September 23, 2015 by 
As an entrepreneur, I have always admired companies whose innovation creates wonderful industry disruption. Take Uber, for example, which has completely turned the taxi industry on its head. Despite their innovation and resourcefulness, entrepreneurial organizations can also fall victim to the 7 Deadly Sins of Customer Engagement, as did Uber with my recent experiences. UberX is the least expensive option for Uber transportation and the most popular, but there are other types of Uber vehicles too, such as luxury cars and large SUVs. As Uber rolls out other options, the app makes it easy to accidentally order a more expensive ride. I’ve done this a few times and know several other people who have as well. Although Uber makes surge pricing clear, sometimes even making customers type the higher rate to confirm they understand the pricing, they haven’t done this for the various types of vehicles. What should have been a $30 ride from the airport easily turns into an $80 one and customers are left feeling price-gouged. Uber’s response to this problem is that customers have consumed the service, so they shouldn’t be entitled to a refund. These experiences show that Uber, its management, and its approach to customer feedback, commit many of the 7 Deadly Sins outlined below.
1. Not Defining The Customer Experience, Vision, and Strategy
Often caused by a lack of executive commitment to the customer, many organizations fall victim to the sin of not having a clearly defined Customer Experience, Vision, and Strategy. How can any organization hope to be Best-in-class in their industry on Customer Engagement without knowing and detailing exactly what they want their customers to experience? Best-in-class organizations not only define their desired customer experience, they actually test it through “undercover customers” such as mystery shoppers.
2. Not Apologizing When Something Goes Wrong
After starting and running the first of three separate businesses, I very quickly learned that even the best organizations make mistakes. I also learned that the best way to retain customers when something goes wrong is to take accountability and apologize; this the first of a proven three-step process to follow when something goes wrong with a customer.
3. Not Reassuring the Customer That The Mistake Won’t Happen Again
Related to step one above, the second step of client retention when something goes wrong is to reassure the customer that the error won’t happen again, clearly explaining exactly what measures were put in place to avoid a similar reoccurrence.
4. Not giving any restitution after making a mistake
The last of the three aforementioned steps of customer retention is the most critical. Simply put, give something back to accommodate for the inconvenience the mistake caused the customer. The sin of not giving restitution is unfortunately quite common simply because it requires the company digging into its pocketbook. I once tore up a customer invoice totaling over $90,000. Not easy to do, but I took a deep breath and tore up the invoice because it was the right thing to do. The result: we retained that customer’s business for years to come.
Follow this three-step process when mistakes happen with customers and I’ll guarantee that you will retain 99% of your customers and the related revenue they generate for your organization. These customers will also become the best promoters of your brand, resulting in new referral revenue.
5. Not asking for Customer Feedback
Shockingly, only 20% of organizations have an ongoing system for getting feedback from customers, such as Customer Surveys.1 As such, they do not get any validation of what they are doing well or potential areas for improvement. There is no doubt that these organizations are missing out on product innovations, as some of the best innovations are thought of by users or customers.
6. Not Listening to Customer Feedback
Drop the “Me-thinking.” It is not about you, it is about your customer. Try and adopt what is referred to as “Outside-in Thinking,” which is viewing your business and decisions through your customers’ eyes.
Do you really know who your customers are? Do you fully understand their needs and pain points? What challenges are they trying to solve? How are they attempting to solve these challenges? How do they feel about you and your approach to helping them?
All of these questions are imperative to answer and you will only find the answers if you are truly listening. I have always loved the old adage, “God gave us two ears and one mouth for good reason.” Does your company have a culture that encourages listening to customers or a culture of discounting customer feedback as “complaints”? The truth is that some of the most valuable feedback will come in the form of a polite “complaint.” Never forgot: it is the sand in the oyster that creates the pearl.
7. Not Acting on Customer Feedback
Needless to say, just listening to your customers will never get you to Best-in-class Customer Experience. You must act on their feedback in order to make tangible progress with customer experience and business outcomes. It is also very important to bring it full circle by communicating to your customers what changes you have made as a direct result of their feedback. If you don’t, your customer will never get the full sense of feeling valued.
Keep in mind that it costs five times more to attract a new customer than retain an existing one2; this fact underscores the need to cherish and nurture existing customer relationships and experiences. You cannot afford to lose them.
I gave Uber the chance to own up to their customer sins with me, and they did not. I am no longer one of their customers.
Sources
1: Study by Yesmail and Gleanster, August 5, 2013
2: Building a Magnetic Culture