Sometimes the best lessons in business and in life come from the least expected places.  The story I am about to tell you is a good example of how a mundane experience, like purchasing a laptop, can turn into several great business lessons.  The story is a bit long, but stay with me, because if you are interested in being successful in business, I believe the lessons shared in this article can be invaluable.

But before I share the main story with you I would like to review a short section of the book The Last Lecture which captures exactly the antithesis of the story I am about to share.  If you are not familiar with Randy Pausch and The Last lecture I would highly encourage you to review the article The Last Lecture is a Huge Lesson on Success after you finish reading this article.

The 100,000 Salt and Pepper Shaker

In section 50 of the book The Last Lecture Randy Pausch tells the story of how when he was twelve years old his family went on a trip to Disney World.  His parents let him and his sister roam a bit around the park without their supervision, which was a great thrill to them.  They felt so grateful for the opportunity that they decided to pull their allowances and get a present for their parents.

They chose to buy a ceramic salt and pepper shaker for $10 at the store and quickly headed out to Main Street looking for the next attraction.  In his excitement, the gift slipped Randy’s fingers, hit the ground and broke.  Both Randy and his sister were in tears.  An adult who saw what had happened suggested they go back to the store.  “They’ll give you a new one”, he said. To which Randy replied: “I can’t do that.  It was my fault.  I dropped it.  Why would the store give us another one?” And the adult replied: “Try anyway.  You never know.”

So they went back to the store and told them exactly what had happened.  The employees listened to them and told them they could have a new salt and pepper shaker.  The employees at the Disney store said it was their fault because they hadn’t wrapped the item well enough.

Randy was in shock and could not believe what had just happened.  When his parents found out about the story they started to appreciate the Disney World institution at a whole new level.  So much so that they made visits to Disney World an integral part of their volunteer work and since that day they spent more than 100,000 at Disney World on tickets, food and souvenirs. 

Today’s executives may not have the same appreciation for the goodwill generated from situations like the one explained above.  In fact, as Randy so eloquently put it, current accounting systems are unable to measure how a ten-dollar salt and pepper shaker could turn into $100,000.  The policies, processes and procedures put in place today by large corporations do not allow for addressing the most basic business principle since the beginning of times: taking care of customers!  But entrepreneurs that truly embrace this most basic business concept, of just taking care of customers, will certainly find success, despite of what their accounting systems might tell them!

The Multi-Million Dollar Laptop

What you will read below about my experience with HP and Best Buy is just the opposite of the Disney story above.

HP is a fine institution.  I know people that I have great respect for that work there.  But they have become so big and impersonal that they no longer reflect the values and vision that the founders Bill Hewlett and David Packard had when they started this company in their garage in Palo Alto.  The same applies to the Geek Squad after being acquired by Best Buy.  The story I am about to tell you is a reflection of what happens when companies lose their way and no longer represent the values of their founders.

I purchased a HP Pavilion dv4-1435dx at Best Buy on September 26, 2009.  Shortly after purchasing the laptop I noticed that it would freeze randomly, and the only way out was to power it down and power it up again.

I considered returning the laptop to Best Buy and just get a new one, but decided to call HP support instead.

The support technician had me try a number of basic things like power it down and power it up again and remove the battery and hold the power button down for several seconds.  I did not believe this would solve the problem but I went along (what choice did I have?)  He told me that this should solve the problem and if it didn’t I would have to do a system restore.

Later I experienced the problem again, so I performed a system restore as the technician had indicated.  During the restore process the system froze, so I called HP support again.

They had me power down the system and power it up again.  Luckily the system came back without any problems.  Then he had me run several diagnostics, including hard disk test, memory test, etc.  He also had me download the latest updates from Microsoft and HP.  We spent several hours on the phone.  We tried to duplicate the problem after the doing the download, but given its random nature we could not duplicate it.  He said this should have resolved the problem.

A few days later I experienced the problem again.   This time I called and asked to talk to a supervisor. I explained that I had already spent several hours trying to fix the problem and that I would like to have a replacement unit.  I did not get a supervisor right away. Instead, the technician asked me the same questions I had already been through with other technicians and wanted to run the diagnostics again.  I explained to him that I had already run all the diagnostics with another technician and that at this point I just wanted to get the laptop repaired or replaced.  He said I would have to ship the unit to HP and that it would take 7-10 business days to get it diagnosed and that I would be without a computer during this period of time.  Since I use the laptop extensively on business trips, this would not work well for me.

I told him again I wanted to speak with a supervisor.  After being put on hold for a long time I finally got to speak to the supervisor.  The supervisor said his understanding was that I was having problems with my computer but was unwilling to run diagnostics.

I told him this was not the case.  I had run several diagnostics already with other technicians on the phone to no avail, but I was still experiencing the same problem.  He said the only thing he could do was have me talk to a case manager.  I was put on hold again for a long time, and when I asked what was going on he said he was documenting the case – the long silence was unnerving and felt more like nothing was happening.

He finally said he would transfer me to the case manager.  I had explained to him that I only had a few more minutes available, but he said this would not take long.  I was put on hold for over 5 minutes waiting for the case manager, and due to other commitments I had to leave the call.

I called back again later and explained what had just happened.  The technician then said I would have to talk to the case manager I had spoken with before, and she was currently unavailable.  I told him I never got to speak with a case manager and asked if I could just talk to another case manager.  He said no, I could only speak to that case manager, and she would have to call me back.  This was very frustrating – I could not talk to a new case manager because I had already attempted to talk to another case manager.  Who comes up with this nonsense?

