Top 5 things service companies must do in order to survive in this economy

Service companies cannot sacrifice customer satisfaction for their financial bottom line in this economy.

I've recently had two important and extremely frustrating customer-service experiences, one dealing with a vehicle purchase and the other with a home-warranty company in charge of fixing my home's broken furnace (I'm sitting at my computer in a 50-some degree room heated only by a tiny spaceheater.) Read about my experiences with Plaza Motors AZ and HWA (Home Warranty of America) below, or jump to the Top 5 things service companies must do in order to survive in this economy.

I purchased a used vehicle on eBay through a company called Plaza Motors AZ. Polite on the phone and quick to reply when I asked them questions before the purchase, I trusted the company's nearly 500 positive ratings. They arranged shipping from Phoenix to Indianapolis with a company whom they said they knew trustworthy, and told me it would be delivered within a certain amount of time.

Plaza didn't give me a tracking number (they laughed when I requested one), so I called the shipper the day before the window in which the car was to be delivered to me, but couldn't get in touch with them. I called over and over, day and night, over the next few days and still hadn't heard from them about the status of my car.

I called Plaza several times asking for any and all contact info for the shipper. They told me they'd given me everything they had. But a day after the delivery window was over, I called one more time in a desperate attempt to contact the shipping company. They gave me a phone number they hadn't given me before, and it actually worked. They should have given me this number in the first place. To make a long, frustrating story short, I finally got my vehicle, albeit a few days late, after worrying that it had been shipped overseas for parts or stolen by Mad-Max-style road pirates.

The hauler who had my vehicle was apologetic, but told me that Plaza shouldn't have told me my car would be delivered as early as they claimed. I was simply happy to have received my car at that point. But as I was driving home, I heard a banshee-style high-pitched squealing: the serpentine belt was loose, even though the dealership said it had just been replaced.

I paid $70 a few days later to have it tightened - not a lot of money, but it was enough of a hassle after having gone without my car for several weeks to be irritating. (In full disclosure, Plaza just sent me a $70 check to pay for this - though it's made out to a scribbled "Tristan T" and I'm not sure the bank will let me cash it.)

I also discovered some other problems with the vehicle: they weren't major engine or drivetrain issues (not yet, at least), but they should've been disclosed. There's a 1" rip in the side of the driver's seat; the passenger-side rear door has been poorly repainted; the motorized side mirrors don't work; and the vehicle arrived with 500 more miles on it than what the eBay listing claimed. On this last point, the dealer said he couldn't control that, as he was selling it for his friend. But if he didn't want to take responsibility for the mileage, or the mirrors, or anything else, why was he selling it for his friend under Plaza's listings? I've sold a few vehicles online before, and have learned the importance of full disclosure - listing everything you know that's right and wrong with a car is the honest thing to do, even if you end up making less money from the sale.

Anyway, I love the vehicle, but the company's unreliable communication was a source of frustration and stress.

Ditto for what I'm going through right now with HWA, or Home Warranty of America. We paid over $400 for an HWA warranty on our current home when we bought it last August to cover major appliances, like our heating/cooling system, refrigerator, dishwasher, and washing machine. We were happy to pay this, after the furnace at our last home died on one of the coldest days of 2008 and we had to pay for the replacement. We didn't want to be left with a several-thousand-dollar problem again.

Nine days ago, I had Northern Heating and Cooling (whom we've used in the past and have been quite happy with) come out for regular furnace maintenance. They discovered that the heat exchanger was cracked, and since this is a carbon monoxide hazard, they shut the furnace off while I called HWA. HWA requires customers to call them as soon as a problem's detected, rather than calling a service company first.

HWA gave me the name of a service company who would come out to verify the cracked heat exchanger and give an estimate to them to replace it. The company couldn't come until the next morning, but they showed up on time and verified the problem. Like Northern, they said the exchanger would be difficult if not impossible to find, and that even if the exchanger were replaced, other parts would likely go out soon and require the whole system to be replaced.

HWA wasn't happy to hear that the entire system should be replaced, and they were determined to only replace the exchanger. So they sent another service contractor to the house, who told them what they wanted to hear: the exchanger needed to be replaced and a full-system replacement was unnecessary. This was Friday afternoon, and by then it was too late to order the part, as the warehouses were closed on the weekend. HWA ordered the part on Monday, and I called them several times throughout the week to find out the status, as our house was frigid and basically unusable for anything but sleeping in (our bedroom has a heat pump which has been running non-stop in an attempt to heat the entire house.) HWA pointed fingers at the company providing the exchanger, saying the wait was simply due to the shipping of the item. The furnace service company pointed fingers at both Carrier and HWA, saying it was their fault for not expediting things.

