How Short Term Greed Trumps Long Term Business Sense
from the how-to-lose-customers-and-piss-off-people dept
Online banking has been an interesting area to watch over the years. It was slow to take off originally — often because of poor design and high fees. However, after a few years, it finally did catch on, helped along by a lack of fees and the overall convenience it provided. Banks also saved money by automating many tasks that it took a human to perform before online banking was used. The banks who had been so keen to charge initially, also saw an unintended consequence of not charging: it increased loyalty and decreased churn. Users who had gone through the trouble of setting up their online banking systems didn’t want to go through the hassle of changing it. Of course, rather than recognizing a good thing for what it is, it appears that some banks can’t keep the greed away. Down in Australia, the Commonwealth Bank has decided to pull the rug out from under many happy online bankers and is adding plenty of fees for doing just about anything beyond the most basic online bill paying. Of course, all this really does is take away much of the incentive for customers to stick with this bank. This is, of course, the standard bank response — to look for more places where fees can be added. However, it’s a short term strategy, ignoring the value of having a loyal, long-term customer.
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An anecdote
Got this email from my mom this morning.
“I found aphids on the roses this morning as I told you in my previous mail. After milk treatment, I was going to hose it down. Then the hose got kinked in the wheel and would not come out.
After various tries and frustration, I called Shimachu and asked to talk to somebody in charge of hose reel selling department. I told him that it is difficult for me to carry the hose back to the store as he suggested and that I need to water the plants today.
Then he said, “The only solution is that I come and take a look.” I was incredulous. “You mean that you come all the way to my place?” I could be living way out of the other site in Tokyo. He didn’t know who I am and where I live at this point. But he repeated the same offer, adding that he is busy today, in the middle of the golden week, yet that seems the only solution.
In half an hour, he materialized at my door, and cordially inspected the hose. After dissecting the container, he found that the hose was bent at one point. How did this happen ? I was careful not to cause this kind of situation, as I anticipated it. I tried to roll it back again, and he pointed out that when the hose is even slightly coiled it gets kinked inside.
After comparison and a few more tries, I decided to exchange it with the self-rolling type, the one that we did not get originally because it is heavier. It turned out that automatic winding type is made in Japan, and the one we bought is made in China. The former has long enough hose so that the unit can sit on the floor rather than precariously sitting on the counter as is the case with the other one.
All in all, the Japanese made type is much sturdier and stable, the hose is heavier and does not kink, and the case house it well so that I don’t need to take off the spout after each use. This is much much better at only 1,420 yen more and a little heavier !!
I was so impressed by Shimachu’s customer service that I wrote a thanks letter to the manager. I will write about this in my next article to the magazine. Japanese economy is all right as long as this kind of business spirit exists. I will remember this event every time I use the hose.
Banzai !!!”
Can we imagine hp, Microsoft, or Dell acting like this?