What is More Important than Customer Loyalty?

I recently had an experience that clearly demonstrated the crucial need for better training at all levels, from entry-level employees to management.

This situation occurred at a local tire store, one that is part of a national chain—of which will go unnamed—but claims in their name to be pros with tires. The store manager made the decision that $20 in his cost on labor, and his need to be right was more important to him than a loyal 10-year customer.

Let’s Review the Benefit of from 10 Years of Customer Loyalty:

New tires (sets of four) on 3 cars—approximately 8 sets at an average of $300 per set equals a minimum of $2,400 in retail sales. Satisfied customer recommendations to friends and business acquaintances—in this particular case the bare minimum is referral benefit is a fleet of 18 cars and trucks that moved their account to this particular store five years ago based on my recommendation.

This referral has resulted in approximately 9 sets of car and truck tires purchased yearly by the company. At an average of $400 (truck & SUV tires are more expensive), the yearly sale to this company is $3,600. The bare bones minimum value this store received from one customer’s loyalty and referrals for 10-years is $20,400.

Let’s Review What the Store Will Most Assuredly Lose in the Coming Decade from the Manager’s Seemingly Inconsequential $20 Decision:

Within the next 2 months, the store will lose the sales on sets of tires for both a minivan and an SUV equalling a minimum of $700.

Over the coming decade the store will also lose, not accounting for inflation, at the very least the same $2,400 from my 3 cars, and most likely more.

After telling the above-mentioned fleet manager that I had recommended to this store five years prior, the one that claims to be pros with tires, this store will most likely also lose my friend’s fleet account. The fleet account loss over the next 10 years will be at least $36,000.

Lost sales in the community of Thousand Oaks, CA where I live. While for a decade I had recommended these pros with tires to a number of friends, now I will, as would most people in this situation, make it a point to tell anyone that will listen how poorly I was treated by the store manager. How many dollars do you think will be lost? National Brand Damage:

I’m sure you would agree that it is not a good idea to treat any customer poorly, but to treat a heavily published author and busy professional speaker poorly is purely lunatic, as I will now use this story about the brand that claims to be pros with tires at many of my seminars across the country.

Will people discontinue using this company that claims to be pros with tires just because I tell the story? I don’t think so. But, what will happen is that the next time they do business with this chain and a problem occurs, as is bound to happen, they will remember my story. Now that chain, and the particular store, has an additional strike against it—perhaps their last?

All of the above lost, and potentially lost business, because a chain store manager let’s his ego and 20 bucks get in the way of making good customer satisfaction decisions. This is a common mistake that many managers and owners make, and not exclusive to retail.

Next - Learning From the Situation