Want to Lose Money? Offer Your Design Clients Great Customer Service!
One thing that has always driven me crazy is when I work with interior designers who suffer from what I have come to label “Infinite Service Disease.” I became aware of this long before I fell into the interior design niche when I used to consult for substantially larger clients in retail, manufacturing, and software, many of them hiring me for a specific turnaround skillset that I had developed.
I suppose increased cash flow is the goal of most all types of consulting, but it is really the goal in turnaround consulting where clients often don’t hire consultants until they’re 90 days or less from running out of cash! (That’s why turnaround consultants, like bankruptcy attorneys, get paid, cash in advance!)
One particular client of mine was the largest bicycle retailer in a major American city with three locations in that same city. Their flagship store had about 12,000 square feet including the display and service areas on the ground floor, and the administrative offices upstairs. If you haven’t purchased a bike in a few decades, you might be surprised to know that a typical adult bike these days costs not hundreds, but thousands of dollars! And, they’re almost always custom fit to the rider in many ways.
My consulting client had the philosophy that these upscale customers were “entitled” to great service after the sale. In fact, they had long ago declared that their customers deserved and expected, “lifetime service, free of charge!”
When I completed my analysis, using the “profit pools” approach that I have taught to many members of The Edge, I discovered that because of this philosophy, the entire service operation was a huge money-loser! And, by creating some simple spreadsheets that included various pricing plans and projections, I was able to show my client that they could actually make more profit from service than from the retail sales. . . but they were giving all of that profit away on a branding idea that no one could convince me was necessary.
So that’s where the debate turned. Management argued that these well- heeled customers expected and even demanded free lifetime service.
I countered that they had little evidence to support their gut feel and it was just as likely that because this clientele was not overly price sensitive (they were buying $5,000 bicycles after all!) they might not mind—or even notice—what they were being charged for service.
After my presentation to the CEO about how I could increase his profit and net worth by seven figures in a very short period of time with this one strategic shift (charge for service) my client was not jumping up and down as I had expected, but to my surprise was clearly irritated. In fact, I would say he was offended! He would never cut back on service, he told me, and never charge for it and his customers deserved nothing but this white glove, lifetime support. (That they had never asked for!)
They should, he said, be treated like buyers of BMW of Mercedes automobiles. My counter, that the service departments of those dealers produce millions in profits, landed on deaf ears,
Combined with the recommendation to shut down one of his three locations, I felt (and still feel) that I had done some of my best analytical and strategic work, yet it was perhaps the only engagement I have ever accepted in which I left behind a client who seemed to be dissatisfied. My follow up calls and emails went unreturned for months.
And then, a full year later, I received this email from the CEO out of the blue:
I hope this email finds you well. So that you’ll know the value of the process you provide, I want to share with you that after 3-4 more months of bleeding cash, we started implementing your recommendations. We shut down the north branch and, yes, eliminated our lifetime service warranty and started charging for service. Our service department started generating huge profits almost overnight, and to my shock, our customers don’t seem to care. . . or even notice, exactly as you predicted. This has made a huge difference to me, financially, and I now consider the money I invested with you to be the best investment in this business I’ve ever made. Thanks!
My point? This case study represents a rare instance in which I could actually quantify via a spreadsheet a case of Infinite Service Disease. But it can be just as insidious, or perhaps more so, when it’s not measurable. Where I see this is when designers become so over-the-top zealous about making customers happy that I’m sure they have gone further than the client ever expected, or was necessary.
That requires time, billable time that’s never going to get billed.
I also wonder if the designer is bending over backwards for the client, or for themselves. And if for themselves, is it more because they are trying to build a great brand and foster word-of-mouth, or is it because their egos and sensibilities will go to any length to avoid the least little criticism by a client, especially toward the end of a job? (See “Scope Creep” article.)
A famous Navy admiral was once grilled by a Congressional committee over the fact that quite a few Navy pilots had recently died in training exercise crashes. The admiral responded matter-of-factly,
“Well, Congressman. . . you have to kill some pilots or you’re not training hard enough.”
The challenge becomes in determining where to draw the line. In the bicycle business, I could find it on a spreadsheet. In the Navy, you can count the lost aircraft and the bodies. But what about in your field? How do you know where the line is between service and support that truly is a part of the expectation you set up front, and excessive service and support that you are giving, at least in part, to avoid any chance of getting push-back from your client and thus having your feelings bruised?
Probably, the only way to find that line is to just back off the over-the-top service a tiny bit at a time, job after job. To offer just a bit less “great service” until at least you hear someone squeal. You can be performing more valuable activities with that time, and if your customer doesn’t expect more, or would happily pay extra for more, stop giving more away!
And if someone should squeal? Well, if a customer expresses displeasure and pushes back, instead of getting your feelings hurt, say to yourself what my wife says in similar circumstances, “Suck it up, Buttercup! You’ll survive.”
But don’t just over-over-over deliver to keep a client cheery and never learn where your actual value proposition starts and stops. That's how money—your money—is left on the table, job after job.