Case Study 1 : The Inexistent Customer Service

We have all experienced this. Automatic hotlines never leading to answers, customer services ignoring us,
expensive hotlines forcing you to pay to complain, emails never receiving any answer, people sending you from a
department to another constantly asking you to repeat your story... bureaucracy and administration are as
necessary as there are harmful for your company's image.

Recently, A man experienced what might have been the worst customer service experience he ever had.

Customer’s Experience :
I fly Lufthansa with my friend. We booked tickets way earlier and we are now ready to fly. Problem is: Lufthansa's
staff is on strike. As I am French, I can hardly blame Germans for being on strike: in my country, this is almost a
national sport!
My flight is changed to another airline and confirmed. All good.
We fly with my friend, but starting then, nothing goes right: we can't sit together, our flight gets late, we miss the
next flight, our luggage is lost, we are sent for three hours from one counter to another, then we are asked to pay
our Metro tickets by ourselves to reach a train station that might help us reaching our destination... hell on earth.
A few days later, I prepare a long, polite, detailed and well organized email to describe my exact situation to
Lufthansa's customer service, convinced that I will get a quick and efficient answer.
After a few minutes, I receive an auto-reply:
Dear Customer,
Thank you for your email.
We will contact you with an answer to your query as soon as possible. In the meantime, your patience is highly
appreciated.
Thank you for choosing Lufthansa and we look forward to serving you online and in flight.
Lufthansa Customer Service & Support Center
Great! I will receive a quick answer.
A week later, I still have nothing. I send another email, copying the original message and asking if my case is being
handled. Same automatic answer.
Another week passes. I check online and find that there are several "customer service" lines for Lufthansa. I decide
to try calling. This time someone answers me! And the answer is clear and precise: please send us an
email.................. I send a third email asking if I can expect receiving an answer someday.

Dear Mr. Rio,

I leave this all story aside for a while. After a month, I send a fourth email and a fifth one, one for each customer
service line. I also go on Facebook and find that Lufthansa has a page: I leave the same complaint there.
My two emails got absolutely ignored but my Facebook message is almost instantly replied:
Hi Julien, I'm sorry to hear you still haven't received a reply from Customer Relations. I will send them a message,
asking them to get back to you as soon as possible.
Great! Finally, something happens!
Well, not really... 45 days after the initial email, I still got no answer and I lose patience. I go back on the Facebook
page and check out other people's messages: I AM NOT ALONE!
Hundreds of people in various languages are complaining the same way as I do for similar reasons.
Enough is enough: I decide to take another approach. I create a Facebook page: "Lufthansa's disappointed
customers".
I go back on Lufthansa's page and remind them that it has been over 45 days since my original complaint and that I
have received no feedback so far. I mention my new page and invite all disappointed customers to join and share
their stories.
A minute later, I receive the following message:

Hi Julien, I have contacted Customer Relations. A decision regarding your case has been made today, you will be
contacted shortly.
Magic, isn't it? You wait for 45 days and nothing is done, but the day you create a Facebook page for disappointed
customers things get better!
Well... not that much actually. My case might have received a decision, but I still haven't received any feedback.

You paid for a service. You received a much lower quality of service and went through endless troubles. When you
would expect to receive apologies and/or compensation, you are asked to wait.
After sending several emails and request, after waiting for 45 days, you still get no feedback, no-one takes interest
in your case. How could it be more frustrating?

The result from the customer's perspective is obvious:

 What do you think of this situation ?

There is one thing each entrepreneur, manager or customer service staff should keep in mind at all
time: Regardless the quality of your product or service, if your customer service is not up to customers' expectation,
all your work is worth nothing.
You might follow step by step all my guidelines and still face difficult situations: that is normal. Customer service is
more a social science than a business. It requires you to really understand people's mind and needs and not
everyone is able to do so.
But if you follow all the steps previously stated, you shall at least be able to limit the frustration of your customers.
Remember that a happy customer might share his experience with one person but a disappointed one will share it
with 8 others. Bad word of mouth can kill companies. Take very good care of your customer service.
Customer service is all about changing feelings, not facts. Whatever bad experience your customer went through is
past already: what you can, what you must change is his perception and feeling about your company. You must
convince your disappointed customer that they can trust you again. Changing feelings involves dedication, empathy
and respect – it doesn’t require money. Most people will be satisfied with a fast reply, apologies and – eventually –
a discount, a small gift or some advantage. Make your customer feel important and involved: that costs nothing and
that creates loyalty.
Case Study 2 : The Complaining Customer

