In many ways, it’s self-explanatory – ignoring your customers isn’t the best idea. Yet it’s shocking how many organizations continue to charge down the hallways of business wearing a blindfold.
Many of you will be familiar with the infamous Domino’s Pizza debacle. A number of employees posted youtube videos of rather disgusting behaviour, which became a viral Internet sensation. It took three days before Domino’s smartened up, discovered what was happening, and was able to respond. But give Domino’s credit – at least they chose to respond.
The newest case of ludicrous behaviour comes to us from NAS (North American Sports) – the owners of “Ironman Canada.” The Canadian Ironman race is typical of a big name triathlon– over 3,000 entrants who pay over $600 each to swim, bike and run through Penticton, British Columbia.
NAS outsources the registration of its races to a company which was unaware that the British Columbia Provincial Government has recently changed its taxation laws. Somehow, 3,000 people signed up for an “Ironman” race without being charged the proper amount of sales tax.
When NAS recognized the error last weekend, they sent an email to all registrants, on the Friday of the US Thanksgiving weekend. In the interest of accuracy, I’ve reproduced it here:
Dear Subaru Ironman Canada Entrant,
As many of you may be aware, effective July 1, 2010 British Columbia moved to a harmonized provincial and federal sales tax at a combined rate of 12%. This has been a controversial and confusing tax change but it is the law and therefore must be collected on all sale of goods and services. Unfortunately when your entry to the 2011 Subaru Ironman Canada was processed through Active, HST was not collected on the entry fee. This has recently been brought to our attention and we are obligated to collect that tax.
To that end, the credit card that you used to enter the race will be charged $69, the amount of the HST on the entry fee. We will begin processing the charges on Monday, November 29th and these will be complete by December 10th. Should you wish to have this charge applied to a different credit card or if the one you used to enter has expired, please contact our athlete services center at admin@nasports.com or 877-377-2373. We apologize for this error and any inconvenience it may cause.
And then hell broke loose. A number of online forums effectively exploded , while both the “Ironman” and “Ironman Canada” Facebook pages started receiving postings from upset customers. Customers were furious that they weren’t consulted, that their credit cards were going to be charged without permission, and there was widespread confusion over how NAS came up with the $69 figure.
How did NAS respond? They didn’t.
Because the customers were ignored, the fury continued unabated Saturday and Sunday. By Monday, the online dialogue had changed. It was no longer “How dare they do this?” but “Why won’t they talk to us?”
Even the irate triathletes were getting in on the action, suggesting ways NAS could have brokered the news. Had NAS responded right away on Monday with a “Folks, we hear you. We are sorry. Clearly, you are upset. Please give us 24 hours to work this out?” chances are good all could be forgiven.
So, on Monday, how did NAS respond? They didn’t.
No – the questions remained unanswered. And since they were being ignored, the online discussions turned to talk of class action lawsuits and mass protests.
At the end of day Tuesday, NAS finally sent out an email, but it, too, was woefully inadequate – ignoring a number of the very concerns being raised by racers. Facing revolt, Ironman has announced that the $69 additional charge would be ‘voluntary.’ Not surprisingly, a large number of the ‘ignored’ athlete customers have announced they have no intention of paying the fee. This could leave NAS with a $210,000 shortfall.
Folks, the lesson here is crystal clear. If NAS had come out initially with a message like this, it’s a different story:
“Hey, folks – we screwed up. We screwed up big, and we feel awful about it. Here’s what happened. The Provincial Government has changed the rules regarding taxation. As a result, we have determined that the race fee needs to go up by $69. We don’t like it either but we’re forced to submit it.
We’re going to give you two choices – if you can pay the $69, great. We appreciate it, and feel bad. In fact, we’re going to give you a coupon for half-price Ironman Merchandise on race day. If you don’t want to pay the $69, please let us know and we will happily refund your race fees.
Again, please accept our apologies. Let us know what you want us to do, and please rest assured we are reviewing our procedures to ensure this doesn’t happen again.
Right away, half the fury evaporates. But even more importantly – if they had bothered to stick around and respond to concerns raised immediately after distributing bad news, the rest of the fury would have evaporated as well. People may not have liked it, but they would be far more understanding and forgiving.
Now, NAS is paying out $210,000, and has managed to infuriate its customer base at the same time. And why? Primarily, because they did not bother to respond to their customers.
And you know what is incredibly sad? As of right now, NAS has STILL not bothered to respond to any of the comments or questions posted on the Ironman Canada facebook page.
Pay attention to your stakeholders. Find out where they talk to each other and meet them there. It’s just common sense and smart business.