Avoid a Self-Inflicted Second Recession

We can all agree that the period since September 2008 has been rough for everyone. Yes, it can be difficult to put your best foot forward when you're going through hard times. But seriously, folks ….

Since the recession began, one or another of our family members has gotten married, bought and furnished a home, had a baby, sent a child off to college, started a new business, and experienced major storm damage to the roof of a home. As a result we've dealt with lots of different retail stores, service providers, contractors, suppliers, and the like. In those dealings, we've noticed a peculiar pattern. Our customer experience has frequently been bad. Unusually bad. As in: the worst since your humble columnists first became adult consumers some 30 years ago. These experiences were not merely disappointing and frustrating, but surprising—given that this is when you might think companies would gladly go the extra mile to secure scarce revenues.

What exactly do we mean by bad?

How about the carpet store that never returned the six calls we made? The message we left each time was: "We'd like to place our $5,000 order now."

The home improvement store that refused to let us take home a second tile sample within a 7-day period? We had bought $3,000 worth of tile after taking home the first sample.

The 1:40 delivery time—a full 60 minutes beyond the promised delivery time—from our (formerly) favorite pizza chain? This experience was enhanced by our being told every 20 minutes that the driver had "left the store 15 minutes ago and should be there any minute." The delivery driver's explanation when he finally arrived: "Well, we're busy tonight."

The brochure printer who said it was "just too hard" to accurately match the colors in the sample brochure he had previously accepted to print? Or another who said that a color mismatch "wasn't [his] problem" because he had subcontracted out that part of the work?

The homeowner's insurance company—a former winner of J.D. Power awards for its claims-handling services—that never once initiated a call to us for more than two weeks (to answer claims-related questions, provide instructions, or give us a progress update) after we had called to say our roof had been damaged.

are companies cutting their throats?

We could go on with many further examples, but you get the point. At first we thought we might just have been unlucky in choosing whom to buy from. The pattern continued, though, across industries, and across product and service types. Our stories were echoed by other consumers with whom we shared them.

As a result, we've become anecdotally convinced that many companies have dealt with the Great Recession by cutting so many corners that they've seriously eroded their ability to deliver customer satisfaction. In our view, such companies shouldn't worry about the current media angst regarding the vague possibility of a "double-dip recession" affecting every company in America. Instead they should worry about the much-more-likely probability of a "self-inflicted second recession" specifically affecting their company.

Has your company cut a few too many corners during the recession? How happy are your customers right now? Before you answer too quickly, ask yourself whether—and how—you would actually know. Do you consistently monitor customer satisfaction in a rigorous way? Or do you track product quality or service levels using methods that are convenient for you to measure, but don't accurately reflect your customer's actual experience? For example, when was the last time you personally tested your front-line employees by pretending to be a customer—ordering something from your own Web site or calling your 800 number with a question?

time to grab market share from rivals

Even if you think your operation is functioning at peak effectiveness, do you know how your front-line performance compares to that of your key competitor? You may have consciously or unconsciously relaxed standards over the past year-and-a-half in an effort to reduce costs and boost your bottom line. If you have, an honest side-by-side comparison of your performance versus your key competitor's may wake you up.

Alternatively, what if you discover that you've actually gained a step or two on your competitor? We'd suggest you pat yourself on the back for about 10 seconds, then begin going after customers of your rival that you've always coveted. Now might be just the time to "double down" in your customer-satisfaction efforts and invest greater resources, not fewer, in order to take some market share. Think about it: If our recent experiences are typical, the same customer who's getting poor service from your competitor is probably getting subpar service from a lot of other vendors right now—and getting pretty irritated.

In contrast, customers appreciate a company that takes care of them when times are tough—especially when no one else seems to be doing so. Now could be a perfect time to strike. Remember: Research shows that market share gained during a recession is twice as likely to continue for the long term as that earned during an economic expansion.

Whether for defensive or offensive reasons, now is the time to take a fresh look at your current product quality. Get out there and put a little spark into your front-line customer service people. Take better care of your customers. Do it right, and you'll not only avoid a "self-inflicted second recession," you might even start a "self-initiated bull market."

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