How companies waste money

Recently, I accidentally came across the following conversation on one of the social media sites of the travel company Booking.com: A customer credibly complains that she will not be reimbursed – of about $100 - for a cancelled overnight stay. The company's answers revolve solely around formal justifications as to why the amount cannot be refunded.

Important background: In the last years, the customer booked trips of over $10'000 with the company.

I find such cases interesting, because they dramatically show the wrong priorities of the company: instead of systematically increasing the value of a customer and inspiring new bookings, they insist on process conformity. Unfortunately, this is not an isolated case.

And before you say, "something like this could not happen with us," I suggest you look twice. You'd probably be surprised how much business potential with customers is also falling through the cracks at your company.

Here are three typical approaches to plugging holes (in which you are throwing away money and goodwill) in your interaction with customers:

1. Clarity. How clear is it to your people, and to yourself, what a treasure your customers represent? The lifetime value of customers is often grossly underestimated, leading to blatantly wrong decisions regarding complaints and other interactions. The €100 saved from an unpaid credit note can easily mean €50'000 in wasted sales over the next few years. Often even more, if one includes the now missing recommendations of this customer.
2. Focus. How focused is your team on creating real customer enthusiasm? Are your people trying everything to inspire customers to make more purchases? Or is the focus more on following procedures? Remember: what you focus on is multiplying. Do you want more enthusiastic customers or more procedures? The choice is yours!
3. Authority. What authority do your people have to inspire customers spontaneously, by their own decision, and, thus, increase customer value? If a "superior" (in the truest sense of the word) always has to be asked first, you nip any initiative in the bud.

These approaches are quite easy to understand, but not easy to implement. Contact me to discuss what we can achieve, together, on this topic.