All three groups are at fault. We've been without useful heat for nearly 9 days, and almost every day has been below freezing. We can't run more than 2 or 3 small space heaters at once, or our electric circuits overload and shut off.

When I speak with people at HWA, they offer sympathy and then promptly blame Carrier, the heat exchanger company, saying we're just waiting on them. I've left messages for the HWA folks I've spoken with throughout the week, and they rarely call back.

My wife also filed claims with HWA to fix our dishwasher and washing machine, neither of which are working properly. No service contractors have called us back to schedule a time to fix the machines, but what's worse is that HWA has sent us three surveys, one for each of our claims, asking us how our service "went." Granted, they ask us not to complete the survey if service hasn't been completed, but it's ridiculous that in 9 days, nothing has been fixed, and they have the nerve to ask us how things have gone.

HWA is fighting to save money - it seems they're hiring the cheapest help to do the cheapest work possible, at the expense of customer comfort and happiness. The workers they hire have been unreliable for us - the furnace contractor has been even worse at communicating than anyone else I've mentioned in this message, and he was supposed to be at my house half an hour ago to fix the furnace, but he hasn't shown up or called.

Customers do have an important role in hiring and tracking responsible companies to perform service. But when doing so becomes a part-time job, the service company loses all trust, future business from that customer, and risks terrible word of mouth, which in today's economy is worth more than ever. Plaza has risked a negative eBay rating, and HWA and the service companies they've hired will be receiving poor ratings from us on Angie's List, a service which itself knows a thing or two about good and bad customer service.

Without further ado, the Top 5 things service companies must do in order to survive in this economy:

1. Communicate. Give your customers the most important information they need to know. Be honest with them about delivery dates, arrival times, contact people, costs, problems, EVERYTHING. Avoiding the truth will get you nowhere in the end. And even if a customer leaves a message about their dissatisfaction and frustration, return their call and talk to them rather than avoiding them completely.

2. Be flexible. If problems arise, think of new ways to make your customer happy, and don't be averse to change. Is negative word of mouth and the loss of a customer really worth the money you save now for sticking to your traditional guns? Or is offering alternatives, spending a little extra money now, or providing new solutions or temporary fixes worth a happy customer? The dealership I bought my car from should have provided me with all the contact information for the hauler, and offered to refund some of the money for shipping or fixing the car's mirrors. Home Warranty of America should have sprung for a more reliable furnace service company and faster part shipping, if not a system replacement, which was recommended by 2 of the 3 service people. But they've lost a future customer - I won't buy a warranty from them again, and I'll tell my friends and family about this negative experience.

3. Don't point fingers. Blaming others, whether it's your employees, shippers, parts providers, or God forbid, your customers, makes you sound like a kindergartner. You're responsible for your actions and your customer's service, so if someone has failed your customer in the service you're providing, apologize to the customer and tell them you'll resolve the issue. Blaming everyone but yourself only makes you look even more irresponsible and at fault.

4. Care. Even if you aren't a mission-based non-profit organization, your company was probably started by someone who cared about its customers and wanted to find and provide solutions for them. Your company may have been started 100 years ago or one year ago, but either way, it was started for a reason: to help customers who have problems. If you forget this fact and worry more about your bottom line than your customers' satisfaction, pretty soon you won't have to worry about a bottom line because you won't have one. And consider the difference between empathy and sympathy: expressing empathy shows your customer that you truly care and can relate to the problem and want to do everything in your power to fix it, but simply expressing sympathy will likely be seen as being cold and uncaring. Every person I've talked to at HWA about our furnace that's been out of service for 9 days expresses sympathy when they say that they understand our house is cold and uncomfortable and they're working on the solution. But if they were empathetic, they would go to their boss, say "Is there ANYTHING we can do for these people? They're nearly freezing!" And if their boss couldn't do anything about it, they could go to THEIR boss and do the same.

5. Follow through. When I took golf lessons as a kid, I got sick of people telling me to "follow through" on my swing. Once I learned what they meant, though, I got better (well, relatively speaking - my game's still poor.) The service companies I wrote about above didn't follow through: they didn't return calls, they didn't provide requested information as promised, and in HWA's case, they haven't followed through on their whole premise for existence: to quickly fix homeowners' difficult mechanical problems. Following through, even if it's with something as simple as a phone call, shows that you care, that you're empathetic to the customer's concerns and situation, and that you're a company that's in business for the customer, rather than for greed.

(Lest you think I'm simply a whiner, let me assure you that I reward great companies and service contractors with good word of mouth, tips, repeat business and positive online ratings.)

So, what advice would you give to businesses or service contractors who've frustrated you?