Web2.0 Lessons in Customer Service - Circuit City
The business books about blogs and conversational marketing are full of stories where companies failed to respond to negative criticism with speed, honesty, and transparency. Most, if not all, paid a hefty price for their slow old-school approach. Circuit City recently proved that they have not read these books or, if they have, they chose not to heed their warnings.
A customer brought in his Hondacar for a navigation system installation. The Circuit City team that did the work botched the job horribly, resulting in $12,119 in damage to the car. Honda, who evaluated the car, refused to give the car back to the owner in it’s current state, declaring it a danger to drive. Circuit City refused to pay for the repairs, offering only to cover the cost of the system for which the customer paid - not the damages inflicted by their installers.
All it took was a forum post about his experience and the story spread like wildfire. It was quickly picked up by the Carsumer Advocacy site and the Consumerist. The Consumerist article received over 3,600 “diggs” and made it to the front page of digg.com. Then, Kevin Rose and Alex Albrecht opted to share the story in their wildly popular weekly podcast, Diggnation, which goes out to hundreds of thousands of technology fans (the “influencers”). In this episode, Kevin and Alex pointed out that no one in the tech community would EVER use Circuit City for a car installation ever again. The damage had been done.
This past week, Circuit City agreed to cover the cost of the damages and threw in some extra gear. To be more accurate, their insurance company is covering the cost less $2,000. Circuit City was too late. They should have given this man a cool new car and enjoyed the great PR from their quick positive response. Now no one knows for sure if Circuit City did the right thing because they new it was the right thing or because they were getting hammered in the court of public opinion. I bet they would gladly go back in time and spend the $25K on a new Civic with navi.
The new world: Listen. React quickly, honestly, and positively to negative criticism. Get your blog going. Bad customer experiences can ripple through the internet like a tsunami.
(1 votes, average: 4 out of 5)
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April 21st, 2008 at 8:11 am
one commenter on this story makes a valid point: The dealership that quoted 12K to repair the Honda in question is inflating the estimate incredibly. They quote 51 hours to repair the damage. Would anyone expect Circuit City to pay that much to repair someone’s dashboard, no matter what the damage? It’s not like their installers set the car on fire and then extinguished the flames with cat urine or anything….
April 21st, 2008 at 11:56 pm
From what I read, they drilled holes in the firewall, cut ALL of the main wiring harness and spliced directly in, rather than using off-the-shelf adapter harnesses, and failed to properly insulate the splices. It sounded plausible.
April 22nd, 2008 at 6:18 pm
The details of the incident are lost in Circuit City’s conventional approach to customer service, which assumes that the customer is always wrong.
Whether or not 51 hours was reasonable for repairs is moot. The question remains, could Circuit City have responded in a positive manner more swiftly to turn lemons into lemonade?
Absolutely.