.
