It’s been almost 40 years since I got my first real car – a used 1972 Ford Maverick. (The picture is actually of a Ford Capri – but same idea). Unbeknownst to me and thousands of other consumers, Ford had been building their cars with substandard steel that rusted with unprecedented speed. By 1977, I had to junk it, because the fenders were quite literally falling off, and there were gaping holes in the doors and floors.
The consumer outrage over the rust issue was loud and persistent, but all Ford could muster was a steady stream of denials, with no hint of even an apology. People were coming up with acronyms for the company, like “F%$#in Old Rusty Dumps,” and “Fix Or Repair Daily.”
I haven’t bought a Ford since.
Fast-forward to 2014. Our company was preparing to renew our license for the Virus scanning software on all of our computers. In making our decisions, there was one company that we didn’t even consider – McAfee. Not because their software isn’t any good, but because a decade ago, they were hiding an ‘automatic credit card renewal’ in the fine print of their contracts. Instead of a nice email saying ‘it’s time to renew your security software,’ there was one that said, ‘your credit card has been charged.’ The process of even trying to find someone at McAfee to address this – not to mention the gigantic hassle of getting them to remove it – was extraordinarily painful. How could we entertain doing business with a security company that we couldn’t trust?
When you look at the customer-focused companies that are thriving today, one of the things they all have in common is how careful they are not to lose the trust and confidence of their customers. Have a problem with an order from Amazon.com or Indigo.com or Zappos? They will fix it no questions asked. The same is true for the retailing giants like Costco.
Unfortunately, there are still a lot of companies who are so focused on containing the costs related to unsatisfied customers, that they neglect to consider the loger term effects. The results can be disasterous.
One of my favourite examples is Sears. Back in the day, as they say, Sears had built their reputation as a company people could trust. If you bought a Craftsman tool from them, for example, and anything (and I mean anything) went wrong with it, they would replace it immediately. My father, and virtually eveyone ffrom his generation, wouldn’t consider buying their tools anywhere else. In the early 90’s however, the company decided that this was simply too costly a policy, so they introduced a much more limited and restrictive warranty. The result? Sears has been in an inexorable decline ever since. They ceased to be the brand one could trust, and became just another department store.
As far as cars go, I figure I have bought 17 cars since the Maverick, spending over a quarter of a million dollars. None of it went to Ford. Yes, they probably saved a bit of cash by buying cheaper steel, but what was the ultimate cost for them?
This is a lesson for all companies. If you don’t treat your customers with care, they will stop caring about you.