Customer Service and the Ripple Effect in a Franchise Organization

Here’s a story that was told to me a couple of months ago. I posted it on one of my other blogs, 21st Century Franchise Coach, but recently thought about how such an experience ultimately affects the franchise brand. So, franchisors, and anyone else that wants to chime in, when you’re reading this article, please keep the following questions in mind:

really-bad-customer-serviceHow would you handle this situation if you became aware of it through a customer complaint?
If asked by a franchisee, about what to do in a situation like this, or how to avoid it completely, how would you respond?
Are situations like this, covered in initial and ongoing franchisee training?
Ultimately, if similar situations are repeated, how could it affect the franchisors’ bottom line?
Do we, as a franchise organization, go the extra mile in working and communicating with our franchisees, who are basically the organization’s customers?

One Lost Customer Could Cost Thousands

I immediately thought about a question that was posted on a social network discussion board about what companies were prepared to do in order to retain customers during the current economic crisis.

Late one morning, a client of mine was told by his boss to purchase gift cards to be given as prizes for that afternoon’s golf tournament. The company had decided to increase the number of prizes as the response to participate by local businesses was overwhelming. The tournament was to start at 12:30PM and my client was playing in the event and had several of his clients playing with him. Therefore, it was imperative he make it to the golf course by noon at the latest.

At 10:35AM he went to a national chain restaurant and found it closed but saw alot of activity inside by the front desk. He knocked on the door and explained his desire to purchase $1000 in gift cards. He was rudely told the restaurant didn’t open until 11:00AM. My client explained his circumstances and the need to get across town to the golf course and not having to wait 25 minutes would really help him. He asked to speak with a manager. He was emphatically told no.

Instead of waiting, my client went across the street to another national restaurant chain location and found it didn’t open until 11AM as well. However, as he was looking in, a cook noticed him and opened the door. The cook cleaned his hands and helped one of the girls in the restaurant dig out enough gift cards to make up the desired amount and complete the transaction.

Okay. Here’s a few things to consider. My client frequently takes clients out for lunch. Do you think he’ll frequent the first restaurant in the future? The gift cards were given to ten participants at the golf tournament. Do you think they may spend above the gift card amount when they redeem the cards? And, is there a possibility their experience at the restaurant may be their first to the restaurant and if they enjoy the experience, they may return? How many people will my client tell about his bad experience at the first restaurant and how many people will he tell about the second one?

By not acting “outside the box”, how much revenue will the first restaurant potentially lose over the course of a year? Thousands?