In an effort to improve service, Presto Cleaner installed a new computer system, designed to cut the
customers’ waiting time and simplify the drop-off and pickup processes. But the system was only a few
months old when Mr. J.W. Sewickley, the company president, received an angry letter from Mr. George
Shelton, whose laundry had been lost by the new system. Mr. Shelton’s letter described his experience with
Presto Cleaner’s complaint-handling operations and demanded compensation and an apology. To respond to
the complaint, Mr. Sewickley sent the letter to his customer complaint office, asking for more information.
The answer came back from Paul Hoffner. He explained that there were extenuating circumstances and
suggested that some customers may not be worth keeping.
Letter By George Shelton to the company President : -

Mr. J.W. Sewickley

President, Presto Cleaner

October 14, 1989

Dear Mr. Sewickley,

My wife and I are angry, frustrated, and disappointed ex-customers. We weren’t always that way. In fact, for a year
prior to the recent set of events, we were exceptionally pleased with your service. When you opened your store at the
intersection of Adams and Broadway, we were delighted. Even though you’re not exactly the least expensive dry
cleaner in the area, my wife and I felt that the convenience of the location, the extra early and late hours of operation,
and the helpfulness of the staff more than made up for the cost.

That was before you installed your computerized system. The following set of facts will tell you why we are not doing
business with Presto Cleaner and what you need to do to get us back as satisfied customers.

At the store, I told the counterperson I had an order to pick up. She asked me for the receipt. I explained that I had used
the new computerized system with the bags, so I didn’t have a receipt. She asked for my identification number. When
she punched it into the computer, it said that my wife had picked up the order earlier in the day.

When I got home, I asked my wife if she had picked up the order. She said she had because she had a business meeting
the next day and needed a suit that was at the cleaners. I asked about the bag, and after looking everywhere, including
the backseat of the car, we finally determined that she had picked up a previous order and definitely not the order with
the special bag. Missing were 4 shirts, 2 blouses, 1 suit, and 1 skirt.

I went to the store and asked about the lost clothing. After a lot of asking around, the counterperson finally determined
that the clothes had not turned up at the store. We next tried to locate the order in the computer, only to discover that
when my wife and I had chosen identification numbers, she had used our home phone number and I had used my
business number. After searching the computer using both numbers, we still turned up nothing. The counterperson said
he would put a tracer on the order back at the plant.

August 25: I called the store. It had heard from the plant, and the plant did not have the clothing.
Why, Mr. Sewickley, did they not call me? I asked how to pursue a claim for lost items and learned that I should call a
Mr. Paul Hoffner at the office. I immediately called Mr. Hoffner and was told that he was not available. I left a message
for him to call back as soon as possible.

September 23: I went in to pick up the dress. The woman behind the counter recognized me and told me that the store
had found our lost clothes. Apparently, they had been mysteriously included in another customer’s order and only just
now returned. She had no clue how this could have happened with the new system. She was, as usual, cheerful,
apologetic, and polite about the mix-up. I paid for the order, picked up the dress, and went home.

Mr. Sewickley, that was more than two weeks ago, and I still haven’t heard from Mr. Hoffner. I am outraged by this entire
episode, by the way your company treats customers, by Mr. Hoffner’s conduct, by the lack of communication, and by the
ridiculous system you introduced. I am particularly incensed at having to pay for clothes that were delivered almost two
months late and by having to purchase new clothes to cover your company’s mistake.

I expect the following: a full refund for the order that was lost; full payment for the four shirts that I had to buy to make
up for the lost order; and a full apology from Mr. Hoffner. If all of those are forthcoming, I might consider giving your
company another chance at my business. Otherwise, my wife and I will never patronize your company again.

