Silly or Smart? Internal Business Policies Can Help – or Hurt

I recently decided to make a change in the service that provides my garbage collection. I took advantage of a special offer with a great price, one that was too hard to resist. When I spoke to the sales representative on the phone about the specifics of the offer, she explained that I would be getting a letter in the mail confirming the details of the new service.

Three weeks later when the letter had not arrived I made a call to the main office to be sure everything was on track for the switch the following week. As I was talking with the customer service representative, she said, “Oh yes, we have your information but we haven’t set your account up yet.”

When I expressed my concern that there was only a week left and I certainly didn’t want garbage piling up by the curb if they missed our agreed upon start date, and I got an interesting response. The rep told me that, “Yes, we get the information but sometimes customers change their mind. So we don’t set the account up until two or three days before the service is supposed to start.”

This approach may sound smart on the surface, at least to the people handling new accounts. It helps the company avoid deleting accounts that are never fully activated. A simple solution to wasted effort, right?

Not so fast. How much does it cost to take my call, and the calls of all those other concerned new customers? I’m sure the time it takes to set up an account is less than the time it takes to deal with a customer who is worried about the quality of their service.

You might guess that the difference in pay rates for the employees that do these two tasks (answer calls and create accounts) is relatively small. If so, there would not be a huge differential on time savings, but the difference would add up over time.

Add to that the fact that inbound calls are essentially work flow interruptions, especially for a business that doesn’t have a dedicated call center, and the cost increases. Account creation, on the other hand is an internal task that can be scheduled for maximum efficiency.

There is another factor that could have a huge impact on the bottom line: This company overlooked the brand value of creating a strong customer relationship from the get-go. My experience signing up as a new customer was just okay. Certainly not an experience I would rush to share with my friends.

While the price was great, price is only one piece of the equation when it comes to trash hauling (and many other services). I want to know that my garbage is going to be picked up regularly, and that I’ll be promptly notified of delays and schedule changes. The provider also needs to inspire my confidence so I don’t fret about my choice.

Based on the initial interaction with this company, I’m a customer who is a little concerned. If other customers are regularly canceling their new orders, maybe the problem isn’t the issue of creating an account that is never used. The real problem might be that the on-boarding process is ineffective and not welcoming to new customers, causing them to question their decision.

When you step back to get a broader perspective, it’s easy to see issues that might have been out of view when looking solely for the solution to a problem defined as, “We need to stop canceling so many new accounts.”

A better solution can be found by focusing on the reason those customers changed their minds. What would happen if this company took the simple step of sending a welcome postcard or email to new customers letting them know their order was entered and that they will soon be getting a letter confirming all the details of their account set up? This would create a welcoming environment and affirm for customers that they made the right decision.

Not only would early account cancellations decline, odds are calls to customer service would also decrease. Customers who felt good about their new service would share with their neighbors, and referral business would grow.

Have you made a similar mistake in your business?

When business policies don’t work out as planned, you may chalk it up to the “law of unintended consequences.” I would say it’s more a matter of unfocused vision. Instead of using a microscope to solve business’s problems, get out the telescope and take a long view. Be sure your field of vision includes all the factors that impact results.

Solving the right problem is smart business policy.

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