Business Lesson 1:  Review your policies and procedures carefully and ask if they make sense from a customer’s standpoint.

Later in the day the original case manager called me.  I explained the situation to her and again, she wanted me to look at more diagnostics – this time the reliability and performance monitor.  I opened that up but it did not show anything.  I explained to her that I had already invested endless hours on the phone with HP technicians and that at this point I just wanted a replacement unit.  She said she could not do that and that the unit would have to be repaired first.  I told her I could not be without a computer for several days.  Then she told me I could just take it to Best Buy and that as an authorized reseller they could run the diagnostics and potentially repair the unit locally. 

I asked her why I wasn’t told this before.  She said it’s because the technicians get paid by the number of things they have customers try and they are not incented to send customers to the local store.

I could not believe this.  They wasted several hours of my time trying all these things that intuitively I knew did not make sense, but if I refused to do them they would say they could no longer help me.  Then I come to find out that these technicians are incented to have customers try all these different things even if they don’t make any sense.

Business Lesson 2:  Be careful with how you incent you employees as incentives drive behavior and the wrong incentives will yield the wrong results.

At the end of the conversation she said that if it is a software problem she had very good technicians that could take care of the problem for me.  I asked her why I would have to call her technicians if Best Buy could diagnose the laptop and fix it for me.  She said they might say that it is a software problem and might want to charge me to fix it – this turned out to be prophetic.

I took the laptop to Best Buy as suggested.  I will spare all the details of my two attempts to deal with the Geek Squad at Best Buy, but suffice it to say that they did not want to have anything to do with my problem unless I paid them additional money.  They were not interested in satisfying a customer.  They were only interested in squeezing additional profits out of me.

They ran diagnostics and did not find anything.  They said it was a software issue and not a hardware problem and since the warranty only covers the hardware they would have to charge me to fix it (sounds familiar?) They said the next step would be for them to do a full restore of the operating system, and they wanted to charge $130 for it. I said I had already done a full restore and it did not solve the problem, so why should I pay to have it done again? (At this point I had already done the restore 3 times, to no avail. )They said if they do the restore they may be able to run additional diagnostics and find the root cause of the problem, but unless I pay them $130 they would not do anything else for me.

I did not believe them.  It would not make sense to pay them to do the exact same thing I had already done several times and that I knew would not solve the problem.  So I called their bluff.

I took the laptop back and called HP.  At this point I was helped by another case manager.  First she said sorry, this case has already been closed and I would have to call tech support again.  I told her that the case was not closed to my satisfaction.  She said they assumed that since I was taking the laptop to Best Buy that they could close the case.  After I explained that I had already spent endless hours on the phone with tech support and was unwilling to do it again she reluctantly re-opened the case.    She said the only thing they could do now was to have me send the laptop in for diagnostics and repair.  Since this was during the Holidays break and I did not need the laptop during this time period, I accepted. 

A few days after I shipped the laptop, I received it back with a sheet that indicated that they had duplicated the problem and repaired or replaced the system board. 

It was in fact a hardware problem.  The Geek Squad at Best Buy either knew that, and lied to me about it, or was simply incompetent.  But what really irks me is that they tried to take advantage of an unsuspecting customer and tried to charge an extra $130 for an item that was under warranty.  And if I were not technically inclined I probably would have paid the $130 only to find out that it did not solve the problem.  This left a bad taste in my mouth and both the Geek Squad and Best Buy lost an opportunity to gain goodwill from a customer.

Business Lesson 3: Don’t try to squeeze additional profits from a customer who has a legitimate issue with an item purchased from you.  He will likely not come back to buy from you, but he will certainly tell the world about the experience.

HP could have easily solved this problem when I first called them, instead of letting it drag for months, leaving me, the customer, irritated with the endless calls and useless visits to the store.  After I had spent a few hours on the phone with a technician they could have offered to send me a replacement unit, or called Best Buy to have them fix it locally.  Or they could have offered a loaner unit while mine was being repaired at the repair center.  All of these actions would have cost them much less and made me a satisfied customer.

Instead, they insisted on following policies that left me irritated.  As a customer, I simply expected to have my brand new laptop work out of the box as advertised.  Yet, what I experienced were endless occasions of random freezes due to a defective unit and a very frustrating experience with their entire support organization.

To HP I may have been just another powerless consumer whose $630 purchase was simply a drop in the bucket for a multi-billion dollar corporation. But what HP does not realize is that I happen to be in a business where I have a tremendous amount of influence over the acquisition of millions of dollars in IT equipment, and HP is one of the vendors that compete for that business.  How favorable to you think I view HP now in light of my recent experience?  How likely is it that I will recommend purchasing equipment from HP?  Could this end up costing HP millions of dollars?

Business Lesson 4:  Treat all customers with great care and respect.  You never know what influence that customer might have on additional revenues for your business.

Obviously I will use my professional judgment when influencing future purchases of HP equipment versus competitors.  The point is that HP had an opportunity to create a great deal of goodwill, just like Disney World did with Randy Pausch’s parents, but they missed that opportunity. 

Business Lesson 5: At the end of the day, business is about people, and how you make them feel.  Never miss an opportunity to make your customer feel great about doing business with you.