Last time, we talked about a breakdown in customer service that my wife and I had experienced when ordering pizza for supper, so today we're going to talk about the potential implications of this in terms of cost to the business and how the problem should have been dealt with.

The Cost:

We don't really keep an exact total of how often we order pizza, but I'm going to guess around twice a month...that will make the calculations easy too! So two orders a month, at an average price of $20 an order translates into $480 a year in revenue. I don't know if you have ever opened your Yelloages to the pizza section, but here in Ontario you'll find a LOT of pizza joints there.  As an aside, I'm told that this is a somewhat Ontario-specific phenomenon. My wife tells me that when they moved from out of province they were shocked by how many pizza places there were around. Apparently, we Ontarians really love our pizza! Basically the implication of our proliferation of pizza places here in Ontario is that unhappy customers - like ourselves - have a lot of alternate choices available.  We started realizing we had all sorts of choices, and many of them were a lot closer than the place we had been ordering from.

So how should our problem have been dealt with?

1. Understand that even when it's not your fault, it's still your fault.

The excuse I was given was that a third party (the delivery service),  has made the mistake so it wasn't their problem.  This is something a customer never wants to hear, and besides, even though a third party might have been responsible,  who contracted that third party to deliver the pizza? I didn't call and arrange for my pizza to be delivered by this delivery service, I contacted the pizza place themselves.

When someone in your supply chain makes a mistake that upsets a customer, it doesn't matter if they are from another company, it is still your issue to deal with. You sold the customer goods or service with the understanding or implication that a certain level of service would be provided, and if it isn't then it's your responsibility to make it right.

2. If you don't keep your customers happy, it will cost you lots of money.

Above, we determined that losing us as a customer cost them $480 in revenue every year. Let's say that several customer service issues like this happen 20 times over the course of a year. That will cost their business almost $10,000 in yearly revenue from lost customers. Never mind the fact that our monthly pizza expenditures might be below what their average customer spends in a given month. So the losses could be even higher.

3. It's not difficult or expensive to fix.

Had they simply apologized and offered to give me the next order free, I would've been very happy with their response.  The actual fixed costs of preparing the food ordered is likely significantly under $20, so the actual loss to the business would've been relatively minor.  I'm going to guess $10 cost,  even though I think that may be a bit high.  Are there any business owners out there who wouldn't be willing to spend $10 to ensure almost $500 of yearly revenue remains secure?

4.  Make sure it makes sense for the business.

If a customer is having grievously bad experiences every week and demanding free food on a constant basis, then this is likely the kind of customer you want to be rid of. If the customer is demanding free pizza for a year to make up for their one bad experience, that's not going to help your business either.  Be sure to put everything into a business frame of mind. Look at the pure dollars and cents of the matter and ensure that you're making a good financial move for your business... if the customer is asking for too much, try to make an alternate offer somewhere in the middle to keep both parties happy, if that's feasible from a financial standpoint.

In summary, we learned that a bad experience from a customer can add up to a lot of lost revenue, and that it's not particularly difficult to turn a bad customer experience into a positive one.  So head out there and make sure you're keeping your customers happy!