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?

5 thoughts on “Customer Service and the Ripple Effect in a Franchise Organization

  1. Hey, Paul. Thanks for filling in some of those details. It satisfied my curiosity 😉

    It’s also important, employees, especially key employees as an assistant manager, to be given the flexibility to act outside-the-box to satisfy a customer without even the slightest thought of repercussion from upper management.

    It’s been my personal experience that this is point you bring up is key in employee creativity to problems, work morale, and store profit. I wish more more business would get a clue from you on it!

    Thanks again, Paul, I really appreciated this post and your thoughts.

  2. Yes, the manager was made aware but basically just blew if off as unimportant.

    We also made the manager aware at the second location where my client was treated, well, as a customer should be treated, and the manager sent one of the hostesses to the kitchen to ask the cook to come up front. He then thanked the cook right in front of my client, and other patrons. I’m sure it made the cook feel like a million bucks!

    Thanks for sharing your thoughts. I really appreciate your insight.

  3. During a conversation one afternoon many years ago, a mentor told me that there was nothing…..not a new government rule, not a new competitor….nothing sacred him as badly as one mad customer.

    That employee was clearly a bad hire. I’ve taught dozens of courses centered around the total cost of hiring the wrong employee. The discussions always end with the same thought: While you can quantify the cost in empirical dollars, it seldom come close the true cost. That cost can be expressed with the following question, What is that mishandled customer saying about your business on Sunday at church? I’m consistently amazed at the number of business owners, franchise or not, who just miss that. And the cost to their businesses and their franchise systems in incalculable.

    In this case, I hope the manager of the offending restaurant was somehow made aware of the regretable incident and was able to take corrective action. Sadly, those types of employees seldom inprove.

  4. At the first restaurant, there were several employees. Two appeared to be hosts, and one was an assistant manager. The hosts were actually rude and refused to help, and when the assistant manager intervened it was more of a “what’s the problem?” and “No, you’ll have to come back later.” attitude.

    At the second restaurant, it was definitely a cook that was busy getting things open. Almost as if the manager was busy doing other things or hadn’t shown up. Regardless of why he was close to the front desk when my client knocked on the door, he was more than anxious to help and although he fumbled around trying to find the gift cards and complete the transaction, he did so without any hesitation or excuses. Then, he actually apologized because he felt it took him too long to help. Mind you, my client never made mention of his experience across the street at the competition. He just stated that he was in a rush and needed to get the transaction done as quickly as possible.

    I definitely agree in better restaurants the cook, chef, has a greater stake in seeing the restaurant do well. But in this case, neither restaurant would be classified as fine dining but certainly not fast food either. I also agree that it’s necessary to impress upon employees the necessity of treating ALL customers well and to go the extra mile whenever possible. It’s also important, employees, especially key employees as an assistant manager, to be given the flexibility to act outside-the-box to satisfy a customer without even the slightest thought of repercussion from upper management. If poor decisions are made and more controls need to be in placed, I would say it’s more a training issue than anything else. But really, how much would even the poorest of decisions cost in the environment we’ve been discussing? Free meals for a table of four? Replacing a customer’s entree? Giving away a free dessert? Helping a customer fifteen minutes early? Penny-wise and pound foolish comes to mind!

    Thanks very much for sharing your thoughts. It’s most appreciated.

  5. Great real world example of a lasting failed customer relationship, Paul. One that I think can equate into more than just a few thousand.

    Not to excuse the first response but I would be interested to know if the person that was rude was just a counter worker. The second restaurant it was the cook, someone who, in better restaurants, often has a greater stake in seeing the restaurant excel and so is more open to the wider business dynamic at stake. Which goes to the point of the need to impress this upon one’s employees because they don’t all have your company’s best interest in mind.

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