Sincerely,

George Shelton

Memo By Mr. Hoffner to the Company President on the complaint :-

This is in response to your memo requesting background information to respond to the customer complaint of Mr.
George Shelton. I am convinced that we did make a good-faith effort to do right by Mr. Shelton, although he may not
recognize it as such. Nevertheless, should you wish to mollify the customer, I would be perfectly happy to play the role
of fall guy if it would help. As far as extending compensation to the customer is concerned, his demands seem to me far
in excess of any real liability: he did get his clothes back. I would certainly extend an apology to him—if he would like it
from me, fine. Let me describe what really happened:

After I spoke with the customer, I spent the next ten days or so checking with the store and the plant in an attempt to
determine what exactly had happened and to locate and identify the clothes. By the end of the first week, I felt sure that
the clothes had mistakenly gone to another customer. But there was no way to retrieve them, other than to wait for
them to turn up. I did not tell the customer this, of course; after years of experience, I have found that customers only
get more upset at the idea that a stranger has their clothes. I sent the form after he requested it, I did not tell him that I
had delayed in sending the form. I told him we were trying to locate and identify his clothes. I did not tell him that I had
delayed in sending the form. I told him we were trying to locate and identify his clothes. As you can tell from the tone of
Mr. Shelton’s letter, he is a very demanding, persistent individual. Given the number and frequency of his calls, there
was no way for me to demonstrate progress on his problem before he called again. He often did not leave a phone
number and, on more than one occasion, even refused to leave his name. For example, he would say, “You know who
this is.” My secretary found all of this quite distressing. Moreover, I’ve never run into a customer so anxious to be
compensated. Now some restitution, such as one free order and a written apology, should be enough. If that is not good
enough for Mr. Shelton, it seems to me we should ask, “Aren’t there some customers we are better off losing?

 What is the best way to handle this case of complaining customers ?

Mr. Sewickley should replace Paul Hoffner. His response—and consequently Presto Cleaner’s—to the situation appears
to be oriented toward driving customers away, not toward building a business, the decision to introduce the system with
limited employee training and no advance customer preparation or education created a nightmare. Hoffner resorts to
identifying the rushed implementation of the system as an acceptable excuse for the customer problem. This clearly is
not the case.
All organizations make mistakes but they provide organizations like Presto Cleaner the opportunity to recover in ways
that actually build customer loyalty rather than lose business. This fact seems to escape Paul Hoffner. He appears to
have adopted an internally focused and strictly rational approach to search for the missing clothing. He therefore
ignores the customer’s emotions. Unreturned phone calls and unsent forms serve only to turn a small mistake into a big
one. The assumption that Presto Cleaner must actively guard against the potential of customers’ fraudulent claims
pervades all aspects of his relationship with Mr. Shelton. If you regard your customers as a band of potential cheats and
believe that you must protect yourself from them, how can you possibly deliver to them the kind of service they
deserve?
Case Study 3 : Can retailers win back shoppers who browse then buy Online ?

Bertice Jenson couldn’t believe how shameless they were. Right in front of her in the Benjy’s superstore in Oklahoma
City, a young couple pointed a smartphone at a Samsung 50-inch Ultra HD TV and then used an app to find an online
price for it. They did the same for a Sony and an LG LED model.

“Excuse me,” Bertice said. “I see what you’re doing. Don’t you think that’s kind of … unfair?”

The two shoppers looked at each other as though this hadn’t occurred to them. “We’re only comparing prices,” the
young woman said, stroking the West Highland terrier nestled in the crook of her arm.

“But the app—it’s Amazon’s, right?” Bertice asked. “Once you figure out which TV you want to buy, you’re going to order
it from Amazon.”

“Probably,” the young man said, shrugging.

“But Amazon … ” Bertice couldn’t articulate what she wanted to say. “See, Amazon … What I mean is, this isn’t Amazon’s
showroom. Benjy’s doesn’t display these products and staff these stores for the benefit of Amazon. We want you to buy
from us.”

They looked at her blankly. “Oh, you work here?” the woman asked.

Bertice wasn’t dressed like the sales staff, and the couple had no way of knowing that she was the daughter of Benjy’s
founder or that she’d been recently appointed to chair the board of the $40 billion electronics and appliance retailer.
She was now making a routine drop-in visit to one of the chain’s 2,000-some stores. But that wasn’t worth explaining.

“Never mind,” Bertice said. “Just be aware that what you do has consequences. This real-live shopping experience
you’re having here at Benjy’s is helping you decide which TV to buy. And if you order from Amazon, you’re basically
stealing that experience and cheating us.” She knew she sounded shrill.

Bertice was now preparing to mediate between her father and the company’s CEO, who had very different ideas about
how to respond to what Bertice had seen in Oklahoma City: “showrooming.” Customers like the couple with the Westie
weren’t unusual. More and more people were coming to Benjy’s to look at products but then buying them from online
competitors whose lack of a bricks-and-mortar presence enabled them to offer discount prices. Research showed that
83% of people shopping for electronics and appliances were now practicing showrooming. The chain’s sales had
nosedived as a result; the most recent quarterly loss was nearly $700 million.

