Lessons Learned from Apple's China Fiasco

In a highly publicized saga, Apple recently faced a firestorm of criticism from customers in China whose iPhone 4 and 4S smartphones had malfunctioned. They lamented--quite publicly--about Apple's customer service, its repair and warranty policies, and its appearance of being "arrogant" in the eyes of millions of consumers. All told, this left the company with a serious customer relations bruise.

This was no small matter. Apple has made a name for itself in the global marketplace by creating powerful technology that's easy for any consumer to use and that outperforms the competition. Yet today, Apple is facing global competition from a bevy of rivals, and China is its biggest and fastest growing market. A potential blemish on its reputation could be dire for its Chinese--and global--prospects.

Customer perception is reality and companies can't take good customer service--or customer loyalty--for granted. Companies must positively engage customers and ensure customer-facing activities and solutions are a top priority. Your plan, and that of other proactive companies, should be to prevent such episodes in the first place. Yet if bad customer service happens, you should also be prepared to respond.

A Customer Service Game Plan

First and foremost, never take your customers and their feedback for granted. Just because the brand is exquisite doesn't mean its reputation can't be soured in an instant if one customer--or thousands of them--report a bad experience.

Next, get ahead of any potential issues. Empower your front line teams to handle a customer service inquiry in pursuit of first call resolution. In Apple's case, company practices made such remediation difficult to impossible. Customers need a simple channel (phone, email, or online) to lodge their feedback and suggestions. People want to believe that when they have an issue, they also have a voice --one that will be heard by the company. As part of its remedy, Apple created and publicized a new suggestion channel. In fact, in his letter to Chinese consumers, Apple CEO Tim Cook admitted the perception that the company was arrogant and held customer concerns in low regard stemmed from insufficient communications.

If Tier One customer service is insufficient, set up an escalation process from the front-line caller to your management team so issues can be handled quickly and efficiently.

To that end, create an easy-to-find review of the company's policies. In fact, this should be standard, not done in response to customer backlash. Admittedly, few customers read the fine print in the documents enclosed with any product's original packaging. Those details should be easy to find and understand.

If an issue escalates, have the appropriate listeners across all traditional and social media channels ready to respond quickly to negative comments and stem them from going viral. For example, if the cable is out in one area, cable providers often get thousands of tweets. But thousands can turn into millions if customer service doesn't respond quickly with an approximate timetable for a remedy.

Along those lines, be prepared to capitalize on feedback. Arm your call centers with data analytics and listening tools to spot trends or problems in a customer service or product. If the company is aware of the problem, they can fix it before it grows. For example, data can show if there is a health problem at a chain restaurant simply by analyzing its customer service line. In Apple's case, untold thousands of inquiries regarding its iPhones should have been ample indication that a situation was unfolding.

Analyzing call center data can also help prevent a national marketing catastrophe. C3 executives once worked on a client market test, which was to precede a national, multimillion dollar rollout and television advertising campaign. When analysis of customer feedback from the market tests revealed significantly poor product reviews, the client postponed the launch.

If a situation does go viral or hits the media, there is no shame in an apology. Though considered by some to be a last resort, by writing a letter of apology to Chinese consumers, Cook (and the company) spoke volumes about how to address customer service issues and improve the process. According to one translation of the letter, the company admitted "profound reflection" in the face of stinging criticism. Over the course of 800 words--no brief correspondence from the head of any company--Cook acknowledged the problems, admitted Apple's perceived arrogance, outlined revised repair and return policies, and promised improved communication channels.

It was a significant mea culpa, one that offers an important lesson for the rest of us. The message could be condensed to this: Never think you're too big, or perceived as too arrogant, to apologize. Whether they are in a small town or the world's largest and fastest growing consumer market of more than a billion people, customers must be respected and their complaints addressed.

As Apple's CEO demonstrates, there is no shame in offering a heartfelt apology and promises of remedy. Just know--your customers and the markets will be watching to see if words are translated into deeds


Rick Ferry is the president and chief operating officer of C3/CustomerContactChannels, a global provider of outsourced customer management solutions.

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