Friday, September 07, 2007

Apple's Approach to Customer Relations

I thought you'd enjoy this Harvard Business Review conversation starter.

Apple's reaction to its angry customers has been swift. Responding to a flood of complaints from early iPhone buyers over a $200 drop in the still-new product's price, Steve Jobs responded by:

1. Recognizing that customers were upset

2. Recognizing that customers had a right to be upset

3. Explaining why Apple chose to drop the price -- and doing so in a way that appears legitimate and honest

4. Offering reparations to early adopters in the form of a $100 credit

No, Jobs didn't satisfy each and every disgruntled iPhone owner but, like JetBlue's response to its meltdown last winter, Apple recognized it had created a potentially big problem with its core customers and took swift and open measures to address it.

Would your company do the same thing or would it try to bury or obfuscate the problem? Not sure? Consider these ideas from Harvard Business Review to brush up on your approach to customer relations:

Want to Perfect Your Company’s Service? Use Behavioral Science

Why Satisfied Customers Defect

Companies and the Customers Who Hate Them

Manage Your Human Sigma

Putting the Service-Profit Chain to Work

You can't please everyone, but...I bought an iPod for my twelve year old daughter two years ago. Cost about $400. After the first year, it stopped working. She had dropped it without its hard case and dented the backing. The hard drive is built right into the backing and the warranty says that if there are any dents the warranty is void.

I tried to reset the machine several times. Frustrated, I made an appointment at an Apple Genius Bar. I was given instructions for resetting the iPod again. It still would not work. I had to buy a new iPod. But I wasn't ready to do that yet. I went online and made another appointment at the genius bar. The only available time was 8:55PM - five minutes before the Apple store here at South Coast Plaza in southern California closes. I went in. Met a different genius.
He fiddled with my iPod, then this is what he did. He said, "You know what?" I said "no." He said, "I'm going to give you another iPod for free." I was stunned, and reiterated that it was out of warranty AND dented. He said Apple didn't see it that way. He said, "At Apple we know people pay a lot for our stuff. We know that these people probably make a lot of money and are probably better than most at taking care of things. So when something goes wrong, we feel it's probably our fault and not their fault." So he went into the back room and returned with a brand new iPod.

At that moment I had rather been indifferent toward whether I used Apples or PCs. But that night I became a convert - and I will give Apple a lot of latitude before I jerk my knee and criticize them. Steve Jobs has been through a lot. And he knows that Integrity is doing the right thing when no one is looking.

And I experienced all of this through my contact with a 19 year old at one of Steve Jobs stores. Simply amazing.

This also reminds me of a story that circulates around one of my client's, Mercedes-Benz.
The owner of a 1981 Mercedes with 480,000 miles had a turbocharger that went bad. A new turbocharger was about $3,800, more than the value of the car today. But here's what the dealer did. He replaced the turbocharger for free. And the following year, rather than shop around, that Mercedes owner came in and bought a brand new Mercedes. Now that's customer service.

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