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Strategic Planning Blog

Three Anti-Customer Words

Posted on October 3rd, 2011 by Anne Marie Smith

Here are three of the most anti-customer words I can think of: “That’s our policy.”

I’ll always remember the time when I purchased an internal drive for my computer at a big computer chain called Computer City.The drive wouldn’t fit inside my tower so I brought it back to the store to look for something that would work. I found an external drive that cost $20 more. When I went to the return desk to make the exchange, I was immediately told that I’d be charged a 15% re-stocking fee on the returned item. I explained that the device didn’t work in my computer and that I was purchasing one that would. “I’m sorry, ma’am,” the clerk said. “That’s our policy.” She turned the purchase receipt over and pointed at a bunch of words printed on the back of it.

Astounded, I asked to speak with the manager. I stood at the front of that store and waited for 45 minutes. As you can imagine, I wasn’t a happy camper but I was determined to behave professionally and rationally. Finally, the manager appeared and reluctantly brought me into his office. I explained what happened. Again, I was flipped the three-word bird: “That’s our policy.”

Still calm, I explained that I wasn’t aware of the policy. I told him that I understood a store’s need to have policies, but exceptions should be made if it makes business sense. I said, “A policy is only a policy. It’s not law. I’m planning on buying something else that costs more. Do you not want my money?” After 15 minutes of discussion the manager said, “I usually don’t do this, but I’ll make an exception this one time.” And here’s the kicker: He ended the conversation by saying, “But don’t ever try this again.” Oh. My. Goodness.

Although I really wanted to ask the dude what kind of car he drove so I could slash his tires and then lay rubber out of the parking lot, I nodded and kept my mouth shut. I had achieved my goal. But you can bet I never went back to that store again. And you can bet I told everyone I knew about my experience. This was back in the late 90s, well before social media. If Facebook and Twitter had existed then, I would have told the world. I would have been merciless.

When that company’s management created its “15% Re-stocking Charge-No Exeptions” policy they were clearly not thinking strategically. They came up with a tactical solution to a business problem (reduce the costs associated with product returns) but did not consider the long-term impact on customer satisfaction and, thus, repeat business.

The company was out of business less than a year later. Go figure.

When you create your policies, it’s always a good idea to keep in mind that customers have policies too. One of a customer’s unwritten policies is to never do business again with someone that punches you in the nose, takes your money, and then scolds you like a naughty child.

I still wish I had asked that store manager about his car…

“Nothing” is a Dangerous Strategy

Posted on August 3rd, 2011 by Anne Marie Smith

Many companies in these harsh economic times are foregoing strategic planning due to resource constraints. A CEO we talked to recently said, “I know the strategic planning process is important and in normal times I could afford to focus on it, but right now it’s taking everything I have to be in the here and now.” Yes, we get it. Totally understandable. Unfortunately, this short-term state of mind will only add to the number of attention deficit disorder (ADD) companies that already exist and will result in a continuation of dramatic swings in earnings and share price. “Nothing” is a very dangerous strategy.

Strategic planning doesn’t need to be a long, drawn-out company-wide set of initiatives. In fact, if the strategic planning process is slow it’s not adding value and is slowing down growth. A Stanford University study, done way back in 1988, linked effective company performance with quick strategic decision-making. “The best strategies are irrelevant if they take too long to formulate,” concluded Kathleen Eisenhardt, Professor of Strategy and Organization at Stanford. This is still true today. It’s really about making thoughtful versus thoughtless, reactive decisions. Every company can benefit from making quality decisions based on the “why” versus the “what.”

The company leader is responsible for assuring that an organization survives the here and now so it can succeed in the future. Forego strategic planning and you might as well forgo the possibility of success in the long-term.