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Product Failure Leads to Lack of Confidence, Leading to Customer Defection

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#1   Posted: 20 Oct 2011 10:04

Last week was a terrible week for people using the BlackBerry (by RIM) handheld smart phones. The company had an "outage" and millions of customers could not access their email for as long as three days. I started thinking about how BlackBerry will handle their customers. Here is something to think about.

No matter how great your customer service, if the product or service you sell fails to do what it is supposed to do, your customers will seek out another place to do business. The reason is a lack of confidence, which is crucial to customer loyalty. In the end, without confidence there will be no customer loyalty.

BlackBerry is in the position of product/service failure. Customers are outraged. I surveyed a number of BlackBerry users and most are considering switching to one of their competitors. reported that RIM is doing all they can to keep their customers, including giving away at least $100 worth of free apps. "We are grateful to our loyal BlackBerry customers for their patience," RIM co-CEO Mike Lazaridis said in a statement. "We have apologized to our customers and we will work tirelessly to restore their confidence. We are taking immediate and aggressive steps to help prevent something like this from happening again."

The apology is appreciated, and necessary. RIM is quickly stepping up and taking responsibility, taking steps to minimize damage. They are increasing their customer service and hoping to minimize their customers' loss of confidence. They are giving free apps and credit, hoping that these concessions will help retain their customers. The comments that have been following articles and blog posts on the Internet are mixed. Some appreciate BlackBerry's gesture and efforts, while others have lost confidence and are defecting.

It will be interesting to see how all of this shakes out for RIM. Watch for future articles and commentary — and the stock price. Where will RIM be a year from now? How many customers will they retain, gain or lose? This will eventually be a great business lesson. We'll look back and be able to learn from both the good and the bad.

If you are a BlackBerry customer, what are you going to do? Will you leave or give them another chance? How do you feel about their offer?

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