What would you think about a vendor who made a commitment to do some work, established a price and then reneged and raised prices?

bad_decision2

No, this post is not about airline over-bookings or cable companies.  Instead, this anecdote is about a baby-sitter* in my neighborhood who called a client just days before a weeklong service, and said she wouldn’t work for the agreed upon price because her father thought the rate was too low.

With examples like this, I believe I am on the verge of solving the mystery of why customer experiences are so poor.  We have more than an experience problem we have an integrity problem.  What does it say when helicopter parents espouse a “me first” culture?  Perhaps our focus on the customer experience and loyalty needs to start much earlier than customer journey maps and metrics.  Perhaps we must start by teaching integrity.

I’m not against a baby-sitter earning the market rate.  But I am against the strong-armed, take it or leave it approach her father advocated.  The fact that the ultimatum was delivered on short notice makes it worse.

What the father taught…

  1. If you can get more you should.
  2. Changing the rules and breaking your commitments is a good way to run a business.
  3. There are an unlimited number of customers who will accept this poor treatment.  (How would the story have differed if there were only one customer on earth?)

What the baby-sitter could have learned…

  1. Know the market rate before you establish pricing.
  2. If you make a mistake, learn from it and make a better decision next time.

What I hope they learned (but honestly, I’m not optimistic on this point)…

  1. Treating clients with integrity is key (see this reference on Covey).  Your word is your bond.  Trust is at the foundation of every business transaction and personal interaction.  When customers are treated unfairly they switch vendors (baby-sitters) as this family did.
  2. Reputations are made in the marketplace through actions.  You just earned a bad one.  More bad news… that reputation will spread via the neighborhood grapevine (i.e. word of mouth (WOM) marketing).  You could have earned a great reputation by honoring the commitment, learning from it, and moving forward.

Businesses learn hard new lessons every day.  The pivot point is that the good ones don’t make their customers pay for their mistakes.  The bad ones, those who try to transfer the costs of their bad decisions to their customers, eventually pay for them… Plus interest.

*  (Note: I don’t know who the kid is and I don’t want to.)

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  • Jim Duster

    I agree. Great companies “eat” their mistakes. However, I have read it is a good idea to communicate your benevolence. If the babysitter had said “my dad says I need to raise prices, but since you are one of my early customers, I’m keeping yours the same”. I’m pretty sure I would have paid her market rate next time!

    • http://pivotpointsolutions.net/ andy_mcf

      Definitely right. Claiming credit helps change the WOM (word of mouth) dynamic! You may enjoy this related link… http://bit.ly/I5pYYF

  • http://www.servicefailurebook.com/ Jeff Toister

    Can you review babysitters on Yelp?

    In all seriousness, you make a very good point about how people learn their values.

  • http://pivotpointsolutions.net Andrew McFarland

    Jeff, appreciate your tongue-in-cheek comment about reviewing babysitters on Yelp. :)

    I’ll bet the informal WOM network in neighborhoods is much faster and possibly more effective. Net: how people treat their customers is important – and public.

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