"I’m sorry, we just can’t do that. It’s company policy."

You recognize this phrase. You’ve probably been the customer, or in some cases the would-be customer or the no-longer customer standing in front of a counter somewhere, or sitting with the phone in hand, dealing with some poor employee who is stuck with you, trapped in the prison of company policy.

You’ve read the only-somewhat-humorous translations for "it’s company policy." You know… that what it really means is "I don’t care," or "the company doesn’t care about you," or "the company doesn’t care about me," or "they don’t pay me enough to argue with you," and other things like that.

You’ve also probably heard the stories of great customer service. Nordstrom’s is a good example, it comes up a lot, most recently for me in Made to Stick, a book I’ve recommended on this blog. These are stories like the Nordstrom employee who changed a customer’s tire in a winter storm, or took back with full refund a product the customer had purchased at Macy’s.

I propose two hard-and-fast rules of good customer service that you probably haven’t heard of, and that I can’t point to any reliable research, or any well-known book, to prove. I’ve just come to believe in these two rules through 35 years in business, much of that consulting with some of the best companies in the world, and much of it building my own business, from 0 to 40 employees and 70% share in our niche, without outside investment.

So here are those two rules:

1. Use flexible guidelines, Not company policy.

"Company policy" might be real in very large organizations, but in small and medium business it’s a cop out. Owners and managers make what they like to call company policy over and over, and they break it in two. Company policy is nothing more than what was said in the last meeting. In a real business, it’s just a guess. It can change easily.

As a customer, you should assume company policy is a smoke screen. "Don’t pay any attention to the man behind the curtain." There should always be somebody behind that front-lines person you’re dealing with, somebody who can understand why your case was different, and why an exception to policy was necessary.

As an owner, or manager, of a business, avoid "company policy" like the plague. It’s an excuse not to think. It’s the opposite of good customer service, because policy, at its core, is based on the same kind of algorithmic logic that drives spreadsheets and computer programming.

Don’t let company policy became a set of rules. People on the front lines want rules because they have a tough job dealing with people, situations, the unforeseen; but the rules too often become a crutch, an excuse for not dealing with new situations, and that smoke screen I’ve mentioned above. I’ve always wanted people on the front lines to know that it’s okay to break rules for good reasons. Good reasons do come up. We can never foresee everything.

And as soon as you start calling things "company policy" you’re going to have people using that as a reason for something. And company policy is not a reason for anything; there had better be a better reason than company policy, or you’re in trouble.

2. Not everybody is a customer

I woke up to this second rule while on a panel with a customer service expert. I spoke on business planning, he spoke on customer service at his award-winning auto repair shop. That shop was so well known for great service that my co-panelist was often asked to speak on the topic. He amazed us all with incredible stories. At his garage customers could do all sorts of nit-picking after the fact, get things fixed for free if they fixed the wrong thing ("the rattle is still there," for example), and have things fixed that they knew they’d broken themselves. He even told stories of picking customers’  kids up from school when service was late.

I had a question I really wanted to ask, but couldn’t, because I was also on stage. Finally somebody asked it:

"I don’t get it," went the obvious question, "how can you possibly stay in business with customer service like that? Why don’t you go broke?"

Bob put a wry grin on his face as he answered. "The secret," he said, "is that not everybody is a customer. You can fool us once, maybe even twice, but if you do that two or three times we’ll suggest you go elsewhere."

Aha! That was a vital secret that made the rest of it make sense. You can only do great customer service if not everybody is a customer. The Nordstrom stories don’t include the detail that the people who get that extra-mile service are either current customers or future customers or the service was wasted. How much do you want to bet that the Nordstrom customer who returned a Macy’s purchase was a regular customer, well worth keeping? How much do you want to bet that he or she couldn’t go back a second and third time and get the same level of customer service?

With the repair shop, our expert said that customers who took unfair advantage of great service did so only once, maybe twice in special cases, before the service went down to perfectly normal. Nobody invited the service-abusing customers to go elsewhere, but nobody missed them when they did.

–Tim