Friday, July 22, 2011

Design for the Many, Not for the One

Too often we design policies for the wrong reason. We design them because somebody tried to take advantage of us. And in the process we restrict the many to protect us from the one.

Yet, no matter where we draw the line, there is still someone out there who will try to skirt around the edges and push past our boundaries. It never fails. Draw a line in the sand and someone will dare to cross it.

Solution?

Quit drawing lines in the sand.

For instance...

We offer layaway. Most stores that have layaway have fairly strict limitations. K-Mart's policy was 25% down, 25% in 15 days, paid off and taken home in 30 days. Period.

We offer a 6-month layaway with only 10% down and one payment of any size per month. And we are pretty lax in enforcing it.

Now ours may seem like a more generous policy, but the truth is, the vast majority of our layaway customers use it less than 30 days and would fit easily into K-Mart's model. In fact, only a small handful of layaways each year pass the 60 day mark, and maybe one per year hits 6 months.

But by offering 6 months, I look so much more generous and customer-friendly than K-Mart.

Here's another example...

We just launched our Birthday Club. The postcard $10 gift certificate we send out has NO expiration date. Some stores give you only 14 days to come in. They want the gift certificate used right away or it expires.

They are afraid that someone will hold their birthday gift certificate and not use it until Christmas or some other time.

But how many kids are really going to do that? And even if they did, wouldn't that be encouraging that the kids were learning how to save?

The reality is that the vast majority will be in right away to spend that $10 gift certificate. Only a small handful will not - regardless of the expiration date. And those who come in after 14 days will be pretty upset with you for not honoring it 4 weeks later.

Is it worth ticking them off? No.

Once again, our policy looks more generous and customer-friendly than the other, although both get roughly the same results.

The key here is to draw up your policies to allow for those customers who push the boundaries to push all they want. The vast majority won't push. Make your policies look generous and in the favor of your customers. You give the appearance that you are putting the customers' needs ahead of your own.

Sure, someone will try to take advantage of you. Someone always tries to take advantage of you. But the vast majority of your customers will not.

Look at all of your policies and see where you can make them more generous. The vast majority of your customers will still comply with what you expect, and you eliminate the nasty confrontations with the one or two customers who try to push beyond your boundaries.

-Phil Wrzesinski
www.PhilsForum.com

PS My newest eBook "Customer Service: From Weak to WOW!" will be coming out next week. Look for an annoucement soon.

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