Bertice prepared a presentation to show in the boardroom and she jumped right in “Showrooming is a serious
problem for most retailers, but particularly those of us in electronics. Amazon keeps making it easier for shoppers to
search, find, and order a product online. We need to decide on a counterstrategy.

The projector was balky, and Ben (her father) took advantage of the pause to put his own views out there. “I think it’s
obvious that we need to play both offense and defense. Offense should include providing more-aggressive discounts
through the Benjy’s app and matching online prices. We also need to get more suppliers to impose minimum advertised
prices on their online retailers, so that there’s a floor price for every product, online or off. We’re already working on
that.
“But there are ways to stop object-recognition software, in online shopping apps ” Ben continued. “We create display
structures within the stores that confuse the apps while still showing off the products. There are consulting firms that
specialize in this. The costs are relatively minor and well worth it. Personally, I think this tactic is a no-brainer.”

Then Farb (current CEO) said : TVs and laptops may seem like commodities that people want to buy only at the lowest
possible prices, but so did coffee before Howard Schultz made Starbucks a destination. Why shouldn’t Benjy’s do the
same—showcase only the highest-value products and educate customers about them, instead of letting them flounder
in an overwhelming, uncurated retail landscape?
“You’re sounding naïve, Farb,” Ben said. “People will still showroom if they find better deals online.

“We could still match prices,” the CEO said.

“How could we afford that?” Bertice asked, keen to break up the back-and-forth between the two men.

Bertice could sense that Farb was ready to respond and that her father was up for a fight, but she knew it wouldn’t be a
productive one. “Farb, you’re proposing a pretty radical change and it’s a lot for us to digest,” she said quickly. “Dad, it
would also be useful to have more detail on those countermeasures you mentioned. So let’s table this discussion for
now and get through the other items on our agenda. Farb can send around his deck, with plenty of supporting data, and
we can all take some time to review the information.

The next day, Bertice was in Huntsville, Alabama, to join in the ribbon cutting for a redevelopment project. Several big-
box superstores—including a Benjy’s—had been closed and replaced by a mixed-use residential-retail community.
Benjy’s still had a presence but a much smaller one.

“Welcome to Benjy’s,” a store employee said when she walked in. “Did you come here today looking for something
specific?”

So customers weren’t responding to price-matching, and they were being chased away by excellent service. All this put
her in mind of Oz again. She would have to figure out herself how to move forward.

 What should Benjy’s do about the showroomers ?

For a “unique to Benjy’s” initiative to be effective, the products would have to be well differentiated from anything that
could be found online. Adding a few bells and whistles wouldn’t be enough. Benjy’s must also keep in mind that many
retailers already offer exclusive products—it’s not a novel idea.

One relevant piece that the company is missing is direct feedback from existing and potential customers as to why some
visit stores while others shop online and why some of them showroom while others don’t. Ben seems to assume that
price is the main factor driving customers to online competitors. But perhaps it’s something else. Maybe availability is
the problem; a few ill-timed out-of-stock situations can have a big impact. Or maybe it’s the product assortment or
some other aspect of the shopping experience. The answers could help Benjy’s figure out how to win over showroomers
and how to better cater to people who like shopping in physical stores.
Those answers, too, could highlight avenues of opportunity, backed by customer research rather than just Farb’s
intuition. Perhaps Benjy’s could indeed build competitive advantage by focusing more on the curation function and
increasing its emphasis on service. Consumers do appreciate interacting with informed sales reps, trying out products
first-hand, and getting items immediately: You see something, you like it, and you take it home.
All those in-store initiatives would need to be seamlessly integrated with an online strategy so that each experience
complements the other. Customers shouldn’t think “Benjy’s online” or “Benjy’s brick-and-mortar,” but just “Benjy’s.” The
company should use its website to expand on the in-store assortment and help customers find the best product and the
best quality without having to do a lot of independent research. That’s where the opportunity lies.

The CEO is right when he says that the world of retail has dramatically changed. And like other physical stores that
sell branded products, Benjy’s may need to rethink its traditional business model if it wants to survive. It’ll help lead a
company that facilitates online sales of furniture and furnishings—items that many people would have once said they’d
never buy online. Who could commit to a multi-thousand-dollar purchase of a sofa, say, without sitting on it and
feeling the fabric ?