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Letting Staff Make Decisions in Customer Service Issues

Action springs not from thought, but from a readiness for responsibility.

~Dietrich Bonhoeffer
A critical piece of every business’s customer service strategy is how you plan to handle customer concerns. When properly dealt with, complaints are an opportunity to transform angry or upset customers into extremely loyal ones. If you can turn a frustrated customer around, they will not only stay with you, but they will also generally become raving fans.
One of the things that is so important here is the speed with which customer concerns are addressed. If a customer has to wait, regardless of the reason, they are much more likely to leave you permanently.
Many companies run into trouble here because the employees who receive the complaint do not have the authority to settle the concern. They must pass the complaint on to be resolved, which ads time to the process.
One way to rectify this problem is to allow your staff to deal with any customer complaints up to a certain dollar amount. By doing so, you satisfy your customers’ needs and indicate how much you trust your staff at the same time.
A large printing company in South Florida processed more than 5,000 orders a week. With this many orders, mistakes are inevitable, and they received numerous customer concerns each day.
Their policy for dealing with customer service issues was to have the president of the company review and approve all returns and adjustments before responding to the customer. As you might guess, it took some time for the president to go over each of these issues, which left their customers waiting for responses.
The firm realized making their customers wait like this was unacceptable. After much thought and deliberation, they authorized each of their customer service agents to settle any customer complaint, up to $500 per case.
They instituted their new policy on a temporary basis at first, so management could watch the settlements and adjustments very carefully. What they found was the way their customer service agents were handling these issues was consistent with how top management would have handled them.
With that discovery, management made the policy permanent, and customer service concerns are now being remedied very quickly. As a bonus, morale among the customer service agents has gone up tremendously, as the staff feels management really trusts them.
Ritz-Carlton has a very similar policy. It gives each employee up to $2,000 to settle any customer service issue. Clearly, they believe that allowing staff to fix problems is a great way to ensure customers are served and show staff that management trusts their decisions.
Now go out and see if you can empower your staff by authorizing them to make decisions about customer concerns. It might seem scary to give so much financial decision-making ability to your staff, but this is the right way to manage your business.
Published: June 13, 2014

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Jerry Osteryoung

Jerry Osteryoung is a consultant to businesses—he has directly assisted over 3,000 firms. He is the Jim Moran Professor of Entrepreneurship (Emeritus) and Professor of Finance (Emeritus) at Florida State University. He was the founding Executive Director of the Jim Moran Institute and served in that position from 1995 through 2008. His latest book, coauthored with Tim O’Brien, “If You Have Employees, You Really Need This Book,” is a bestseller on Amazon. Email Jerry @ jerry.osteryoung@gmail.com

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