Is this a “problem?”

This morning I got an email from a friend that recounts a (still ongoing) story of a failed freezer.

We arrived home Tuesday from a week away to find the “extra” freezer in the garage totally kaput…..much of the stuff inside already ruined but some still partially frozen. It’s only 4 years old and within warranty, so [we] go on line and schedule an appointment with GE service for the next day, and spend hours sorting what [food] might be savable, getting bags of ice to try and bridge the time until (you would assume) they will exchange this unit with a new one. Tech comes out the next day, announces that the compressor is fried, and that he’ll order the part and see you in a week to install.

Needless to say, the customer is not exactly happy here. What could be saved now cannot. When they elevate the problem to “Customer Care” on the phone, the answer is basically holding the line to the warranty terms which give the company the option of replacing or repairing the unit.

Aside from speculation that the response would be different if this had been a commercial unit for a large corporate customer, this story brings up some interesting issues.

Clearly the company here is well within their agreement with the customer. That is (apparently) spelled out in black and white in the warranty, all approved by the legal department. And repair of the unit is the logical economic choice for the company.

But equally clearly, the customer here is not happy with the response.

All of my protestations about how an exchange unit shipped from their warehouse in Kent today would allow my wife to save her food falls on deaf ears. Not even a transfer to a “supervisor” for exception resolution could be arranged. If you don’t like it, tough luck..not buy another GE product? “hey, your choice” hard to believe!

And a customer with a technical problem has likely been turned into a customer for the competition.

So here is the question.

“Is this a problem?”

And when I say “problem” I mean, is this a “problem” from the standpoint of the company’s internal process?

I have my thoughts, and I’ll share them in a day or so. But I’d like to hear what you think.

4 thoughts on “Is this a “problem?”

  1. When you were speaking to the GE customer service you were speaking to a system of fear and authority. Those representititves incentive process is to not please the customer and fill the customer needs. The incentives are to follow the company line and do what you are told. For customer service reps. my guess is that you dealt with autonomy is not allowed. Additionally the rep. knew that the anger from you and perhaps one lost customer is a path of least resistance. If the rep. sent you to the supervisor the rep. knows the hell they would have caught and they do not want to go through a discipline process and lose their jobs.

    With any organization (like lean) we must root cause the problem. The problem is the organizational structure is not created for the customer. It is created to keep the company profitable with little loss.
    This has worked for many years and GE is too big to fail, or are they?

  2. I say there is no problem. GE is doing the right thing. However, my solution would be to find out how many times this sort of situation arises. Then possibly have the Technician drive a larger truck and have a loaner freezer, and a loaner refrigerator on it at all times.

    It comes down to this. The bigger the company the less nimble it is. If GE were to adopt a policy of replacing or fixing an appliance under warranty, based on the individual customers circumstance, GE would be making repair decisions based on lots of different sob stories. i.e. “We have a wedding in five days and we need the freezer”, etc. GE would need to have a system in place to make decisions in the field based on the customer’s particular situation. It would be left to the Technician or field supervisor to determine what GE should do. Bad idea.

    On the other hand if the freezer retailer was a Mom and Pop store, they could provide this service and make those decisions without too many variations in their decision making process. Do anything to keep the customer happy. Send over a loaner. Or replace the whole freezer. Being part of the community this Mom and Pop store would gain a customer for life. And the store might sell these same customers other appliances and even in a few years a different make and model of freezer.

    I think GE lost the customer when the compressor went out and the food was lost. I don’t think it matters much whether or not the customer had to wait for the repair. They already think GE makes junk. If the Technician had had a new freezer on his truck and it was replaced in 10 minutes, still, the next freezer the customer brought would not be a GE. Nor would the customer recommend GE to their neighbors.

    I’m on GE’s side on this one.

  3. PS: The part about the response and attitude from GE,

    ” Not even a transfer to a “supervisor” for exception resolution could be arranged. If you don’t like it, tough luck..not buy another GE product? “hey, your choice” ”

    Now this is a problem……..

  4. Mark,

    A few points…

    1. There is some middle ground between driving around with a semi truck full of replacement parts on all service calls, and taking a week to get a new component. Hard to believe, though, that GE can’t get what I am assuming to be a common part quicker than a week. (This is a problem)

    2. Repair by replacement is generally done only on low end products. Nobody would expect a four year old car (under warranty) to get replaced when there is a problem that could be repaired. I don’t see opting to repair rather than replace the freezer as a problem. A loaner would be nice, but GE isn’t a premiere brand.

    3. From your friend’s story, it’s hard to believe the ‘hey, your choice’ part. Definitely a problem that stems from process failures. I’ve seen some pretty irritated customers and seen some amazing service reps calm them down even while saying no. “The customer is always right” is nice in theory, but what if he says “I am only going to pay $2.78 for this brand new car?” Sometimes you have to tell customers no, but it takes a good process and effective training to keep the customer the next time around.

    4. Quality is impossible to judge from this story. Obviously the goal is zero defects, but that has to be in context. Zero defects for how long? 5 years? 10? 50? At some point entropy takes over, and things break down. 4 years certainly seems way too short, but when you sell millions of units, some fall at the front tail of the bell curve. He might just be an outlier. Need more data to determine if the failure is a problem.

    A final thought on service. I’ve seen data (can’t recall the source) that showed hotel patrons generally rank service higher if they had a problem that was solved to their satisfaction than if they had no problem at all. Something to think about here for GE.

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