Under normal circumstances, would you pay your customer $460 to purchase a $40 product?

Not if you want to stay in business. Yet that sort of business practice happens more often than people realize. I happens because employees with the most customer contact often have the least knowledge, resources and authority to make decisions that serve the business. Unless organizations begin change that, we guarantee it will continue to have a negative effect on quality, profitability, cycle time and unique response.We’ve had this point driven home by several negative customer service experiences, including a recent incident with a large, well-known company.

Due to a misprint in a catalog, the wrong product was shipped to us — twice. Over the next few weeks, we spent nearly seven hours with call center employees and/or their supervisors trying to get the order corrected. At times we were left on hold for up to 20 minutes. We dogged the issue until we got a second-level supervisor on the phone. After repeating our saga for the umpteenth time, she apologized and arranged to have the coffeepot we wanted shipped express – at no charge to us. It took six weeks to satisfy our order even though the product had been in stock the whole time.

While we appreciated the resolution, by our calculations, a mistake that could have been quickly resolved with one phone call ended up costing this company:
  • Shipping costs for three regular deliveries and one express delivery

  • More than six hours of employee time (minimum of $100 based on online salary estimators)

  • $99 for the coffee pot we were finally sent, at no charge to us

  • Additional time for the employees working in the warehouse, accounting and other related departments

  • Opportunity costs — employees dealing with us could not be serving other customers

  • Serious erosion of customer loyalty and goodwill
This company spent at least $500 – for a $40 mistake. That’s a serious problem for companies where employees have thousands of customer contacts a week.

Often these employees earn the lowest wages, are given strict protocols to follow, have no decision-making authority and lack a clear understanding of how what they do contributes to business success. Sometimes they are treated like children who can’t be trusted— we have been in call centers where employees are required to ask permission to use the bathroom!

Imagine if these front-line employees had the same knowledge and decision-making authority as second-level supervisors, and understood how what they did contributed to the success of the whole. They could grant exceptions to satisfy a customer in the moment.

Do they have to understand the difference between fixing a $40 mistake and a $500 mistake? Absolutely. That is why business literacy is essential. The upfront investment in helping employees understand the business will pay bigger dividends than the back end cleaning up of a customer service mess.